SOUTHERN CALIFORNIA GAS CO

For the period ended Dec 31, 2023. Filed Feb 27, 2024.

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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.

FY2023 · Filed Feb 27, 2024

SRE$78.38-0.5%Stored close · as of Nov 10, 2026

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Contents

Reports of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Sempra:

We have audited the accompanying consolidated balance sheets of Sempra and subsidiaries (“Sempra”) as of December 31, 2023 and 2022, the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows for each of the three years in the period ended December 31, 2023, the related notes, and the schedule listed in Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of Sempra as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), Sempra’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2024, expressed an unqualified opinion on Sempra’s internal control over financial reporting.

These financial statements are the responsibility of Sempra’s management. Our responsibility is to express an opinion on Sempra’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to Sempra in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Sempra is subject to rate regulation by regulators and commissions in various jurisdictions (collectively, the “Commissions”) that have jurisdiction with respect to the rates of electric and gas transmission and distribution companies in those jurisdictions. Management has determined it meets the requirements under U.S. GAAP to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures.

We identified the impact of rate regulation as a critical audit matter due to the high degree of subjectivity involved in assessing the impact of regulatory orders on the financial statements. Management’s judgments include assessing the likelihood of (1) the recovery in future rates of incurred costs and (2) potential refunds to customers. Auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.

Our audit procedures related to the application of specialized rules to account for the effects of cost-based rate regulation and the uncertainty of future decisions by the Commissions included the following, among others:

We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in rates of costs deferred as regulatory assets, and (2) a refund or a reduction in rates that should be reported as regulatory liabilities. We tested the effectiveness of management’s controls over the initial recognition of amounts as regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.

We read relevant regulatory orders issued by the Commissions for Sempra and other publicly available information to assess the likelihood of recovery in rates, or of a reduction in rates, based on precedents of the Commissions’ treatment of similar costs under similar circumstances.

We evaluated Sempra’s disclosures related to the impacts of rate regulation.

Hedge Accounting Applied to Interest Rate Swaps – Refer to Notes 7 and 11 of the Notes to Financial Statements

Sempra designates qualifying derivative instruments as cash flow hedges. In March 2023, Port Arthur LNG, LLC (“Port Arthur LNG”), a consolidated subsidiary of Sempra, entered into a seven-year term loan facility agreement (the “Term Loan Facility”) with a syndicate of lenders for an aggregate principal amount of approximately $6.8 billion. Also, in March 2023, Port Arthur LNG entered into floating-to-fixed interest rate swaps to hedge the variability in cash flows related to the interest payments on forecasted loans. Sempra designated the floating-to-fixed interest rate swaps as cash flow hedges.

We identified the application of hedge accounting for the interest rate swaps used to hedge the interest payments on the forecasted loans as a critical audit matter due to the significant judgments made by management regarding the applicability of hedge accounting and the assessment of hedge effectiveness of the interest rate swaps, including the probability of refinancing of the loans under the Term Loan Facility. Auditing these judgments required specialized knowledge of accounting for cash flow hedges and a high degree of auditor judgment and subjectivity when designing and performing audit procedures to evaluate the reasonableness of critical assumptions made by management.

Our audit procedures related to the application of hedge accounting for the interest rates swaps included the following, among others:

We tested the effectiveness of controls over management's evaluation of the interest rate swaps and hedging relationships, including the review of critical assumptions used.

With the assistance of professionals in our firm having expertise in derivative financial instruments, we evaluated the applicability of hedge accounting for the interest rate swaps.

With the assistance of professionals in our firm having fair value expertise, we evaluated the hedge effectiveness by comparing a sample of data points used in management’s effectiveness assessment to independent valuation.

We evaluated management's assessment of their ability to obtain the forecasted issuances of fixed-rate debt underlying the cash flow hedge relationship by considering independent market data and similar past transactions completed by Sempra, performing corroborating inquiries with Sempra's finance and treasury departments, and obtaining a management representation that the forecasted transaction is probable of occurring.

We evaluated the presentation and disclosure of the interest rate swaps in the financial statements.

We have served as Sempra’s auditor since 1935.

To the Shareholder and Board of Directors of San Diego Gas & Electric Company:

We have audited the accompanying balance sheets of San Diego Gas & Electric Company (“SDG&E”) as of December 31, 2023 and 2022, the related statements of operations, comprehensive income (loss), changes in shareholder’s equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of SDG&E as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), SDG&E’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2024, expressed an unqualified opinion on SDG&E’s internal control over financial reporting.

These financial statements are the responsibility of SDG&E’s management. Our responsibility is to express an opinion on SDG&E’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to SDG&E in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

SDG&E is subject to rate regulation by regulators and commissions in various jurisdictions (collectively, the “Commissions”) that have jurisdiction with respect to the rates of electric and gas transmission and distribution companies in those jurisdictions. Management has determined it meets the requirements under U.S. GAAP to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures.

We read relevant regulatory orders issued by the Commissions for SDG&E and other publicly available information to assess the likelihood of recovery in rates, or of a reduction in rates, based on precedents of the Commissions’ treatment of similar costs under similar circumstances.

We evaluated SDG&E’s disclosures related to the impacts of rate regulation.

We have served as SDG&E’s auditor since 1935.

To the Shareholders and Board of Directors of Southern California Gas Company:

We have audited the accompanying balance sheets of Southern California Gas Company (“SoCalGas”) as of December 31, 2023 and 2022, the related statements of operations, comprehensive income (loss), changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of SoCalGas as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), SoCalGas’ internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 27, 2024, expressed an unqualified opinion on SoCalGas’ internal control over financial reporting.

These financial statements are the responsibility of SoCalGas’ management. Our responsibility is to express an opinion on SoCalGas’ financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to SoCalGas in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Critical Audit Matter

SoCalGas is subject to rate regulation by regulators and commissions in various jurisdictions (collectively, the “Commissions”) that have jurisdiction with respect to the rates of gas transmission and distribution companies in those jurisdictions. Management has determined it meets the requirements under U.S. GAAP to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for the economics of rate regulation impacts multiple financial statement line items and disclosures.

We read relevant regulatory orders issued by the Commissions for SoCalGas and other publicly available information to assess the likelihood of recovery in rates, or of a reduction in rates, based on precedents of the Commissions’ treatment of similar costs under similar circumstances.

We evaluated SoCalGas’ disclosures related to the impacts of rate regulation.

We have served as SoCalGas’ auditor since 1937.

SEMPRA
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share amounts; shares in thousands)
	Years ended December 31,
	2023	2022	2021
REVENUES
Utilities:
Natural gas	$9,495	$7,868	$6,333
Electric	4,334	4,783	4,658
Energy-related businesses	2,891	1,788	1,866
Total revenues	16,720	14,439	12,857
EXPENSES AND OTHER INCOME
Utilities:
Cost of natural gas	(3,719)	(2,603)	(1,597)
Cost of electric fuel and purchased power	(375)	(937)	(1,010)
Energy-related businesses cost of sales	(548)	(942)	(611)
Operation and maintenance	(5,459)	(4,746)	(4,341)
Aliso Canyon litigation and regulatory matters	—	(259)	(1,593)
Depreciation and amortization	(2,227)	(2,019)	(1,855)
Franchise fees and other taxes	(677)	(635)	(596)
Gain on sale of assets	1	—	36
Other income, net	131	24	58
Interest income	89	75	69
Interest expense	(1,309)	(1,054)	(1,198)
Income before income taxes and equity earnings	2,627	1,343	219
Income tax expense	(490)	(556)	(99)
Equity earnings	1,481	1,498	1,343
Net income	3,618	2,285	1,463
Earnings attributable to noncontrolling interests	(543)	(146)	(145)
Preferred dividends	(44)	(44)	(63)
Preferred dividends of subsidiary	(1)	(1)	(1)
Earnings attributable to common shares	$3,030	$2,094	$1,254
Basic EPS:
Earnings	$4.81	$3.32	$2.01
Weighted-average common shares outstanding	630,296	630,318	623,510
Diluted EPS:
Earnings	$4.79	$3.31	$2.01
Weighted-average common shares outstanding	632,733	632,757	626,073

SEMPRA
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
	Years ended December 31, 2023, 2022 and 2021
	Sempra shareholders’ equity
	Pretax amount	Income tax(expense)benefit	Net-of-tax amount	Noncontrollinginterests(after tax)	Total
2023:
Net income	$3,565	$(490)	$3,075	$543	$3,618
Other comprehensive income (loss):
Foreign currency translation adjustments	23	—	23	10	33
Financial instruments	57	(18)	39	(38)	1
Pension and other postretirement benefits	(39)	8	(31)	—	(31)
Total other comprehensive income (loss)	41	(10)	31	(28)	3
Comprehensive income	3,606	(500)	3,106	515	3,621
Preferred dividends of subsidiary	(1)	—	(1)	—	(1)
Comprehensive income, afterpreferred dividends of subsidiary	$3,605	$(500)	$3,105	$515	$3,620
2022:
Net income	$2,695	$(556)	$2,139	$146	$2,285
Other comprehensive income (loss):
Foreign currency translation adjustments	11	—	11	4	15
Financial instruments	221	(55)	166	50	216
Pension and other postretirement benefits	3	(6)	(3)	—	(3)
Total other comprehensive income	235	(61)	174	54	228
Comprehensive income	2,930	(617)	2,313	200	2,513
Preferred dividends of subsidiary	(1)	—	(1)	—	(1)
Comprehensive income, afterpreferred dividends of subsidiary	$2,929	$(617)	$2,312	$200	$2,512
2021:
Net income	$1,417	$(99)	$1,318	$145	$1,463
Other comprehensive income (loss):
Foreign currency translation adjustments	(6)	—	(6)	(3)	(9)
Financial instruments	191	(47)	144	14	158
Pension and other postretirement benefits	28	(6)	22	—	22
Total other comprehensive income	213	(53)	160	11	171
Comprehensive income	1,630	(152)	1,478	156	1,634
Preferred dividends of subsidiary	(1)	—	(1)	—	(1)
Comprehensive income, afterpreferred dividends of subsidiary	$1,629	$(152)	$1,477	$156	$1,633

SEMPRA
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
	December 31,
	2023	2022
ASSETS
Current assets:
Cash and cash equivalents	$236	$370
Restricted cash	49	40
Accounts receivable – trade, net	2,151	2,635
Accounts receivable – other, net	561	685
Due from unconsolidated affiliates	31	54
Income taxes receivable	94	113
Inventories	482	403
Prepaid expenses	273	268
Regulatory assets	226	351
Fixed-price contracts and other derivatives	122	803
Greenhouse gas allowances	1,189	141
Other current assets	56	49
Total current assets	5,470	5,912
Other assets:
Restricted cash	104	52
Regulatory assets	3,771	2,588
Greenhouse gas allowances	301	796
Nuclear decommissioning trusts	872	841
Dedicated assets in support of certain benefit plans	549	505
Deferred income taxes	129	135
Right-of-use assets – operating leases	723	655
Investment in Oncor Holdings	14,266	13,665
Other investments	2,244	2,012
Goodwill	1,602	1,602
Other intangible assets	318	344
Wildfire fund	269	303
Other long-term assets	1,603	1,382
Total other assets	26,751	24,880
Property, plant and equipment:
Property, plant and equipment	72,495	63,893
Less accumulated depreciation and amortization	(17,535)	(16,111)
Property, plant and equipment, net	54,960	47,782
Total assets	$87,181	$78,574

SEMPRA
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	December 31,
	2023	2022
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$2,342	$3,352
Accounts payable – trade	2,211	1,994
Accounts payable – other	224	275
Due to unconsolidated affiliates	5	—
Dividends and interest payable	691	621
Accrued compensation and benefits	526	484
Regulatory liabilities	553	504
Current portion of long-term debt and finance leases	975	1,019
Reserve for Aliso Canyon costs	31	129
Greenhouse gas obligations	1,189	141
Other current liabilities	1,343	1,380
Total current liabilities	10,090	9,899
Long-term debt and finance leases	27,759	24,548
Deferred credits and other liabilities:
Due to unconsolidated affiliates	307	301
Regulatory liabilities	3,739	3,341
Greenhouse gas obligations	—	565
Pension and other postretirement benefit plan obligations, net of plan assets	407	410
Deferred income taxes	5,254	4,591
Asset retirement obligations	3,642	3,546
Deferred credits and other	2,329	2,117
Total deferred credits and other liabilities	15,678	14,871
Commitments and contingencies (Note 16)
Equity:
Preferred stock (50,000,000 shares authorized):
Preferred stock, series C(900,000 shares outstanding)	889	889
Common stock (1,125,000,000 shares authorized; 631,431,732 and 628,669,356 sharesoutstanding at December 31, 2023 and 2022, respectively; no par value)	12,204	12,160
Retained earnings	15,732	14,201
Accumulated other comprehensive income (loss)	(150)	(135)
Total Sempra shareholders’ equity	28,675	27,115
Preferred stock of subsidiary	20	20
Other noncontrolling interests	4,959	2,121
Total equity	33,654	29,256
Total liabilities and equity	$87,181	$78,574

SEMPRA
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
	Years ended December 31,
	2023	2022	2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$3,618	$2,285	$1,463
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	2,227	2,019	1,855
Deferred income taxes and investment tax credits	249	392	(78)
Gain on sale of assets	(1)	—	(36)
Equity earnings	(1,481)	(1,498)	(1,343)
Foreign currency transaction (gains) losses, net	(2)	24	18
Share-based compensation expense	80	71	63
Fixed-price contracts and other derivatives	(666)	863	206
Bad debt expense	458	122	55
Other	(11)	32	115
Net change in working capital components:
Accounts receivable	168	(976)	(599)
Due to/from unconsolidated affiliates, net	26	(31)	(1)
Income taxes receivable/payable, net	142	(29)	(38)
Inventories	(80)	(17)	(87)
Other current assets	11	(1,608)	(220)
Accounts payable	(270)	430	263
Regulatory balancing accounts, net	260	36	249
Reserve for Aliso Canyon costs	(98)	(1,851)	1,532
Other current liabilities	1,270	228	(105)
Insurance receivable for Aliso Canyon costs	—	360	85
Distributions from investments	912	854	941
Changes in other noncurrent assets and liabilities, net	(594)	(564)	(496)
Net cash provided by operating activities	6,218	1,142	3,842
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(8,397)	(5,357)	(5,015)
Expenditures for investments and acquisitions	(382)	(376)	(633)
Proceeds from sale of assets	3	—	38
Distributions from investments	—	—	366
Purchases of nuclear decommissioning and other trust assets	(610)	(700)	(961)
Proceeds from sales of nuclear decommissioning and other trust assets	661	762	961
Advances to unconsolidated affiliates	—	—	(8)
Repayments of advances to unconsolidated affiliates	—	626	38
Disbursement for note receivable	—	—	(305)
Other	9	6	11
Net cash used in investing activities	$(8,716)	$(5,039)	$(5,508)

SEMPRA
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Dollars in millions)
	Years ended December 31,
	2023	2022	2021
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	$(1,483)	$(1,430)	$(1,331)
Preferred dividends paid	(44)	(44)	(99)
Issuances of common stock, net	145	4	5
Repurchases of common stock	(32)	(478)	(339)
Issuances of debt (maturities greater than 90 days)	7,669	9,984	3,773
Payments on debt (maturities greater than 90 days) and finance leases	(6,294)	(4,510)	(5,489)
Increase (decrease) in short-term debt, net	552	(1,266)	1,913
Advances from unconsolidated affiliates	31	28	40
Proceeds from sales of noncontrolling interests, net	1,219	1,732	3,206
Purchases of noncontrolling interests	—	—	(224)
Distributions to noncontrolling interests	(730)	(237)	—
Contributions from noncontrolling interests	1,570	31	4
Settlement of cross-currency swaps	(99)	—	—
Other	(85)	(35)	(199)
Net cash provided by financing activities	2,419	3,779	1,260
Effect of exchange rate changes on cash, cash equivalents and restricted cash	6	(1)	2
Decrease in cash, cash equivalents and restricted cash	(73)	(119)	(404)
Cash, cash equivalents and restricted cash, January 1	462	581	985
Cash, cash equivalents and restricted cash, December 31	$389	$462	$581
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	$1,172	$1,014	$1,163
Income tax payments, net of refunds	197	284	230
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Increase in Cameron LNG JV investment for guarantee	$—	$—	$22
Repayment of advances from unconsolidated affiliate in lieu of distribution	36	32	45
Accrued capital expenditures	1,052	590	591
Increase in finance lease obligations for investment in PP&E	57	57	43
Derecognized PP&E for net investment in sales-type lease	—	—	44
Increase in ARO for investment in PP&E	33	91	153
Issuance of common stock in exchange for NCI and related AOCI	—	—	1,373
Conversion of mandatory convertible preferred stock	—	—	2,258
Preferred dividends declared but not paid	11	11	11
Common dividends declared but not paid	376	360	349
Contributions from NCI	200	—	—

SEMPRA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Dollars in millions)
	Years ended December 31, 2023, 2022 and 2021
Preferred stock · Commonstock · Retainedearnings · Accumulatedothercomprehensiveincome (loss) · Semprashareholders'equity · Non-controllinginterests · Totalequity
Balance at December 31, 2020	$3,147		$7,053		$13,673		$(500)		$23,373			$1,561		$24,934
Net income				1,318			1,318		145			1,463
Other comprehensive income					160		160		11			171
Share-based compensation expense		63					63				63
Dividends declared:
Series B preferred stock ($3.38/share)				(19)			(19)				(19)
Series C preferred stock ($48.75/share)				(44)			(44)				(44)
Common stock ($2.20/share)				(1,379)			(1,379)				(1,379)
Preferred dividends of subsidiary				(1)			(1)				(1)
Conversion of series A preferred stock	(1,693)		1,693					—				—
Conversion of series B preferred stock	(565)		565					—				—
Issuances of common stock		5					5				5
Repurchases of common stock		(339)					(339)				(339)
Noncontrolling interest activities:
Contributions								4		4
Purchases		1,459				(44)		1,415		(1,567)			(152)
Sales		1,363				66		1,429		1,283			2,712
Deconsolidation								1		1
Balance at December 31, 2021	889		11,862		13,548		(318)		25,981			1,438		27,419
Net income				2,139			2,139		146			2,285
Other comprehensive income					174		174		54			228
Share-based compensation expense		71					71				71
Dividends declared:
Series C preferred stock ($48.75/share)				(44)			(44)				(44)
Common stock ($2.29/share)				(1,441)			(1,441)				(1,441)
Preferred dividends of subsidiary				(1)			(1)				(1)
Issuances of common stock		4					4				4
Repurchases of common stock		(478)					(478)				(478)
Noncontrolling interest activities:
Contributions								31		31
Distributions								(237)		(237)
Sale		701				9		710		709			1,419
Balance at December 31, 2022	$889		$12,160		$14,201		$(135)		$27,115			$2,141		$29,256

SEMPRA
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
(Dollars in millions)
	Years ended December 31, 2023, 2022 and 2021
Preferred stock · Commonstock · Retainedearnings · Accumulatedothercomprehensiveincome (loss) · Semprashareholders'equity · Non-controllinginterests · Totalequity
Balance at December 31, 2022	$889		$12,160		$14,201		$(135)		$27,115			$2,141		$29,256
Net income				3,075			3,075		543			3,618
Other comprehensive income (loss)					31		31		(28)			3
Share-based compensation expense		80					80				80
Dividends declared:
Series C preferred stock ($48.75/share)				(44)			(44)				(44)
Common stock ($2.38/share)				(1,499)			(1,499)				(1,499)
Preferred dividends of subsidiary				(1)			(1)				(1)
Issuances of common stock		144					144				144
Repurchases of common stock		(32)					(32)				(32)
Noncontrolling interest activities:
Contributions		(145)					(145)		1,770			1,625
Distributions								(730)		(730)
Sales		(3)				(46)		(49)		1,283			1,234
Balance at December 31, 2023	$889		$12,204		$15,732		$(150)		$28,675			$4,979		$33,654

SAN DIEGO GAS & ELECTRIC COMPANY
STATEMENTS OF OPERATIONS
(Dollars in millions)
	Years ended December 31,
	2023	2022	2021
Operating revenues:
Electric	$4,349	$4,795	$4,666
Natural gas	1,248	1,043	838
Total operating revenues	5,597	5,838	5,504
Operating expenses:
Cost of electric fuel and purchased power	445	994	1,069
Cost of natural gas	532	363	242
Operation and maintenance	1,846	1,677	1,587
Depreciation and amortization	1,098	982	889
Franchise fees and other taxes	381	373	350
Total operating expenses	4,302	4,389	4,137
Operating income	1,295	1,449	1,367
Other income, net	97	92	64
Interest income	15	5	1
Interest expense	(497)	(449)	(412)
Income before income taxes	910	1,097	1,020
Income tax benefit (expense)	26	(182)	(201)
Net income/Earnings attributable to common shares	$936	$915	$819

SAN DIEGO GAS & ELECTRIC COMPANY
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
	Years ended December 31, 2023, 2022 and 2021
	Pretaxamount	Income taxbenefit (expense)	Net-of-taxamount
2023:
Net income	$910	$26	$936
Other comprehensive income (loss):
Pension and other postretirement benefits	(2)	1	(1)
Total other comprehensive loss	(2)	1	(1)
Comprehensive income	$908	$27	$935
2022:
Net income	$1,097	$(182)	$915
Other comprehensive income (loss):
Pension and other postretirement benefits	4	(1)	3
Total other comprehensive income	4	(1)	3
Comprehensive income	$1,101	$(183)	$918
2021:
Net income/Comprehensive income	$1,020	$(201)	$819

SAN DIEGO GAS & ELECTRIC COMPANY
BALANCE SHEETS
(Dollars in millions)
	December 31,
	2023	2022
ASSETS
Current assets:
Cash and cash equivalents	$50	$7
Accounts receivable – trade, net	870	799
Accounts receivable – other, net	141	110
Income taxes receivable, net	236	—
Inventories	153	134
Prepaid expenses	165	179
Regulatory assets	19	247
Fixed-price contracts and other derivatives	25	113
Greenhouse gas allowances	158	22
Other current assets	6	19
Total current assets	1,823	1,630
Other assets:
Regulatory assets	1,968	1,219
Greenhouse gas allowances	202	196
Nuclear decommissioning trusts	872	841
Right-of-use assets – operating leases	368	281
Wildfire fund	269	303
Other long-term assets	134	146
Total other assets	3,813	2,986
Property, plant and equipment:
Property, plant and equipment	30,918	28,574
Less accumulated depreciation and amortization	(7,369)	(6,768)
Property, plant and equipment, net	23,549	21,806
Total assets	$29,185	$26,422

SAN DIEGO GAS & ELECTRIC COMPANY
BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	December 31,
	2023	2022
LIABILITIES AND SHAREHOLDER’S EQUITY
Current liabilities:
Short-term debt	$—	$205
Accounts payable	808	744
Due to unconsolidated affiliates	73	135
Interest payable	81	63
Accrued compensation and benefits	145	140
Accrued franchise fees	112	120
Regulatory liabilities	447	110
Current portion of long-term debt and finance leases	441	489
Greenhouse gas obligations	158	22
Asset retirement obligations	116	98
Other current liabilities	216	193
Total current liabilities	2,597	2,319
Long-term debt and finance leases	9,453	8,497
Deferred credits and other liabilities:
Regulatory liabilities	2,534	2,298
Greenhouse gas obligations	—	81
Pension obligation, net of plan assets	79	42
Deferred income taxes	2,873	2,540
Asset retirement obligations	778	789
Deferred credits and other	969	789
Total deferred credits and other liabilities	7,233	6,539
Commitments and contingencies (Note 16)
Shareholder’s equity:
Preferred stock (45,000,000 shares authorized; none issued)	—	—
Common stock (255,000,000 shares authorized; 116,583,358 shares outstanding;no par value)	1,660	1,660
Retained earnings	8,250	7,414
Accumulated other comprehensive income (loss)	(8)	(7)
Total shareholder’s equity	9,902	9,067
Total liabilities and shareholder’s equity	$29,185	$26,422

SAN DIEGO GAS & ELECTRIC COMPANY
STATEMENTS OF CASH FLOWS
(Dollars in millions)
	Years ended December 31,
	2023	2022	2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$936	$915	$819
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,098	982	889
Deferred income taxes and investment tax credits	135	93	153
Bad debt expense	112	46	16
Other	(35)	(34)	(30)
Net change in working capital components:
Accounts receivable	(213)	(163)	(105)
Due to/from unconsolidated affiliates, net	(62)	38	33
Income taxes receivable/payable, net	(236)	9	(20)
Inventories	(19)	(11)	(19)
Other current assets	(17)	(80)	—
Accounts payable	31	153	7
Regulatory balancing accounts, net	571	(10)	(57)
Other current liabilities	129	62	(92)
Changes in noncurrent assets and liabilities, net	(494)	(271)	(218)
Net cash provided by operating activities	1,936	1,729	1,376
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(2,540)	(2,473)	(2,220)
Purchases of nuclear decommissioning trust assets	(532)	(586)	(961)
Proceeds from sales of nuclear decommissioning trust assets	592	639	961
Other	8	8	7
Net cash used in investing activities	(2,472)	(2,412)	(2,213)
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	(100)	(100)	(300)
Issuances of debt (maturities greater than 90 days)	1,389	1,395	1,120
Payments on debt (maturities greater than 90 days) and finance leases	(490)	(425)	(613)
(Decrease) increase in short-term debt, net	(205)	(196)	401
Debt issuance costs	(13)	(9)	(8)
Other	(2)	—	—
Net cash provided by financing activities	579	665	600
Increase (decrease) in cash and cash equivalents	43	(18)	(237)
Cash and cash equivalents, January 1	7	25	262
Cash and cash equivalents, December 31	$50	$7	$25
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	$472	$431	$402
Income tax payments, net of refunds	76	79	67
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures	$264	$231	$228
Increase in finance lease obligations for investment in PP&E	17	16	24
Increase in ARO for investment in PP&E	29	15	14

SAN DIEGO GAS & ELECTRIC COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
(Dollars in millions)
	Years ended December 31, 2023, 2022 and 2021
Commonstock · Retainedearnings · Accumulatedothercomprehensiveincome (loss) · Totalshareholder'sequity
Balance at December 31, 2020	$1,660		$6,080		$(10)		$7,730
Net income		819				819
Common stock dividends declared ($2.57/share)		(300)				(300)
Balance at December 31, 2021	1,660		6,599		(10)		8,249
Net income		915				915
Other comprehensive income				3		3
Common stock dividends declared ($0.86/share)		(100)				(100)
Balance at December 31, 2022	1,660		7,414		(7)		9,067
Net income		936				936
Other comprehensive loss				(1)		(1)
Common stock dividends declared ($0.86/share)		(100)				(100)
Balance at December 31, 2023	$1,660		$8,250		$(8)		$9,902

SOUTHERN CALIFORNIA GAS COMPANY
STATEMENTS OF OPERATIONS
(Dollars in millions)
	Years ended December 31,
	2023	2022	2021
Operating revenues	$8,289	$6,840	$5,515
Operating expenses:
Cost of natural gas	3,264	2,233	1,369
Operation and maintenance	2,821	2,402	2,180
Aliso Canyon litigation and regulatory matters	—	259	1,593
Depreciation and amortization	839	761	716
Franchise fees and other taxes	278	247	223
Total operating expenses	7,202	5,902	6,081
Operating income (loss)	1,087	938	(566)
Other expense, net	(4)	(8)	(14)
Interest income	9	6	1
Interest expense	(285)	(198)	(157)
Income (loss) before income taxes	807	738	(736)
Income tax benefit (expense)	5	(138)	310
Net income (loss)	812	600	(426)
Preferred dividends	(1)	(1)	(1)
Earnings (losses) attributable to common shares	$811	$599	$(427)

SOUTHERN CALIFORNIA GAS COMPANY
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
	Years ended December 31, 2023, 2022 and 2021
	Pretaxamount	Income tax benefit (expense)	Net-of-taxamount
2023:
Net income	$807	$5	$812
Other comprehensive income (loss):
Financial instruments	1	—	1
Total other comprehensive income	1	—	1
Comprehensive income	$808	$5	$813
2022:
Net income	$738	$(138)	$600
Other comprehensive income (loss):
Financial instruments	1	—	1
Pension and other postretirement benefits	8	(2)	6
Total other comprehensive income	9	(2)	7
Comprehensive income	$747	$(140)	$607
2021:
Net loss/Comprehensive loss	$(736)	$310	$(426)

SOUTHERN CALIFORNIA GAS COMPANY
BALANCE SHEETS
(Dollars in millions)
	December 31,
	2023	2022
ASSETS
Current assets:
Cash and cash equivalents	$2	$21
Accounts receivable – trade, net	985	1,295
Accounts receivable – other, net	102	293
Due from unconsolidated affiliates	22	77
Inventories	277	159
Regulatory assets	204	104
Greenhouse gas allowances	950	111
Other current assets	100	69
Total current assets	2,642	2,129
Other assets:
Regulatory assets	1,715	1,291
Greenhouse gas allowances	62	551
Right-of-use assets – operating leases	29	42
Other long-term assets	645	583
Total other assets	2,451	2,467
Property, plant and equipment:
Property, plant and equipment	27,025	25,058
Less accumulated depreciation and amortization	(7,852)	(7,308)
Property, plant and equipment, net	19,173	17,750
Total assets	$24,266	$22,346

SOUTHERN CALIFORNIA GAS COMPANY
BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	December 31,
	2023	2022
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$946	$900
Accounts payable – trade	811	953
Accounts payable – other	184	176
Due to unconsolidated affiliates	38	36
Accrued compensation and benefits	213	209
Regulatory liabilities	103	394
Current portion of long-term debt and finance leases	523	318
Reserve for Aliso Canyon costs	31	129
Greenhouse gas obligations	950	111
Asset retirement obligations	73	68
Other current liabilities	535	429
Total current liabilities	4,407	3,723
Long-term debt and finance leases	6,288	5,780
Deferred credits and other liabilities:
Regulatory liabilities	1,202	1,043
Greenhouse gas obligations	—	443
Pension obligation, net of plan assets	231	277
Deferred income taxes	1,586	1,306
Asset retirement obligations	2,774	2,675
Deferred credits and other	368	401
Total deferred credits and other liabilities	6,161	6,145
Commitments and contingencies (Note 16)
Shareholders’ equity:
Preferred stock (11,000,000 shares authorized; 862,043 shares outstanding)	22	22
Common stock (100,000,000 shares authorized; 91,300,000 shares outstanding;no par value)	2,316	2,316
Retained earnings	5,095	4,384
Accumulated other comprehensive income (loss)	(23)	(24)
Total shareholders’ equity	7,410	6,698
Total liabilities and shareholders’ equity	$24,266	$22,346

SOUTHERN CALIFORNIA GAS COMPANY
STATEMENTS OF CASH FLOWS
(Dollars in millions)
	Years ended December 31,
	2023	2022	2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$812	$600	$(426)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	839	761	716
Deferred income taxes and investment tax credits	12	146	(494)
Bad debt expense	294	70	26
Other	(12)	(12)	(7)
Net change in working capital components:
Accounts receivable	207	(512)	(383)
Due to/from unconsolidated affiliates, net	57	(28)	(25)
Income taxes receivable/payable, net	(8)	23	(43)
Inventories	(118)	13	(18)
Other current assets	(1,053)	(139)	(21)
Accounts payable	(179)	191	181
Regulatory balancing accounts, net	(311)	46	306
Reserve for Aliso Canyon costs	(98)	(1,851)	1,532
Other current liabilities	1,047	185	(92)
Insurance receivable for Aliso Canyon costs	—	360	85
Changes in other noncurrent assets and liabilities, net	(100)	(307)	(304)
Net cash provided by (used in) operating activities	1,389	(454)	1,033
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(2,020)	(1,993)	(1,984)
Net cash used in investing activities	(2,020)	(1,993)	(1,984)
CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	(100)	—	(75)
Preferred dividends paid	(1)	(1)	(1)
Equity contributions from Sempra	—	650	800
Issuances of debt (maturities greater than 90 days)	997	2,094	—
Payments on debt (maturities greater than 90 days) and finance leases	(1,120)	(15)	(12)
Increase (decrease) in short-term debt, net	846	(285)	272
Debt issuance costs	(10)	(12)	—
Net cash provided by financing activities	612	2,431	984
(Decrease) increase in cash and cash equivalents	(19)	(16)	33
Cash and cash equivalents, January 1	21	37	4
Cash and cash equivalents, December 31	$2	$21	$37
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	$279	$173	$151
Income tax payments (refunds), net	6	(31)	227
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures	$290	$245	$222
Increase in finance lease obligations for investment in PP&E	40	41	19
Increase in ARO for investment in PP&E	1	63	125

SOUTHERN CALIFORNIA GAS COMPANY
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Dollars in millions)
	Years ended December 31, 2023, 2022 and 2021
Preferredstock · Commonstock · Retainedearnings · Accumulatedothercomprehensiveincome (loss) · Totalshareholders’equity
Balance at December 31, 2020	$22		$866		$4,287	$(31)	$5,144
Net loss				(426)		(426)
Dividends declared:
Preferred stock ($1.50/share)				(1)		(1)
Common stock ($0.82/share)				(75)		(75)
Equity contribution from Sempra		800				800
Balance at December 31, 2021	22		1,666		3,785	(31)	5,442
Net income				600		600
Other comprehensive income					7	7
Dividends declared:
Preferred stock ($1.50/share)				(1)		(1)
Equity contributions from Sempra		650				650
Balance at December 31, 2022	22		2,316		4,384	(24)	6,698
Net income				812		812
Other comprehensive income					1	1
Dividends declared:
Preferred stock ($1.50/share)				(1)		(1)
Common stock ($1.10/share)				(100)		(100)
Balance at December 31, 2023	$22		$2,316		$5,095	$(23)	$7,410

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