Sempra’s Condensed Consolidated Financial Statements include the accounts of Sempra, a California-based holding company, and its consolidated entities, which invest in, develop and operate energy infrastructure in North America, and provide electric and gas services to customers. Sempra has three operating and reportable segments, which we describe in Note 13. All references in these Notes to our reportable segments are not intended to refer to any legal entity with the same or similar name.

SoCalGas’ common stock is wholly owned by Pacific Enterprises, which is a wholly owned subsidiary of Sempra. SoCalGas is a regulated public natural gas distribution utility, serving customers throughout most of Southern California and part of central California. SoCalGas has one operating and reportable segment.

We have prepared our Condensed Consolidated Financial Statements in conformity with U.S. GAAP and in accordance with the interim period reporting requirements of Form 10-Q and applicable rules of the SEC. The financial statements reflect all adjustments that are necessary for a fair presentation of the results for the interim periods. These adjustments are only of a normal, recurring nature. Results of operations for interim periods are not necessarily indicative of results for the entire year or for any other period. We evaluated events and transactions that occurred after March 31, 2025 through the date the financial statements were issued and, in the opinion of management, the accompanying financial statements reflect all adjustments and disclosures necessary for a fair presentation.

All December 31, 2024 balance sheet information in the Condensed Consolidated Financial Statements has been derived from our audited 2024 Consolidated Financial Statements in the Annual Report. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the interim period reporting provisions of U.S. GAAP and the SEC.

SDG&E’s and SoCalGas’ accounting policies and financial statements reflect the application of U.S. GAAP provisions governing rate-regulated operations and the policies of the CPUC and the FERC. We discuss revenue recognition and the effects of regulation at our utilities in Notes 3 and 4 below and in Notes 1, 3 and 4 of the Notes to Consolidated Financial Statements in the Annual Report.

Sempra Infrastructure’s natural gas distribution utility, Ecogas, also applies U.S. GAAP provisions governing rate-regulated operations, including the same evaluation of probability of recovery of regulatory assets described above. Certain business activities at Sempra Infrastructure are regulated by the CNE and the FERC and meet the regulatory accounting requirements of U.S. GAAP.

SDG&E’s power procurement is subject to reliability requirements that may require SDG&E to enter into various PPAs that include variable interests. SDG&E evaluates the respective entities to determine if variable interests exist and, based on the qualitative and quantitative analyses described above, if SDG&E, and indirectly Sempra, is the primary beneficiary.

SDG&E has agreements under which it purchases power generated by facilities for which it supplies all of the natural gas to fuel the power plant (i.e., tolling agreements). SDG&E’s obligation to absorb natural gas costs may be a significant variable interest. In addition, SDG&E has the power to direct the dispatch of electricity generated by these facilities. Based on our analysis, the ability to direct the dispatch of electricity may have the most significant impact on the economic performance of the entity owning the generating facility because of the associated exposure to the cost of natural gas, which fuels the plants, and the value of electricity produced. To the extent that SDG&E (1) is obligated to purchase and provide fuel to operate the facility, (2) has the power to direct the dispatch, and (3) purchases all of the output from the facility for a substantial portion of the facility’s useful life, SDG&E may be the primary beneficiary of the entity owning the generating facility. SDG&E determines if it is the primary beneficiary in these cases based on a qualitative approach in which it considers the operational characteristics of the facility, including its expected power generation output relative to its capacity to generate and the financial structure of the entity, among other factors. If SDG&E determines that it is the primary beneficiary, SDG&E and Sempra consolidate the entity that owns the facility as a VIE.

In addition to tolling agreements, other variable interests involve various elements of fuel and power costs, and other components of cash flows expected to be paid to or received by our counterparties. In most of these cases, the expectation of variability is not substantial, and SDG&E generally does not have the power to direct activities, including the operation and maintenance activities of the generating facility, that most significantly impact the economic performance of the other VIEs. If our ongoing evaluation of these VIEs were to conclude that SDG&E becomes the primary beneficiary and consolidation by SDG&E becomes necessary, the effects could be significant to the financial position and liquidity of SDG&E and Sempra.

SDG&E determined that none of its PPAs and tolling agreements resulted in SDG&E being the primary beneficiary of a VIE at March 31, 2025 and December 31, 2024. PPAs and tolling agreements that relate to SDG&E’s involvement with VIEs are primarily accounted for as finance leases. The carrying amounts of the assets and liabilities under these contracts are included in PP&E, net, and finance lease liabilities with balances of $1,131 million and $1,138 million at March 31, 2025 and December 31, 2024, respectively. SDG&E recovers costs incurred on PPAs, tolling agreements and other variable interests through CPUC-approved long-term power procurement plans. SDG&E has no residual interest in the respective entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 15 of the Notes to Consolidated Financial Statements in the Annual Report. As a result, SDG&E’s potential exposure to loss from its variable interest in these VIEs is not significant.

Oncor Holdings is a VIE. Sempra is not the primary beneficiary of this VIE because of the structural and operational ring-fencing and governance measures in place that prevent us from having the power to direct the significant activities of Oncor Holdings. As a result, we do not consolidate Oncor Holdings and instead account for our ownership interest as an equity method investment. See Note 5 of the Notes to Consolidated Financial Statements in the Annual Report for additional information about our equity method investment in Oncor Holdings and restrictions on our ability to influence its activities. Our maximum exposure to loss, which fluctuates over time, from our interest in Oncor Holdings does not exceed the carrying value of our investment, which was $15,871 million and $15,400 million at March 31, 2025 and December 31, 2024, respectively.

Cameron LNG JV is a VIE principally due to contractual provisions that transfer certain risks to customers. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of Cameron LNG JV, including LNG production and operation and maintenance activities at the liquefaction facility. Therefore, we account for our investment in Cameron LNG JV under the equity method. The carrying value of our investment was $1,127 million at March 31, 2025 and $1,149 million at December 31, 2024. Our maximum exposure to loss, which fluctuates over time, includes the carrying value of our investment and our obligation under the SDSRA, which we discuss in Note 12.

As we discuss in Note 12, in July 2020, Sempra entered into a Support Agreement for the benefit of CFIN, which is a VIE. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of CFIN, including modification, prepayment, and refinance decisions related to the financing arrangement with external lenders and Cameron LNG JV’s four project owners as well as the ability to determine and enforce remedies in the event of default. The conditional obligations of the Support Agreement represent a variable interest that we measure at fair value on a recurring basis (see Note 9). Sempra’s maximum exposure to loss under the terms of the Support Agreement is $979 million, which we discuss in Note 12.

ECA LNG Phase 1 is a VIE because its total equity at risk is not sufficient to finance its activities without additional subordinated financial support. We expect that ECA LNG Phase 1 will require future capital contributions or other financial support to finance the construction of the facility. Sempra is the primary beneficiary of this VIE because we have the power to direct the activities related to the construction and future operation and maintenance of the liquefaction facility. As a result, we consolidate ECA LNG Phase 1. Sempra consolidated $1,853 million and $1,758 million of assets at March 31, 2025 and December 31, 2024, respectively, consisting primarily of PP&E, net, attributable to ECA LNG Phase 1 that could be used only to settle obligations of this VIE and that are not available to settle obligations of Sempra, and $1,168 million and $1,080 million of liabilities at March 31, 2025 and December 31, 2024, respectively, consisting primarily of long-term debt attributable to ECA LNG Phase 1 for which creditors do not have recourse to the general credit of Sempra. Additionally, IEnova and TotalEnergies SE have provided guarantees for 83.4% and 16.6%, respectively, of the loan facility supporting construction of the liquefaction facility (see Note 7).

Port Arthur LNG is a VIE because its total equity at risk is not sufficient to finance its activities without additional subordinated financial support. We expect that Port Arthur LNG will require future capital contributions or other financial support to finance the construction of the PA LNG Phase 1 project, which we discuss in Note 10 in “Noncontrolling Interests – SI Partners Subsidiaries.” Sempra is the primary beneficiary of this VIE because we have the power to direct the activities related to the construction and future operation and maintenance of the liquefaction facility. As a result, we consolidate Port Arthur LNG. Sempra consolidated $7,179 million and $6,419 million of assets at March 31, 2025 and December 31, 2024, respectively, consisting primarily of PP&E, net, attributable to Port Arthur LNG that could be used only to settle obligations of this VIE and that are not available to settle obligations of Sempra, and $2,437 million and $1,584 million of liabilities at March 31, 2025 and December 31, 2024, respectively, consisting primarily of long-term debt and accounts payable attributable to Port Arthur LNG for which creditors do not have recourse to the general credit of Sempra.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on Sempra’s Condensed Consolidated Balance Sheets to the sum of such amounts reported on Sempra’s Condensed Consolidated Statements of Cash Flows. We provide information about the nature of restricted cash in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.


RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
	March 31, 2025		December 31, 2024
Sempra:
Cash and cash equivalents	$	1,739	$	1,565
Restricted cash, current	20		21
Restricted cash, noncurrent	3		3
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows	$	1,762	$	1,589

We are exposed to credit losses from financial assets measured at amortized cost, including trade and other accounts receivable, amounts due from unconsolidated affiliates, our net investment in sales-type leases and a note receivable. We are also exposed to credit losses from off-balance sheet arrangements through Sempra’s guarantees, which we discuss below and in Note 12.

We regularly monitor and evaluate credit losses and record allowances for expected credit losses, if necessary, for trade and other accounts receivable using a combination of factors, including past-due status based on contractual terms, trends in write-offs, the age of the receivables and customer payment patterns, historical and industry trends, counterparty creditworthiness, economic conditions and specific events, such as bankruptcies, pandemics and other factors. We write off financial assets measured at amortized cost in the period in which we determine they are not recoverable. We record recoveries of amounts previously written off when it is known that they will be recovered.


CHANGES IN ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	2025		2024
Sempra:
Allowances for credit losses at January 1	$	514	$	533
Provisions for expected credit losses	(4)		42
Write-offs	(48)		(50)
Allowances for credit losses at March 31	$	462	$	525
SDG&E:
Allowances for credit losses at January 1	$	114	$	144
Provisions for expected credit losses	15		6
Write-offs	(20)		(17)
Allowances for credit losses at March 31	$	109	$	133
SoCalGas:
Allowances for credit losses at January 1	$	285	$	331
Provisions for expected credit losses	9		26
Write-offs	(28)		(33)
Allowances for credit losses at March 31	$	266	$	324


ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	March 31,		December 31,
	2025		2024
Sempra:
Accounts receivable – trade, net	$	395	$	447
Accounts receivable – other, net	56		53
Other long-term assets(1)	11		14
Total allowances for credit losses	$	462	$	514
SDG&E:
Accounts receivable – trade, net	$	76	$	81
Accounts receivable – other, net	26		25
Other long-term assets(1)	7		8
Total allowances for credit losses	$	109	$	114
SoCalGas:
Accounts receivable – trade, net	$	232	$	251
Accounts receivable – other, net	30		28
Other long-term assets(1)	4		6
Total allowances for credit losses	$	266	$	285

As we discuss below in “Note Receivable,” we have an interest-bearing promissory note due from KKR Pinnacle. On a quarterly basis, we evaluate credit losses and record allowances for expected credit losses on this note receivable, including compounded interest and unamortized transaction costs, based on published default rate studies, the maturity date of the instrument and an internally developed credit rating. At both March 31, 2025 and December 31, 2024, $5 million of expected credit losses are included in Other Long-Term Assets on Sempra’s Condensed Consolidated Balance Sheets.

As we discuss in Note 12, Sempra provided a guarantee for the benefit of Cameron LNG JV related to amounts withdrawn by Sempra Infrastructure from the SDSRA. On a quarterly basis, we evaluate credit losses and record liabilities for expected credit losses on this off-balance sheet arrangement based on external credit ratings, published default rate studies and the maturity date of the arrangement. At both March 31, 2025 and December 31, 2024, $5 million of expected credit losses are included in Deferred Credits and Other on Sempra’s Condensed Consolidated Balance Sheets.

In February 2025, SI Partners entered into a 15-month credit support agreement with a third-party financial institution related to a customer’s secured borrowing for repayment of its past due account balance owed to SI Partners. SI Partners’ maximum exposure to loss under this off-balance sheet arrangement is $85 million. At March 31, 2025, $9 million and $2 million of expected credit losses are included in Other Current Liabilities and Deferred Credits and Other, respectively, on Sempra’s Condensed Consolidated Balance Sheet.


AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	March 31, 2025		December 31, 2024
Sempra:
Tax sharing agreement with Oncor Holdings	$	11	$	8
Various affiliates	4		5
Total due from unconsolidated affiliates – current	$	15	$	13




TAG Pipelines(1):
5.5% Note due January 14, 2026	$	—	$	(8)
5.5% Note due July 14, 2026	—		(12)
5.5% Note due January 19, 2027	—		(15)
5.5% Note due July 21, 2027	(9)		(19)
5.5% Note due January 19, 2028	(48)		(48)
5.5% Note due July 18, 2028	(42)		(41)
5.5% Note due January 22, 2029	(44)		—
TAG Norte – 5.74% Note due December 17, 2029(1)	(212)		(209)
Total due to unconsolidated affiliates – noncurrent	$	(355)	$	(352)
SDG&E:
Sempra	$	(44)	$	(42)
SoCalGas	(9)		(14)
Various affiliates	(14)		(3)
Total due to unconsolidated affiliates – current	$	(67)	$	(59)

Income taxes due from Sempra(2)	$	21	$	38
SoCalGas:
SDG&E	$	32	$	14
Various affiliates	2		2
Total due from unconsolidated affiliates – current	$	34	$	16

Sempra	$	(25)	$	(38)

Total due to unconsolidated affiliates – current	$	(25)	$	(38)

Income taxes due to Sempra(2)	$	(78)	$	(6)

(2) SDG&E and SoCalGas are included in the consolidated income tax return of Sempra, and their respective income tax expense/benefit is computed as an amount equal to that which would result from each company having always filed a separate return. Amounts include current and noncurrent income taxes due from/to Sempra.


INVENTORY BALANCES
(Dollars in millions)
	Sempra				SDG&E				SoCalGas
	March 31, 2025		December 31, 2024		March 31, 2025		December 31, 2024		March 31, 2025		December 31, 2024
Natural gas	$	105	$	163	$	1	$	1	$	95	$	148
LNG	12		27		—		—		—		—
Materials and supplies	451		369		231		201		143		139
Total	$	568	$	559	$	232	$	202	$	238	$	287

In support of its Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans, Sempra maintains dedicated assets, including a Rabbi Trust and investments in life insurance contracts, which totaled $566 million and $585 million at March 31, 2025 and December 31, 2024, respectively.

In November 2021, Sempra loaned $300 million to KKR Pinnacle in exchange for an interest-bearing promissory note that is due in full no later than October 2029 and bears compound interest at 5% per annum, which may be paid quarterly or added to the outstanding principal at the election of KKR Pinnacle. At March 31, 2025 and December 31, 2024, Other Long-Term Assets includes $354 million and $349 million, respectively, of outstanding principal, compounded interest and unamortized transaction costs, net of allowance for credit losses, on Sempra’s Condensed Consolidated Balance Sheets.

Sempra Infrastructure’s Sonora natural gas pipeline consists of two pipeline segments, the Sasabe-Puerto Libertad-Guaymas segment and the Guaymas-El Oro segment. Each segment has its own service agreement with the CFE. Following the start of commercial operations of the Guaymas-El Oro segment, Sempra Infrastructure reported damage to the pipeline in the Yaqui territory that has made that section inoperable since August 2017 because it was not able to be repaired due to legal challenges, which were resolved in March 2023, by some members of the Yaqui tribe. Sempra Infrastructure and the CFE have agreed to an amendment to their transportation services agreement and to re-route the portion of the pipeline that is in the Yaqui territory, whereby the CFE would pay for the re-routing with a new tariff. This amendment will terminate if certain conditions are not met, and Sempra Infrastructure retains the right to terminate the transportation services agreement and seek to recover its reasonable and documented costs and lost profit. Sempra Infrastructure continues to acquire and pursue the necessary rights-of-way and permits for the portion of the pipeline that needs to be re-routed. At March 31, 2025, Sempra Infrastructure had $398 million in PP&E, net, related to the Guaymas-El Oro segment of the Sonora pipeline, which could be subject to impairment if Sempra Infrastructure is unable to re-route a portion of the pipeline and resume operations or if Sempra Infrastructure terminates the contract and is unable to obtain recovery.


CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
(Dollars in millions)
	Foreign currency translation adjustments		Financial instruments		Pension and PBOP		Total AOCI
	Three months ended March 31, 2025 and 2024
Sempra:
Balance at December 31, 2024	$	(66)	$	15	$	(115)	$	(166)
OCI before reclassifications	—		(31)		(2)		(33)
Amounts reclassified from AOCI	—		(1)		5		4
Net OCI	—		(32)		3		(29)
Balance at March 31, 2025	$	(66)	$	(17)	$	(112)	$	(195)

Balance at December 31, 2023	$	(36)	$	3	$	(117)	$	(150)
OCI before reclassifications	3		45		2		50
Amounts reclassified from AOCI	—		(6)		2		(4)
Net OCI	3		39		4		46
Balance at March 31, 2024	$	(33)	$	42	$	(113)	$	(104)
SDG&E:




Balance at December 31, 2024 and March 31, 2025					$	(12)	$	(12)





Balance at December 31, 2023 and March 31, 2024					$	(8)	$	(8)
SoCalGas:
Balance at December 31, 2024			$	(10)	$	(17)	$	(27)
OCI before reclassifications			—		(2)		(2)
Amounts reclassified from AOCI			—		4		4
Net OCI			—		2		2
Balance at March 31, 2025			$	(10)	$	(15)	$	(25)

Balance at December 31, 2023			$	(11)	$	(12)	$	(23)
Amounts reclassified from AOCI			—		1		1
Net OCI			—		1		1
Balance at March 31, 2024			$	(11)	$	(11)	$	(22)


RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
Details about AOCI components	Amounts reclassified from AOCI				Affected line item on Condensed Consolidated Statements of Operations
	Three months ended March 31,
	2025		2024
Sempra:
Financial instruments:
Interest rate instruments	$	(2)	$	(3)	Interest expense
Interest rate instruments	(5)		(5)		Equity earnings(1)
Foreign exchange instruments	2		(3)		Revenues: Energy-related businesses

Foreign exchange instruments	2		(2)		Equity earnings(1)

Total, before income tax	(3)		(13)
	1		3		Income tax expense
Total, net of income tax	(2)		(10)
	1		4		Earnings attributable to noncontrolling interests
Total, net of income tax and after NCI	$	(1)	$	(6)

Pension and PBOP(2):
Amortization of actuarial loss	$	2	$	2	Other income, net
Amortization of prior service cost	—		1		Other income, net
Settlement charges	4		—		Other income, net
Total, before income tax	6		3
	(1)		(1)		Income tax expense
Total, net of income tax	$	5	$	2

Total reclassifications for the period, net of income tax and after NCI	$	4	$	(4)









SoCalGas:


Pension and PBOP(2):
Amortization of actuarial loss	$	1	$	—	Other income, net
Amortization of prior service cost	—		1		Other income, net
Settlement charges	4		—		Other income, net
Total, before income tax	5		1
	(1)		—		Income tax expense
Total, net of income tax	$	4	$	1

Total reclassifications for the period, net of income tax	$	4	$	1


NET PERIODIC BENEFIT COST
(Dollars in millions)
	Pension				PBOP
	Three months ended March 31,
	2025		2024		2025		2024
Sempra:
Service cost	$	32	$	32	$	3	$	4
Interest cost	45		42		10		9
Expected return on assets	(45)		(45)		(16)		(17)
Amortization of:
Prior service cost (credit)	1		1		(1)		(1)
Actuarial loss (gain)	3		3		(3)		(4)
Settlement charges	4		—		—		—
Net periodic benefit cost (credit)	40		33		(7)		(9)
Regulatory adjustments	(28)		(25)		7		9
Total expense recognized	$	12	$	8	$	—	$	—
SDG&E:
Service cost	$	9	$	10	$	1	$	1
Interest cost	12		11		2		2
Expected return on assets	(12)		(12)		(2)		(3)
Amortization of:

Actuarial loss (gain)	2		2		(1)		—
Net periodic benefit cost	11		11		—		—
Regulatory adjustments	(10)		(10)		—		—
Total expense recognized	$	1	$	1	$	—	$	—
SoCalGas:
Service cost	$	19	$	19	$	3	$	3
Interest cost	28		26		7		7
Expected return on assets	(30)		(30)		(14)		(15)
Amortization of:
Prior service cost (credit)	1		1		(1)		(1)
Actuarial loss (gain)	1		—		(2)		(3)
Settlement charges	4		—		—		—
Net periodic benefit cost (credit)	23		16		(7)		(9)
Regulatory adjustments	(18)		(15)		7		9
Total expense recognized	$	5	$	1	$	—	$	—


OTHER INCOME (EXPENSE), NET
(Dollars in millions)
	Three months ended March 31,
		2025		2024
Sempra:
Allowance for equity funds used during construction		$	41	$	37
Investment gains, net(1)		2		16

Foreign currency transaction gains, net		4		1
Non-service components of net periodic benefit cost		23		28
Interest on regulatory balancing accounts, net		21		18
Sundry, net		—		(1)
Total		$	91	$	99
SDG&E:
Allowance for equity funds used during construction		$	19	$	20
Non-service components of net periodic benefit cost		9		10
Interest on regulatory balancing accounts, net		11		7
Sundry, net		1		(4)
Total		$	40	$	33
SoCalGas:
Allowance for equity funds used during construction		$	18	$	17
Non-service components of net periodic benefit cost		17		21
Interest on regulatory balancing accounts, net		10		11
Sundry, net		(3)		(2)
Total		$	42	$	47


INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
	Three months ended March 31,
		2025			2024
Sempra:
Income tax expense		$	57		$	172

Income before income taxes and equity earnings		$	651		$	705
Equity earnings, before income tax(1)		141			134
Pretax income		$	792		$	839

Effective income tax rate		7		%	21		%
SDG&E:
Income tax expense		$	14		$	40
Income before income taxes		$	295		$	263
Effective income tax rate		5		%	15		%
SoCalGas:
Income tax expense		$	38		$	43
Income before income taxes		$	481		$	402
Effective income tax rate		8		%	11		%

For SDG&E and SoCalGas, the CPUC requires flow-through rate-making treatment for the current income tax benefit or expense arising from certain property-related and other temporary differences between the treatment for financial reporting and income tax, which will reverse over time. Under the regulatory accounting treatment required for these flow-through temporary differences, deferred income tax assets and liabilities are not recorded to deferred income tax expense, but rather to a regulatory asset or liability that will be flowed through to customers in the future, which impacts the ETR. As a result, changes in the relative size of these items compared to pretax income, from period to period, can cause variations in the ETR. Items subject to flow-through treatment include: