Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS


SEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share amounts; shares in thousands)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
	(unaudited)
REVENUES
Utilities:
Natural gas	$	1,704	$	1,278	$	4,024	$	3,055
Electric	1,189		1,156		2,306		2,224
Energy-related businesses	654		307		1,037		721
Total revenues	3,547		2,741		7,367		6,000

EXPENSES AND OTHER INCOME
Utilities:
Cost of natural gas	(528)		(261)		(1,330)		(610)
Cost of electric fuel and purchased power	(251)		(284)		(456)		(516)
Energy-related businesses cost of sales	(289)		(119)		(424)		(228)
Operation and maintenance	(1,162)		(1,024)		(2,248)		(2,025)
Aliso Canyon litigation and regulatory matters	(45)		—		(137)		—
Depreciation and amortization	(501)		(463)		(994)		(905)
Franchise fees and other taxes	(150)		(138)		(312)		(291)


Other (expense) income, net	(1)		72		37		107
Interest income	15		15		40		34
Interest expense	(271)		(258)		(514)		(517)
Income before income taxes and equity earnings	364		281		1,029		1,049
Income tax expense	(80)		(139)		(414)		(297)
Equity earnings	375		313		701		631
Net income	659		455		1,316		1,383
Earnings attributable to noncontrolling interests	(88)		(10)		(122)		(43)
Preferred dividends	(11)		(20)		(22)		(41)
Preferred dividends of subsidiary	(1)		(1)		(1)		(1)
Earnings attributable to common shares	$	559	$	424	$	1,171	$	1,298

Basic EPS:
Earnings	$	1.78	$	1.38	$	3.71	$	4.27
Weighted-average common shares outstanding	314,845		307,800		315,595		304,372

Diluted EPS:
Earnings	$	1.77	$	1.37	$	3.70	$	4.24
Weighted-average common shares outstanding	315,867		308,607		316,647		306,284

See Notes to Condensed Consolidated Financial Statements.


SEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
	Sempra Energy shareholders’ equity
	Pretax amount		Income tax (expense) benefit		Net-of-tax amount		Noncontrolling interests (after tax)		Total
	(unaudited)
	Three months ended June 30, 2022 and 2021
2022:
Net income	$	651	$	(80)	$	571	$	88	$	659
Other comprehensive income (loss):
Foreign currency translation adjustments	2		—		2		—		2
Financial instruments	65		(17)		48		15		63
Pension and other postretirement benefits	4		(1)		3		—		3
Total other comprehensive income	71		(18)		53		15		68
Comprehensive income	722		(98)		624		103		727
Preferred dividends of subsidiary	(1)		—		(1)		—		(1)
Comprehensive income, after preferred dividends of subsidiary	$	721	$	(98)	$	623	$	103	$	726
2021:
Net income	$	584	$	(139)	$	445	$	10	$	455
Other comprehensive income (loss):
Foreign currency translation adjustments	5		—		5		1		6
Financial instruments	(14)		2		(12)		(6)		(18)
Pension and other postretirement benefits	1		(1)		—		—		—
Total other comprehensive loss	(8)		1		(7)		(5)		(12)
Comprehensive income	576		(138)		438		5		443
Preferred dividends of subsidiary	(1)		—		(1)		—		(1)
Comprehensive income, after preferred dividends of subsidiary	$	575	$	(138)	$	437	$	5	$	442

	Six months ended June 30, 2022 and 2021
2022:
Net income	$	1,608	$	(414)	$	1,194	$	122	$	1,316
Other comprehensive income (loss):
Foreign currency translation adjustments	5		—		5		1		6
Financial instruments	167		(41)		126		35		161
Pension and other postretirement benefits	13		(2)		11		—		11
Total other comprehensive income	185		(43)		142		36		178
Comprehensive income	1,793		(457)		1,336		158		1,494
Preferred dividends of subsidiary	(1)		—		(1)		—		(1)
Comprehensive income, after preferred dividends of subsidiary	$	1,792	$	(457)	$	1,335	$	158	$	1,493
2021:
Net income	$	1,637	$	(297)	$	1,340	$	43	$	1,383
Other comprehensive income (loss):

Financial instruments	107		(27)		80		9		89
Pension and other postretirement benefits	18		(4)		14		—		14
Total other comprehensive income	125		(31)		94		9		103
Comprehensive income	1,762		(328)		1,434		52		1,486
Preferred dividends of subsidiary	(1)		—		(1)		—		(1)
Comprehensive income, after preferred dividends of subsidiary	$	1,761	$	(328)	$	1,433	$	52	$	1,485

See Notes to Condensed Consolidated Financial Statements.


SEMPRA ENERGY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
	June 30,		December 31,
	2022		2021(1)
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,931	$	559
Restricted cash	103		19
Accounts receivable – trade, net	1,839		2,071
Accounts receivable – other, net	323		398
Due from unconsolidated affiliates	646		23
Income taxes receivable	73		79
Inventories	377		389
Prepaid expenses	173		260
Regulatory assets	145		271
Greenhouse gas allowances	98		97
Other current assets	194		209
Total current assets	5,902		4,375

Other assets:
Restricted cash	59		3
Due from unconsolidated affiliates	—		637
Regulatory assets	2,465		2,011
Insurance receivable for Aliso Canyon costs	344		360
Greenhouse gas allowances	643		422
Nuclear decommissioning trusts	863		1,012
Dedicated assets in support of certain benefit plans	498		567
Deferred income taxes	138		151
Right-of-use assets – operating leases	580		594
Investment in Oncor Holdings	13,301		12,947
Other investments	1,792		1,525
Goodwill	1,602		1,602
Other intangible assets	357		370
Wildfire fund	317		331
Other long-term assets	1,319		1,244
Total other assets	24,278		23,776

Property, plant and equipment:
Property, plant and equipment	60,855		58,940
Less accumulated depreciation and amortization	(15,453)		(15,046)
Property, plant and equipment, net	45,402		43,894
Total assets	$	75,582	$	72,045

(1) Derived from audited financial statements.

See Notes to Condensed Consolidated Financial Statements.


SEMPRA ENERGY
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	June 30,		December 31,
	2022		2021(1)
	(unaudited)
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	955	$	3,471
Accounts payable – trade	1,604		1,671
Accounts payable – other	215		178
Dividends and interest payable	609		563
Accrued compensation and benefits	334		479
Regulatory liabilities	307		359
Current portion of long-term debt and finance leases	303		106
Reserve for Aliso Canyon costs	2,003		1,980
Greenhouse gas obligations	98		97
Other current liabilities	1,122		1,131
Total current liabilities	7,550		10,035

Long-term debt and finance leases	24,661		21,068

Deferred credits and other liabilities:
Due to unconsolidated affiliates	282		287
Regulatory liabilities	3,295		3,402

Greenhouse gas obligations	392		225
Pension and other postretirement benefit plan obligations, net of plan assets	678		687
Deferred income taxes	4,212		3,477
Asset retirement obligations	3,467		3,375
Deferred credits and other	1,992		2,070
Total deferred credits and other liabilities	14,318		13,523

Commitments and contingencies (Note 11)

Equity:
Preferred stock (50 million shares authorized):
Preferred stock, series C (0.9 million shares outstanding)	889		889
Common stock (750 million shares authorized; 314 million and 317 million shares outstanding at June 30, 2022 and December 31, 2021, respectively; no par value)	12,121		11,862
Retained earnings	13,998		13,548
Accumulated other comprehensive income (loss)	(167)		(318)
Total Sempra Energy shareholders’ equity	26,841		25,981
Preferred stock of subsidiary	20		20
Other noncontrolling interests	2,192		1,418
Total equity	29,053		27,419
Total liabilities and equity	$	75,582	$	72,045

(1) Derived from audited financial statements.

See Notes to Condensed Consolidated Financial Statements.


SEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
	Six months ended June 30,
	2022		2021
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	1,316	$	1,383
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	994		905
Deferred income taxes and investment tax credits	379		193
Equity earnings	(701)		(631)
Foreign currency transaction losses (gains), net	22		(7)
Share-based compensation expense	32		34
Fixed-price contracts and other derivatives	122		199
Other	101		54
Net change in working capital components	(3)		(63)
Insurance receivable for Aliso Canyon costs	16		31
Distributions from investments	403		532
Changes in other noncurrent assets and liabilities, net	(317)		(375)
Net cash provided by operating activities	2,364		2,255

CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(2,361)		(2,424)
Expenditures for investments and acquisitions	(181)		(165)
Purchases of nuclear decommissioning trust assets	(397)		(542)
Proceeds from sales of nuclear decommissioning trust assets	397		542
Advances to unconsolidated affiliates	—		(8)
Distributions from investments	—		4
Other	7		5
Net cash used in investing activities	(2,535)		(2,588)

CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	(711)		(634)
Preferred dividends paid	(22)		(68)
Issuances of common stock	3		5
Repurchases of common stock	(476)		(38)
Issuances of debt (maturities greater than 90 days)	4,818		285
Payments on debt (maturities greater than 90 days) and finance leases	(1,543)		(1,432)
(Decrease) increase in short-term debt, net	(2,011)		1,584
Advances from unconsolidated affiliates	18		20
Proceeds from sale of noncontrolling interests, net	1,732		7
Purchases of noncontrolling interests	—		(10)
Distributions to noncontrolling interests	(106)		—
Contributions from noncontrolling interests	13		—
Other	(30)		(1)
Net cash provided by (used in) financing activities	1,685		(282)

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(2)		1

Increase (decrease) in cash, cash equivalents and restricted cash	1,512		(614)
Cash, cash equivalents and restricted cash, January 1	581		985
Cash, cash equivalents and restricted cash, June 30	$	2,093	$	371

See Notes to Condensed Consolidated Financial Statements.


SEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Dollars in millions)
	Six months ended June 30,
	2022		2021
	(unaudited)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	$	466	$	488
Income tax payments, net of refunds	233		73

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	32		—
Accrued capital expenditures	476		526
Increase in finance lease obligations for investment in PP&E	22		24
Increase in ARO for investment in PP&E	55		8
Issuance of common stock in exchange for NCI and related AOCI	—		1,373
Common dividends declared but not paid	359		347
Conversion of mandatory convertible preferred stock	—		1,693
Preferred dividends declared but not paid	11		20

See Notes to Condensed Consolidated Financial Statements.


SEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Dollars in millions)
	Preferred stock		Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Sempra Energy shareholders' equity		Non- controlling interests		Total equity
	(unaudited)
	Three months ended June 30, 2022
Balance at March 31, 2022	$	889	$	11,656	$	13,798	$	(229)	$	26,114	$	1,446	$	27,560

Net income					571				571		88		659
Other comprehensive income							53		53		15		68

Share-based compensation expense			15						15				15
Dividends declared:


Series C preferred stock ($12.19/share)					(11)				(11)				(11)
Common stock ($1.14/share)					(359)				(359)				(359)
Preferred dividends of subsidiary					(1)				(1)				(1)



Repurchases of common stock			(250)						(250)				(250)
Noncontrolling interest activities:
Contributions											7		7
Distributions											(53)		(53)

Sale			700				9		709		709		1,418


Balance at June 30, 2022	$	889	$	12,121	$	13,998	$	(167)	$	26,841	$	2,212	$	29,053

	Three months ended June 30, 2021
Balance at March 31, 2021	$	1,454	$	8,730	$	14,214	$	(399)	$	23,999	$	1,609	$	25,608

Net income					445				445		10		455
Other comprehensive loss							(7)		(7)		(5)		(12)

Share-based compensation expense			17						17				17
Dividends declared:
Series B preferred stock ($1.69/share)					(9)				(9)				(9)
Series C preferred stock ($12.19/share)					(11)				(11)				(11)
Common stock ($1.10/share)					(347)				(347)				(347)
Preferred dividends of subsidiary					(1)				(1)				(1)
Issuances of common stock			5						5				5
Repurchases of common stock			(1)						(1)				(1)
Noncontrolling interest activities:


Purchases			1,399				(38)		1,361		(1,373)		(12)



Balance at June 30, 2021	$	1,454	$	10,150	$	14,291	$	(444)	$	25,451	$	241	$	25,692

See Notes to Condensed Consolidated Financial Statements.


SEMPRA ENERGY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Dollars in millions)
	Preferred stock		Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Sempra Energy shareholders' equity		Non- controlling interests		Total equity
	(unaudited)
	Six months ended June 30, 2022
Balance at December 31, 2021	$	889	$	11,862	$	13,548	$	(318)	$	25,981	$	1,438	$	27,419

Net income					1,194				1,194		122		1,316
Other comprehensive income							142		142		36		178

Share-based compensation expense			32						32				32
Dividends declared:
Series C preferred stock ($24.38/share)					(22)				(22)				(22)
Common stock ($2.29/share)					(721)				(721)				(721)
Preferred dividends of subsidiary					(1)				(1)				(1)
Issuances of common stock			3						3				3
Repurchases of common stock			(476)						(476)				(476)
Noncontrolling interest activities:
Contributions											13		13
Distributions											(106)		(106)

Sale			700				9		709		709		1,418


Balance at June 30, 2022	$	889	$	12,121	$	13,998	$	(167)	$	26,841	$	2,212	$	29,053

	Six months ended June 30, 2021
Balance at December 31, 2020	$	3,147	$	7,053	$	13,673	$	(500)	$	23,373	$	1,561	$	24,934

Net income					1,340				1,340		43		1,383
Other comprehensive income							94		94		9		103

Share-based compensation expense			34						34				34
Dividends declared:
Series B preferred stock ($3.38/share)					(19)				(19)				(19)
Series C preferred stock ($24.38/share)					(22)				(22)				(22)
Common stock ($2.20/share)					(680)				(680)				(680)
Preferred dividends of subsidiary					(1)				(1)				(1)
Conversion of series A preferred stock	(1,693)		1,693						—				—

Issuances of common stock			5						5				5
Repurchases of common stock			(38)						(38)				(38)
Noncontrolling interest activities:


Purchases			1,399				(38)		1,361		(1,373)		(12)
Sale			4						4		1		5


Balance at June 30, 2021	$	1,454	$	10,150	$	14,291	$	(444)	$	25,451	$	241	$	25,692

See Notes to Condensed Consolidated Financial Statements.


SAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED STATEMENTS OF OPERATIONS
(Dollars in millions)
		Three months ended June 30,				Six months ended June 30,
		2022		2021		2022		2021
	(unaudited)
Operating revenues
Electric		$	1,192	$	1,158	$	2,312	$	2,227
Natural gas		207		160		532		428
Total operating revenues		1,399		1,318		2,844		2,655
Operating expenses
Cost of electric fuel and purchased power		269		304		490		545
Cost of natural gas		69		40		195		122
Operation and maintenance		420		373		817		763
Depreciation and amortization		244		220		483		433
Franchise fees and other taxes		88		83		180		171
Total operating expenses		1,090		1,020		2,165		2,034
Operating income		309		298		679		621
Other income, net		22		22		56		57
Interest income		1		—		1		1
Interest expense		(114)		(101)		(220)		(203)
Income before income taxes		218		219		516		476
Income tax expense		(42)		(33)		(106)		(78)
Net income/Earnings attributable to common shares		$	176	$	186	$	410	$	398

See Notes to Condensed Financial Statements.


SAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
	Pretax amount		Income tax expense		Net-of-tax amount
	(unaudited)
	Three months ended June 30, 2022 and 2021
2022:




Net income/Comprehensive income	$	218	$	(42)	$	176
2021:





Net income/Comprehensive income	$	219	$	(33)	$	186

	Six months ended June 30, 2022 and 2021
2022:




Net income/Comprehensive income	$	516	$	(106)	$	410
2021:





Net income/Comprehensive income	$	476	$	(78)	$	398

See Notes to Condensed Financial Statements.


SAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
(Dollars in millions)
	June 30,		December 31,
	2022		2021(1)
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	533	$	25
Accounts receivable – trade, net	685		715
Accounts receivable – other, net	72		78
Income taxes receivable, net	11		9
Inventories	124		123
Prepaid expenses	115		174
Regulatory assets	134		231
Greenhouse gas allowances	13		13
Other current assets	65		63
Total current assets	1,752		1,431

Other assets:
Regulatory assets	947		786
Greenhouse gas allowances	127		111
Nuclear decommissioning trusts	863		1,012
Right-of-use assets – operating leases	198		185
Wildfire fund	317		331
Other long-term assets	130		154
Total other assets	2,582		2,579

Property, plant and equipment:
Property, plant and equipment	27,201		26,456
Less accumulated depreciation and amortization	(6,460)		(6,408)
Property, plant and equipment, net	20,741		20,048
Total assets	$	25,075	$	24,058

(1) Derived from audited financial statements.

See Notes to Condensed Financial Statements.


SAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	June 30,		December 31,
	2022		2021(1)
	(unaudited)
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	—	$	776
Accounts payable	635		588
Due to unconsolidated affiliates	68		97
Interest payable	61		50
Accrued compensation and benefits	87		148
Regulatory liabilities	13		14
Current portion of long-term debt and finance leases	35		49
Customer deposits	27		30
Greenhouse gas obligations	13		13
Asset retirement obligations	94		86
Other current liabilities	281		260
Total current liabilities	1,314		2,111

Long-term debt and finance leases	8,958		7,581

Deferred credits and other liabilities:
Regulatory liabilities	2,213		2,302
Greenhouse gas obligations	57		31
Pension obligation, net of plan assets	24		25
Deferred income taxes	2,368		2,275
Asset retirement obligations	791		804
Deferred credits and other	691		680
Total deferred credits and other liabilities	6,144		6,117

Commitments and contingencies (Note 11)

Shareholder's equity:
Preferred stock (45 million shares authorized; none issued)	—		—
Common stock (255 million shares authorized; 117 million shares outstanding; no par value)	1,660		1,660
Retained earnings	7,009		6,599
Accumulated other comprehensive income (loss)	(10)		(10)
Total shareholder’s equity	8,659		8,249
Total liabilities and shareholder's equity	$	25,075	$	24,058

(1) Derived from audited financial statements.

See Notes to Condensed Financial Statements.


SAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in millions)
	Six months ended June 30,
	2022		2021
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	410	$	398
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	483		433
Deferred income taxes and investment tax credits	41		41
Other	19		(13)
Net change in working capital components	165		(136)
Changes in noncurrent assets and liabilities, net	(105)		(113)
Net cash provided by operating activities	1,013		610

CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(1,090)		(1,072)
Purchases of nuclear decommissioning trust assets	(397)		(542)
Proceeds from sales of nuclear decommissioning trust assets	397		542
Other	8		7
Net cash used in investing activities	(1,082)		(1,065)

CASH FLOWS FROM FINANCING ACTIVITIES
Issuances of debt (maturities greater than 90 days)	1,395		—
Payments on debt (maturities greater than 90 days) and finance leases	(408)		(231)
(Decrease) increase in short-term debt, net	(401)		437
Debt issuance costs	(9)		—
Net cash provided by financing activities	577		206

Increase (decrease) in cash and cash equivalents	508		(249)
Cash and cash equivalents, January 1	25		262
Cash and cash equivalents, June 30	$	533	$	13

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	$	206	$	201
Income tax payments, net of refunds	68		58

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures	$	186	$	192
Increase in ARO for investment in PP&E	1		18
Increase in finance lease obligations for investment in PP&E	9		13

See Notes to Condensed Financial Statements.


SAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDER’S EQUITY
(Dollars in millions)
	Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Total shareholder's equity
	(unaudited)
	Three months ended June 30, 2022
Balance at March 31, 2022	$	1,660	$	6,833	$	(10)	$	8,483

Net income			176				176




Balance at June 30, 2022	$	1,660	$	7,009	$	(10)	$	8,659

	Three months ended June 30, 2021
Balance at March 31, 2021	$	1,660	$	6,292	$	(10)	$	7,942

Net income			186				186




Balance at June 30, 2021	$	1,660	$	6,478	$	(10)	$	8,128

	Six months ended June 30, 2022
Balance at December 31, 2021	$	1,660	$	6,599	$	(10)	$	8,249

Net income			410				410




Balance at June 30, 2022	$	1,660	$	7,009	$	(10)	$	8,659

	Six months ended June 30, 2021
Balance at December 31, 2020	$	1,660	$	6,080	$	(10)	$	7,730

Net income			398				398



Balance at June 30, 2021	$	1,660	$	6,478	$	(10)	$	8,128

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF OPERATIONS
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
	(unaudited)

Operating revenues	$	1,501	$	1,124	$	3,494	$	2,632
Operating expenses
Cost of natural gas	459		223		1,136		496
Operation and maintenance	605		525		1,156		1,028
Aliso Canyon litigation and regulatory matters	45		—		137		—
Depreciation and amortization	188		180		375		353
Franchise fees and other taxes	57		51		119		109
Total operating expenses	1,354		979		2,923		1,986
Operating income	147		145		571		646
Other income (expense), net	4		(2)		38		37
Interest income	1		—		1		—
Interest expense	(45)		(40)		(85)		(79)
Income before income taxes	107		103		525		604
Income tax expense	(19)		(8)		(103)		(102)
Net income	88		95		422		502
Preferred dividends	(1)		(1)		(1)		(1)
Earnings attributable to common shares	$	87	$	94	$	421	$	501

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
	Pretax amount		Income tax expense		Net-of-tax amount
	(unaudited)
	Three months ended June 30, 2022 and 2021
2022:
Net income	$	107	$	(19)	$	88
Other comprehensive income (loss):
Financial instruments	1		—		1

Total other comprehensive income	1		—		1
Comprehensive income	$	108	$	(19)	$	89
2021:
Net income	$	103	$	(8)	$	95
Other comprehensive income (loss):

Pension and other postretirement benefits	1		—		1
Total other comprehensive income	1		—		1
Comprehensive income	$	104	$	(8)	$	96

	Six months ended June 30, 2022 and 2021
2022:
Net income	$	525	$	(103)	$	422
Other comprehensive income (loss):
Financial instruments	1		—		1
Pension and other postretirement benefits	1		—		1
Total other comprehensive income	2		—		2
Comprehensive income	$	527	$	(103)	$	424
2021:
Net income	$	604	$	(102)	$	502
Other comprehensive income (loss):

Pension and other postretirement benefits	1		—		1
Total other comprehensive income	1		—		1
Comprehensive income	$	605	$	(102)	$	503

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED BALANCE SHEETS
(Dollars in millions)
	June 30,		December 31,
	2022		2021(1)
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	416	$	37
Accounts receivable – trade, net	722		1,084
Accounts receivable – other, net	48		58
Due from unconsolidated affiliates	31		49
Income taxes receivable, net	23		23
Inventories	169		172
Regulatory assets	11		40
Greenhouse gas allowances	76		75
Other current assets	32		61
Total current assets	1,528		1,599

Other assets:
Regulatory assets	1,441		1,148
Insurance receivable for Aliso Canyon costs	344		360
Greenhouse gas allowances	488		290
Right-of-use assets – operating leases	49		57
Other long-term assets	616		627
Total other assets	2,938		2,482

Property, plant and equipment:
Property, plant and equipment	23,975		23,104
Less accumulated depreciation and amortization	(7,087)		(6,861)
Property, plant and equipment, net	16,888		16,243
Total assets	$	21,354	$	20,324

(1) Derived from audited financial statements.

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	June 30,		December 31,
	2022		2021(1)
	(unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	—	$	385
Accounts payable – trade	647		775
Accounts payable – other	152		142
Due to unconsolidated affiliates	36		36
Accrued compensation and benefits	159		202
Regulatory liabilities	294		345
Current portion of long-term debt and finance leases	13		11
Customer deposits	15		13
Reserve for Aliso Canyon costs	2,003		1,980
Greenhouse gas obligations	76		75
Asset retirement obligations	76		77
Other current liabilities	230		271
Total current liabilities	3,701		4,312

Long-term debt and finance leases	5,471		4,773

Deferred credits and other liabilities:
Regulatory liabilities	1,082		1,100

Greenhouse gas obligations	303		174
Pension obligation, net of plan assets	545		551
Deferred income taxes	1,212		1,039
Asset retirement obligations	2,609		2,505
Deferred credits and other	416		428
Total deferred credits and other liabilities	6,167		5,797

Commitments and contingencies (Note 11)

Shareholders’ equity:
Preferred stock (11 million shares authorized; 1 million shares outstanding)	22		22
Common stock (100 million shares authorized; 91 million shares outstanding; no par value)	1,816		1,666
Retained earnings	4,206		3,785
Accumulated other comprehensive income (loss)	(29)		(31)
Total shareholders’ equity	6,015		5,442
Total liabilities and shareholders’ equity	$	21,354	$	20,324

(1) Derived from audited financial statements.

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in millions)
	Six months ended June 30,
	2022		2021
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	422	$	502
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	375		353
Deferred income taxes and investment tax credits	103		18
Other	36		42
Net change in working capital components	225		297
Insurance receivable for Aliso Canyon costs	16		31
Changes in other noncurrent assets and liabilities, net	(316)		(280)
Net cash provided by operating activities	861		963

CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(931)		(936)
Net cash used in investing activities	(931)		(936)

CASH FLOWS FROM FINANCING ACTIVITIES
Preferred dividends paid	(1)		(1)
Common dividends paid	—		(50)
Equity contribution from Sempra Energy	150		—
Issuances of debt (maturities greater than 90 days)	697		—
Payments on finance leases	(6)		(6)
(Decrease) increase in short-term debt, net	(385)		30
Debt issuance costs	(6)		—
Net cash provided by (used in) financing activities	449		(27)

Increase in cash and cash equivalents	379		—
Cash and cash equivalents, January 1	37		4
Cash and cash equivalents, June 30	$	416	$	4

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	$	75	$	76
Income tax payments, net of refunds	—		82

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures	$	199	$	156
Increase (decrease) in ARO for investment in PP&E	54		(10)
Increase in finance lease obligations for investment in PP&E	13		11
Common dividends declared but not paid	—		25

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Dollars in millions)
	Preferred stock		Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Total shareholders’ equity
	(unaudited)
	Three months ended June 30, 2022
Balance at March 31, 2022	$	22	$	1,666	$	4,119	$	(30)	$	5,777

Net income					88				88
Other comprehensive income							1		1

Dividends declared:
Preferred stock ($0.37/share)					(1)				(1)

Equity contribution from Sempra Energy			150						150
Balance at June 30, 2022	$	22	$	1,816	$	4,206	$	(29)	$	6,015

	Three months ended June 30, 2021
Balance at March 31, 2021	$	22	$	866	$	4,644	$	(31)	$	5,501

Net income					95				95
Other comprehensive income							1		1

Dividends declared:
Preferred stock ($0.37/share)					(1)				(1)
Common stock ($0.27/share)					(25)				(25)
Balance at June 30, 2021	$	22	$	866	$	4,713	$	(30)	$	5,571

	Six months ended June 30, 2022
Balance at December 31, 2021	$	22	$	1,666	$	3,785	$	(31)	$	5,442

Net income					422				422
Other comprehensive income							2		2

Dividends declared:
Preferred stock ($0.75/share)					(1)				(1)

Equity contribution from Sempra Energy			150						150
Balance at June 30, 2022	$	22	$	1,816	$	4,206	$	(29)	$	6,015

	Six months ended June 30, 2021
Balance at December 31, 2020	$	22	$	866	$	4,287	$	(31)	$	5,144

Net income					502				502
Other comprehensive income							1		1

Dividends declared:
Preferred stock ($0.75/share)					(1)				(1)
Common stock ($0.82/share)					(75)				(75)
Balance at June 30, 2021	$	22	$	866	$	4,713	$	(30)	$	5,571

See Notes to Condensed Financial Statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. GENERAL INFORMATION AND OTHER FINANCIAL DATA

PRINCIPLES OF CONSOLIDATION

Sempra

Sempra’s Condensed Consolidated Financial Statements include the accounts of Sempra Energy, a California-based holding company doing business as Sempra, and its consolidated entities. In the fourth quarter of 2021, we formed Sempra Infrastructure, which resulted in a change to our reportable segments. Historical segment disclosures have been restated to conform with the current presentation of our four separate reportable segments, which we discuss in Note 12. All references in these Notes to our reportable segments are not intended to refer to any legal entity with the same or similar name.

SDG&E

SDG&E’s common stock is wholly owned by Enova Corporation, which is a wholly owned subsidiary of Sempra.

SoCalGas

SoCalGas’ common stock is wholly owned by Pacific Enterprises, which is a wholly owned subsidiary of Sempra.

BASIS OF PRESENTATION

This is a combined report of Sempra, SDG&E and SoCalGas. We provide separate information for SDG&E and SoCalGas as required. We have eliminated intercompany accounts and transactions within the consolidated financial statements of each reporting entity.

We have prepared our Condensed Consolidated Financial Statements in conformity with U.S. GAAP and in accordance with the interim period reporting requirements of Form 10-Q and applicable rules of the SEC. The financial statements reflect all adjustments that are necessary for a fair presentation of the results for the interim periods. These adjustments are only of a normal, recurring nature. Results of operations for interim periods are not necessarily indicative of results for the entire year or for any other period. We evaluated events and transactions that occurred after June 30, 2022 through the date the financial statements were issued and, in the opinion of management, the accompanying statements reflect all adjustments necessary for a fair presentation.

All December 31, 2021 balance sheet information in the Condensed Consolidated Financial Statements has been derived from our audited 2021 Consolidated Financial Statements in the Annual Report. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to the interim period reporting provisions of U.S. GAAP and the SEC.

We describe our significant accounting policies in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report and the impact of the adoption of new accounting standards on those policies in Note 2 below. We follow the same accounting policies for interim period reporting purposes.

The information contained in this report should be read in conjunction with the Annual Report.

Regulated Operations

SDG&E, SoCalGas and Sempra Infrastructure’s natural gas distribution utility, Ecogas, prepare their financial statements in accordance with the provisions of U.S. GAAP governing rate-regulated operations. We discuss revenue recognition and the effects of regulation at our utilities in Notes 3 and 4 below and in Notes 1, 3 and 4 of the Notes to Consolidated Financial Statements in the Annual Report.

Our Sempra Texas Utilities segment is comprised of our equity method investments in holding companies that own interests in regulated electric transmission and distribution utilities in Texas.

Our Sempra Infrastructure segment includes the operating companies of our subsidiary, IEnova, as well as certain holding companies and risk management activity. Certain business activities at IEnova are regulated by the CRE and meet the regulatory accounting requirements of U.S. GAAP. Pipeline projects currently under construction at IEnova that meet the regulatory accounting requirements of U.S. GAAP record the impact of AFUDC related to equity. We discuss AFUDC below and in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

Cash equivalents are highly liquid investments with original maturities of three months or less at the date of purchase.

Restricted cash includes:

▪for Sempra Infrastructure, funds fully drawn against Gazprom’s letters of credit, including draws associated with its LNG storage and regasification agreement that we discuss in Note 11, and funds denominated in Mexican pesos to pay for rights-of-way, license fees, permits, topographic surveys and other costs pursuant to trust and debt agreements related to pipeline projects

▪for Parent and other, funds held in a delisting trust for the purpose of purchasing the remaining publicly owned IEnova shares

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on Sempra’s Condensed Consolidated Balance Sheets to the sum of such amounts reported on Sempra’s Condensed Consolidated Statements of Cash Flows.


RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
	June 30, 2022		December 31, 2021
Cash and cash equivalents	$	1,931	$	559
Restricted cash, current	103		19
Restricted cash, noncurrent	59		3
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows	$	2,093	$	581

CREDIT LOSSES

We are exposed to credit losses from financial assets measured at amortized cost, including trade and other accounts receivable, amounts due from unconsolidated affiliates, our net investment in sales-type leases and a note receivable. We are also exposed to credit losses from off-balance sheet arrangements through Sempra’s guarantee related to Cameron LNG JV’s SDSRA, which we discuss in Note 6.

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

In 2021, SDG&E and SoCalGas applied, on behalf of their customers, for financial assistance from the California Department of Community Services and Development under the California Arrearage Payment Program, which provided funds of $63 million and $79 million for SDG&E and SoCalGas, respectively. In the first quarter of 2022, SDG&E and SoCalGas received and applied the amounts directly to eligible customer accounts to reduce past due balances. In June 2022, AB 205 was approved establishing, among other things, the 2022 California Arrearage Payment Program. SDG&E and SoCalGas expect to apply for funding from this program on behalf of their residential customers with past due balances and, if approved, receive such funding in the first quarter of 2023.

We provide below allowances and changes in allowances for credit losses for trade receivables and other receivables. SDG&E and SoCalGas record changes in the allowances for credit losses related to Accounts Receivable – Trade in regulatory accounts.


RECEIVABLES – ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	2022		2021
Sempra:
Allowances for credit losses at January 1	$	136	$	138
Provisions for expected credit losses	77		66
Write-offs	(36)		(12)
Allowances for credit losses at June 30	$	177	$	192
SDG&E:
Allowances for credit losses at January 1	$	66	$	69
Provisions for expected credit losses	37		13
Write-offs	(18)		(7)

Allowances for credit losses at June 30	$	85	$	75
SoCalGas:
Allowances for credit losses at January 1	$	69	$	68
Provisions for expected credit losses	37		52
Write-offs	(18)		(5)
Allowances for credit losses at June 30	$	88	$	115

Allowances for credit losses related to accounts receivable are included in the Condensed Consolidated Balance Sheets as follows:


ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	June 30,		December 31,
	2022		2021
Sempra:
Accounts receivable – trade, net	$	142	$	94
Accounts receivable – other, net	33		39
Other long-term assets	2		3
Total allowances for credit losses	$	177	$	136
SDG&E:
Accounts receivable – trade, net	$	62	$	42
Accounts receivable – other, net	22		22
Other long-term assets	1		2
Total allowances for credit losses	$	85	$	66
SoCalGas:
Accounts receivable – trade, net	$	76	$	51
Accounts receivable – other, net	11		17
Other long-term assets	1		1
Total allowances for credit losses	$	88	$	69

As we discuss below in “Transactions with Affiliates,” we have loans due from unconsolidated affiliates with varying tenors, interest rates and currencies. On a quarterly basis, we evaluate credit losses and record allowances for expected credit losses on amounts due from unconsolidated affiliates, if necessary, based on credit quality indicators such as external credit ratings, published default rate studies, the maturity date of the instrument and past delinquencies. However, we do not record allowances for expected credit losses related to accrued interest receivable on loans due from unconsolidated affiliates because we write off such amounts, if any, through a reversal of interest income in the period we determine such amounts are uncollectible. In the absence of external credit ratings, we may utilize an internally developed credit rating based on our analysis of a counterparty’s financial statements to determine our expected credit losses. At December 31, 2021, $1 million of expected credit losses are included in noncurrent Due From Unconsolidated Affiliates on Sempra’s Condensed Consolidated Balance Sheet.

As we discuss below in “Note Receivable,” we have an interest-bearing promissory note due from KKR. On a quarterly basis, we evaluate credit losses and record allowances for expected credit losses on this note receivable, including compounded interest and unamortized transaction costs, based on published default rate studies, the maturity date of the instrument and an internally developed credit rating. At June 30, 2022 and December 31, 2021, $7 million and $8 million, respectively, of expected credit losses are included in Other Long-Term Assets on Sempra’s Condensed Consolidated Balance Sheets.

As we discuss below in Note 6, Sempra provided a guarantee for the benefit of Cameron LNG JV related to amounts withdrawn

by Sempra Infrastructure from the SDSRA. On a quarterly basis, we evaluate credit losses and record liabilities for expected credit losses on this off-balance sheet arrangement based on external credit ratings, published default rate studies and the maturity date of the arrangement. At June 30, 2022 and December 31, 2021, $6 million and $7 million, respectively, of expected credit losses are included in Deferred Credits and Other on Sempra’s Condensed Consolidated Balance Sheets.

INVENTORIES

The components of inventories are as follows:


INVENTORY BALANCES
(Dollars in millions)
	Sempra				SDG&E				SoCalGas
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Natural gas	$	138	$	164	$	—	$	—	$	102	$	114
LNG	31		27		—		—		—		—
Materials and supplies	208		198		124		123		67		58
Total	$	377	$	389	$	124	$	123	$	169	$	172

NOTE RECEIVABLE

In October 2021, Sempra loaned $300 million to KKR in exchange for an interest-bearing promissory note that is due in full no later than October 2029 and bears compound interest at 5% per annum, which may be paid quarterly or added to the outstanding principal at the election of KKR. At June 30, 2022 and December 31, 2021, Other Long-Term Assets includes $308 million and $297 million, respectively, of outstanding principal, compounded interest and unamortized transaction costs, net of allowance for credit losses, and at December 31, 2021, Other Current Assets includes $3 million of interest receivable on Sempra’s Condensed Consolidated Balance Sheets.

CAPITALIZED FINANCING COSTS

Capitalized financing costs include capitalized interest costs and AFUDC related to both debt and equity financing of construction projects. We capitalize interest costs incurred to finance capital projects and interest at equity method investments that have not commenced planned principal operations.

The table below summarizes capitalized financing costs, comprised of AFUDC and capitalized interest.


CAPITALIZED FINANCING COSTS
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Sempra	$	60	$	55	$	117	$	114
SDG&E	26		28		54		58
SoCalGas	17		15		35		31

VARIABLE INTEREST ENTITIES

We consolidate a VIE if we are the primary beneficiary of the VIE. Our determination of whether we are the primary beneficiary is based on qualitative and quantitative analyses, which assess:

▪the purpose and design of the VIE;

▪the nature of the VIE’s risks and the risks we absorb;

▪the power to direct activities that most significantly impact the economic performance of the VIE; and

▪the obligation to absorb losses or the right to receive benefits that could be significant to the VIE.

We will continue to evaluate our VIEs for any changes that may impact our determination of whether an entity is a VIE and if we are the primary beneficiary.

SDG&E

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

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

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

SDG&E determined that none of its PPAs and tolling agreements resulted in SDG&E being the primary beneficiary of a VIE at June 30, 2022 and December 31, 2021. PPAs and tolling agreements that relate to SDG&E’s involvement with VIEs are primarily accounted for as finance leases. The carrying amounts of the assets and liabilities under these contracts are included in PP&E, net, and finance lease liabilities with balances of $1,206 million and $1,217 million at June 30, 2022 and December 31, 2021, respectively. SDG&E recovers costs incurred on PPAs, tolling agreements and other variable interests through CPUC-approved long-term power procurement plans. SDG&E has no residual interest in the respective entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 16 of the Notes to Consolidated Financial Statements in the Annual Report. As a result, SDG&E’s potential exposure to loss from its variable interest in these VIEs is not significant.

Sempra Texas Utilities

Oncor Holdings is a VIE. Sempra is not the primary beneficiary of this VIE because of the structural and operational ring-fencing and governance measures in place that prevent us from having the power to direct the significant activities of Oncor Holdings. As a result, we do not consolidate Oncor Holdings and instead account for our ownership interest as an equity method investment. See Note 6 of the Notes to Consolidated Financial Statements in the Annual Report for additional information about our equity method investment in Oncor Holdings and restrictions on our ability to influence its activities. Our maximum exposure to loss, which fluctuates over time, from our interest in Oncor Holdings does not exceed the carrying value of our investment, which was $13,301 million at June 30, 2022 and $12,947 million at December 31, 2021.

Sempra Infrastructure

Cameron LNG JV

Cameron LNG JV is a VIE principally due to contractual provisions that transfer certain risks to customers. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of Cameron LNG JV, including LNG production and operation and maintenance activities at the liquefaction facility. Therefore, we account for our investment in Cameron LNG JV under the equity method. The carrying value of our investment, including amounts recognized in AOCI related to interest-rate cash flow hedges at Cameron LNG JV, was $723 million at June 30, 2022 and $514 million at December 31, 2021. Our maximum exposure to loss, which fluctuates over time, includes the carrying value of our investment and our obligation under the SDSRA, which we discuss in Note 6.

CFIN

As we discuss in Note 6, in July 2020, Sempra entered into a Support Agreement for the benefit of CFIN, which is a VIE. Sempra is not the primary beneficiary of this VIE because we do not have the power to direct the most significant activities of CFIN, including modification, prepayment, and refinance decisions related to the financing arrangement with external lenders and Cameron LNG JV’s four project owners as well as the ability to determine and enforce remedies in the event of default. The conditional obligations of the Support Agreement represent a variable interest that we measure at fair value on a recurring basis (see Note 9). Sempra’s maximum exposure to loss under the terms of the Support Agreement is $979 million.

ECA LNG Phase 1

ECA LNG Phase 1 is a VIE because its total equity at risk is not sufficient to finance its activities without additional subordinated financial support. We expect that ECA LNG Phase 1 will require future capital contributions or other financial support to finance the construction of the facility. Sempra is the primary beneficiary of this VIE because we have the power to direct the development activities related to the construction of the liquefaction facility, which we consider to be the most significant activities of ECA LNG Phase 1 during the construction phase of its natural gas liquefaction export project. As a result, we consolidate ECA LNG Phase 1. Sempra consolidated $767 million and $632 million of assets at June 30, 2022 and December 31, 2021, respectively, consisting primarily of PP&E, net, and Accounts Receivable – Other attributable to ECA LNG Phase 1 that could be used only to settle obligations of this VIE and that are not available to settle obligations of Sempra, and $532 million and $455 million of liabilities at June 30, 2022 and December 31, 2021, respectively, consisting primarily of long-term debt, short-term debt and accounts payable attributable to ECA LNG Phase 1 for which creditors do not have recourse to the general credit of Sempra. Additionally, as we discuss in Note 7, Sempra and TotalEnergies SE have provided guarantees for the loan facility supporting construction of the liquefaction facility based on their respective proportionate ownership interest in ECA LNG Phase 1.

PENSION AND OTHER POSTRETIREMENT BENEFITS

Net Periodic Benefit Cost

The following three tables provide the components of net periodic benefit cost. The components of net periodic benefit cost, other than the service cost component, are included in the Other (Expense) Income, Net, table below.


NET PERIODIC BENEFIT COST – SEMPRA
(Dollars in millions)
	Pension benefits				Other postretirement benefits
	Three months ended June 30,
	2022		2021		2022		2021
Service cost	$	42	$	36	$	6	$	5
Interest cost	29		28		7		7
Expected return on assets	(45)		(43)		(16)		(15)
Amortization of:
Prior service cost	2		2		—		—
Actuarial loss (gain)	5		11		(3)		(2)
Net periodic benefit cost (credit)	33		34		(6)		(5)
Regulatory adjustments	24		22		6		5
Total expense recognized	$	57	$	56	$	—	$	—

	Six months ended June 30,
	2022		2021		2022		2021
Service cost	$	83	$	73	$	13	$	11
Interest cost	59		56		14		14
Expected return on assets	(91)		(86)		(32)		(30)
Amortization of:
Prior service cost (credit)	5		5		(1)		(1)
Actuarial loss (gain)	11		22		(7)		(4)
Settlement charges	—		7		—		—
Net periodic benefit cost (credit)	67		77		(13)		(10)
Regulatory adjustments	(3)		(7)		13		10
Total expense recognized	$	64	$	70	$	—	$	—


NET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)
	Pension benefits				Other postretirement benefits
	Three months ended June 30,
	2022		2021		2022		2021
Service cost	$	10	$	9	$	1	$	1
Interest cost	6		6		2		2
Expected return on assets	(11)		(13)		(3)		(3)
Amortization of:
Actuarial loss (gain)	1		1		—		(1)
Net periodic benefit cost (credit)	6		3		—		(1)
Regulatory adjustments	7		11		—		1
Total expense recognized	$	13	$	14	$	—	$	—

	Six months ended June 30,
	2022		2021		2022		2021
Service cost	$	20	$	17	$	3	$	2
Interest cost	13		12		3		3
Expected return on assets	(22)		(25)		(5)		(5)
Amortization of:
Actuarial loss (gain)	1		1		(1)		(1)
Net periodic benefit cost (credit)	12		5		—		(1)
Regulatory adjustments	2		9		—		1
Total expense recognized	$	14	$	14	$	—	$	—


NET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)
	Pension benefits				Other postretirement benefits
	Three months ended June 30,
	2022		2021		2022		2021
Service cost	$	28	$	25	$	5	$	4
Interest cost	21		20		6		6
Expected return on assets	(33)		(30)		(14)		(12)
Amortization of:
Prior service cost	2		2		—		—
Actuarial loss (gain)	4		10		(3)		(2)
Net periodic benefit cost (credit)	22		27		(6)		(4)
Regulatory adjustments	17		11		6		4
Total expense recognized	$	39	$	38	$	—	$	—

	Six months ended June 30,
	2022		2021		2022		2021
Service cost	$	56	$	50	$	10	$	8
Interest cost	41		40		11		11
Expected return on assets	(64)		(58)		(27)		(24)
Amortization of:
Prior service cost (credit)	4		4		(1)		(1)
Actuarial loss (gain)	8		19		(6)		(3)
Net periodic benefit cost (credit)	45		55		(13)		(9)
Regulatory adjustments	(5)		(16)		13		9
Total expense recognized	$	40	$	39	$	—	$	—

RABBI TRUST

In support of its Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans, Sempra maintains dedicated assets, including a Rabbi Trust and investments in life insurance contracts, which totaled $498 million and $567 million at June 30, 2022 and December 31, 2021, respectively.

SEMPRA EARNINGS PER COMMON SHARE

Basic EPS is calculated by dividing earnings attributable to common shares by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.


EARNINGS PER COMMON SHARE COMPUTATIONS
(Dollars in millions, except per share amounts; shares in thousands)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Numerator:
Earnings attributable to common shares	$	559	$	424	$	1,171	$	1,298

Denominator:
Weighted-average common shares outstanding for basic EPS(1)	314,845		307,800		315,595		304,372
Dilutive effect of stock options and RSUs(2)	1,022		807		1,052		846
Dilutive effect of mandatory convertible preferred stock	—		—		—		1,066
Weighted-average common shares outstanding for diluted EPS	315,867		308,607		316,647		306,284

EPS:
Basic	$	1.78	$	1.38	$	3.71	$	4.27
Diluted	$	1.77	$	1.37	$	3.70	$	4.24

(1) Includes 399 and 447 fully vested RSUs held in our Deferred Compensation Plan for the three months ended June 30, 2022 and 2021, respectively, and 403 and 454 of such RSUs for the six months ended June 30, 2022 and 2021, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.

(2) Due to market fluctuations of both Sempra common stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.

The potentially dilutive impact from stock options and RSUs is calculated under the treasury stock method. Under this method, proceeds based on the exercise price and unearned compensation are assumed to be used to repurchase shares on the open market at the average market price for the period, reducing the number of potential new shares to be issued and sometimes causing an antidilutive effect. The computation of diluted EPS for the three months and six months ended June 30, 2022 excludes 8,899 and 173,064 potentially dilutive shares, respectively, and the computation of diluted EPS for the three months and six months ended June 30, 2021 excludes 145,247 and 287,061 potentially dilutive shares, respectively, because to include them would be antidilutive for the period. However, these shares could potentially dilute basic EPS in the future.

In 2021, the potentially dilutive impact from mandatory convertible preferred stock was calculated under the if-converted method until the mandatory conversion date. After the mandatory conversion date, the converted shares are included in weighted-average common shares outstanding for basic EPS. We converted all of our series A preferred stock into common stock on January 15, 2021 and all of our series B preferred stock into common stock on July 15, 2021. The computation of diluted EPS for both the three months and six months ended June 30, 2021 excludes 4,256,725 potentially dilutive shares.

In January 2022, pursuant to Sempra’s share-based compensation plans, the Compensation and Talent Committee of Sempra’s board of directors granted 219,898 nonqualified stock options, 338,080 performance-based RSUs and 150,286 service-based RSUs.

We discuss share-based compensation plans and related awards and the terms and conditions of Sempra’s equity securities further in Notes 10, 13 and 14 of the Notes to Consolidated Financial Statements in the Annual Report.

COMPREHENSIVE INCOME

The following tables present the changes in AOCI by component and amounts reclassified out of AOCI to net income, after amounts attributable to NCI.


CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
(Dollars in millions)
	Foreign currency translation adjustments		Financial instruments		Pension and other postretirement benefits		Total accumulated other comprehensive income (loss)
	Three months ended June 30, 2022 and 2021
Sempra:
Balance at March 31, 2022	$	(76)	$	(78)	$	(75)	$	(229)

OCI before reclassifications	1		37		1		39
Amounts reclassified from AOCI(2)	10		11		2		23
Net OCI(2)	11		48		3		62
Balance at June 30, 2022	$	(65)	$	(30)	$	(72)	$	(167)

Balance at March 31, 2021	$	(69)	$	(239)	$	(91)	$	(399)

OCI before reclassifications(3)	(19)		(36)		(2)		(57)
Amounts reclassified from AOCI	—		10		2		12
Net OCI(3)	(19)		(26)		—		(45)
Balance at June 30, 2021	$	(88)	$	(265)	$	(91)	$	(444)
SDG&E:




Balance at March 31, 2022 and June 30, 2022					$	(10)	$	(10)





Balance at March 31, 2021 and June 30, 2021					$	(10)	$	(10)
SoCalGas:
Balance at March 31, 2022			$	(13)	$	(17)	$	(30)

Amounts reclassified from AOCI			1		—		1
Net OCI			1		—		1
Balance at June 30, 2022			$	(12)	$	(17)	$	(29)

Balance at March 31, 2021			$	(13)	$	(18)	$	(31)
Amounts reclassified from AOCI			—		1		1
Net OCI			—		1		1
Balance at June 30, 2021			$	(13)	$	(17)	$	(30)

(1) All amounts are net of income tax, if subject to tax, and after NCI.

(2) Total AOCI includes $9 of foreign currency translation adjustments associated with sale of NCI to ADIA, which we discuss below in “Other Noncontrolling Interests – Sempra Infrastructure.” This transaction did not impact the Condensed Consolidated Statement of Comprehensive Income (Loss).

(3) Total AOCI includes $24 of foreign currency translation adjustments and $14 of financial instruments associated with the IEnova exchange offer, which we discuss below in “Other Noncontrolling Interests – Sempra Infrastructure.” This transaction did not impact the Condensed Consolidated Statement of Comprehensive Income (Loss).


CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) (CONTINUED)
(Dollars in millions)
	Foreign currency translation adjustments		Financial instruments		Pension and other postretirement benefits		Total accumulated other comprehensive income (loss)
	Six months ended June 30, 2022 and 2021
Sempra:
Balance as of December 31, 2021	$	(79)	$	(156)	$	(83)	$	(318)

OCI before reclassifications	4		111		7		122
Amounts reclassified from AOCI(2)	10		15		4		29
Net OCI(2)	14		126		11		151
Balance as of June 30, 2022	$	(65)	$	(30)	$	(72)	$	(167)

Balance as of December 31, 2020	$	(64)	$	(331)	$	(105)	$	(500)
OCI before reclassifications(3)	(24)		37		5		18
Amounts reclassified from AOCI	—		29		9		38
Net OCI(3)	(24)		66		14		56
Balance as of June 30, 2021	$	(88)	$	(265)	$	(91)	$	(444)
SDG&E:





Balance at December 31, 2021 and June 30, 2022					$	(10)	$	(10)





Balance at December 31, 2020 and June 30, 2021					$	(10)	$	(10)
SoCalGas:
Balance as of December 31, 2021			$	(13)	$	(18)	$	(31)

Amounts reclassified from AOCI			1		1		2
Net OCI			1		1		2
Balance as of June 30, 2022			$	(12)	$	(17)	$	(29)

Balance as of December 31, 2020			$	(13)	$	(18)	$	(31)

Amounts reclassified from AOCI			—		1		1
Net OCI			—		1		1
Balance as of June 30, 2021			$	(13)	$	(17)	$	(30)

(1) All amounts are net of income tax, if subject to tax, and after NCI.


RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
Details about accumulated other comprehensive income (loss) components	Amounts reclassified from accumulated other comprehensive income (loss)				Affected line item on Condensed Consolidated Statements of Operations
	Three months ended June 30,
	2022		2021
Sempra:
Foreign currency translation adjustments	$	1	$	—	Operation and Maintenance

Financial instruments:
Interest rate instruments	$	—	$	(1)	Interest Expense
Interest rate instruments	13		19		Equity Earnings(1)
Foreign exchange instruments	(1)		—		Revenues: Energy-Related Businesses
	1		—		Other (Expense) Income, Net

Interest rate and foreign exchange instruments	(1)		—		Interest Expense
	—		(7)		Other (Expense) Income, Net
Total, before income tax	12		11
	(4)		(1)		Income Tax Expense
Total, net of income tax	8		10
	3		—		Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCI	$	11	$	10

Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	2	$	1	Other (Expense) Income, Net
Amortization of prior service cost	1		1		Other (Expense) Income, Net

Total, before income tax	3		2
	(1)		—		Income Tax Expense
Total, net of income tax	$	2	$	2

Total reclassifications for the period, net of income tax and NCI	$	14	$	12












SoCalGas:
Financial instruments:
Interest rate instruments	$	1	$	—	Interest Expense

Pension and other postretirement benefits(2):

Amortization of prior service cost	$	—	$	1	Other Income (Expense), Net




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

(1) Equity earnings at our foreign equity method investees are recognized after tax.

(2) Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).


RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
(Dollars in millions)
Details about accumulated other comprehensive income (loss) components	Amounts reclassified from accumulated other comprehensive income (loss)				Affected line item on Condensed Consolidated Statements of Operations
	Six months ended June 30,
	2022		2021
Sempra:
Foreign currency translation adjustments	$	1	$	—	Operation and Maintenance

Financial instruments:
Interest rate instruments	$	(1)	$	1	Interest Expense
Interest rate instruments	27		38		Equity Earnings(1)
Foreign exchange instruments	(2)		1		Revenues: Energy-Related Businesses
	1		—		Other (Expense) Income, Net
Foreign exchange instruments	(1)		1		Equity Earnings(1)
Interest rate and foreign exchange instruments	(1)		—		Interest Expense
	(6)		(1)		Other (Expense) Income, Net
Total, before income tax	17		40
	(5)		(9)		Income Tax Expense
Total, net of income tax	12		31
	3		(2)		Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCI	$	15	$	29

Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	4	$	3	Other (Expense) Income, Net
Amortization of prior service cost	2		2		Other (Expense) Income, Net
Settlement charges	—		7		Other (Expense) Income, Net
Total, before income tax	6		12
	(2)		(3)		Income Tax Expense
Total, net of income tax	$	4	$	9

Total reclassifications for the period, net of income tax and NCI	$	20	$	38












SoCalGas:
Financial instruments:
Interest rate instruments	$	1	$	—	Interest Expense

Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	1	$	—	Other Income (Expense), Net
Amortization of prior service cost	—		1		Other Income (Expense), Net
Total, before income tax	1		1
	—		—		Income Tax Expense
Total, net of income tax	$	1	$	1

Total reclassifications for the period, net of income tax	$	2	$	1

(1) Equity earnings at our foreign equity method investees are recognized after tax.

(2) Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).

For the three months and six months ended June 30, 2022 and 2021, reclassifications out of AOCI to net income were negligible for SDG&E.

SHAREHOLDERS’ EQUITY AND NONCONTROLLING INTERESTS

Sempra Series A Preferred Stock

On January 15, 2021, we converted all 17,250,000 shares of series A preferred stock into 13,781,025 shares of our common stock based on a conversion rate of 0.7989 shares of our common stock for each issued and outstanding share of series A preferred stock. As a consequence, no shares of series A preferred stock were outstanding after January 15, 2021 and the 17,250,000 shares that were formerly series A preferred stock returned to the status of authorized and unissued shares of preferred stock.

Sempra Common Stock Repurchases

On January 11, 2022, we entered into an ASR program under which we prepaid $200 million to repurchase shares of our common stock in a share forward transaction. A total of 1,472,756 shares were purchased under this program at an average price of $135.80 per share. The total number of shares purchased was determined by dividing the $200 million purchase price by the arithmetic average of the volume-weighted average trading prices of shares of our common stock during the valuation period of January 12, 2022 through February 11, 2022, minus a fixed discount. The ASR program was completed on February 11, 2022.

On April 6, 2022, we entered into an ASR program under which we prepaid $250 million to repurchase shares of our common stock in a share forward transaction. A total of 1,471,957 shares were purchased under this program at an average price of $169.84 per share. The total number of shares purchased was determined by dividing the $250 million purchase price by the arithmetic average of the volume-weighted average trading prices of shares of our common stock during the valuation period of April 7, 2022 through April 25, 2022, minus a fixed discount. The ASR program was completed on April 25, 2022.

Other Noncontrolling Interests

The following table provides information about NCI held by others in subsidiaries or entities consolidated by us and recorded in Other Noncontrolling Interests in Total Equity on Sempra’s Condensed Consolidated Balance Sheets.


OTHER NONCONTROLLING INTERESTS
(Dollars in millions)
	Percent ownership held by noncontrolling interests				Equity held by noncontrolling interests
	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Sempra Infrastructure:
SI Partners	30.0	%	20.0	%	$	2,146	$	1,384
SI Partners subsidiaries(1)	0.1 - 16.6		0.1 - 16.6		46		34
Total Sempra					$	2,192	$	1,418

(1) SI Partners has subsidiaries with NCI held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.

Sempra Infrastructure

Sale of NCI in SI Partners to ADIA. On June 1, 2022, Sempra and ADIA consummated the transaction contemplated under a purchase and sale agreement dated December 21, 2021 (the ADIA Purchase Agreement). Pursuant to the ADIA Purchase Agreement, ADIA acquired Class A Units representing a 10% NCI in SI Partners for a purchase price of $1.7 billion. Following the closing of the transaction, Sempra, KKR and ADIA directly or indirectly own 70%, 20%, and 10%, respectively, of the outstanding Class A Units of SI Partners, which excludes the non-voting Sole Risk Interests held only by Sempra. As a result of this sale to ADIA, we recorded a $709 million increase in equity held by NCI and an increase in Sempra’s shareholders’ equity of $709 million, net of $12 million in transaction costs and $301 million in tax impacts. Transaction costs include $10 million paid to ADIA for reimbursement of certain expenses that ADIA incurred in connection with closing the transaction.

At the closing of the sale of NCI in SI Partners to ADIA, SI Partners indirectly owned 99.9% of the outstanding shares of IEnova. To the extent we acquire additional shares of IEnova after the closing, such additional shares will be acquired by SI Partners, and KKR and ADIA will provide 20% and 10%, respectively, of the funding.

At the closing, KKR and ADIA (the Minority Partners) and Sempra entered into a second amended and restated agreement of limited partnership of SI Partners (the Amended LP Agreement), which governs their respective rights and obligations in respect of their ownership of SI Partners. Under the Amended LP Agreement, matters are decided generally by majority vote and the managers designated by Sempra, KKR and ADIA each, as a group, have voting power equivalent to the ownership percentage of their respective designating limited partner. Sempra maintains control of SI Partners. However, SI Partners and its controlled subsidiaries are prohibited from taking certain limited actions without the prior written approval of the Minority Partners (subject

to each Minority Partner maintaining certain ownership thresholds in SI Partners). The minority protections held by ADIA constitute a subset of the minority protections granted to KKR.

The terms of the Amended LP Agreement applicable to ADIA in relation to capital contributions and distributions are generally consistent with those granted to KKR, with adjustments and limitations to take into account ADIA’s relative ownership percentage, including limiting ADIA’s priority distribution rights to the failure of certain proposed projects to receive a positive final investment decision by a certain date or to achieve specified thresholds of projected internal rates of return or leverage. The transfer rights and restrictions and registration rights in the Amended LP Agreement applicable to ADIA are also generally consistent with those granted to KKR, with adjustments and limitations to take into account ADIA’s relative ownership percentage, including a general restriction on ADIA transferring its interests in SI Partners to third parties (other than pursuant to certain specified permitted transfers) for a specified period following its entry into the Amended LP Agreement.

SI Partners Subsidiaries. In May 2021, we acquired 381,015,194 publicly owned shares of IEnova in exchange for 12,306,777 newly issued shares of our common stock upon completion of our exchange offer launched in the U.S. and Mexico, which increased our ownership interest in IEnova from 70.2% to 96.4%. We acquired the IEnova shares at an exchange ratio of 0.0323 shares of our common stock for each one IEnova share. In connection with the exchange offer, we recorded a $1.4 billion decrease in equity held by NCI and an increase in Sempra’s shareholders’ equity of $1.4 billion, net of $12 million in transactions costs.

Following the exchange offer we completed in May 2021 and a subsequent cash tender offer we completed in September 2021, IEnova’s shares were delisted from the Mexican Stock Exchange effective October 15, 2021. In connection with the delisting, we are maintaining a trust for the purpose of purchasing the 1,212,981 IEnova shares that remained publicly owned as of the completion of the cash tender offer for 78.97 Mexican pesos per share, the same price per share that was offered in our cash tender offer. The trust was to be in place through the earlier of April 14, 2022 or the date on which we acquired all the remaining publicly owned IEnova shares. On April 13, 2022, the term of the trust was amended so that it will remain in place until we terminate it, subject to any maximum term under applicable Mexican law. As of August 1, 2022, an aggregate of 851,211 of the remaining publicly owned IEnova shares had been acquired by such trust.

TRANSACTIONS WITH AFFILIATES

We summarize amounts due from and to unconsolidated affiliates at Sempra, SDG&E and SoCalGas in the following table.


AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	June 30, 2022		December 31, 2021
Sempra:
Sempra Infrastructure – IMG – Note due March 15, 2023(1)	$	626	$	2
Various affiliates	20		21
Total due from unconsolidated affiliates – current	$	646	$	23

Sempra Infrastructure – IMG – Note due March 15, 2022, net of allowance for credit losses of $1 at December 31, 2021(1)	$	—	$	637
Total due from unconsolidated affiliates – noncurrent	$	—	$	637




Sempra Infrastructure(2):
TAG Pipelines Norte, S. de R.L. de C.V.:
5.5% Note due January 9, 2024	$	(39)	$	(69)
5.5% Note due January 14, 2025	(22)		(21)
5.5% Note due July 16, 2025	(21)		(20)
5.5% Note due January 14, 2026	(18)		—
TAG – 5.74% Note due December 17, 2029	(182)		(177)
Total due to unconsolidated affiliates – noncurrent	$	(282)	$	(287)
SDG&E:



Sempra	$	(26)	$	(40)
SoCalGas	(30)		(48)
Various affiliates	(12)		(9)
Total due to unconsolidated affiliates – current	$	(68)	$	(97)

Income taxes due from Sempra(3)	$	21	$	19
SoCalGas:
SDG&E	$	30	$	48
Various affiliates	1		1
Total due from unconsolidated affiliates – current	$	31	$	49

Sempra	$	(36)	$	(36)
Total due to unconsolidated affiliates – current	$	(36)	$	(36)

Income taxes due from Sempra(3)	$	6	$	6

(1) At December 31, 2021, represents a Mexican peso-denominated revolving line of credit for up to 14.2 billion Mexican pesos or approximately $691 U.S. dollar-equivalent at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 bps. In March 2022, Sempra Infrastructure amended and restated the revolving line of credit to a U.S. dollar-denominated note in the amount of $625 at a variable interest rate based on the adjusted 1-month Secured Overnight Financing Rate plus 180 bps (3.41% at June 30, 2022) and extended the maturity date to March 15, 2023. At June 30, 2022 and December 31, 2021, $1 and $2 of accrued interest receivable, respectively, is included in Due from Unconsolidated Affiliates – Current. In July 2022, this note receivable was paid in full.

(2) U.S. dollar-denominated loans at fixed interest rates. Amounts include principal balances plus accumulated interest outstanding.

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

The following table summarizes income statement information from unconsolidated affiliates.


INCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Sempra:
Revenues	$	15	$	7	$	22	$	15
Cost of sales	—		—		—		11
Interest income	4		12		14		27
Interest expense	4		3		8		7
SDG&E:
Revenues	$	4	$	2	$	8	$	4
Cost of sales	26		27		50		55
SoCalGas:
Revenues	$	23	$	23	$	49	$	48
Cost of sales(1)	(4)		—		(4)		3

(1) Includes net commodity costs from natural gas transactions with unconsolidated affiliates.

Guarantees

Sempra provided guarantees related to Cameron LNG JV’s SDSRA and CFIN’s Support Agreement, which remain outstanding. We discuss these guarantees in Note 6 below and in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.

OTHER (EXPENSE) INCOME, NET

Other (expense) income, net, consists of the following:


OTHER (EXPENSE) INCOME, NET
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Sempra:
Allowance for equity funds used during construction	$	34	$	34	$	69	$	72
Investment (losses) gains, net(1)	(34)		19		(47)		28
(Losses) gains on interest rate and foreign exchange instruments, net	(1)		7		5		(23)
Foreign currency transaction (losses) gains, net(2)	(3)		26		(22)		7
Non-service components of net periodic benefit (cost) credit	(9)		(15)		32		14
Interest on regulatory balancing accounts, net	4		2		5		3
Sundry, net	8		(1)		(5)		6
Total	$	(1)	$	72	$	37	$	107
SDG&E:
Allowance for equity funds used during construction	$	21	$	22	$	42	$	45
Non-service components of net periodic benefit (cost) credit	(2)		(4)		9		5
Interest on regulatory balancing accounts, net	3		2		4		3
Sundry, net	—		2		1		4
Total	$	22	$	22	$	56	$	57
SoCalGas:
Allowance for equity funds used during construction	$	13	$	11	$	26	$	23
Non-service components of net periodic benefit (cost) credit	(6)		(9)		26		19
Interest on regulatory balancing accounts, net	1		—		1		—
Sundry, net	(4)		(4)		(15)		(5)
Total	$	4	$	(2)	$	38	$	37

(1) Represents net investment (losses) gains on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are offset by corresponding changes in compensation expense related to the plans, recorded in O&M on the Condensed Consolidated Statements of Operations.

(2) Includes losses of $11 in the six months ended June 30, 2022 and gains of $28 and $5 in the three months and six months ended June 30, 2021, respectively, from translation to U.S. dollars of a Mexican peso-denominated loan to IMG, which are offset by corresponding amounts included in Equity Earnings on the Condensed Consolidated Statements of Operations.

INCOME TAXES

We provide our calculations of ETRs in the following table.


INCOME TAX EXPENSE AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Sempra:
Income tax expense	$	80		$	139		$	414		$	297

Income before income taxes and equity earnings	$	364		$	281		$	1,029		$	1,049
Equity earnings, before income tax(1)	159			185			302			320
Pretax income	$	523		$	466		$	1,331		$	1,369

Effective income tax rate	15		%	30		%	31		%	22		%
SDG&E:
Income tax expense	$	42		$	33		$	106		$	78
Income before income taxes	$	218		$	219		$	516		$	476
Effective income tax rate	19		%	15		%	21		%	16		%
SoCalGas:
Income tax expense	$	19		$	8		$	103		$	102
Income before income taxes	$	107		$	103		$	525		$	604
Effective income tax rate	18		%	8		%	20		%	17		%

(1) We discuss how we recognize equity earnings in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.

Sempra, SDG&E and SoCalGas record income taxes for interim periods utilizing a forecasted ETR anticipated for the full year. Unusual and infrequent items and items that cannot be reliably estimated are recorded in the interim period in which they occur, which can result in variability in the ETR.

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

▪repairs expenditures related to a certain portion of utility plant fixed assets

▪the equity portion of AFUDC, which is non-taxable

▪a portion of the cost of removal of utility plant assets

▪utility self-developed software expenditures

▪depreciation on a certain portion of utility plant assets

▪state income taxes

The AFUDC related to equity recorded for regulated construction projects at Sempra Infrastructure has similar flow-through treatment.

In the six months ended June 30, 2022, we recognized income tax expense of $120 million for a deferred income tax liability related to outside basis differences in our foreign subsidiaries that we had previously considered to be indefinitely reinvested.

NOTE 2. NEW ACCOUNTING STANDARDS

We describe below recent accounting pronouncements that have had or may have a significant effect on our results of operations, financial condition, cash flows or disclosures.

ASU 2020-06, “Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”: ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and

contracts on an entity’s own equity. In addition to other changes, this standard amends ASC 470-20, “Debt with Conversion and Other Options,” by removing the accounting models for instruments with beneficial and cash conversion features. The standard also amends certain guidance in ASC 260, “Earnings Per Share,” for the computation of EPS for convertible instruments and contracts on an entity’s own equity. For public entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. An entity can use either a full or modified retrospective approach to adopt ASU 2020-06 and must disclose, in the period of adoption, EPS transition information about the effect of the change on affected per-share amounts. We adopted the standard on January 1, 2022 using a modified retrospective approach and the adoption did not materially impact our financial statements or per-share amounts.

NOTE 3. REVENUES

We discuss revenue recognition for revenues from contracts with customers and from sources other than contracts with customers in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.

The following table disaggregates our revenues from contracts with customers by major service line and market and provides a reconciliation to total revenues by segment. The majority of our revenue is recognized over time.


DISAGGREGATED REVENUES
(Dollars in millions)
	SDG&E		SoCalGas		Sempra Infrastructure		Consolidating adjustments and Parent and other		Sempra
	Three months ended June 30, 2022
By major service line:
Utilities	$	1,250	$	1,347	$	20	$	(27)	$	2,590
Energy-related businesses	—		—		457		(14)		443
Revenues from contracts with customers	$	1,250	$	1,347	$	477	$	(41)	$	3,033

By market:
Gas	$	159	$	1,347	$	340	$	(19)	$	1,827
Electric	1,091		—		137		(22)		1,206
Revenues from contracts with customers	$	1,250	$	1,347	$	477	$	(41)	$	3,033

Revenues from contracts with customers	$	1,250	$	1,347	$	477	$	(41)	$	3,033
Utilities regulatory revenues	149		154		—		—		303
Other revenues	—		—		212		(1)		211
Total revenues	$	1,399	$	1,501	$	689	$	(42)	$	3,547

	Six months ended June 30, 2022
By major service line:
Utilities	$	2,751	$	3,259	$	48	$	(56)	$	6,002
Energy-related businesses	—		—		749		(29)		720
Revenues from contracts with customers	$	2,751	$	3,259	$	797	$	(85)	$	6,722

By market:
Gas	$	489	$	3,259	$	569	$	(45)	$	4,272
Electric	2,262		—		228		(40)		2,450
Revenues from contracts with customers	$	2,751	$	3,259	$	797	$	(85)	$	6,722

Revenues from contracts with customers	$	2,751	$	3,259	$	797	$	(85)	$	6,722
Utilities regulatory revenues	93		235		—		—		328
Other revenues	—		—		316		1		317
Total revenues	$	2,844	$	3,494	$	1,113	$	(84)	$	7,367


DISAGGREGATED REVENUES (CONTINUED)
(Dollars in millions)
	SDG&E		SoCalGas		Sempra Infrastructure		Consolidating adjustments and Parent and other		Sempra
	Three months ended June 30, 2021
By major service line:
Utilities	$	1,170	$	1,062	$	17	$	(25)	$	2,224
Energy-related businesses	—		—		260		(14)		246
Revenues from contracts with customers	$	1,170	$	1,062	$	277	$	(39)	$	2,470

By market:
Gas	$	162	$	1,062	$	185	$	(24)	$	1,385
Electric	1,008		—		92		(15)		1,085
Revenues from contracts with customers	$	1,170	$	1,062	$	277	$	(39)	$	2,470

Revenues from contracts with customers	$	1,170	$	1,062	$	277	$	(39)	$	2,470
Utilities regulatory revenues	148		62		—		—		210
Other revenues	—		—		64		(3)		61
Total revenues	$	1,318	$	1,124	$	341	$	(42)	$	2,741

	Six months ended June 30, 2021
By major service line:
Utilities	$	2,386	$	2,719	$	44	$	(52)	$	5,097
Energy-related businesses	—		—		529		(15)		514
Revenues from contracts with customers	$	2,386	$	2,719	$	573	$	(67)	$	5,611

By market:
Gas	$	435	$	2,719	$	397	$	(48)	$	3,503
Electric	1,951		—		176		(19)		2,108
Revenues from contracts with customers	$	2,386	$	2,719	$	573	$	(67)	$	5,611

Revenues from contracts with customers	$	2,386	$	2,719	$	573	$	(67)	$	5,611
Utilities regulatory revenues	269		(87)		—		—		182
Other revenues	—		—		217		(10)		207
Total revenues	$	2,655	$	2,632	$	790	$	(77)	$	6,000

REVENUES FROM CONTRACTS WITH CUSTOMERS

Remaining Performance Obligations

For contracts greater than one year, at June 30, 2022, we expect to recognize revenue related to the fixed fee component of the consideration as shown below. Sempra’s remaining performance obligations primarily relate to capacity agreements for natural gas storage and transportation at Sempra Infrastructure and transmission line projects at SDG&E. SoCalGas did not have any remaining performance obligations at June 30, 2022.


REMAINING PERFORMANCE OBLIGATIONS(1)
(Dollars in millions)
	Sempra		SDG&E
2022 (excluding first six months of 2022)	$	200	$	2
2023	384		4
2024	385		4
2025	384		4
2026	382		4
Thereafter	4,525		63
Total revenues to be recognized	$	6,260	$	81

(1) Excludes intercompany transactions.

Contract Liabilities from Revenues from Contracts with Customers

Activities within Sempra’s and SDG&E’s contract liabilities are presented below. There were no contract liabilities at SoCalGas in the six months ended June 30, 2022 or 2021. As we discuss in Note 11, Sempra Infrastructure drew against and fully exhausted Gazprom’s letters of credit in April 2022 due to Gazprom’s non-renewal of such letters of credit as required under its LNG storage and regasification agreement. Sempra Infrastructure recorded a contract liability for the funds drawn from the letters of credit as payments received in advance. Gazprom has not paid its invoices since March 2022, so funds drawn from the letters of credit have been used to fully offset such nonpayment, which have been reflected as revenue from performance obligations satisfied during the reporting period. We expect that these funds will provide payment security from Gazprom through the end of 2024.


CONTRACT LIABILITIES
(Dollars in millions)
	2022		2021
Sempra:
Contract liabilities at January 1	$	(278)	$	(207)
Revenue from performance obligations satisfied during reporting period	86		49
Payments received in advance	(105)		(1)
Contract liabilities at June 30(1)	$	(297)	$	(159)
SDG&E:
Contract liabilities at January 1	$	(83)	$	(87)
Revenue from performance obligations satisfied during reporting period	2		2
Contract liabilities at June 30(1)	$	(81)	$	(85)

(1) Balances at June 30, 2022 include $81 and $4 in Other Current Liabilities and $216 and $77 in Deferred Credits and Other on Sempra’s and SDG&E’s Condensed Consolidated Balance Sheets, respectively.

Receivables from Revenues from Contracts with Customers

The table below shows receivable balances associated with revenues from contracts with customers on the Condensed Consolidated Balance Sheets.


RECEIVABLES FROM REVENUES FROM CONTRACTS WITH CUSTOMERS
(Dollars in millions)
	June 30, 2022		December 31, 2021
Sempra:
Accounts receivable – trade, net	$	1,620	$	1,886
Accounts receivable – other, net	13		19
Due from unconsolidated affiliates – current(1)	5		2
Other long-term assets(2)	32		70
Total	$	1,670	$	1,977
SDG&E:
Accounts receivable – trade, net	$	685	$	715
Accounts receivable – other, net	11		9
Due from unconsolidated affiliates – current(1)	3		2
Other long-term assets(2)	17		25
Total	$	716	$	751
SoCalGas:
Accounts receivable – trade, net	$	722	$	1,084
Accounts receivable – other, net	2		10
Other long-term assets(2)	15		45
Total	$	739	$	1,139

(1) Amount is presented net of amounts due to unconsolidated affiliates on the Condensed Consolidated Balance Sheets, when right of offset exists.

(2) In connection with the COVID-19 pandemic and at the direction of the CPUC, SDG&E and SoCalGas enrolled residential and small business customers with past-due balances in long-term repayment plans.

NOTE 4. REGULATORY MATTERS

We discuss regulatory matters in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report and provide updates to those discussions and information about new regulatory matters below. With the exception of regulatory balancing accounts, we generally do not earn a return on our regulatory assets until such time as a related cash expenditure has been made. Upon the occurrence of a cash expenditure associated with a regulatory asset, the related amounts are recoverable through a regulatory account mechanism for which we earn a return authorized by applicable regulators, which generally approximates the three-month commercial paper rate. The periods during which we recognize a regulatory asset while we do not earn a return vary by regulatory asset.


REGULATORY ASSETS (LIABILITIES)
(Dollars in millions)
	June 30, 2022		December 31, 2021

SDG&E:
Fixed-price contracts and other derivatives	$	(24)	$	(50)
Deferred income taxes recoverable in rates	176		125
Pension and other postretirement benefit plan obligations	(8)		(7)
Removal obligations	(2,185)		(2,251)
Environmental costs	61		62
Sunrise Powerlink fire mitigation	121		122
Regulatory balancing accounts(1)(2)
Commodity – electric	246		77
Gas transportation	33		49
Safety and reliability	80		67
Public purpose programs	(117)		(107)
Wildfire mitigation plan	255		178
Liability insurance premium	102		110
Other balancing accounts	(17)		207
Other regulatory assets, net(2)	132		119
Total SDG&E	(1,145)		(1,299)
SoCalGas:
Deferred income taxes recoverable in rates	113		44
Pension and other postretirement benefit plan obligations	39		51
Employee benefit costs	31		31
Removal obligations	(603)		(627)
Environmental costs	34		34
Regulatory balancing accounts(1)(2)
Commodity – gas, including transportation	(46)		(146)
Safety and reliability	425		339
Public purpose programs	(213)		(183)
Liability insurance premium	18		16
Other balancing accounts	125		42
Other regulatory assets, net(2)	153		142
Total SoCalGas	76		(257)
Sempra Infrastructure:
Deferred income taxes recoverable in rates	77		77

Total Sempra	$	(992)	$	(1,479)

(1) At June 30, 2022 and December 31, 2021, the noncurrent portion of regulatory balancing accounts – net undercollected for SDG&E was $453 and $358, respectively, and for SoCalGas was $601 and $410, respectively.

(2) Includes regulatory assets earning a return authorized by applicable regulators, which generally approximates the three-month commercial paper rate.

SEMPRA CALIFORNIA

CPUC GRC

The CPUC uses GRCs to set rates designed to allow SDG&E and SoCalGas to recover their reasonable operating costs and to provide the opportunity to realize their authorized rates of return on their investments.

In May 2022, SDG&E and SoCalGas filed their 2024 GRC applications requesting CPUC approval of test year revenue requirements for 2024 and attrition year adjustments for 2025 through 2027. SDG&E and SoCalGas requested revenue requirements for 2024 of $3.0 billion and $4.4 billion, respectively. SDG&E and SoCalGas are proposing post-test year revenue requirement changes using various mechanisms that are estimated to result in annual increases of approximately 8% to 12% at SDG&E and approximately 6% to 8% at SoCalGas. SDG&E and SoCalGas have requested that the CPUC issue a final decision by the end of 2023 with new rates to be implemented in January 2024. SDG&E proposes to submit separate requests in its GRC for review and recovery of its wildfire mitigation plan costs in mid-2023 for costs incurred from 2019 through 2022 and in mid-2024 for costs incurred in 2023.

CPUC Cost of Capital

A CPUC cost of capital proceeding determines a utility’s authorized capital structure and authorized return on rate base. The CCM applies in the interim years between required cost of capital applications and considers changes in the cost of capital based on changes in interest rates based on the applicable utility bond index published by Moody’s (the CCM benchmark rate) for each 12-month period ending September 30 (the measurement period). The CCM benchmark rate is the basis of comparison to determine if the CCM is triggered, which occurs if the change in the applicable Moody’s utility bond index relative to the CCM benchmark rate is larger than plus or minus 1.000% at the end of the measurement period. The index applicable to SDG&E and SoCalGas is based on each utility’s credit rating. Alternatively, each of SDG&E and SoCalGas is permitted to file a cost of capital application in an interim year in which an extraordinary or catastrophic event materially impacts its cost of capital and affects utilities differently than the market as a whole to have its cost of capital determined in lieu of the CCM.

Authorized Cost of Capital, Subject to the CCM

In December 2019, the CPUC approved the cost of capital (shown in the table below) for SDG&E and SoCalGas that became effective on January 1, 2020 and will remain in effect through December 31, 2022, subject to the CCM. SDG&E’s CCM benchmark rate is 4.498% based on Moody’s Baa- utility bond index, and SoCalGas’ CCM benchmark rate is 4.029% based on Moody’s A- utility bond index.


AUTHORIZED CPUC COST OF CAPITAL, SUBJECT TO THE CCM

SDG&E							SoCalGas
Authorized weighting		Return on rate base		Weighted return on rate base			Authorized weighting		Return on rate base		Weighted return on rate base
45.25	%	4.59	%	2.08	%	Long-Term Debt	45.60	%	4.23	%	1.93	%
2.75		6.22		0.17		Preferred Equity	2.40		6.00		0.14
52.00		10.20		5.30		Common Equity	52.00		10.05		5.23
100.00	%			7.55	%		100.00	%			7.30	%

For the measurement period that ended September 30, 2021, the CCM would trigger for SDG&E if the CPUC determines that the CCM should be implemented because the average Moody’s Baa- utility bond index between October 1, 2020 and September 30, 2021 was 1.17% below SDG&E’s CCM benchmark rate of 4.498%. In August 2021, SDG&E filed an application with the CPUC to update its cost of capital due to the ongoing effects of the COVID-19 pandemic rather than have the CCM apply. In December 2021, the CPUC established a proceeding to determine if SDG&E’s cost of capital was impacted by an extraordinary event such that the CCM should not apply. If the CPUC finds that there was not an extraordinary event, the CCM would be effective retroactive to January 1, 2022 and would automatically adjust SDG&E’s authorized ROE from 10.20% to 9.62% and adjust its authorized cost of debt to reflect the then current embedded cost and projected interest rate. If the CPUC finds that there was an extraordinary event, it will then determine whether to suspend the CCM for 2022 and preserve SDG&E’s current authorized cost of capital or hold a second phase of the proceeding to set a new cost of capital for 2022. SDG&E expects to receive a final decision in the second half of 2022. In December 2021, the CPUC granted SDG&E the establishment of memorandum accounts effective January 1, 2022 to track any differences in revenue requirement resulting from the interim cost of capital decision expected in 2022.

Proposed Cost of Capital

In April 2022, SDG&E and SoCalGas each filed applications with the CPUC to update their cost of capital (shown in the table below), which would become effective on January 1, 2023 and would remain in effect through December 31, 2025, subject to the CCM if it remains in place as proposed. SDG&E and SoCalGas expect to receive a final decision by the end of 2022.


PROPOSED CPUC COST OF CAPITAL

SDG&E							SoCalGas
Authorized weighting		Return on rate base		Weighted return on rate base			Authorized weighting		Return on rate base		Weighted return on rate base
46.00	%	3.87	%	1.78	%	Long-Term Debt	45.60	%	3.89	%	1.77	%
—		—		—		Preferred Equity	0.40		6.00		0.02
54.00		10.55		5.70		Common Equity	54.00		10.75		5.81
100.00	%			7.48	%		100.00	%			7.60	%

SOCALGAS

OSCs – Energy Efficiency and Advocacy

In October 2019, the CPUC issued an OSC to determine whether SoCalGas should be sanctioned for violation of certain CPUC code sections and orders relating to energy efficiency (EE) codes and standards advocacy activities, undertaken by SoCalGas following a CPUC decision disallowing SoCalGas’ future engagement in advocacy around such EE codes and standards. In February 2022, the assigned Administrative Law Judge issued a Presiding Officer’s Decision (POD 1) that found that SoCalGas did undertake prohibited EE codes and standards advocacy activities using ratepayer funds. POD 1 imposes on SoCalGas a financial penalty of $10 million; customer refunds for certain ratepayer expenditures and shareholder incentives that SoCalGas estimates will be negligible; and a prohibition from recovering from ratepayers costs of proposed codes and standards activities until SoCalGas demonstrates policies, practices and procedures that adhere to the CPUC’s intent for codes and standards advocacy. POD 1 became the final decision of the CPUC in March 2022.

In December 2019, the CPUC issued a second OSC to determine whether SoCalGas is entitled to the EE program’s shareholder incentives for codes and standards advocacy in 2016 and 2017 (later expanded to include 2014 and 2015), whether its shareholders should bear the costs of those advocacy activities, and to address whether any other remedies are appropriate. In April 2021, the assigned Administrative Law Judge issued a Presiding Officer’s Decision (POD 2) on this second OSC. POD 2 finds no violations and assesses no fines or penalties but finds that SoCalGas spent ratepayer funds on activities that were not aligned with the CPUC’s intent for EE codes and standards advocacy, and orders customer refunds that SoCalGas estimates will be negligible. Additionally, POD 2 precludes SoCalGas from seeking cost recovery associated with EE codes and standards advocacy programs until lifted by the CPUC, and orders certain nonfinancial remedies. POD 2 was appealed by intervenors and in February 2022, a CPUC commissioner issued an alternative decision finding that there were violations of certain legal principles and imposing a financial penalty of $150,000. The alternative decision was adopted by the CPUC as the final decision in April 2022.

NOTE 5. ACQUISITIONS AND DIVESTITURES

ACQUISITION

Sempra Infrastructure

ESJ

In March 2021, Sempra Infrastructure completed the acquisition of Saavi Energía’s 50% equity interest in ESJ for a purchase price of $65 million (net of $14 million of acquired cash and cash equivalents) plus the assumption of $277 million in debt (including $94 million owed from ESJ to Sempra Infrastructure that eliminates upon consolidation). Sempra Infrastructure previously accounted for its 50% interest in ESJ as an equity method investment. This acquisition increased Sempra Infrastructure’s ownership interest in ESJ from 50% to 100%. We accounted for this asset acquisition using a cost accumulation

model whereby the cost of the acquisition and carrying value of our previously held interest in ESJ ($34 million) were allocated to assets acquired ($458 million) and liabilities assumed ($345 million) based on their relative fair values. ESJ owns a fully operating wind power generation facility with a nameplate capacity of 155 MW that is fully contracted by SDG&E under a long-term PPA. Sempra Infrastructure recorded a $190 million intangible asset for the relative fair value of the PPA that will be amortized over a period of 14 years against revenues. On January 15, 2022, ESJ completed construction and began commercial operation of a second wind power generation facility with a nameplate capacity of 108 MW that is also fully contracted by SDG&E under a long-term PPA.

NOTE 6. INVESTMENTS IN UNCONSOLIDATED ENTITIES

We generally account for investments under the equity method when we have significant influence over, but do not have control of, these entities. Equity earnings and losses, both before and net of income tax, are combined and presented as Equity Earnings on the Condensed Consolidated Statements of Operations. See Note 12 for information on equity earnings and losses, both before and net of income tax, by segment. See Note 1 for information on how equity earnings and losses before income taxes are factored into the calculations of our pretax income or loss and ETR.

We provide additional information concerning our equity method investments in Notes 5 and 6 of the Notes to Consolidated Financial Statements in the Annual Report.

SEMPRA TEXAS UTILITIES

Oncor Holdings

We account for our 100% ownership interest in Oncor Holdings, which owns an 80.25% interest in Oncor, as an equity method investment. Due to the ring-fencing measures, governance mechanisms and commitments in effect, we do not have the power to direct the significant activities of Oncor Holdings and Oncor. See Note 6 of the Notes to Consolidated Financial Statements in the Annual Report for additional information related to the restrictions on our ability to direct the significant activities of Oncor Holdings and Oncor.

In the six months ended June 30, 2022 and 2021, Sempra contributed $171 million and $100 million, respectively, to Oncor Holdings, and Oncor Holdings distributed $170 million and $162 million, respectively, to Sempra.

We provide summarized income statement information for Oncor Holdings in the following table.


SUMMARIZED FINANCIAL INFORMATION – ONCOR HOLDINGS
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Operating revenues	$	1,293	$	1,147	$	2,542	$	2,286
Operating expenses	(908)		(836)		(1,805)		(1,665)
Income from operations	385		311		737		621
Interest expense	(108)		(102)		(216)		(204)
Income tax expense	(52)		(34)		(94)		(70)
Net income	226		167		417		332
Noncontrolling interest held by Texas Transmission Investment LLC	(46)		(34)		(84)		(67)
Earnings attributable to Sempra(1)	180		133		333		265

(1) Excludes adjustments to equity earnings related to amortization of a tax sharing liability associated with a tax sharing arrangement and changes in basis differences in AOCI within the carrying value of our equity method investment.

SEMPRA INFRASTRUCTURE

Cameron LNG JV

In the six months ended June 30, 2022, Sempra Infrastructure contributed $10 million to Cameron LNG JV. In the six months ended June 30, 2022 and 2021, Cameron LNG JV distributed to Sempra Infrastructure $233 million and $378 million, respectively, of which $165 million relates to the distribution from Cameron LNG JV’s SDSRA that we discuss below.

Sempra Promissory Note for SDSRA Distribution

Cameron LNG JV’s debt agreements require Cameron LNG JV to maintain the SDSRA, which is an additional reserve account beyond the Senior Debt Service Accrual Account, where funds accumulate from operations to satisfy senior debt obligations due and payable on the next payment date. Both accounts can be funded with cash or authorized investments. In June 2021, Sempra Infrastructure received a distribution of $165 million based on its proportionate share of the SDSRA, for which Sempra provided a promissory note and letters of credit to secure a proportionate share of Cameron LNG JV’s obligation to fund the SDSRA. Sempra’s maximum exposure to loss is replenishment of the amount withdrawn by Sempra Infrastructure from the SDSRA, or $165 million. We recorded a guarantee liability of $22 million in June 2021, with an associated carrying value of $21 million at June 30, 2022, for the fair value of the promissory note, which is being reduced over the duration of the guarantee through Sempra Infrastructure’s investment in Cameron LNG JV. The guarantee will terminate upon full repayment of Cameron LNG JV’s debt, scheduled to occur in 2039, or replenishment of the amount withdrawn by Sempra Infrastructure from the SDSRA.

Sempra Support Agreement for CFIN

In July 2020, CFIN entered into a financing arrangement with Cameron LNG JV’s four project owners and received aggregate proceeds of $1.5 billion from two project owners and from external lenders on behalf of the other two project owners (collectively, the affiliate loans), based on their proportionate ownership interest in Cameron LNG JV. CFIN used the proceeds from the affiliate loans to provide a loan to Cameron LNG JV. The affiliate loans mature in 2039. Principal and interest will be paid from Cameron LNG JV’s project cash flows from its three-train natural gas liquefaction facility. Cameron LNG JV used the proceeds from its loan to return equity to its project owners. Sempra used its $753 million share of the proceeds for working capital and other general corporate purposes, including the repayment of indebtedness.

Sempra Infrastructure’s $753 million proportionate share of the affiliate loans, based on its 50.2% ownership interest in Cameron LNG JV, was funded by external lenders comprised of a syndicate of eight banks (the bank debt) to whom Sempra has provided a guarantee pursuant to a Support Agreement, as amended on June 29, 2021, under which:

▪Sempra has severally guaranteed repayment of the bank debt plus accrued and unpaid interest if CFIN fails to pay the external lenders;

▪the external lenders may exercise an option to put the bank debt to Sempra Infrastructure upon the occurrence of certain events, including a failure by CFIN to meet its payment obligations under the bank debt;

▪the external lenders will put some or all of the bank debt to Sempra Infrastructure on the fifth, tenth, or fifteenth anniversary date of the affiliate loans, except the portion of the debt owed to any external lender that has elected not to participate in the put option six months prior to the respective anniversary date;

▪Sempra Infrastructure also has a right to call the bank debt back from, or to refinance the bank debt with, the external lenders at any time; and

▪the Support Agreement will terminate upon full repayment of the bank debt, including repayment following an event in which the bank debt is put to Sempra Infrastructure.

In exchange for this guarantee, the external lenders will pay a guarantee fee that is based on the credit rating of Sempra’s long-term senior unsecured non-credit enhanced debt rating, which guarantee fee Sempra Infrastructure will recognize as interest income as earned. Sempra’s maximum exposure to loss is the bank debt plus any accrued and unpaid interest and related fees, subject to a liability cap of 130% of the bank debt, or $979 million. We measure the Support Agreement at fair value, net of related guarantee fees, on a recurring basis (see Note 9). At June 30, 2022, the fair value of the Support Agreement was $16 million, of which $7 million is included in Other Current Assets and $9 million is included in Other Long-Term Assets on Sempra’s Condensed Consolidated Balance Sheet.

ESJ

As we discuss in Note 5, in March 2021, Sempra Infrastructure completed the acquisition of the remaining 50% equity interest in ESJ and ESJ became a wholly owned, consolidated subsidiary. Prior to the acquisition date, Sempra Infrastructure owned 50% of ESJ and accounted for its interest as an equity method investment. In the six months ended June 30, 2021, ESJ distributed a $4 million return of investment to IEnova.

TAG

In the six months ended June 30, 2022, TAG distributed $32 million to Sempra Infrastructure.

NOTE 7. DEBT AND CREDIT FACILITIES

The principal terms of our debt arrangements are described below and in Note 7 of the Notes to Consolidated Financial Statements in the Annual Report.

SHORT-TERM DEBT

Committed Lines of Credit

At June 30, 2022, Sempra had an aggregate capacity of $9.5 billion under seven primary committed lines of credit, which provide liquidity and support commercial paper programs. Because our commercial paper programs are supported by some of these lines of credit, we reflect the amount of commercial paper outstanding, before reductions of any unamortized discounts, and any letters of credit outstanding as a reduction to the available unused credit capacity.


COMMITTED LINES OF CREDIT
(Dollars in millions)
		June 30, 2022
Borrower	Expiration date of facility	Total facility		Commercial paper outstanding		Amounts outstanding		Available unused credit
Sempra	May 2024	$	3,185	$	(42)	$	—	$	3,143
Sempra	May 2024	1,250		—		—		1,250
SDG&E	May 2024	1,500		—		—		1,500
SoCalGas	May 2024	750		—		—		750
SI Partners	November 2024	1,000		—		(285)		715
IEnova	September 2023	350		—		(310)		40
IEnova	February 2024	1,500		—		—		1,500
Total		$	9,535	$	(42)	$	(595)	$	8,898

Sempra, SDG&E and SoCalGas each must maintain a ratio of indebtedness to total capitalization (as defined in each of the applicable credit facilities) of no more than 65% at the end of each quarter. At June 30, 2022, each entity was in compliance with this ratio under its respective credit facility.

SI Partners must maintain a ratio of consolidated adjusted net indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (as defined in its credit facility) of no more than 5.25 to 1.00 as of the end of each quarter. At June 30, 2022, SI Partners was in compliance with this ratio.

Uncommitted Lines of Credit

In addition to our committed lines of credit, Sempra Infrastructure’s foreign operations in Mexico have uncommitted lines of credit with an aggregate capacity of $570 million at June 30, 2022, which are generally used for working capital requirements. We reflect amounts outstanding under these uncommitted lines of credit before reductions of any unamortized discounts.


FOREIGN UNCOMMITTED LINES OF CREDIT
(Dollars and U.S. dollar equivalent in millions)
			June 30, 2022
Borrower	Expiration date of facility	Borrowing denomination	Total facility		Amounts outstanding		Available unused credit
IEnova	September 2022	U.S. dollars	$	250	$	(250)	$	—
ECA LNG Phase 1(1)	August 2023	U.S. dollars or Mexican pesos	200		(32)		168
IEnova(2)	October 2023	U.S. dollars	100		(36)		64
IEnova	October 2023	U.S. dollars or Mexican pesos	20		—		20
Total			$	570	$	(318)	$	252

(1) In March 2022, the facility was amended to increase the borrowing capacity from $100 to $200.

(2) Advances are due in full within 180 days of the disbursement date, which may be extended in increments of 180 days provided that no advance may have a maturity date that falls more than three years after the date of disbursement.

Uncommitted Letters of Credit

Outside of our domestic and foreign credit facilities, we have bilateral unsecured standby letter of credit capacity with select lenders that is uncommitted and supported by reimbursement agreements. At June 30, 2022, we had approximately $730 million in standby letters of credit outstanding under these agreements.


UNCOMMITTED LETTERS OF CREDIT
(Dollars in millions)
		June 30, 2022
	Expiration date range	Uncommitted letters of credit outstanding
SDG&E	January 2023 to May 2023	$	15
SoCalGas	November 2022 to October 2023	20
Sempra Infrastructure	July 2022 to October 2043	525
Parent and other	September 2022 to June 2023	170
Total		$	730

Term Loan

In July 2022, SoCalGas entered into an $800 million, 364-day term loan agreement with a maturity date of July 6, 2023. SoCalGas may request one borrowing of up to $800 million through October 7, 2022. The borrowings will bear interest at benchmark rates plus 70 bps and are due in full upon maturity. The term loan provides SoCalGas with additional liquidity outside of its line of credit, which may include payment of a portion of the costs associated with civil litigation related to the Leak.

Weighted-Average Interest Rates

The weighted-average interest rates on all short-term debt were as follows:


WEIGHTED-AVERAGE INTEREST RATES

	June 30, 2022		December 31, 2021
Sempra	2.70	%	0.60	%
SDG&E	—		0.65
SoCalGas	—		0.21

LONG-TERM DEBT

Sempra

In March 2022, we issued $750 million aggregate principal amount of 3.30% senior unsecured notes due in full upon maturity on April 1, 2025 and received proceeds of $745 million (net of debt discount, underwriting discounts and debt issuance costs of $5 million), and $500 million of 3.70% senior unsecured notes due in full upon maturity on April 1, 2029 and received proceeds of $494 million (net of debt discount, underwriting discounts and debt issuance costs of $6 million). Each series of the notes is redeemable prior to maturity, subject to their terms, and in certain circumstances subject to make-whole provisions. We used a portion of the net proceeds for general corporate purposes and repayment of commercial paper.

SDG&E

In February 2022, SDG&E entered into a $400 million, two-year term loan with a maturity date of February 18, 2024. SDG&E borrowed $200 million in the three months ended March 31, 2022 and an additional $200 million in the three months ended June 30, 2022. The borrowings bear interest at benchmark rates plus 62.5 bps and are due in full upon maturity. The margin is based on SDG&E’s long-term senior unsecured credit rating. SDG&E used the net proceeds for repayment of commercial paper and for general corporate purposes.

In March 2022, SDG&E issued $500 million aggregate principal amount of 3.00% first mortgage bonds due in full upon maturity on March 15, 2032 and received proceeds of $494 million (net of debt discount, underwriting discounts and debt issuance costs of $6 million), and $500 million aggregate principal amount of 3.70% first mortgage bonds due in full upon maturity on March 15, 2052 and received proceeds of $492 million (net of debt discount, underwriting discounts and debt issuance costs of $8 million). Each of the first mortgage bonds are redeemable prior to maturity, subject to their terms, and in certain circumstances subject to make-whole provisions. SDG&E used a portion of the net proceeds for repayment of commercial paper and its 364-day term loan

and intends to use the remaining proceeds for capital expenditures and other general corporate purposes.

SoCalGas

In March 2022, SoCalGas issued $700 million aggregate principal amount of 2.95% senior unsecured notes due in full upon maturity on April 15, 2027 and received proceeds of $691 million (net of debt discount, underwriting discounts and debt issuance costs of $9 million). The notes are redeemable prior to maturity, subject to their terms, and in certain circumstances subject to make-whole provisions. SoCalGas used a portion of the net proceeds for repayment of commercial paper and intends to use the remaining proceeds for general corporate purposes, which may include payment of a portion of the costs relating to civil litigation pertaining to the Leak.

Sempra Infrastructure

SI Partners

In January 2022, SI Partners completed a private offering of $400 million in aggregate principal of 3.25% senior notes due in full upon maturity on January 15, 2032 to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and non-U.S. persons outside the U.S. under Regulation S under the Securities Act. The notes are senior unsecured obligations that rank equally with all of SI Partners’ existing and future outstanding unsecured senior indebtedness and are redeemable prior to maturity, subject to their terms, and in certain circumstances subject to make-whole provisions. Sempra Infrastructure received proceeds of $390 million (net of debt discount, underwriting discounts and debt issuance costs of $10 million). Sempra Infrastructure used the net proceeds for general corporate purposes, including the repayment of certain indebtedness of its subsidiaries.

ECA LNG Phase 1

In December 2020, ECA LNG Phase 1 entered into a five-year loan agreement with a syndicate of nine banks for an aggregate principal amount of up to $1.6 billion. Sempra and TotalEnergies SE have provided guarantees for repayment of the loans plus accrued and unpaid interest based on their proportionate ownership interest in ECA LNG Phase 1 of 83.4% and 16.6%, respectively. At June 30, 2022 and December 31, 2021, $455 million and $341 million, respectively, was outstanding under the loan agreement, with a weighted-average interest rate of 4.37% and 2.93%, respectively.

In July 2022, ECA LNG Phase 1 replaced Sempra with IEnova as the guarantor and replaced two of the nine banks and their combined principal commitment of $203 million ($61 million of which was outstanding at June 30, 2022) with a shareholder loan from IEnova, thereby reducing the syndicate to seven banks.

NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS

We use derivative instruments primarily to manage exposures arising in the normal course of business. Our principal exposures are commodity market risk, benchmark interest rate risk and foreign exchange rate exposures. Our use of derivatives for these risks is integrated into the economic management of our anticipated revenues, anticipated expenses, assets and liabilities. Derivatives may be effective in mitigating these risks (1) that could lead to declines in anticipated revenues or increases in anticipated expenses, or (2) that could cause our asset values to fall or our liabilities to increase. Accordingly, our derivative activity summarized below generally represents an impact that is intended to offset associated revenues, expenses, assets or liabilities that are not included in the tables below.

In certain cases, we apply the normal purchase or sale exception to derivative instruments and have other commodity contracts that are not derivatives. These contracts are not recorded at fair value and are therefore excluded from the disclosures below.

In all other cases, we record derivatives at fair value on the Condensed Consolidated Balance Sheets. We may have derivatives that are (1) cash flow hedges, (2) fair value hedges, or (3) undesignated. Depending on the applicability of hedge accounting and, for SDG&E and SoCalGas and other operations subject to regulatory accounting, the requirement to pass impacts through to customers, the impact of derivative instruments may be offset in OCI (cash flow hedges), on the balance sheet (regulatory offsets), or recognized in earnings (fair value hedges and undesignated derivatives not subject to rate recovery). We classify cash flows from the principal settlements of cross-currency swaps that hedge exposure related to Mexican peso-denominated debt and hedge termination costs on interest rate swaps as financing activities and settlements of other derivative instruments as operating activities on the Condensed Consolidated Statements of Cash Flows.

HEDGE ACCOUNTING

We may designate a derivative as a cash flow hedging instrument if it effectively converts anticipated cash flows associated with revenues or expenses to a fixed dollar amount. We may utilize cash flow hedge accounting for derivative commodity instruments, foreign currency instruments and interest rate instruments. Designating cash flow hedges is dependent on the business context in which the instrument is being used, the effectiveness of the instrument in offsetting the risk that the future cash flows of a given revenue or expense item may vary, and other criteria.

ENERGY DERIVATIVES

Our market risk is primarily related to natural gas and electricity price volatility and the specific physical locations where we transact. We use energy derivatives to manage these risks. The use of energy derivatives in our various businesses depends on the particular energy market, and the operating and regulatory environments applicable to the business, as follows:

▪SDG&E and SoCalGas use natural gas derivatives and SDG&E uses electricity derivatives, for the benefit of customers, with the objective of managing price risk and basis risks, and stabilizing and lowering natural gas and electricity costs. These derivatives include fixed-price natural gas and electricity positions, options, and basis risk instruments, which are either exchange-traded or over-the-counter financial instruments, or bilateral physical transactions. This activity is governed by risk management and transacting activity plans that have been filed with and approved by the CPUC. Natural gas and electricity derivative activities are recorded as commodity costs that are offset by regulatory account balances and are recovered in rates. Net commodity cost impacts on the Condensed Consolidated Statements of Operations are reflected in Cost of Electric Fuel and Purchased Power or in Cost of Natural Gas.

▪SDG&E is allocated and may purchase CRRs, which serve to reduce the regional electricity price volatility risk that may result from local transmission capacity constraints. Unrealized gains and losses do not impact earnings, as they are offset by regulatory account balances. Realized gains and losses associated with CRRs, which are recoverable in rates, are recorded in Cost of Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations.

▪Sempra Infrastructure may use natural gas and electricity derivatives, as appropriate, in an effort to optimize the earnings of their assets which support the following businesses: LNG, natural gas transportation and storage, and power generation. Gains and losses associated with undesignated derivatives are recognized in Energy-Related Businesses Revenues on the Condensed Consolidated Statements of Operations. Certain of these derivatives may also be designated as cash flow hedges.

▪From time to time, our various businesses, including SDG&E and SoCalGas, may use other energy derivatives to hedge exposures such as greenhouse gas allowances.

The following table summarizes net energy derivative volumes.


NET ENERGY DERIVATIVE VOLUMES
(Quantities in millions)
Commodity	Unit of measure	June 30, 2022	December 31, 2021
Sempra:
Natural gas	MMBtu	193	184
Electricity	MWh	—	1
Congestion revenue rights	MWh	49	45

SDG&E:
Natural gas	MMBtu	10	7
Electricity	MWh	—	1
Congestion revenue rights	MWh	49	45
SoCalGas:
Natural gas	MMBtu	141	201

INTEREST RATE DERIVATIVES

We are exposed to interest rates primarily as a result of our current and expected use of financing. SDG&E and SoCalGas, as well as Sempra and its other subsidiaries and JVs, periodically enter into interest rate derivative agreements intended to moderate our exposure to interest rates and to lower our overall costs of borrowing. In addition, we may utilize interest rate swaps, typically designated as cash flow hedges, to lock in interest rates on outstanding debt or in anticipation of future financings.

The following table presents the net notional amounts of our interest rate derivatives, excluding those in our equity method investments.


INTEREST RATE DERIVATIVES
(Dollars in millions)
	June 30, 2022			December 31, 2021
	Notional debt		Maturities	Notional debt		Maturities
Sempra:
Cash flow hedges	$	436	2022-2034	$	462	2022-2034

FOREIGN CURRENCY DERIVATIVES

We utilize cross-currency swaps to hedge exposure related to Mexican peso-denominated debt at our Mexican subsidiaries and JVs. These cash flow hedges exchange our Mexican peso-denominated principal and interest payments into the U.S. dollar and swap Mexican fixed interest rates for U.S. fixed interest rates. From time to time, Sempra Infrastructure and its JVs may use other foreign currency derivatives to hedge exposures related to cash flows associated with revenues from contracts denominated in Mexican pesos that are indexed to the U.S. dollar.

We are also exposed to exchange rate movements at our Mexican subsidiaries and JVs, which have U.S. dollar-denominated cash balances, receivables, payables and debt (monetary assets and liabilities) that give rise to Mexican currency exchange rate movements for Mexican income tax purposes. They also have deferred income tax assets and liabilities denominated in the Mexican peso, which must be translated to U.S. dollars for financial reporting purposes. In addition, monetary assets and liabilities and certain nonmonetary assets and liabilities are adjusted for Mexican inflation for Mexican income tax purposes. We may utilize foreign currency derivatives as a means to manage the risk of exposure to significant fluctuations in our income tax expense and equity earnings from these impacts; however, we generally do not hedge our deferred income tax assets and liabilities or for inflation.

The following table presents the net notional amounts of our foreign currency derivatives, excluding those in our equity method investments.


FOREIGN CURRENCY DERIVATIVES
(Dollars in millions)
	June 30, 2022			December 31, 2021
	Notional amount		Maturities	Notional amount		Maturities
Sempra:
Cross-currency swaps	$	306	2022-2023	$	306	2022-2023
Other foreign currency derivatives	65		2022-2023	106		2022-2023

FINANCIAL STATEMENT PRESENTATION

The Condensed Consolidated Balance Sheets reflect the offsetting of net derivative positions and cash collateral with the same counterparty when a legal right of offset exists. The following tables provide the fair values of derivative instruments on the Condensed Consolidated Balance Sheets, including the amount of cash collateral receivables that were not offset because the cash collateral was in excess of liability positions.


DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
	June 30, 2022
	Other current assets		Other long-term assets		Other current liabilities		Deferred credits and other
Sempra:
Derivatives designated as hedging instruments:
Interest rate instruments	$	5	$	27	$	—	$	—
Foreign exchange instruments	—		—		(2)		—
Interest rate and foreign exchange instruments	—		—		(117)		—

Derivatives not designated as hedging instruments:


Commodity contracts not subject to rate recovery	182		91		(182)		(89)
Associated offsetting commodity contracts	(167)		(32)		167		32

Commodity contracts subject to rate recovery	27		25		(22)		(1)
Associated offsetting commodity contracts	(3)		—		3		—

Net amounts presented on the balance sheet	44		111		(153)		(58)
Additional cash collateral for commodity contracts not subject to rate recovery	76		—		—		—
Additional cash collateral for commodity contracts subject to rate recovery	48		—		—		—
Total(1)	$	168	$	111	$	(153)	$	(58)
SDG&E:


Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery	$	26	$	25	$	(14)	$	—
Associated offsetting commodity contracts	(3)		—		3		—

Net amounts presented on the balance sheet	23		25		(11)		—

Additional cash collateral for commodity contracts subject to rate recovery	36		—		—		—
Total(1)	$	59	$	25	$	(11)	$	—
SoCalGas:
Derivatives not designated as hedging instruments:


Commodity contracts subject to rate recovery	$	1	$	—	$	(8)	$	(1)


Net amounts presented on the balance sheet	1		—		(8)		(1)

Additional cash collateral for commodity contracts subject to rate recovery	12		—		—		—
Total	$	13	$	—	$	(8)	$	(1)

(1) Normal purchase contracts previously measured at fair value are excluded.


DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	December 31, 2021
	Other current assets		Other long-term assets		Other current liabilities		Deferred credits and other
Sempra:
Derivatives designated as hedging instruments:
Interest rate instruments	$	—	$	6	$	(6)	$	(2)
Foreign exchange instruments	1		1		(1)		—
Interest rate and foreign exchange instruments	—		—		(1)		(130)
Derivatives not designated as hedging instruments:


Commodity contracts not subject to rate recovery	136		11		(122)		(10)
Associated offsetting commodity contracts	(93)		(8)		93		8

Commodity contracts subject to rate recovery	38		52		(58)		—
Associated offsetting commodity contracts	(8)		—		8		—

Net amounts presented on the balance sheet	74		62		(87)		(134)
Additional cash collateral for commodity contracts not subject to rate recovery	58		—		—		—
Additional cash collateral for commodity contracts subject to rate recovery	46		—		—		—
Total(1)	$	178	$	62	$	(87)	$	(134)
SDG&E:
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery	$	34	$	52	$	(20)	$	—
Associated offsetting commodity contracts	(5)		—		5		—

Net amounts presented on the balance sheet	29		52		(15)		—

Additional cash collateral for commodity contracts subject to rate recovery	28		—		—		—
Total(1)	$	57	$	52	$	(15)	$	—
SoCalGas:
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery	$	4	$	—	$	(38)	$	—
Associated offsetting commodity contracts	(3)		—		3		—

Net amounts presented on the balance sheet	1		—		(35)		—

Additional cash collateral for commodity contracts subject to rate recovery	18		—		—		—
Total	$	19	$	—	$	(35)	$	—

(1) Normal purchase contracts previously measured at fair value are excluded.

The following table includes the effects of derivative instruments designated as cash flow hedges on the Condensed Consolidated Statements of Operations and in OCI and AOCI.


CASH FLOW HEDGE IMPACTS
(Dollars in millions)
	Pretax gain (loss) recognized in OCI					Pretax gain (loss) reclassified from AOCI into earnings
	Three months ended June 30,					Three months ended June 30,
	2022		2021		Location	2022		2021
Sempra:
Interest rate instruments	$	13	$	(6)	Interest Expense	$	—	$	1
Interest rate instruments	50		(32)		Equity Earnings(1)	(13)		(19)
Foreign exchange instruments	—		(1)		Revenues: Energy- Related Businesses	1		—
					Other (Expense) Income, Net	(1)		—
Foreign exchange instruments	—		(1)		Equity Earnings(1)	—		—
Interest rate and foreign exchange instruments	4		7		Interest Expense	1		—
					Other (Expense) Income, Net	—		7
Total	$	67	$	(33)		$	(12)	$	(11)


SoCalGas:
Interest rate instruments	$	—	$	—	Interest Expense	$	(1)	$	—

	Six months ended June 30,					Six months ended June 30,
	2022		2021		Location	2022		2021
Sempra:
Interest rate instruments	$	35	$	20	Interest Expense	$	1	$	(1)
Interest rate instruments	144		51		Equity Earnings(1)	(27)		(38)
Foreign exchange instruments	(3)		2		Revenues: Energy- Related Businesses	2		(1)
					Other (Expense) Income, Net	(1)		—
Foreign exchange instruments	(2)		2		Equity Earnings(1)	1		(1)
Interest rate and foreign exchange instruments	13		1		Interest Expense	1		—
					Other (Expense) Income, Net	6		1
Total	$	187	$	76		$	(17)	$	(40)


SoCalGas:
Interest rate instruments	$	—	$	—	Interest Expense	$	(1)	$	—

(1) Equity earnings at our foreign equity method investees are recognized after tax.

For Sempra, we expect that net gains before NCI of $6 million, which are net of income tax expense, that are currently recorded in AOCI (with net gains of $11 million attributable to NCI) related to cash flow hedges will be reclassified into earnings during the next 12 months as the hedged items affect earnings. SoCalGas expects that $1 million of losses, net of income tax benefit, that are currently recorded in AOCI related to cash flow hedges will be reclassified into earnings during the next 12 months as the hedged items affect earnings. Actual amounts ultimately reclassified into earnings depend on the interest rates in effect when derivative contracts mature.

For all forecasted transactions, the maximum remaining term over which we are hedging exposure to the variability of cash flows at June 30, 2022 is approximately 12 years for Sempra. The maximum remaining term for which we are hedging exposure to the variability of cash flows at our equity method investees is 17 years.

The following table summarizes the effects of derivative instruments not designated as hedging instruments on the Condensed Consolidated Statements of Operations.


UNDESIGNATED DERIVATIVE IMPACTS
(Dollars in millions)
		Pretax (loss) gain on derivatives recognized in earnings
		Three months ended June 30,				Six months ended June 30,
	Location	2022		2021		2022		2021
Sempra:

Commodity contracts not subject to rate recovery	Revenues: Energy-Related Businesses	$	(151)	$	(142)	$	(228)	$	(190)
Commodity contracts subject to rate recovery	Cost of Natural Gas	(4)		—		(4)		2
Commodity contracts subject to rate recovery	Cost of Electric Fuel and Purchased Power	(24)		41		(6)		43
Foreign exchange instruments	Other (Expense) Income, Net	—		—		—		(24)
Total		$	(179)	$	(101)	$	(238)	$	(169)
SDG&E:

Commodity contracts subject to rate recovery	Cost of Electric Fuel and Purchased Power	$	(24)	$	41	$	(6)	$	43

SoCalGas:

Commodity contracts subject to rate recovery	Cost of Natural Gas	$	(4)	$	—	$	(4)	$	2

CONTINGENT FEATURES

For Sempra, SDG&E and SoCalGas, certain of our derivative instruments contain credit limits which vary depending on our credit ratings. Generally, these provisions, if applicable, may reduce our credit limit if a specified credit rating agency reduces our ratings. In certain cases, if our credit ratings were to fall below investment grade, the counterparty to these derivative liability instruments could request immediate payment or demand immediate and ongoing full collateralization.

For Sempra, the total fair value of this group of derivative instruments in a liability position at June 30, 2022 and December 31, 2021 was $17 million and $88 million, respectively. For SoCalGas, the total fair value of this group of derivative instruments in a liability position at June 30, 2022 and December 31, 2021 was $9 million and $36 million, respectively. SDG&E did not have this group of derivative instruments in a liability position at June 30, 2022 or December 31, 2021. At June 30, 2022, if the credit ratings of Sempra or SoCalGas were reduced below investment grade, $17 million and $9 million, respectively, of additional assets could be required to be posted as collateral for these derivative contracts.

For Sempra, SDG&E and SoCalGas, some of our derivative contracts contain a provision that would permit the counterparty, in certain circumstances, to request adequate assurance of our performance under the contracts. Such additional assurance, if needed, is not material and is not included in the amounts above.

NOTE 9. FAIR VALUE MEASUREMENTS

We discuss the valuation techniques and inputs we use to measure fair value and the definition of the three levels of the fair value hierarchy in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.

RECURRING FAIR VALUE MEASURES

The three tables below, by level within the fair value hierarchy, set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis at June 30, 2022 and December 31, 2021. We classify financial assets and liabilities in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair-valued assets and liabilities, and their placement within the fair value hierarchy. We have not changed the valuation techniques or types of inputs we use to measure recurring fair value since December 31, 2021.

The fair value of commodity derivative assets and liabilities is presented in accordance with our netting policy, as we discuss in Note 8 under “Financial Statement Presentation.”

The determination of fair values, shown in the tables below, incorporates various factors, including but not limited to, the credit standing of the counterparties involved and the impact of credit enhancements (such as cash deposits, letters of credit and priority interests).

Our financial assets and liabilities that were accounted for at fair value on a recurring basis in the tables below include the following:

▪Nuclear decommissioning trusts reflect the assets of SDG&E’s NDT, excluding accounts receivable and accounts payable. A third-party trustee values the trust assets using prices from a pricing service based on a market approach. We validate these prices by comparison to prices from other independent data sources. Securities are valued using quoted prices listed on nationally recognized securities exchanges or based on closing prices reported in the active market in which the identical security is traded (Level 1). Other securities are valued based on yields that are currently available for comparable securities of issuers with similar credit ratings (Level 2).

▪For commodity contracts, interest rate derivatives and foreign exchange instruments, we primarily use a market or income approach with market participant assumptions to value these derivatives. Market participant assumptions include those about risk, and the risk inherent in the inputs to the valuation techniques. These inputs can be readily observable, market corroborated, or generally unobservable. We have exchange-traded derivatives that are valued based on quoted prices in active markets for the identical instruments (Level 1). We also may have other commodity derivatives that are valued using industry standard models that consider quoted forward prices for commodities, time value, current market and contractual prices for the underlying instruments, volatility factors, and other relevant economic measures (Level 2). Level 3 recurring items relate to CRRs and long-term, fixed-price electricity positions at SDG&E, as we discuss below in “Level 3 Information – SDG&E.”

▪Rabbi Trust investments include short-term investments that consist of money market and mutual funds that we value using a market approach based on closing prices reported in the active market in which the identical security is traded (Level 1).

▪As we discuss in Note 6, in July 2020, Sempra entered into a Support Agreement for the benefit of CFIN. We measure the Support Agreement, which includes a guarantee obligation, a put option and a call option, net of related guarantee fees, at fair value on a recurring basis. We use a discounted cash flow model to value the Support Agreement, net of related guarantee fees. Because some of the inputs that are significant to the valuation are less observable, the Support Agreement is classified as Level 3, as we describe below in “Level 3 Information – Sempra Infrastructure.”


RECURRING FAIR VALUE MEASURES – SEMPRA
(Dollars in millions)
	Fair value at June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalents	$	15	$	—	$	—	$	15
Equity securities	283		5		—		288
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	30		13		—		43
Municipal bonds	—		293		—		293
Other securities	—		237		—		237
Total debt securities	30		543		—		573
Total nuclear decommissioning trusts(1)	328		548		—		876
Short-term investments held in Rabbi Trust	50		—		—		50
Interest rate instruments	—		32		—		32
Commodity contracts not subject to rate recovery	—		74		—		74
Effect of netting and allocation of collateral(2)	76		—		—		76
Commodity contracts subject to rate recovery	13		1		35		49
Effect of netting and allocation of collateral(2)	32		10		6		48
Support Agreement, net of related guarantee fees	—		—		16		16
Total	$	499	$	665	$	57	$	1,221
Liabilities:
Foreign exchange instruments	$	—	$	2	$	—	$	2
Interest rate and foreign exchange instruments	—		117		—		117
Commodity contracts not subject to rate recovery	—		72		—		72
Commodity contracts subject to rate recovery	—		18		2		20
Total	$	—	$	209	$	2	$	211

(1) Excludes receivables (payables), net.

(2) Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.


RECURRING FAIR VALUE MEASURES – SEMPRA (CONTINUED)
(Dollars in millions)
	Fair value at December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalents	$	13	$	(10)	$	—	$	3
Equity securities	358		6		—		364
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	48		8		—		56
Municipal bonds	—		321		—		321
Other securities	—		260		—		260
Total debt securities	48		589		—		637
Total nuclear decommissioning trusts(1)	419		585		—		1,004
Short-term investments held in Rabbi Trust	81		—		—		81
Interest rate instruments	—		6		—		6
Foreign exchange instruments	—		2		—		2
Commodity contracts not subject to rate recovery	—		46		—		46
Effect of netting and allocation of collateral(2)	58		—		—		58
Commodity contracts subject to rate recovery	12		1		69		82
Effect of netting and allocation of collateral(2)	31		9		6		46
Support Agreement, net of related guarantee fees	—		—		7		7
Total	$	601	$	649	$	82	$	1,332
Liabilities:
Interest rate instruments	$	—	$	8	$	—	$	8
Foreign exchange instruments	—		1		—		1
Interest rate and foreign exchange instruments	—		131		—		131
Commodity contracts not subject to rate recovery	—		31		—		31
Commodity contracts subject to rate recovery	—		35		15		50
Total	$	—	$	206	$	15	$	221

(1) Excludes receivables (payables), net.

(2) Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.


RECURRING FAIR VALUE MEASURES – SDG&E
(Dollars in millions)
	Fair value at June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalents	$	15	$	—	$	—	$	15
Equity securities	283		5		—		288
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	30		13		—		43
Municipal bonds	—		293		—		293
Other securities	—		237		—		237
Total debt securities	30		543		—		573
Total nuclear decommissioning trusts(1)	328		548		—		876
Commodity contracts subject to rate recovery	13		—		35		48
Effect of netting and allocation of collateral(2)	30		—		6		36
Total	$	371	$	548	$	41	$	960

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	9	$	2	$	11
Total	$	—	$	9	$	2	$	11

	Fair value at December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalents	$	13	$	(10)	$	—	$	3
Equity securities	358		6		—		364
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	48		8		—		56
Municipal bonds	—		321		—		321
Other securities	—		260		—		260
Total debt securities	48		589		—		637
Total nuclear decommissioning trusts(1)	419		585		—		1,004
Commodity contracts subject to rate recovery	12		—		69		81
Effect of netting and allocation of collateral(2)	22		—		6		28
Total	$	453	$	585	$	75	$	1,113

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	—	$	15	$	15
Total	$	—	$	—	$	15	$	15

(1) Excludes receivables (payables), net.

(2) Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.


RECURRING FAIR VALUE MEASURES – SOCALGAS
(Dollars in millions)
	Fair value at June 30, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts subject to rate recovery	$	—	$	1	$	—	$	1
Effect of netting and allocation of collateral(1)	2		10		—		12
Total	$	2	$	11	$	—	$	13

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	9	$	—	$	9
Total	$	—	$	9	$	—	$	9

	Fair value at December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts subject to rate recovery	$	—	$	1	$	—	$	1
Effect of netting and allocation of collateral(1)	9		9		—		18
Total	$	9	$	10	$	—	$	19

Liabilities:
Commodity contracts subject to rate recovery	$	—	$	35	$	—	$	35
Total	$	—	$	35	$	—	$	35

(1) Includes the effect of the contractual ability to settle contracts under master netting agreements and with cash collateral, as well as cash collateral not offset.

Level 3 Information

SDG&E

The table below sets forth reconciliations of changes in the fair value of CRRs and long-term, fixed-price electricity positions classified as Level 3 in the fair value hierarchy for Sempra and SDG&E.


LEVEL 3 RECONCILIATIONS(1)
(Dollars in millions)
	Three months ended June 30,
	2022		2021
Balance at April 1	$	58	$	62
Realized and unrealized (losses) gains	(30)		8
Allocated transmission instruments	(6)		(2)
Settlements	11		12
Balance at June 30	$	33	$	80
Change in unrealized (losses) gains relating to instruments still held at June 30	$	(23)	$	14

	Six months ended June 30,
	2022		2021
Balance at January 1	$	54	$	69
Realized and unrealized (losses) gains	(23)		6
Allocated transmission instruments	(6)		(2)
Settlements	8		7
Balance at June 30	$	33	$	80
Change in unrealized (losses) gains relating to instruments still held at June 30	$	(18)	$	12

(1) Excludes the effect of the contractual ability to settle contracts under master netting agreements.

Inputs used to determine the fair value of CRRs and fixed-price electricity positions are reviewed and compared with market conditions to determine reasonableness. SDG&E expects all costs related to these instruments to be recoverable through customer rates. As such, there is no impact to earnings from changes in the fair value of these instruments.

CRRs are recorded at fair value based almost entirely on the most current auction prices published by the California ISO, an objective source. Annual auction prices are published once a year, typically in the middle of November, and are the basis for valuing CRRs settling in the following year. For the CRRs settling from January 1 to December 31, the auction price inputs, at a given location, were in the following ranges for the years indicated below:


CONGESTION REVENUE RIGHTS AUCTION PRICE INPUTS

Settlement year	Price per MWh					Median price per MWh
2022	$	(3.67)	to	$	6.96	$	(0.70)
2021	(1.81)		to	14.11		(0.12)

The impact associated with discounting is negligible. Because these auction prices are a less observable input, these instruments are classified as Level 3. The fair value of these instruments is derived from auction price differences between two locations. Positive values between two locations represent expected future reductions in congestion costs, whereas negative values between two locations represent expected future charges. Valuation of our CRRs is sensitive to a change in auction price. If auction prices at one location increase (decrease) relative to another location, this could result in a significantly higher (lower) fair value measurement. We summarize CRR volumes in Note 8.

Long-term, fixed-price electricity positions that are valued using significant unobservable data are classified as Level 3 because the contract terms relate to a delivery location or tenor for which observable market rate information is not available. The fair value of the net electricity positions classified as Level 3 is derived from a discounted cash flow model using market electricity forward price inputs. The range and weighted-average price of these inputs at June 30 were as follows:


LONG-TERM, FIXED-PRICE ELECTRICITY POSITIONS PRICE INPUTS

Settlement year	Price per MWh					Weighted-average price per MWh
2022	$	25.25	to	$	125.00	$	66.36
2021		22.45	to		151.90		49.27

A significant increase (decrease) in market electricity forward prices would result in a significantly higher (lower) fair value. We summarize long-term, fixed-price electricity position volumes in Note 8.

Realized gains and losses associated with CRRs and long-term, fixed-price electricity positions, which are recoverable in rates, are recorded in Cost of Electric Fuel and Purchased Power on the Condensed Consolidated Statements of Operations. Because unrealized gains and losses are recorded as regulatory assets and liabilities, they do not affect earnings.

Sempra Infrastructure

The table below sets forth reconciliations of changes in the fair value of Sempra’s Support Agreement for the benefit of CFIN classified as Level 3 in the fair value hierarchy for Sempra.


LEVEL 3 RECONCILIATIONS
(Dollars in millions)
	Three months ended June 30,
	2022		2021
Balance at April 1	$	12	$	3
Realized and unrealized gains(1)	6		3
Settlements	(2)		(2)
Balance at June 30(2)	$	16	$	4
Change in unrealized gains relating to instruments still held at June 30	$	5	$	2

	Six months ended June 30,
	2022		2021
Balance at January 1	$	7	$	3
Realized and unrealized gains(1)	14		5
Settlements	(5)		(4)
Balance at June 30(2)	$	16	$	4
Change in unrealized gains relating to instruments still held at June 30	$	13	$	4

(1) Net gains are included in Interest Income and net losses are included in Interest Expense on Sempra’s Condensed Consolidated Statements of Operations.

(2) Includes $7 in Other Current Assets and $9 in Other Long-term Assets at June 30, 2022 on Sempra’s Condensed Consolidated Balance Sheet.

The fair value of the Support Agreement, net of related guarantee fees, is based on a discounted cash flow model using a probability of default and survival methodology. Our estimate of fair value considers inputs such as third-party default rates, credit ratings, recovery rates, and risk-adjusted discount rates, which may be readily observable, market corroborated or generally unobservable inputs. Because CFIN’s credit rating and related default and survival rates are unobservable inputs that are significant to the valuation, the Support Agreement, net of related guarantee fees, is classified as Level 3. We assigned CFIN an internally developed credit rating of A3 and relied on default rate data published by Moody’s to assign a probability of default. A hypothetical change in the credit rating up or down one notch could result in a significant change in the fair value of the Support Agreement.

Fair Value of Financial Instruments

The fair values of certain of our financial instruments (cash, accounts receivable, amounts due to/from unconsolidated affiliates with original maturities of less than 90 days, dividends and accounts payable, short-term debt and customer deposits) approximate their carrying amounts because of the short-term nature of these instruments. Investments in life insurance contracts that we hold in support of our Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans are carried at cash surrender values, which represent the amount of cash that could be realized under the contracts. The following table provides the carrying amounts and fair values of certain other financial instruments that are not recorded at fair value on the Condensed Consolidated Balance Sheets.


FAIR VALUE OF FINANCIAL INSTRUMENTS
(Dollars in millions)
	Carrying amount			Fair value
			Level 1			Level 2			Level 3			Total
	June 30, 2022
Sempra:
Short-term amounts due from unconsolidated affiliates(1)	$	626		$	—		$	630		$	—		$	630
Long-term note receivable(2)	310			—			—			278			278
Long-term amounts due to unconsolidated affiliates	282			—			251			—			251
Total long-term debt(3)	23,924			—			21,709			—			21,709
SDG&E:
Total long-term debt(4)	$	7,800		$	—		$	7,102		$	—		$	7,102
SoCalGas:
Total long-term debt(5)	$	5,459		$	—		$	5,110		$	—		$	5,110

	December 31, 2021
Sempra:
Long-term note receivable(2)	$	300		$	—		$	—		$	327		$	327
Long-term amounts due from unconsolidated affiliates(1)	640			—			642			—			642
Long-term amounts due to unconsolidated affiliates	287			—			295			—			295
Total long-term debt(3)	20,099			—			22,126			—			22,126
SDG&E:
Total long-term debt(4)	$	6,417		$	—		$	7,236		$	—		$	7,236
SoCalGas:
Total long-term debt(5)	$	4,759		$	—		$	5,367		$	—		$	5,367

(1) Before allowances for credit losses of $1 at December 31, 2021. Includes $1 and $2 of accrued interest receivable at June 30, 2022 and December 31, 2021, respectively, in Due From Unconsolidated Affiliates – Current.

(2) Before allowances for credit losses of $7 and $8 at June 30, 2022 and December 31, 2021, respectively. Excludes unamortized transaction costs of $5 at both June 30, 2022 and December 31, 2021, respectively.

(3) Before reductions of unamortized discount and debt issuance costs of $294 and $260 at June 30, 2022 and December 31, 2021, respectively, and excluding finance lease obligations of $1,334 and $1,335 at June 30, 2022 and December 31, 2021, respectively.

(4) Before reductions of unamortized discount and debt issuance costs of $73 and $61 at June 30, 2022 and December 31, 2021, respectively, and excluding finance lease obligations of $1,266 and $1,274 at June 30, 2022 and December 31, 2021, respectively.

(5) Before reductions of unamortized discount and debt issuance costs of $43 and $36 at June 30, 2022 and December 31, 2021, respectively, and excluding finance lease obligations of $68 and $61 at June 30, 2022 and December 31, 2021, respectively.

We provide the fair values for the securities held in the NDT related to SONGS in Note 10.

NOTE 10. SAN ONOFRE NUCLEAR GENERATING STATION

We provide below updates to ongoing matters related to SONGS, a nuclear generating facility near San Clemente, California that permanently ceased operations in June 2013, and in which SDG&E has a 20% ownership interest. We discuss SONGS further in Note 15 of the Notes to Consolidated Financial Statements in the Annual Report.

NUCLEAR DECOMMISSIONING AND FUNDING

As a result of Edison’s decision to permanently retire SONGS Units 2 and 3, Edison began the decommissioning phase of the plant. Major decommissioning work began in 2020. We expect the majority of the decommissioning work to take approximately 10 years. Decommissioning of Unit 1, removed from service in 1992, is largely complete. The remaining work for Unit 1 will be completed once Units 2 and 3 are dismantled and the spent fuel is removed from the site. The spent fuel is currently being stored on-site, until the DOE identifies a spent fuel storage facility and puts in place a program for the fuel’s disposal, as we discuss below. SDG&E is responsible for approximately 20% of the total decommissioning cost.

The Samuel Lawrence Foundation filed a writ petition under the California Coastal Act in LA Superior Court in December 2019 seeking to invalidate the coastal development permit and to obtain injunctive relief to stop decommissioning work. The petition was denied in September 2021. In December 2021, the Samuel Lawrence Foundation filed a notice of appeal. To date, decommissioning work has not been interrupted as a result of this writ petition.

In accordance with state and federal requirements and regulations, SDG&E has assets held in the NDT to fund its share of decommissioning costs for SONGS Units 1, 2 and 3. Amounts that were collected in rates for SONGS’ decommissioning are invested in the NDT, which is comprised of externally managed trust funds. Amounts held by the NDT are invested in accordance with CPUC regulations. SDG&E classifies debt and equity securities held in the NDT as available-for-sale. The NDT assets are presented on the Sempra and SDG&E Condensed Consolidated Balance Sheets at fair value with the offsetting credits recorded in noncurrent Regulatory Liabilities.

Except for the use of funds for the planning of decommissioning activities or NDT administrative costs, CPUC approval is required for SDG&E to access the NDT assets to fund SONGS decommissioning costs for Units 2 and 3. In December 2021, SDG&E received authorization from the CPUC to access NDT funds of up to $78 million for forecasted 2022 costs.

The following table shows the fair values and gross unrealized gains and losses for the securities held in the NDT on the Sempra and SDG&E Condensed Consolidated Balance Sheets. We provide additional fair value disclosures for the NDT in Note 9.


NUCLEAR DECOMMISSIONING TRUSTS
(Dollars in millions)
	Cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
	June 30, 2022
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies(1)	$	43	$	1	$	(1)	$	43
Municipal bonds(2)	305		1		(13)		293
Other securities(3)	256		1		(20)		237
Total debt securities	604		3		(34)		573
Equity securities	109		187		(8)		288
Short-term investments, primarily cash equivalents	15		—		—		15
Receivables (payables), net	(13)		—		—		(13)
Total	$	715	$	190	$	(42)	$	863

	December 31, 2021
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	$	56	$	—	$	—	$	56
Municipal bonds	309		13		(1)		321
Other securities	255		7		(2)		260
Total debt securities	620		20		(3)		637
Equity securities	104		262		(2)		364
Short-term investments, primarily cash equivalents	3		—		—		3
Receivables (payables), net	8		—		—		8
Total	$	735	$	282	$	(5)	$	1,012

(1) Maturity dates are 2023-2052.

(2) Maturity dates are 2022-2056.

(3) Maturity dates are 2022-2072.

The following table shows the proceeds from sales of securities in the NDT and gross realized gains and losses on those sales.


SALES OF SECURITIES IN THE NUCLEAR DECOMMISSIONING TRUSTS
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Proceeds from sales	$	155	$	254	$	397	$	542
Gross realized gains	3		18		14		39
Gross realized losses	(7)		(1)		(11)		(3)

Net unrealized gains and losses, as well as realized gains and losses that are reinvested in the NDT, are included in noncurrent Regulatory Liabilities on Sempra’s and SDG&E’s Condensed Consolidated Balance Sheets. We determine the cost of securities in the trusts on the basis of specific identification.

ASSET RETIREMENT OBLIGATION

SDG&E’s ARO related to decommissioning costs for SONGS Units 1, 2 and 3 was $557 million at June 30, 2022 and is based on a cost study prepared in 2020 that is pending CPUC approval, which SDG&E expects to receive in 2023.

NUCLEAR INSURANCE

The SONGS owners have nuclear property damage insurance of $130 million, which exceeds the minimum federal requirement of $50 million. This insurance coverage is provided through NEIL. The NEIL policies have specific exclusions and limitations that can result in reduced coverage. Insured members as a group are subject to retrospective premium assessments to cover losses sustained by NEIL under all issued policies. SDG&E could be assessed up to $4.1 million of retrospective premiums based on overall member claims.

NOTE 11. COMMITMENTS AND CONTINGENCIES

LEGAL PROCEEDINGS

We accrue losses for a legal proceeding when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. However, the uncertainties inherent in legal proceedings make it difficult to reasonably estimate the costs and effects of resolving these matters. Accordingly, actual costs incurred may differ materially from amounts accrued, may exceed, and in some cases have exceeded, applicable insurance coverage and could materially adversely affect our business, results of operations, financial condition, cash flows and/or prospects. Unless otherwise indicated, we are unable to reasonably estimate possible losses or a range of losses in excess of any amounts accrued.

At June 30, 2022, loss contingency accruals for legal matters, including associated legal fees and regulatory matters related to the Leak, that are probable and estimable were $2,118 million for Sempra, including $13 million for SDG&E and $2,029 million for SoCalGas. Amounts for Sempra and SoCalGas include $2,004 million for matters related to the Leak, which we discuss below.

SoCalGas

Aliso Canyon Natural Gas Storage Facility Gas Leak

From October 23, 2015 through February 11, 2016, SoCalGas experienced a natural gas leak from one of the injection-and-withdrawal wells, SS25, at its Aliso Canyon natural gas storage facility in Los Angeles County. As described below, numerous lawsuits, investigations and regulatory proceedings have been initiated in response to the Leak, resulting in significant costs, which together with other Leak-related costs are discussed below in “Cost Estimate, Accounting Impact and Insurance.”

Civil Litigation – Litigation Subject to Agreements to Resolve. As of August 1, 2022, approximately 390 lawsuits including approximately 36,000 plaintiffs (the Individual Plaintiffs) were pending against SoCalGas and Sempra related to the Leak. All these cases are coordinated before a single court in the LA Superior Court for pretrial management.

In November 2017, in the coordinated proceeding, a Third Amended Consolidated Master Case Complaint for Individual Actions was filed on behalf of the Individual Plaintiffs, through which their separate lawsuits are managed for pretrial purposes. The consolidated complaint asserts causes of action for negligence, negligence per se, private and public nuisance (continuing and permanent), trespass, inverse condemnation, strict liability, negligent and intentional infliction of emotional distress, fraudulent concealment, loss of consortium and wrongful death against SoCalGas and Sempra (the Individual Plaintiff Litigation). The complaint also asserted violations of Proposition 65, which were resolved in January 2022. The consolidated complaint seeks compensatory and punitive damages for personal injuries, lost wages and/or lost profits, property damage and diminution in property value, injunctive relief, costs of future medical monitoring, civil penalties, and attorneys’ fees.

In October 2018 and January 2019, complaints were filed on behalf of 51 firefighters stationed near the Aliso Canyon natural gas storage facility who allege they were injured by exposure to chemicals released during the Leak. The complaints against SoCalGas and Sempra assert causes of actions for negligence, negligence per se, private and public nuisance (continuing and permanent), trespass, inverse condemnation, strict liability, negligent and intentional infliction of emotional distress, fraudulent concealment and loss of consortium. The complaints seek compensatory and punitive damages for personal injuries, lost wages and/or lost profits, property damage and diminution in property value, and attorneys’ fees. These complaints are included in the coordinated proceeding and the Individual Plaintiff Litigation.

In September 2021, SoCalGas and Sempra entered into an agreement with counsel representing over 80% of the plaintiffs in the Individual Plaintiff Litigation to resolve the claims of all Individual Plaintiffs for a payment of up to $1.8 billion. The agreement is subject to acceptance by no fewer than roughly 97% of all plaintiffs in the Individual Plaintiff Litigation. The agreement, which requires each plaintiff who accepts a settlement to release all such plaintiff’s claims against SoCalGas, Sempra and their respective affiliates related to the Individual Plaintiff Litigation and the Leak, provides that the settlement amount will be reduced based on the number of plaintiffs who do not accept. The LA Superior Court previously approved the process to allocate payments among the plaintiffs. The Individual Plaintiffs’ counsel report that they have exceeded the 97% threshold described above and, in July 2022, the parties extended the date by which all conditions under the agreement must be met by the Individual Plaintiffs’ counsel or waived by SoCalGas and Sempra. SoCalGas expects to make a payment of approximately $1.8 billion under the agreement on or around August 30, 2022. The plaintiffs who do not agree to participate in the settlement will be able to continue to pursue their claims. Pursuant to the agreement, the Individual Plaintiff Litigation has been stayed.

In January 2017, a putative class of persons and businesses who own or lease real property within a five-mile radius of the well filed a consolidated class action complaint against SoCalGas and Sempra (the Property Class Action). The Property Class Action asserts claims for strict liability for ultra-hazardous activities, negligence, negligence per se, violation of the California Unfair Competition Law, trespass, permanent and continuing public and private nuisance, and inverse condemnation.

In September 2021, SoCalGas and Sempra entered into an agreement to settle the Property Class Action for a total amount of $40 million. In April 2022, the LA Superior Court gave final approval of the settlement, which releases SoCalGas, Sempra and their respective affiliates from all claims of the property class members.

Complaints on behalf of five property developers (the Developer Plaintiffs) were filed in October 2018 and October 2020 against SoCalGas and Sempra alleging causes of action for strict liability, negligence per se, negligence, negligent interference, continuing nuisance, permanent nuisance, inverse condemnation and violation of the California Unfair Competition Law and California Public Utilities Code section 2106. The complaints seek compensatory, statutory and punitive damages, injunctive relief and attorneys’ fees. In January 2022 and March 2022, SoCalGas and Sempra entered into agreements to settle the claims of four of the Developer Plaintiffs.

Civil Litigation – Unresolved Litigation. The complaint of one of the Developer Plaintiffs remains pending, and the LA Superior Court has scheduled a trial for October 2022. SoCalGas has engaged in settlement discussions with the remaining Developer Plaintiff.

Four shareholder derivative actions were filed alleging breach of fiduciary duties against certain officers and certain directors of Sempra and/or SoCalGas. Three of the actions were joined in an Amended Consolidated Shareholder Derivative Complaint, which was dismissed with prejudice in January 2021. The plaintiffs have appealed this dismissal. In the remaining fourth action, the plaintiffs filed an amended complaint in June 2022.

An adverse ruling in any of the lawsuits by plaintiffs in the Individual Plaintiff Litigation who do not agree to settle or by the remaining Developer Plaintiff could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial

condition, cash flows and/or prospects. In addition, there can be no assurance that the conditions to resolve the Individual Plaintiff Litigation will be satisfied or waived to the extent not satisfied.

Regulatory Proceedings. In January 2016, CalGEM and the CPUC directed an independent analysis of the technical root cause of the Leak to be conducted by Blade. In May 2019, Blade released its report, which concluded that the Leak was caused by a failure of the production casing of the well due to corrosion and that attempts to stop the Leak were not effectively conducted, but did not identify any instances of non-compliance by SoCalGas. Blade concluded that SoCalGas’ compliance activities conducted prior to the Leak did not find indications of a casing integrity issue. Blade opined, however, that there were measures, none of which were required by gas storage regulations at the time, that could have been taken to aid in the early identification of corrosion and that, in Blade’s opinion, would have prevented or mitigated the Leak. The report also identified well safety practices and regulations that have since been adopted by CalGEM and implemented by SoCalGas.

In June 2019, the CPUC opened an OII to consider penalties against SoCalGas for the Leak, which it later bifurcated into two phases. The first phase will consider whether SoCalGas violated California Public Utilities Code Section 451 or other laws, CPUC orders or decisions, rules or requirements, whether SoCalGas engaged in unreasonable and/or imprudent practices with respect to its operation and maintenance of the Aliso Canyon natural gas storage facility or its related record-keeping practices, whether SoCalGas cooperated sufficiently with the SED of the CPUC and Blade during the pre-formal investigation, and whether any of the mitigation measures proposed by Blade should be implemented to the extent not already done. The SED, based largely on the Blade report, has alleged a total of 324 violations in the first phase, asserting that SoCalGas violated California Public Utilities Code Section 451 and failed to cooperate in the investigation and to keep proper records. Hearings on a subset of issues began in March 2021. A schedule for hearings on the remaining issues has not been set. The second phase will consider whether SoCalGas should be sanctioned for the Leak and what damages, fines or other penalties, if any, should be imposed for any violations, unreasonable or imprudent practices, or failure to cooperate sufficiently with the SED as determined by the CPUC in the first phase. In addition, the second phase will determine the amounts of various costs incurred by SoCalGas and other parties in connection with the Leak and the ratemaking treatment or other disposition of such costs, which could result in little or no recovery of such costs by SoCalGas. SoCalGas has engaged in settlement discussions with the SED in connection with this proceeding.

In February 2017, the CPUC opened a proceeding pursuant to the SB 380 OII to determine the feasibility of minimizing or eliminating the use of the Aliso Canyon natural gas storage facility while still maintaining energy and electric reliability for the region, but excluding issues with respect to air quality, public health, causation, culpability or cost responsibility regarding the Leak. The first phase of the proceeding established a framework for the hydraulic, production cost and economic modeling assumptions for the potential reduction in usage or elimination of the Aliso Canyon natural gas storage facility. Phase 2 of the proceeding, which is evaluating the impacts of reducing or eliminating the Aliso Canyon natural gas storage facility using the established framework and models, began in the first quarter of 2019. In December 2019, the CPUC added a third phase of the proceeding and engaged a consultant who is analyzing alternative means for meeting or avoiding the demand for the facility’s services if it were eliminated in either the 2027 or 2035 timeframe. In July 2021, the CPUC combined Phase 2 and Phase 3 and modified the scope of Phase 3 to also address potential implementation of alternatives to the Aliso Canyon natural gas storage facility if the CPUC determines that the Aliso Canyon natural gas storage facility should be permanently closed. The CPUC also added all California IOUs as parties to the proceeding and encouraged all load serving entities in the Los Angeles Basin to join the proceeding.

In November 2021, the CPUC issued a decision on the interim range of gas inventory levels at the Aliso Canyon natural gas storage facility, setting an interim range of gas inventory levels of up to 41.16 Bcf. The CPUC may issue future changes to this interim range of authorized gas inventory levels before issuing a final inventory determination within the SB 380 OII proceeding.

At June 30, 2022, the Aliso Canyon natural gas storage facility had a net book value of $908 million. If the Aliso Canyon natural gas storage facility were to be permanently closed or if future cash flows from its operation were otherwise insufficient to recover its carrying value, we may record an impairment of the facility, incur higher than expected operating costs and/or be required to make additional capital expenditures (any or all of which may not be recoverable in rates), and natural gas reliability and electric generation could be jeopardized. Any such outcome could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial condition, cash flows and/or prospects.

Cost Estimate, Accounting Impact and Insurance. SoCalGas has incurred significant costs related to the Leak, primarily for temporary relocation of community residents; to control the well and stop the Leak; to mitigate the natural gas released; to purchase natural gas to replace what was lost through the Leak; to defend against and, in certain cases, settle, civil and criminal litigation arising from the Leak; to pay the costs of the government-ordered response to the Leak, including the costs for Blade to conduct the root cause analysis described above; to respond to various government and agency investigations regarding the Leak; and to comply with increased regulation imposed as a result of the Leak. At June 30, 2022, SoCalGas estimates these costs related

to the Leak are $3,361 million (the cost estimate), which includes $1,279 million of costs recovered or probable of recovery from insurance. This cost estimate may increase significantly as more information becomes available. At June 30, 2022, $2,003 million of the cost estimate is accrued in Reserve for Aliso Canyon Costs and $4 million of the cost estimate is accrued in Deferred Credits and Other on SoCalGas’ and Sempra’s Condensed Consolidated Balance Sheets.

In the three months and six months ended June 30, 2022, SoCalGas recorded total charges of $45 million ($32 million after tax) and $137 million ($98 million after tax), respectively, inclusive of estimated legal costs, in Aliso Canyon Litigation and Regulatory Matters on the SoCalGas and Sempra Condensed Consolidated Statements of Operations related to the claims of the Developer Plaintiffs that we describe above. These charges are included in the cost estimate that we describe above.

Except for the amounts paid or estimated to settle certain legal and regulatory matters as described above, the cost estimate does not include (i) any amounts necessary to resolve claims of Individual Plaintiffs who do not agree to participate in the settlement of the Individual Plaintiff Litigation or (ii) the matters that we describe above in “Civil Litigation – Unresolved Litigation” and “Regulatory Proceedings” to the extent it is not possible to predict at this time the outcome of these actions or reasonably estimate the possible costs or a range of possible costs for damages, restitution, civil or administrative fines or penalties, defense, settlement or other costs or remedies that may be imposed or incurred. The cost estimate also does not include certain other costs incurred by Sempra associated with defending against shareholder derivative lawsuits and other potential costs that we currently do not anticipate incurring or that we cannot reasonably estimate. Further, we are not able to reasonably estimate the possible loss or a range of possible losses in excess of the amounts accrued. The costs or losses not included in the cost estimate could be significant and could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial condition, cash flows and/or prospects.

We have received insurance payments for many of the categories of costs included in the cost estimate, including temporary relocation and associated processing costs, control-of-well expenses, costs of the government-ordered response to the Leak, certain legal costs and lost gas. At June 30, 2022, we recorded the expected recovery of the cost estimate related to the Leak of $344 million as Insurance Receivable for Aliso Canyon Costs on SoCalGas’ and Sempra’s Condensed Consolidated Balance Sheets. This amount is exclusive of insurance retentions and $935 million of insurance proceeds we received through June 30, 2022. We intend to pursue the full extent of our insurance coverage for the costs we have incurred. Other than insurance for certain future defense costs we may incur as well as directors’ and officers’ liability, we have exhausted all of our insurance in this matter. We continue to pursue other sources of insurance coverage for costs related to this matter, but we may not be successful in obtaining additional insurance recovery for any of these costs. If we are not able to secure additional insurance recovery, if any costs we have recorded as an insurance receivable are not collected, if there are delays in receiving insurance recoveries, or if the insurance recoveries are subject to income taxes while the associated costs are not tax deductible, such amounts and/or delays could have a material adverse effect on SoCalGas’ and Sempra’s results of operations, financial condition, cash flows and/or prospects.

Sempra Infrastructure

Energía Costa Azul

We describe below certain land and customer disputes and permit challenges affecting our ECA Regas Facility. Certain of these land disputes involve land on which portions of the ECA LNG liquefaction facilities are proposed to be situated or on which portions of the ECA Regas Facility that would be necessary for the operation of the proposed ECA LNG liquefaction facilities are situated. One or more unfavorable final decisions on these disputes or challenges could materially adversely affect our existing natural gas regasification operations and proposed natural gas liquefaction projects at the site of the ECA Regas Facility and have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.

Land Disputes. Sempra Infrastructure has been engaged in a long-running land dispute relating to property adjacent to its ECA Regas Facility that allegedly overlaps with land owned by the ECA Regas Facility (the facility, however, is not situated on the land that is the subject of this dispute), as follows:

▪A claimant to the adjacent property filed complaints in the federal Agrarian Court challenging the refusal of SEDATU in 2006 to issue title to him for the disputed property. In November 2013, the federal Agrarian Court ordered that SEDATU issue the requested title to the claimant and cause it to be registered. Both SEDATU and Sempra Infrastructure challenged the ruling due to lack of notification of the underlying process. In May 2019, a federal court in Mexico reversed the ruling and ordered a retrial, which is pending resolution.

▪In a separate proceeding, the claimant filed suit to reinitiate an administrative procedure at SEDATU to obtain the property title that was previously dismissed. In April 2021, the Agrarian Court ordered that the administrative procedure be restarted. The proceeding in the Agrarian Court has concluded; however, the administrative procedure at SEDATU may continue if SEDATU decides to reopen the matter.

In addition, four cases involving two adjacent areas of real property on which part of the ECA Regas Facility is situated, each brought by a single plaintiff or her descendants, remain pending against the facility, as follows:

▪The first disputed area is subject to a claim in the federal Agrarian Court that has been ongoing since 2006, in which the plaintiff seeks to annul the property title for a portion of the land on which the ECA Regas Facility is situated and to obtain possession of a different parcel that allegedly overlaps with the site of the ECA Regas Facility. The proceeding, which seeks an order that SEDATU annul the ECA Regas Facility’s competing property title, was initiated in 2006 and, in July 2021, a decision was issued in favor of the ECA Regas Facility. The plaintiff appealed, and in February 2022, the appellate court confirmed the ruling in favor of the ECA Regas Facility and dismissed the appeal. The plaintiff filed a final federal appeal against the appellate court ruling. A final ruling from the Federal Collegiate Circuit Court is pending.

▪The second disputed area is a parcel adjacent to the ECA Regas Facility that allegedly overlaps with land on which the ECA Regas Facility is situated, which is subject to a claim in the federal Agrarian Court and two claims in Mexican civil courts. The ECA Regas Facility first bought the property from the federal government in 2003; however, to resolve an ownership controversy, in 2008, the ECA Regas Facility reached a financial settlement with the plaintiff to eliminate an adverse claim to its title. Nevertheless, the plaintiff sued in 2013 for the nullity of both titles. The Agrarian Court ruled in favor of the plaintiff in May 2021, nullifying the first property title. Sempra Infrastructure appealed the ruling in July 2021. In May 2022, Sempra Infrastructure won the appeal and the plaintiff’s claims were dismissed, which the plaintiff has appealed. The ECA Regas Facility continues to hold the second property title to the land. The two civil court proceedings, which seek to invalidate the contract by which the ECA Regas Facility purchased for the second time the applicable parcel of land on which the ECA Regas Facility is situated on the grounds that the purchase price was allegedly unfair, are progressing at different stages. In the first civil case, initiated in 2013, the court ruled in favor of the ECA Regas Facility, and the final decision was affirmed on a federal appeal. The descendants of the same plaintiff filed the second civil case in 2019, which was dismissed by the court. However, the dismissal has been appealed, which is pending the appellate court’s ruling. In April 2022, the ECA Regas Facility entered into a settlement agreement with the plaintiff, whereby the plaintiff has agreed to recognize the ECA Regas Facility as the sole owner of the property and waive any current or future rights over the property, or any other properties related to the ECA Regas Facility. The settlement agreement is pending court approval and would definitively resolve all three pending cases.

Environmental and Social Impact Permits. Several administrative challenges are pending before Mexico’s Secretariat of Environment and Natural Resources (the Mexican environmental protection agency) and Federal Tax and Administrative Courts, seeking revocation of the environmental impact authorization issued to the ECA Regas Facility in 2003. These cases generally allege that the conditions and mitigation measures in the environmental impact authorization are inadequate and challenge findings that the activities of the terminal are consistent with regional development guidelines.

In 2018 and 2021, three related claimants filed separate challenges in the federal district court in Ensenada, Baja California in relation to the environmental and social impact permits issued by each of ASEA and SENER to ECA LNG authorizing natural gas liquefaction activities at the ECA Regas Facility, as follows:

▪In the first case, the court issued a provisional injunction in September 2018. In December 2018, ASEA approved modifications to the environmental permit that facilitate the development of the proposed natural gas liquefaction facility in two phases. In May 2019, the court canceled the provisional injunction. The claimant appealed the court’s decision canceling the injunction but was not successful. The claimant’s underlying challenge to the permits remains pending.

▪In the second case, the initial request for a provisional injunction was denied. That decision was reversed on appeal in January 2020, resulting in the issuance of a new injunction against the permits that were issued by ASEA and SENER. This injunction has uncertain application absent clarification by the court. The claimants petitioned the court to rule that construction of natural gas liquefaction facilities violated the injunction, and in February 2022, the court ruled in favor of the ECA Regas Facility, meaning that the natural gas liquefaction activities have not been affected. The claimants have appealed this ruling.

▪In the third case, a group of residents filed a complaint in June 2021 against various federal and state authorities alleging deficiencies in the public consultation process for the issuance of the permits. The request for an initial injunction was denied and the claimants have appealed, which is pending the appellate court’s ruling.

Customer Dispute. In May 2020, the two third-party capacity customers at the ECA Regas Facility, Shell Mexico and Gazprom, asserted that a 2019 update of the general terms and conditions for service at the facility, as approved by the CRE, resulted in a breach of contract by Sempra Infrastructure and a force majeure event. In July 2020, Shell Mexico submitted a request for arbitration of the dispute and Gazprom joined the proceeding, and a hearing was held in October 2021. The International Court of Arbitration issued a final, non-appealable decision dated April 27, 2022 in favor of Sempra Infrastructure dismissing all claims and confirming the contracts remain in force. Shell Mexico submitted a request to the International Court of Arbitration, and Gazprom joined the request, to issue an additional decision, asserting that two of the claims were not addressed in the ruling. Sempra Infrastructure filed a response and requested that any additional decision by the International Court of Arbitration be incorporated into the original decision as one, final ruling for clarity to aid in enforcement proceedings should they become necessary.

Citing the alleged breach, Shell Mexico stopped making payments under its LNG storage and regasification agreement. Due to nonpayment, Sempra Infrastructure drew against Shell Mexico’s letters of credit provided as payment security until they were fully exhausted in March 2022 and this customer has not resumed making payments. Although Gazprom had previously been making regular monthly payments under its LNG storage and regasification agreement, Sempra Infrastructure drew against and fully exhausted Gazprom’s letters of credit in April 2022 due to Gazprom’s non-renewal of such letters of credit as required under the agreement. Gazprom has not paid its invoices since March 2022, so funds drawn from the letters of credit have been used to fully offset such nonpayment. We expect that these funds will provide payment security from Gazprom through the end of 2024.

In addition to the arbitration proceeding, Shell Mexico also filed constitutional claims against the CRE’s approval of the general terms and conditions for service at the facility and against the issuance of the liquefaction permit. Shell Mexico’s request for an injunction against the general terms and conditions was denied, and the ruling was upheld on appeal. The request for an injunction against the liquefaction permit was denied, and the decision was vacated and remanded on appeal to the First District Court in Administrative Matters, which again denied the injunction. The case on the injunction request was then heard again by the appellate court. A hearing was held on the merits and a decision is pending.

Sonora Pipeline

Guaymas-El Oro Segment. Sempra Infrastructure’s Sonora natural gas pipeline consists of two segments, the Sasabe-Puerto Libertad-Guaymas segment and the Guaymas-El Oro segment. Each segment has its own service agreement with the CFE. In 2015, the Yaqui tribe, with the exception of some members living in the Bácum community, granted its consent and a right-of-way easement agreement for the construction of the Guaymas-El Oro segment of the Sonora natural gas pipeline that crosses its territory. Representatives of the Bácum community filed a legal challenge in Mexican federal court demanding the right to withhold consent for the project, the stoppage of work in the Yaqui territory and damages. In 2016, the judge granted a suspension order that prohibited the construction of such segment through the Bácum community territory. Because the pipeline does not pass through the Bácum community, Sempra Infrastructure did not believe the 2016 suspension order prohibited construction in the remainder of the Yaqui territory. Construction of the Guaymas-El Oro segment was completed, and commercial operations began in May 2017.

Following the start of commercial operations of the Guaymas-El Oro segment, Sempra Infrastructure reported damage to the Guaymas-El Oro segment of the Sonora pipeline in the Yaqui territory that has made that section inoperable since August 2017 and, as a result, Sempra Infrastructure declared a force majeure event. In 2017, an appellate court ruled that the scope of the 2016 suspension order encompassed the wider Yaqui territory, which has prevented Sempra Infrastructure from making repairs to put the pipeline back in service. In July 2019, a federal district court ruled in favor of Sempra Infrastructure and held that the Yaqui tribe was properly consulted and that consent from the Yaqui tribe was properly received. Representatives of the Bácum community appealed this decision, causing the suspension order preventing Sempra Infrastructure from repairing the damage to the Guaymas-El Oro segment of the Sonora pipeline in the Yaqui territory to remain in place until the appeals process is exhausted. In December 2021, the court of appeals referred the matter to Mexico’s Supreme Court. In June 2022, the Supreme Court remanded the case back to the court of appeals for final resolution.

Sempra Infrastructure exercised its rights under the contract, which included seeking force majeure payments for the two-year period such force majeure payments were required to be made, which ended in August 2019.

In July 2019, the CFE filed a request for arbitration generally to nullify certain contract terms that provide for fixed capacity payments in instances of force majeure and made a demand for substantial damages in connection with the force majeure event. In September 2019, the arbitration process ended when Sempra Infrastructure and the CFE reached an agreement to restart natural gas transportation service on the earlier of completion of repair of the damaged pipeline or January 15, 2020, and to modify the tariff structure and extend the term of the contract by 10 years. Subsequently, Sempra Infrastructure and the CFE agreed to extend the service start date multiple times, most recently to November 30, 2022. Under the revised agreement, the CFE will resume making payments only when the damaged section of the Guaymas-El Oro segment of the Sonora pipeline is repaired. If the pipeline is not repaired by November 30, 2022, and the parties do not agree on a new service start date, Sempra Infrastructure retains the right to terminate the contract and seek to recover its reasonable and documented costs and lost profits. Discussions with the CFE regarding the future of the pipeline are underway in accordance with a non-binding MOU announced in January 2022 that, among other matters, addresses efforts to restart service on the pipeline. In July 2022, Sempra Infrastructure and the CFE entered into a Shareholders’ Agreement that establishes a framework for a JV between the parties to work on restarting service on the pipeline, including the potential re-routing of a portion of the pipeline. This agreement is subject to a number of conditions to be satisfied before it becomes effective, including regulatory and corporate authorizations.

At June 30, 2022, Sempra Infrastructure had $426 million in PP&E, net, related to the Guaymas-El Oro segment of the Sonora pipeline, which could be subject to impairment if Sempra Infrastructure is unable to make such repairs (which have not

commenced) or re-route a portion of the pipeline (which has not been agreed to by the parties, but is subject to negotiation pursuant to a non-binding MOU and a Shareholders’ Agreement, as described above) and resume operations or if Sempra Infrastructure terminates the contract and is unable to obtain recovery, which in each case could have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.

Sasabe-Puerto Libertad-Guaymas Segment. In June 2014, Sempra Infrastructure and a landowner agreed to enter into a voluntary right-of-way easement agreement for the construction and operation of a seven-mile section of the 314-mile Sasabe-Puerto Libertad-Guaymas segment of the Sonora natural gas pipeline on the landowner’s property. However, in 2015, the landowner filed a complaint demanding the easement agreement be nullified. In September 2021, a definitive and non-appealable judgment was issued declaring the easement agreement nullified and ordering the removal of the pipeline from the landowner’s property. The execution of the judgment is suspended as a result of an amparo lawsuit filed by the CFE as an interested third party that did not participate in the litigation. Sempra Infrastructure filed a special judicial action asking the civil court to acknowledge the existence of the easement and to determine the consideration the landowner should receive in exchange for the easement. In July 2022, Sempra Infrastructure and the landowner entered into a new easement agreement approved by the court for the seven-mile section on the landowner’s property, thus bringing this case to definitive conclusion.

Regulatory and Other Actions by the Mexican Government

We describe below certain actions by the Mexican government that could have a material impact on the energy sector in Mexico. Sempra Infrastructure and other parties affected by these resolutions, orders, decrees, regulations and proposed amendments to Mexican law have challenged them by filing amparo and other claims, some of which have been granted injunctive relief. The court-ordered injunctions or suspensions provide temporary relief until Mexico’s federal district court or Supreme Court ultimately resolves the amparo and other claims. An unfavorable decision on one or more of these amparo or other challenges or the potential for extended disputes may impact our ability to operate our facilities at existing levels or at all, may result in increased costs for Sempra Infrastructure and its customers, may adversely affect our ability to develop new projects, may result in decreased revenues and cash flows, and may negatively impact our ability to recover the carrying values of our investments in Mexico, any of which may have a material adverse effect on our business, results of operations, financial condition, cash flows and/or prospects.

Transmission Rates for Legacy Generation Facilities. In May 2020, the CRE approved an update to the transmission rates included in legacy renewable and cogeneration energy contracts based on the claim that the legacy transmission rates did not reflect fair and proportional costs for providing the applicable services and, therefore, created inequitable competitive conditions. Three of Sempra Infrastructure’s renewable energy facilities (Don Diego Solar, Border Solar and Ventika) are currently holders of contracts with such legacy rates, and under the terms of these contracts any increases in the transmission rates would be passed through directly to their customers. These renewable energy facilities sought and obtained injunctive relief but were required to guarantee the difference in tariffs. The three facilities obtained favorable resolutions from a lower court and the CRE appealed those decisions, which were definitively affirmed in favor of the Don Diego Solar, Border Solar and Ventika facilities, whereby the injunctions were made permanent, the regulations were declared unconstitutional, and the guarantee was determined to not be required. The resolution is definitive and final.

Offtakers of Legacy Generation Permits. In October 2020, the CRE approved a resolution to amend the rules for the inclusion of new offtakers of legacy generation and self-supply permits (the Offtaker Resolution), which became effective immediately. The Offtaker Resolution prohibits self-supply permit holders from adding new offtakers that were not included in the original development or expansion plans, making modifications to the amount of energy allocated to the named offtakers, and including load centers that have entered into a supply arrangement under Mexico’s Electricity Industry Law. Don Diego Solar, Border Solar and Ventika are holders of self-supply permits and are impacted by the Offtaker Resolution. In January 2022, Don Diego Solar and Border Solar obtained a favorable resolution from a Mexican federal district court and the CRE appealed that decision. If Sempra Infrastructure is not able to obtain legal protection for these impacted facilities, Sempra Infrastructure expects it will sell Border Solar’s capacity and a portion of Don Diego Solar’s capacity affected by the Offtaker Resolution into the spot market. Currently, prices in the spot market are higher than the fixed prices in the PPAs that were entered into through self-supply permits, but these markets are subject to significant volatility. At June 30, 2022, Sempra Infrastructure had $14 million in other intangible assets, net, related to these self-supply permits previously granted by the CRE and impacted by the Offtaker Resolution that could be subject to impairment if Sempra Infrastructure is unable to obtain adequate legal protection. Sempra Infrastructure has filed lawsuits against the Offtaker Resolution and received injunctive relief pending final resolution.

Amendments to Mexico’s Electricity Industry Law. In March 2021, the Mexican government published a decree with amendments to Mexico’s Electricity Industry Law that include some public policy changes, including establishing priority of dispatch for CFE plants over privately owned plants. According to the decree, these amendments were to become effective on March 10, 2021, and SENER, the CRE and CENACE were to have 180 calendar days to modify, as necessary, all resolutions,

policies, criteria, manuals and other regulations applicable to the power industry to conform with this decree. However, a Mexican court issued a suspension of the amendments on March 19, 2021. In April 2022, the Mexican Supreme Court resolved an action of unconstitutionality filed by a group of senators against the amended Electricity Industry Law, but the qualified majority of eight votes out of 11 as is required in matters involving constitutionality was not reached and the proceeding was dismissed, which means that the Mexican Supreme Court did not issue a binding precedent and the amended Electricity Industry Law remains in force. Sempra Infrastructure filed three lawsuits against the amendments to the Electricity Industry Law and, in each of them, Sempra Infrastructure obtained a favorable judgment of the first instance in the lower courts, which has been appealed. If the proposed amendments are affirmed by the lower courts or by the Mexican Supreme Court (which in these cases would only require a simple majority vote), the CRE may be required to revoke self-supply permits granted under the former electricity law, which were grandfathered when the new Electricity Industry Law was enacted, under a legal standard that is ambiguous and not well defined under the law.

Amendments to Mexico’s Hydrocarbons Law. In May 2021, amendments to Mexico’s Hydrocarbons Law were published and became effective. The amendments grant SENER and the CRE additional powers to suspend and revoke permits related to the midstream and downstream sectors. Suspension of permits will be determined by SENER or the CRE when a danger to national security, energy security, or to the national economy is foreseen. Likewise, new grounds for the revocation of permits are in place if the permit holder (i) carries out its activity with illegally imported products; (ii) fails, on more than one occasion, to comply with the provisions applicable to quantity, quality and measurement of the products; or (iii) modifies the technical conditions of its infrastructure without authorization. Additionally, in the case of existing permits, authorities will revoke those permits that fail to comply with the minimum storage requirements established by SENER or fail to comply with requirements or violate provisions established by the amended Hydrocarbons Law. All the Sempra Infrastructure entities participating in the Mexico hydrocarbons sector filed lawsuits against the initiative to reform the Hydrocarbons Law. In 2021, district courts issued judgments that the amendments do not affect the interests of the companies at this time and, as a result, dismissed the amparo lawsuits, including the lawsuits filed by Sempra Infrastructure entities. The Sempra Infrastructure entities have appealed these judgments. The Circuit Courts upheld the dismissal of the amparo lawsuits, except one that is pending resolution.

Proposed Constitutional Reform in Mexico. In September 2021, the President of Mexico presented a constitutional reform initiative with the stated goal of preserving energy security and self-sufficiency, and a continuous supply of electricity to the country’s population, as a condition for guaranteeing national security and the human right to a decent life. The CRE and the National Commission of Hydrocarbons would be dissolved, and their functions would be carried out by SENER. CENACE would be reinstated to the CFE, and the CFE would be responsible for generating, conducting, transforming, distributing and supplying electricity, and would be the only entity allowed to commercialize electric energy in Mexico. Electricity generation permits and contracts for the sale of electricity and RECs to the CFE, including permits at all of Sempra Infrastructure’s operational power generation facilities, would be canceled. The public electricity supply service would be provided exclusively by the CFE, which may acquire up to 46% of required energy from the private sector. Only certain private power plants would be permitted to continue generating electricity and compete to offer the CFE the lowest production costs. On April 17, 2022, the Chamber of Deputies in Mexico rejected the proposed constitutional reform.

Other Litigation

RBS Sempra Commodities

Sempra holds an equity method investment in RBS Sempra Commodities, a limited liability partnership in the process of being liquidated. In 2015, liquidators filed a claim in the High Court of Justice against RBS (now NatWest Markets plc, our partner in the JV) and Mercuria Energy Europe Trading Limited (the Defendants) on behalf of 10 companies (the Liquidating Companies) that engaged in carbon credit trading via chains that included a company that traded directly with RBS SEE, a subsidiary of RBS Sempra Commodities. The claim alleges that the Defendants’ participation in the purchase and sale of carbon credits resulted in the Liquidating Companies’ carbon credit trading transactions creating a VAT liability they were unable to pay, and that the Defendants are liable to provide for equitable compensation due to dishonest assistance and compensation under the U.K. Insolvency Act of 1986. Trial on the matter was held in June and July of 2018. In March 2020, the High Court of Justice rendered its judgment mostly in favor of the Liquidating Companies and awarded damages of approximately £45 million (approximately $55 million in U.S. dollars at June 30, 2022), plus costs and interest. In October 2020, the High Court of Justice assessed costs and interest to be approximately £21 million (approximately $26 million in U.S. dollars at June 30, 2022) as of that date, with interest continuing to accrue. The Defendants appealed and, in May 2021, the Court of Appeal set aside the High Court of Justice’s decision and ordered a retrial. In July 2022, the Supreme Court of the U.K. denied the Liquidating Companies application for permission to appeal the Court of Appeal’s decision. No date has been scheduled for the retrial. J.P. Morgan Chase & Co., which acquired RBS SEE and later sold it to Mercuria Energy Group, Ltd., previously notified us that Mercuria Energy

Group, Ltd. has sought indemnity for the claim, and J.P. Morgan Chase & Co. has in turn sought indemnity from Sempra and RBS.

In the second quarter of 2021, we reduced our estimate of our obligations to settle pending VAT matters and related legal costs by $50 million in Equity Earnings on Sempra’s Condensed Consolidated Statement of Operations based on the settlement with Her Majesty’s Revenue and Customs (U.K.’s Revenue and Customs Department) on the First-Tier Tribunal case and revised assumptions on the High Court of Justice case.

Asbestos Claims Against EFH Subsidiaries

Certain EFH subsidiaries that we acquired as part of the merger of EFH with an indirect subsidiary of Sempra were defendants in personal injury lawsuits brought in state courts throughout the U.S. These cases alleged illness or death as a result of exposure to asbestos in power plants designed and/or built by companies whose assets were purchased by predecessor entities to the EFH subsidiaries, and generally assert claims for product defects, negligence, strict liability and wrongful death. They sought compensatory and punitive damages. As of August 1, 2022, one lawsuit is pending. Additionally, in connection with the EFH bankruptcy proceeding, approximately 28,000 proofs of claim were filed on behalf of persons who allege exposure to asbestos under similar circumstances and assert the right to file such lawsuits in the future. None of these claims or lawsuits were discharged in the EFH bankruptcy proceeding. The costs to defend or resolve these lawsuits and the amount of damages that may be imposed or incurred could have a material adverse effect on Sempra’s results of operations, financial condition, cash flows and/or prospects.

Ordinary Course Litigation

We are also defendants in ordinary routine litigation incidental to our businesses, including personal injury, employment litigation, product liability, property damage and other claims. Juries have demonstrated an increasing willingness to grant large awards, including punitive damages, in these types of cases.

LEASES

We discuss leases further in Note 16 of the Notes to Consolidated Financial Statements in the Annual Report.

Lessee Accounting

We have operating and finance leases for real and personal property (including office space, land, fleet vehicles, machinery and equipment, warehouses and other operational facilities) and PPAs with renewable energy, energy storage and peaker plant facilities.

Leases That Have Not Yet Commenced

SDG&E has entered into three energy storage tolling agreements, of which SDG&E expects two will commence in the third quarter of 2022 and one will commence in the second quarter of 2023. SDG&E expects the future minimum lease payments to be $7 million in 2022, $18 million in each of 2023 through 2026 and $101 million thereafter until expiration at various dates from 2032 through 2033.

SoCalGas has entered into a fleet vehicle agreement, under which SoCalGas expects leases will commence in the second half of 2022 through the first half of 2023. SoCalGas expects the future minimum lease payments to be $2 million in each of 2023 through 2026 and $10 million thereafter until expiration at various dates from 2030 through 2031.

Lessor Accounting

Sempra Infrastructure is a lessor for certain of its natural gas and ethane pipelines, compressor stations, liquid petroleum gas storage facilities, a rail facility and liquid fuels terminals, which we account for as operating or sales-type leases.

We provide information below for leases for which we are the lessor.


LESSOR INFORMATION ON THE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS – SEMPRA
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
Sales-type leases:
Interest income	$	2	$	—	$	4	$	—
Total revenues from sales-type leases(1)	$	2	$	—	$	4	$	—

Operating leases:
Fixed lease payments	$	70	$	59	$	140	$	112
Variable lease payments	3		1		4		1
Total revenues from operating leases(1)	$	73	$	60	$	144	$	113

Depreciation expense	$	14	$	12	$	27	$	22

(1) Included in Revenues: Energy-Related Businesses on the Condensed Consolidated Statements of Operations.

CONTRACTUAL COMMITMENTS

We discuss below significant changes in the first six months of 2022 to contractual commitments discussed in Notes 1 and 16 of the Notes to Consolidated Financial Statements in the Annual Report.

LNG Purchase Agreement

Sempra Infrastructure has a SPA for the supply of LNG to the ECA Regas Facility. The commitment amount is calculated using a predetermined formula based on estimated forward prices of the index applicable from 2022 to 2029. Although this agreement specifies a number of cargoes to be delivered, under its terms, the supplier may divert certain cargoes, which would reduce amounts paid under the agreement by Sempra Infrastructure. At June 30, 2022, we expect the commitment amount to decrease by $208 million in 2022 and then increase by $227 million in 2023, $203 million in 2024, $191 million in 2025, $175 million in 2026 and by $421 million thereafter (through contract termination in 2029) compared to December 31, 2021, reflecting changes in estimated forward prices since December 31, 2021 and actual transactions for the first six months of 2022. These LNG commitment amounts are based on the assumption that all LNG cargoes, less those already confirmed to be diverted, under the agreement are delivered. Actual LNG purchases in the current and prior years have been significantly lower than the maximum amount provided under the agreement due to the customer electing to divert cargoes as allowed by the agreement.

ENVIRONMENTAL ISSUES

We disclose any proceeding under environmental laws to which a government authority is a party when the potential monetary sanctions, exclusive of interest and costs, exceed the lesser of $1 million or 1% of current assets, which was $59 million for Sempra, $18 million for SDG&E and $15 million for SoCalGas at June 30, 2022.

NOTE 12. SEGMENT INFORMATION

We have four separately managed reportable segments, as follows:

▪SDG&E provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County.

▪SoCalGas is a natural gas distribution utility, serving customers throughout most of Southern California and part of central California.

▪Sempra Texas Utilities holds our investment in Oncor Holdings, which owns an 80.25% interest in Oncor, a regulated electric transmission and distribution utility serving customers in the north-central, eastern, western and panhandle regions of Texas; and our indirect, 50% interest in Sharyland Holdings L.P., which owns Sharyland Utilities, L.L.C., a regulated electric transmission utility serving customers near the Texas-Mexico border.

▪Sempra Infrastructure includes the operating companies of our subsidiary, SI Partners, as well as a holding company and certain services companies. Sempra Infrastructure develops, builds, operates and invests in energy infrastructure to help enable the energy transition in North American markets and globally. Sempra Infrastructure owns a 70% interest in SI Partners, which held a 100% ownership interest in Sempra LNG Holding, LP and a 99.9% ownership interest in IEnova at June 30, 2022.

We evaluate each segment’s performance based on its contribution to Sempra’s reported earnings and cash flows. SDG&E and SoCalGas operate in essentially separate service territories, under separate regulatory frameworks and rate structures set by the CPUC and, in the case of SDG&E, the FERC.

The cost of common services shared by the business segments is assigned directly or allocated based on various cost factors, depending on the nature of the service provided. Interest income and expense is recorded on intercompany loans. The loan balances and related interest are eliminated in consolidation.

The following tables show selected information by segment from our Condensed Consolidated Statements of Operations and Condensed Consolidated Balance Sheets. Amounts labeled as “All other” in the following tables consist primarily of activities of parent organizations.


SEGMENT INFORMATION
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
REVENUES
SDG&E	$	1,399	$	1,318	$	2,844	$	2,655
SoCalGas	1,501		1,124		3,494		2,632
Sempra Infrastructure	689		341		1,113		790
All other	—		1		—		2
Adjustments and eliminations	(2)		(1)		—		(1)
Intersegment revenues(1)	(40)		(42)		(84)		(78)
Total	$	3,547	$	2,741	$	7,367	$	6,000
DEPRECIATION AND AMORTIZATION
SDG&E	$	244	$	220	$	483	$	433
SoCalGas	188		180		375		353
Sempra Infrastructure	67		59		132		113
All other	2		4		4		6
Total	$	501	$	463	$	994	$	905
INTEREST INCOME
SDG&E	$	1	$	—	$	1	$	1
SoCalGas	1		—		1		—
Sempra Infrastructure	9		20		30		41
All other	4		1		8		1
Intercompany eliminations	—		(6)		—		(9)
Total	$	15	$	15	$	40	$	34
INTEREST EXPENSE
SDG&E	$	114	$	101	$	220	$	203
SoCalGas	45		40		85		79
Sempra Infrastructure	32		45		59		86
All other	81		79		151		162
Intercompany eliminations	(1)		(7)		(1)		(13)
Total	$	271	$	258	$	514	$	517
INCOME TAX EXPENSE (BENEFIT)
SDG&E	$	42	$	33	$	106	$	78
SoCalGas	19		8		103		102
Sempra Infrastructure	70		94		161		151
All other	(51)		4		44		(34)
Total	$	80	$	139	$	414	$	297
EQUITY EARNINGS (LOSSES)
Equity earnings, before income tax:
Sempra Texas Utilities	$	3	$	2	$	5	$	3
Sempra Infrastructure	156		133		297		267
All other	—		50		—		50
	159		185		302		320
Equity earnings (losses), net of income tax:
Sempra Texas Utilities	184		137		346		273
Sempra Infrastructure	32		(9)		53		38
	216		128		399		311
Total	$	375	$	313	$	701	$	631

(1) Revenues for reportable segments include intersegment revenues of $3, $23, and $14 for the three months ended June 30, 2022; $7, $49, and $28 for the six months ended June 30, 2022; $2, $23, and $17 for the three months ended June 30, 2021 and $4, $48, and $26 for the six months ended June 30, 2021 for SDG&E, SoCalGas, and Sempra Infrastructure, respectively.


SEGMENT INFORMATION (CONTINUED)
(Dollars in millions)
	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021
EARNINGS (LOSSES) ATTRIBUTABLE TO COMMON SHARES
SDG&E	$	176	$	186	$	410	$	398
SoCalGas	87		94		421		501
Sempra Texas Utilities	186		138		348		273
Sempra Infrastructure	183		53		278		255
All other	(73)		(47)		(286)		(129)
Total	$	559	$	424	$	1,171	$	1,298
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
SDG&E					$	1,090	$	1,072
SoCalGas					931		936
Sempra Infrastructure					336		415
All other					4		1
Total					$	2,361	$	2,424

					June 30, 2022		December 31, 2021
ASSETS
SDG&E					$	25,075	$	24,058
SoCalGas					21,354		20,324
Sempra Texas Utilities					13,406		13,047
Sempra Infrastructure					14,958		14,408
All other					1,984		1,399
Intersegment receivables					(1,195)		(1,191)
Total					$	75,582	$	72,045
EQUITY METHOD AND OTHER INVESTMENTS
Sempra Texas Utilities					$	13,406	$	13,047
Sempra Infrastructure					1,687		1,425
Total					$	15,093	$	14,472

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