SEMPRA

We discuss herein Sempra’s results of operations and significant changes in earnings, revenues and costs by segment, as well as Parent and other, for the three months ended March 31, 2025 compared to the same period in 2024. We also discuss herein the impact of foreign currency and inflation rates on Sempra’s results of operations.

Due to the delay in the issuance of the CPUC’s final decision in the SDG&E and SoCalGas 2024 GRC, Sempra California recorded revenues in the first three quarters of 2024 based on levels authorized for 2023 under the 2019 GRC. In December 2024, the CPUC approved an FD in the 2024 GRC, effective retroactive to January 1, 2024, for which Sempra California recorded the retroactive impacts in the fourth quarter of 2024. Sempra California’s authorized base revenues in the first quarter of 2025 are based on the revenues authorized for the 2024 test year plus the amount authorized for attrition for 2025. We provide additional information on the 2024 GRC FD in Note 4 of the Notes to Condensed Consolidated Financial Statements in this report and in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report.

RESULTS OF OPERATIONS

(Dollars and shares in millions, except per share amounts)

Sempra California

Sempra California’s earnings are comprised of SDG&E and SoCalGas. Because changes in SDG&E’s and SoCalGas’ cost of natural gas and/or electricity are recovered in rates, changes in these costs are offset in the changes in revenues and therefore do not impact earnings, other than potential impacts related to the GCIM for SoCalGas that we describe below. In addition to the changes in cost or market prices, natural gas or electric revenues recorded during a period are impacted by the difference between customer billings and recorded or CPUC-authorized amounts. These differences are required to be balanced over time, resulting in over- and undercollected regulatory balancing accounts. We discuss balancing accounts and their effects further in Note 4 of the Notes to Condensed Consolidated Financial Statements in this report and in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report.

In the three months ended March 31, 2025 compared to the same period in 2024, the increase in earnings of $142 million (24%) was primarily due to:

▪$88 million higher CPUC base operating margin, net of operating expenses and $13 million lower authorized cost of capital. In the first three quarters of 2024, Sempra California recorded CPUC-authorized base revenues based on 2023 authorized levels

▪$62 million higher income tax benefits primarily from flow-through items, including gas repairs tax benefits, which in the first three quarters of 2024 were recorded as a regulatory liability that was released in the fourth quarter of 2024 as a result of the 2024 GRC FD

▪$15 million higher net interest expense

Sempra Texas Utilities

In the three months ended March 31, 2025 compared to the same period in 2024, the decrease in earnings of $37 million (20%) was primarily due to lower equity earnings from Oncor Holdings driven by:

▪higher interest expense and depreciation expense associated with increases in invested capital

▪higher O&M

▪overall higher revenues primarily attributable to:

◦rate updates to reflect increases in invested capital

◦higher customer consumption primarily attributable to weather

◦customer growth

◦decreases in transmission billing units

Sempra Infrastructure

In the three months ended March 31, 2025 compared to the same period in 2024, the increase in earnings of $15 million (11%) was primarily due to:

▪$49 million favorable impact from foreign currency and inflation effects on our monetary positions in Mexico, comprised of an $8 million favorable impact in 2025 compared to a $41 million unfavorable impact in 2024

▪$20 million lower O&M in 2025 from lower provisions for expected credit losses

▪$10 million in interest income from an increase in the fair value of the Support Agreement

▪$50 million from asset and supply optimization driven by lower optimization of transport and storage contracts and higher unrealized losses on commodity derivatives due to changes in natural gas prices

▪$12 million from TdM driven by lower unrealized gains on commodity derivatives due to changes in power prices and lower volumes, including from a scheduled maintenance outage in March 2025

▪$9 million in interest expense from unrealized losses in 2025 on interest rate swaps related to the PA LNG Phase 1 project

Parent and Other

In the three months ended March 31, 2025 compared to the same period in 2024, the increase in losses of $15 million (16%) was primarily due to $17 million higher net interest expense.

The regulatory framework permits SDG&E and SoCalGas to recover certain program expenditures and other costs authorized by the CPUC (referred to as “refundable programs”).

Utilities: Natural Gas Revenues and Cost of Natural Gas

Our utilities revenues include natural gas revenues at Sempra California and Sempra Infrastructure, which includes Ecogas. Intercompany revenues are eliminated in Sempra’s Condensed Consolidated Statements of Operations.

SDG&E and SoCalGas operate under a regulatory framework that permits the cost of natural gas purchased for core customers to be passed through to customers in rates substantially as incurred and without markup. The GCIM provides for SoCalGas to share in the savings and/or costs from buying natural gas for its core customers at prices below or above monthly market-based benchmarks. This mechanism permits full recovery of costs incurred when average purchase costs are within a price range around the benchmark price. Any higher costs incurred or savings realized outside this range are shared between SoCalGas and its core customers. We provide further discussion in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.

(1)Excludes depreciation and amortization, which are presented separately on Sempra’s Condensed Consolidated Statements of Operations.

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s natural gas revenues increased by $253 million (12%) driven by Sempra California, which included:

▪$179 million higher CPUC-authorized revenues, including certain incremental and balanced capital projects that are now in CPUC-authorized base revenues as a result of the 2024 GRC FD offset by $13 million lower authorized cost of capital

▪$163 million higher revenues associated with refundable programs, which are fully offset in O&M

▪$52 million higher regulatory revenues, including gas repairs tax benefits, which are offset in income tax expense. Gas repairs tax benefits in the first three quarters of 2024 were recorded as a regulatory liability that was released in the fourth quarter of 2024 as a result of the 2024 GRC FD

▪$71 million lower revenues from incremental and balanced capital projects, including those that are now in CPUC-authorized base revenues as a result of the 2024 GRC FD and lower authorized cost of capital

▪$59 million decrease in cost of natural gas sold, which we discuss below

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s cost of natural gas decreased by $61 million (11%) driven by Sempra California, which included:

▪$38 million lower average natural gas prices

▪$21 million lower volumes driven by weather

Utilities: Electric Revenues and Cost of Electric Fuel and Purchased Power

Our utilities revenues include electric revenues at Sempra California, substantially all of which is at SDG&E. Intercompany revenues are eliminated in Sempra’s Condensed Consolidated Statements of Operations.

SDG&E operates under a regulatory framework that permits it to recover the actual cost incurred to generate or procure electricity based on annual estimates of the cost of electricity supplied to customers. The differences in cost between estimates and actual are recovered or refunded in subsequent periods through rates.

Utility cost of electric fuel and purchased power includes utility-owned generation, power purchased from third parties, and net power purchases and sales to/from the California ISO.

(1)Excludes depreciation and amortization, which are presented separately on Sempra’s Condensed Consolidated Statements of Operations.

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s electric revenues increased by $3 million driven by Sempra California, which included:

▪$45 million higher CPUC-authorized revenues, including certain incremental and balanced capital projects that are now in CPUC-authorized base revenues as a result of the 2024 GRC FD offset by $5 million lower authorized cost of capital

▪$9 million higher revenues from incremental and balanced capital projects offset by certain projects that are now in CPUC-authorized base revenues as a result of the 2024 GRC FD and lower authorized cost of capital

▪$6 million higher revenues from transmission operations

▪$44 million lower regulatory revenues from higher ITCs from standalone energy storage projects, which are offset in income tax expense

▪$34 million decrease in cost of electric fuel and purchased power, which we discuss below

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s cost of electric fuel and purchased power decreased by $37 million (42%) driven by Sempra California, which included:

▪$26 million lower purchased power primarily due to change in excess capacity sales

▪$20 million lower purchased power from the California ISO due to lower market prices

▪$15 million lower sales to the California ISO due to lower market prices

Energy-Related Businesses: Revenues and Cost of Sales

(1) Includes eliminations of intercompany activity.

(2)Excludes depreciation and amortization, which are presented separately on Sempra’s Condensed Consolidated Statements of Operations.

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s revenues from energy-related businesses decreased by $94 million (20%) primarily due to:

▪$92 million from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:

◦$45 million from lower optimization of transport and storage contracts primarily due to changes in natural gas prices

◦$45 million higher unrealized losses on commodity derivatives

▪$16 million from TdM mainly due to lower volumes, including from a scheduled maintenance outage in March 2025

▪$17 million higher revenues driven by satisfaction of performance obligations related to customer payments received in advance from a contract modification in December 2024 on an LNG storage and regasification agreement

▪$7 million higher revenues in 2025 due to the commencement of commercial operations at the Topolobampo marine terminal in June 2024

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s cost of sales from energy-related businesses increased by $10 million (9%) primarily due to:

▪$15 million driven by higher natural gas purchases related to asset and supply optimization

▪$6 million at TdM driven by lower volumes, including from a scheduled maintenance outage in March 2025

(1) Includes eliminations of intercompany activity.

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s O&M increased by $131 million (11%) primarily due to:

▪$171 million increase at Sempra California due to:

◦$180 million higher expenses associated with refundable programs, which costs are recovered in revenue

◦$9 million lower non-refundable operating costs

▪$25 million decrease at Parent and other primarily due to a $19 million change in deferred compensation from a $9 million benefit in 2025 compared to $10 million expense in 2024

▪$15 million decrease at Sempra Infrastructure due to:

◦$26 million from lower provisions for expected credit losses

◦$7 million higher development costs and certain non-capitalized expenses from projects under construction

Other Income, Net

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s other income, net, decreased by $8 million (8%) to $91 million primarily due to:

▪$14 million lower investment gains on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan at Parent and other

▪$4 million higher AFUDC equity primarily at Sempra Infrastructure

Interest Income

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s interest income increased by $21 million to $34 million primarily due to a $14 million increase in the fair value of the Support Agreement at Sempra Infrastructure.

Interest Expense

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s interest expense increased by $128 million (42%) to $433 million primarily due to:

▪$77 million at Sempra Infrastructure primarily from $65 million in unrealized losses in 2025 on interest rate swaps related to the PA LNG Phase 1 project

▪$31 million at Parent and other from higher debt balances from debt issuances, offset by lower borrowings on commercial paper and capitalization of interest expense on projects under construction at Sempra Infrastructure

▪$20 million at Sempra California from higher debt balances from debt issuances

(1) We discuss how we recognize equity earnings in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report.

We report as part of our pretax results the income or loss attributable to NCI. However, we do not record income taxes for a portion of this income or loss, as some of our entities with NCI are currently treated as partnerships for U.S. income tax purposes, and thus we are only liable for income taxes on the portion of the earnings that are allocated to us. Our pretax income, however, includes 100% of these entities. If our entities with NCI grow, and if we continue to invest in such entities, the impact on our ETR may become more significant.

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s income tax expense decreased by $115 million primarily due to:

▪$63 million from $10 million income tax benefit in 2025 compared to $53 million income tax expense in 2024 from foreign currency and inflation effects on our monetary positions in Mexico

▪higher income tax benefit in 2025 from higher ITCs from standalone energy storage projects

▪higher income tax benefits from flow-through items

We discuss the impact of foreign currency exchange rates and inflation on income taxes below in “Impact of Foreign Currency and Inflation Rates on Results of Operations.” See Note 1 of the Notes to Condensed Consolidated Financial Statements in this report and Notes 1 and 7 of the Notes to Consolidated Financial Statements in the Annual Report for further details about our accounting for income taxes and items subject to flow-through treatment.

Equity Earnings

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s equity earnings decreased by $23 million (7%) to $325 million primarily due to:

▪$37 million at Oncor Holdings driven by:

◦higher interest expense and depreciation expense associated with increases in invested capital

◦higher O&M

◦overall higher revenues primarily attributable to:

•rate updates to reflect increases in invested capital

•higher customer consumption primarily attributable to weather

•customer growth

•decreases in transmission billing units

▪$7 million at Cameron LNG JV primarily from lower interest expense

▪$6 million at TAG Norte from lower income tax expense primarily from foreign currency and inflation effects

Earnings Attributable to Noncontrolling Interests

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s earnings attributable to NCI decreased by $67 million to $2 million primarily due to a decrease in SI Partners subsidiaries’ net income driven by unrealized losses in 2025 from interest rate swaps related to the PA LNG Phase 1 project.

IMPACT OF FOREIGN CURRENCY AND INFLATION RATES ON RESULTS OF OPERATIONS

Because our natural gas distribution utility in Mexico, Ecogas, uses its local currency as its functional currency, its revenues and expenses are translated into U.S. dollars at average exchange rates for the period for consolidation in Sempra’s results of operations. We discuss further the impact of foreign currency and inflation rates on results of operations, including impacts on income taxes and related hedging activity, in “Part II – Item 7. MD&A – Impact of Foreign Currency and Inflation Rates on Results of Operations” in the Annual Report.

Foreign Currency Translation

Any difference in average exchange rates used for the translation of income statement activity from year to year can cause a variance in Sempra’s comparative results of operations. In the three months ended March 31, 2025 compared to the same period in 2024, the change in our earnings as a result of foreign currency translation rates was negligible.

Transactional Impacts

Income statement activities at our foreign operations and their JVs are also impacted by transactional gains and losses, a summary of which is shown in the table below: