SAN DIEGO GAS & ELECTRIC CO

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 (Q2) and six months (YTD) ended June 30, 2025 compared to the same periods 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 FD 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 half 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 June 30, 2025 compared to the same period in 2024, the decrease in earnings of $57 million (18%) was primarily due to:

▪$20 million lower 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

▪$17 million higher net interest expense

▪$16 million lower CPUC base operating margin, net of operating expenses including higher depreciation and $9 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

In the six months ended June 30, 2025 compared to the same period in 2024, the increase in earnings of $85 million (9%) was primarily due to:

▪$72 million higher CPUC base operating margin, net of operating expenses including higher depreciation and $22 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

▪$42 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

▪$4 million higher net regulatory interest income

▪$32 million higher net interest expense

Sempra Texas Utilities

In the three months ended June 30, 2025 compared to the same period in 2024, the increase in earnings of $6 million (3%) was primarily due to higher equity earnings from Oncor Holdings driven by:

▪overall higher revenues primarily attributable to:

◦rate updates to reflect increases in invested capital

◦increase due to Oncor’s SRP and the establishment of the UTM

◦customer growth

◦lower customer consumption primarily attributable to weather

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

▪higher O&M

In the six months ended June 30, 2025 compared to the same period in 2024, the decrease in earnings of $31 million (8%) 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

◦customer growth

◦increase due to Oncor’s SRP and the establishment of the UTM

◦higher customer consumption primarily attributable to weather

◦decreases in transmission billing units

Sempra Infrastructure

In the three months ended June 30, 2025 compared to the same period in 2024, the decrease in earnings of $219 million was primarily due to:

▪$251 million unfavorable impact from foreign currency and inflation effects on our monetary positions in Mexico, comprised of an $98 million unfavorable impact in 2025 compared to a $153 million favorable impact in 2024

▪$26 million income tax expense in 2025 due to the recognition of a Mexican deferred tax liability on our outside basis difference in Ecogas as a result of management’s decision to hold the asset for sale

▪$46 million from asset and supply optimization driven by unrealized gains in 2025 compared to unrealized losses in 2024 on commodity derivatives due to changes in natural gas prices and higher LNG diversion fees

▪$9 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

In the six months ended June 30, 2025 compared to the same period in 2024, the decrease in earnings of $204 million (48%) was primarily due to:

▪$202 million unfavorable impact from foreign currency and inflation effects on our monetary positions in Mexico, comprised of an $90 million unfavorable impact in 2025 compared to a $112 million favorable impact in 2024

▪$26 million income tax expense in 2025 due to the recognition of a Mexican deferred tax liability on our outside basis difference in Ecogas as a result of management’s decision to hold the asset for sale

▪$15 million from TdM driven by unrealized losses in 2025 compared to unrealized gains in 2024 on commodity derivatives due to changes in power prices

▪$8 million interest expense from unrealized losses in 2025 on interest rate swaps related to the PA LNG Phase 1 project

▪$4 million from asset and supply optimization driven by lower optimization of transport and storage contracts offset by unrealized gains in 2025 compared to unrealized losses in 2024 on commodity derivatives due to changes in natural gas prices and higher LNG diversion fees

▪$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

▪$16 million lower O&M in 2025 from lower provisions for expected credit losses

▪$10 million interest income from a change in the fair value of the Support Agreement

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

Parent and Other

In the three months ended June 30, 2025 compared to the same period in 2024, the decrease in losses of $18 million (19%) was primarily due to:

▪$16 million higher income tax benefit from the interim period application of an annual forecasted consolidated ETR

▪$15 million higher net investment gains on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan

▪$5 million related to settlement charges from our nonqualified pension plan in 2024

▪$23 million higher net interest expense

In the six months ended June 30, 2025 compared to the same period in 2024, the decrease in losses of $3 million (2%) was primarily due to:

▪$18 million higher income tax benefit from the interim period application of an annual forecasted consolidated ETR

▪$15 million higher net investment gains on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan

▪$5 million related to settlement charges from our nonqualified pension plan in 2024

▪$40 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 June 30, 2025 compared to the same period in 2024, Sempra’s natural gas revenues decreased by $24 million (2%) driven by Sempra California, which included:

▪$97 million lower revenues associated with refundable programs, which are fully offset in O&M

▪$70 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

▪$7 million lower 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

▪$3 million lower revenues associated with impacts resulting from changes in tax laws tracked in the income tax expense memorandum account

▪$129 million higher CPUC-authorized base 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 $8 million lower authorized cost of capital

▪$45 million increase in cost of natural gas sold, which we discuss below

In the three months ended June 30, 2025 compared to the same period in 2024, Sempra’s cost of natural gas increased by $46 million (34%) driven by Sempra California, primarily due to higher average natural gas prices.

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s natural gas revenues increased by $229 million (6%) driven by Sempra California, which included:

▪$308 million higher CPUC-authorized base 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 $21 million lower authorized cost of capital

▪$66 million higher revenues associated with refundable programs, which are fully offset in O&M

▪$45 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

▪$141 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

▪$14 million decrease in cost of natural gas sold, which we discuss below

▪$11 million lower revenues associated with impacts resulting from changes in tax laws tracked in the income tax expense memorandum account

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s cost of natural gas decreased by $15 million (2%) driven by Sempra California, which included:

▪$25 million lower volumes driven by weather

▪$11 million higher average natural gas prices

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 June 30, 2025 compared to the same period in 2024, Sempra’s electric revenues decreased by $113 million (10%) driven by Sempra California, which included:

▪$69 million decrease in cost of electric fuel and purchased power, which we discuss below

▪$28 million lower revenues associated with refundable programs, which are fully offset in O&M

▪$23 million lower regulatory revenues from higher ITCs from standalone energy storage projects, which are offset in income tax (expense) benefit

▪$7 million higher revenues from transmission operations

In the three months ended June 30, 2025 compared to the same period in 2024, Sempra’s cost of electric fuel and purchased power decreased by $65 million (42%) driven by Sempra California, which included:

▪$44 million lower purchased power primarily due to change in excess capacity sales and lower renewable energy costs

▪$24 million lower purchased power from the California ISO due to lower customer demand from departing load now served by CCAs

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s electric revenues decreased by $110 million (5%) driven by Sempra California, which included:

▪$103 million decrease in cost of electric fuel and purchased power, which we discuss below

▪$67 million lower regulatory revenues from higher ITCs from standalone energy storage projects, which are offset in income tax (expense) benefit

▪$11 million lower revenues associated with refundable programs, which are fully offset in O&M

▪$47 million higher CPUC-authorized base 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 $9 million lower authorized cost of capital

▪$14 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

▪$13 million higher revenues from transmission operations

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s cost of electric fuel and purchased power decreased by $102 million (42%) driven by Sempra California, which included:

▪$73 million lower purchased power primarily due to change in excess capacity sales and lower renewable energy costs

▪$44 million lower purchased power from the California ISO due to lower customer demand from departing load now served by CCAs

▪$15 million lower sales to the California ISO due to decreased utility-owned generator availability

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 June 30, 2025 compared to the same period in 2024, Sempra’s revenues from energy-related businesses increased by $126 million (34%) primarily due to:

▪$104 million from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:

◦$60 million from $48 million unrealized gains in 2025 compared to $12 million unrealized losses in 2024 on commodity derivatives

◦$25 million primarily from higher natural gas prices

◦$12 million primarily from higher diversion fees due to higher natural gas prices

▪$18 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

▪$9 million from TdM driven by higher volumes in 2025 from scheduled major maintenance in April 2024

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

▪$11 million from lower power prices from solar generation assets and lower volumes from wind power generation assets

In the three months ended June 30, 2025 compared to the same period in 2024, Sempra’s cost of sales from energy-related businesses increased by $31 million primarily due to $29 million higher natural gas purchases related to asset and supply optimization.

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s revenues from energy-related businesses increased by $32 million (4%) primarily due to:

▪$35 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

▪$14 million higher revenues in 2025 due to the commencement of commercial operations at the Topolobampo marine terminal in June 2024

▪$12 million from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:

◦$23 million from higher natural gas prices offset by lower volumes

◦$15 million lower unrealized losses on commodity derivatives

◦$12 million primarily from higher diversion fees due to higher natural gas prices

◦$38 million from lower optimization of transport and storage contracts primarily due to changes in natural gas prices

▪$11 million from lower power prices from solar generation assets and lower volumes from wind power generation assets

▪$7 million from TdM mainly due to lower volumes

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s cost of sales from energy-related businesses increased by $41 million (25%) primarily due to:

▪$43 million driven by higher natural gas purchases related to asset and supply optimization

▪$7 million at TdM driven by lower volumes offset by higher natural gas prices

(1) Includes eliminations of intercompany activity.

In the three months ended June 30, 2025 compared to the same period in 2024, Sempra’s O&M decreased by $94 million (7%) primarily due to:

▪$106 million decrease at Sempra California due to:

◦$125 million lower expenses associated with refundable programs, which costs are recovered in revenue

◦$19 million higher non-refundable operating costs

▪$9 million increase at Parent and other primarily due to higher deferred compensation expense

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s O&M increased by $37 million (1%) primarily due to:

▪$65 million increase at Sempra California due to:

◦$55 million higher expenses associated with refundable programs, which costs are recovered in revenue

◦$10 million higher non-refundable operating costs

▪$16 million decrease at Parent and other primarily due to lower deferred compensation expense

▪$11 million decrease at Sempra Infrastructure due to:

◦$22 million from lower provisions for expected credit losses

◦$4 million higher development costs and certain non-capitalized expenses from projects under construction

Other Income, Net

In the three months ended June 30, 2025 compared to the same period in 2024, Sempra’s other income, net, increased by $29 million to $59 million primarily due to:

▪$20 million higher investment gains on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan at Parent and other

▪$8 million higher AFUDC equity primarily at Sempra Infrastructure

▪$3 million higher net interest income on regulatory balancing accounts at Sempra California

▪$7 million reduction in regulatory interest from disallowed regulatory recovery of COVID-19 costs at Sempra California

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s other income, net, increased by $21 million (16%) to $150 million primarily due to:

▪$12 million higher AFUDC equity primarily at Sempra Infrastructure

▪$6 million higher net interest income on regulatory balancing accounts at Sempra California

▪$6 million higher investment gains on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan at Parent and other

▪$5 million gains in 2025 from impacts associated with interest rate and foreign exchange instruments and foreign currency transactions driven by other foreign currency transactional effects primarily at Sempra Infrastructure

▪$7 million reduction in regulatory interest from disallowed regulatory recovery of COVID-19 costs at Sempra California

Interest Income

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s interest income increased by $18 million to $48 million primarily due to a $14 million change in the fair value of the Support Agreement at Sempra Infrastructure.

Interest Expense

In the three months ended June 30, 2025 compared to the same period in 2024, Sempra’s interest expense increased by $48 million (15%) to $359 million primarily due to:

▪$34 million at Parent and other from higher debt balances from debt issuances

▪$19 million at Sempra California from higher debt balances from debt issuances

▪$6 million at Sempra Infrastructure primarily from $9 million in unrealized gains in 2025 on interest rate swaps related to the PA LNG Phase 1 project

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s interest expense increased by $176 million (29%) to $792 million primarily due to:

▪$71 million at Sempra Infrastructure primarily from $56 million in unrealized losses in 2025 on interest rate swaps related to the PA LNG Phase 1 project

▪$65 million at Parent and other from higher debt balances from debt issuances offset by lower borrowings on commercial paper and higher capitalization of interest expense on projects under construction at Sempra Infrastructure

▪$39 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 June 30, 2025 compared to the same period in 2024, Sempra had an income tax expense in 2025 compared to an income tax benefit in 2024 primarily due to:

▪$308 million from $122 million income tax expense in 2025 compared to $186 million income tax benefit in 2024 from foreign currency and inflation effects on our monetary positions in Mexico

▪$38 million income tax expense in 2025 due to the recognition of a Mexican deferred tax liability on our outside basis difference in Ecogas as a result of management’s decision to hold the asset for sale

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s income tax expense increased by $187 million primarily due to:

▪$245 million from $112 million income tax expense in 2025 compared to $133 million income tax benefit in 2024 from foreign currency and inflation effects on our monetary positions in Mexico

▪$38 million income tax expense in 2025 due to the recognition of a Mexican deferred tax liability on our outside basis difference in Ecogas as a result of management’s decision to hold the asset for sale

▪higher income tax benefits from flow-through items

▪lower pretax income

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 June 30, 2025 compared to the same period in 2024, Sempra’s equity earnings decreased by $40 million (9%) to $393 million primarily due to:

▪$51 million at IMG due to income tax expense in 2025 compared to an income tax benefit in 2024 primarily from foreign currency and inflation effects

▪$5 million at TAG Norte due to income tax expense in 2025 compared to an income tax benefit in 2024 primarily from foreign currency and inflation effects offset by foreign currency gains in 2025 compared to foreign currency losses in 2024

▪$10 million at Cameron LNG JV primarily from higher maintenance revenues and lower interest expense

▪$7 million at Oncor Holdings driven by:

◦overall higher revenues primarily attributable to:

•rate updates to reflect increases in invested capital

•increase due to Oncor’s SRP and the establishment of the UTM

•customer growth

•lower customer consumption primarily attributable to weather

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

◦higher O&M

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s equity earnings decreased by $63 million (8%) to $718 million primarily due to:

▪$50 million at IMG due to income tax expense in 2025 compared to an income tax benefit in 2024 primarily from foreign currency and inflation effects

▪$30 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

•customer growth

•increase due to Oncor’s SRP and the establishment of the UTM

•higher customer consumption primarily attributable to weather

•decreases in transmission billing units

▪$17 million at Cameron LNG JV primarily from higher maintenance revenues and lower interest expense

Earnings Attributable to Noncontrolling Interests

In the three months ended June 30, 2025 compared to the same period in 2024, Sempra’s earnings attributable to NCI decreased by $100 million to $46 million primarily due to a decrease in SI Partners subsidiaries’ net income driven by foreign currency and inflation effects on our monetary positions in Mexico.

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s earnings attributable to NCI decreased by $167 million to $48 million primarily due to a decrease in SI Partners subsidiaries’ net income driven by foreign currency and inflation effects on our monetary positions in Mexico and 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 and six months ended June 30, 2025 compared to the same periods 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 equity method investments are also impacted by transactional gains and losses, a summary of which is shown in the table below: