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, in the three months ended March 31, 2026 compared to the same period in 2025. We also discuss herein the impact of foreign currency and inflation rates on Sempra’s results of operations.

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, 2026 compared to the same period in 2025, the decrease in earnings of $4 million (1%) was primarily due to:

▪$34 million lower income tax benefits primarily from flow-through items

▪$14 million higher net interest expense

▪$38 million higher CPUC base operating margin, net of operating expenses, including $43 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD

▪$6 million regulatory award approved by the CPUC in 2026

Sempra Texas Utilities

In the three months ended March 31, 2026 compared to the same period in 2025, the increase in earnings of $25 million (17%) was primarily due to higher equity earnings from Oncor Holdings driven by:

▪overall higher revenues primarily attributable to:

◦the establishment of the UTM in June 2025 and the SRP

◦rate updates to reflect increases in invested capital

◦customer growth

◦lower customer consumption primarily attributable to weather

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

▪higher O&M

Sempra Infrastructure

In the three months ended March 31, 2026 compared to the same period in 2025, the increase in earnings of $116 million was primarily due to:

▪$58 million from asset and supply optimization driven by unrealized gains on commodity derivatives in 2026 compared to unrealized losses on commodity derivatives in 2025 due to changes in natural gas prices and higher optimization of transport and storage contracts

▪$36 million lower depreciation expense as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively

▪$35 million net income tax benefit in 2026 as a result of classifying SI Partners and Ecogas as held for sale, comprised of the following:

◦$33 million net income tax benefit to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners

◦$2 million income tax benefit to adjust a Mexican deferred income tax liability on our outside basis difference in Ecogas

▪$12 million favorable impact from foreign currency and inflation effects on our monetary positions in Mexico and associated undesignated derivatives, comprised of a $19 million favorable impact in 2026 compared to a $7 million favorable impact in 2025

▪$11 million higher O&M from changes in provisions for expected credit losses

▪$9 million from revenues in 2025 driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025

Parent and Other

In the three months ended March 31, 2026 compared to the same period in 2025, the increase in losses of $6 million (5%) was primarily due to:

▪$17 million higher net interest expense

▪$14 million unfavorable impact from $4 million net investment losses in 2026 compared to $10 million net investment gains in 2025 on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan

▪$11 million preferred dividends in 2025 prior to the redemption of series C preferred stock

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”), which may be subject to reviews for reasonableness.

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, 2026 compared to the same period in 2025, Sempra’s natural gas revenues decreased by $337 million (14%) driven by Sempra California, which included:

▪$164 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M

▪$155 million decrease in cost of natural gas sold, which we discuss below

▪$29 million lower regulatory revenues associated with the acceleration of self-developed software deductions, which are offset in income tax expense

▪$9 million lower regulatory revenues primarily from higher gas repairs tax benefits

▪$37 million higher CPUC-authorized base revenues

▪$8 million regulatory award approved by the CPUC in 2026

In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s cost of natural gas decreased by $158 million (32%) driven by Sempra California, which included:

▪$95 million lower volumes driven by weather

▪$60 million lower 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 are 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, 2026 compared to the same period in 2025, Sempra’s electric revenues increased by $165 million (16%) driven by Sempra California, which included:

▪$99 million higher revenues from incremental and balanced capital projects, including $59 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD

▪$33 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are offset in income tax expense

▪$21 million increase in cost of electric fuel and purchased power, which we discuss below

▪$14 million higher revenues from transmission operations

▪$9 million higher regulatory revenues associated with refundable programs, which are fully offset in O&M

In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s cost of electric fuel and purchased power increased by $29 million driven by Sempra California, which included:

▪$42 million lower sales to the California ISO due to lower market prices

▪$5 million higher purchased power primarily due to tolling agreements offset by lower utility-owned generation costs

▪$26 million lower purchased power from 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, 2026 compared to the same period in 2025, Sempra’s revenues from energy-related businesses increased by $25 million (7%) primarily due to:

▪$36 million from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:

◦$80 million from $13 million unrealized gains in 2026 compared to $67 million unrealized losses in 2025 on commodity derivatives

◦$41 million driven by lower natural gas prices associated with optimization of transport and storage contracts

▪$19 million revenues in 2025 driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025

In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s cost of sales from energy-related businesses decreased by $43 million (36%) primarily due to:

▪$60 million driven by lower natural gas purchases related to asset and supply optimization

▪$22 million unrealized losses in 2026 on commodity derivatives related to the PA LNG Phase 1 project

(1) Includes eliminations of intercompany activity.

In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s O&M decreased by $101 million (8%) due to:

▪$159 million decrease at Sempra California primarily due to $155 million lower expenses associated with refundable programs, which costs are recovered in revenue

▪ $47 million increase at Sempra Infrastructure due to:

◦$22 million from changes in provisions for expected credit losses

◦$18 million higher purchased services and maintenance expenses

◦$17 million higher development costs and certain non-capitalized expenses from projects under construction

◦$14 million related to 2025 expected credit losses on a credit support agreement with a third-party financial institution and associated transaction fees

▪$11 million increase at Parent and other due to a $16 million change in deferred compensation from $7 million expense in 2026 compared to $9 million benefit in 2025

Depreciation and Amortization

In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s depreciation and amortization decreased by $19 million (3%) to $621 million primarily due to:

▪$73 million lower at Sempra Infrastructure as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively

▪$55 million higher at Sempra California due to higher utility plant rate base

Other Income, Net

In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s other income, net, increased by $9 million (10%) to $100 million primarily due to:

▪$6 million higher non-service components of net periodic benefit cost at Sempra California

▪$4 million higher net gains from impacts associated with foreign exchange instruments and foreign currency transactions at Sempra Infrastructure, including:

◦$9 million gains in 2026 on foreign currency derivatives as a result of fluctuation of the Mexican peso

◦$5 million from a $1 million loss in 2026 compared to $4 million gains in 2025 driven by foreign currency transactional effects

Interest Expense

In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s interest expense decreased by $51 million (12%) to $382 million due to:

▪$87 million at Sempra Infrastructure from:

◦$74 million favorable impact in interest expense from interest rate swaps related to the PA LNG Phase 1 project comprised of:

•$84 million realized gains in 2026 from the termination of interest rate swaps, net of transaction costs

•$10 million higher unrealized losses

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

▪$17 million at Parent and other from higher debt balances from debt issuances and higher borrowings on commercial paper offset by higher capitalization of interest expense in 2026 from projects under construction at Sempra Infrastructure

(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, 2026 compared to the same period in 2025, Sempra’s income tax expense increased by $8 million (14%) primarily due to:

▪higher pretax income

▪lower income tax benefit from lower ITCs from standalone energy storage projects

▪$36 million net income tax benefit in 2026 as a result of classifying SI Partners and Ecogas as held for sale, comprised of the following:

◦$33 million net income tax benefit to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners

◦$3 million income tax benefit to adjust a Mexican deferred tax liability on our outside basis difference in Ecogas

▪$21 million higher income tax benefit attributable to NCI’s share of higher U.S. partnership’s pretax income

▪$8 million from $18 million income tax benefit in 2026 compared to $10 million income tax benefit in 2025 from foreign currency and inflation effects on our monetary positions in Mexico and associated undesignated derivatives

▪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 8 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, 2026 compared to the same period in 2025, Sempra’s equity earnings increased by $42 million (13%) to $367 million primarily due to:

▪ $25 million at Oncor Holdings driven by:

◦overall higher revenues primarily attributable to:

•the establishment of the UTM in June 2025 and the SRP

•rate updates to reflect increases in invested capital

•customer growth

•lower customer consumption primarily attributable to weather

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

◦higher O&M

▪$7 million at Cameron LNG JV primarily from lower interest expense and higher maintenance revenues

▪$7 million at IMG due to lower income tax expense primarily from foreign currency and inflation effects

Earnings Attributable to Noncontrolling Interests

In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s earnings attributable to NCI increased by $105 million to $107 million primarily due to an increase in SI Partners subsidiaries’ net income driven by a favorable impact in interest expense from the termination of interest rate swaps in 2026 related to the PA LNG Phase 1 project and lower depreciation expense as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively.

IMPACT OF FOREIGN CURRENCY AND INFLATION RATES ON RESULTS OF OPERATIONS

Because Ecogas, our natural gas distribution utility in Mexico, uses the Mexican peso as its functional currency, its revenues and expenses are translated into U.S. dollars at average exchange rates for the period when included in Sempra’s results of operations. Year‑over‑year differences in average exchange rates used to translate Ecogas’ income statement activity can therefore create variances in our comparative results of operations. In the three months ended March 31, 2026 compared to the same period in 2025, the impact of changes in average foreign currency translation rates on our earnings was $1 million.

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.

The impact from fluctuations in foreign currency exchange rates and Mexican inflation on our results of operations is summarized in the following table.

At March 31, 2026, SI Partners, which holds our foreign operations, is classified as held for sale. Upon completion of the sale, which we expect to occur in the second or third quarter of 2026, we will deconsolidate SI Partners and account for our remaining 25% interest under the equity method, which we expect will reduce volatility in our results of operations associated with foreign currency exchange rate fluctuations and Mexican inflation.