Item 1. FINANCIAL STATEMENTS

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Item 1. FINANCIAL STATEMENTS


SEMPRA
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in millions, except per share amounts; shares in thousands)
	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
	(unaudited)
REVENUES
Utilities:
Natural gas	$	1,195	$	1,488	$	4,798	$	7,560
Electric	1,069		1,250		3,269		3,331
Energy-related businesses	512		596		1,360		2,338
Total revenues	2,776		3,334		9,427		13,229

EXPENSES AND OTHER INCOME
Utilities:
Cost of natural gas	(99)		(260)		(790)		(3,254)
Cost of electric fuel and purchased power	18		(183)		(227)		(385)
Energy-related businesses cost of sales	(134)		(163)		(297)		(437)
Operation and maintenance	(1,326)		(1,383)		(3,871)		(3,958)
Depreciation and amortization	(614)		(563)		(1,811)		(1,651)
Franchise fees and other taxes	(175)		(169)		(515)		(509)
Other income, net	65		3		194		75
Interest income	17		19		47		60
Interest expense	(328)		(312)		(944)		(995)
Income before income taxes and equity earnings	200		323		1,213		2,175
Income tax benefit (expense)	105		52		63		(499)
Equity earnings	454		479		1,235		1,086
Net income	759		854		2,511		2,762
Earnings attributable to noncontrolling interests	(110)		(122)		(325)		(435)
Preferred dividends	(11)		(11)		(33)		(33)
Preferred dividends of subsidiary	—		—		(1)		(1)
Earnings attributable to common shares	$	638	$	721	$	2,152	$	2,293

Basic EPS:
Earnings	$	1.01	$	1.14	$	3.40	$	3.64
Weighted-average common shares outstanding	633,752		630,036		633,342		629,963

Diluted EPS:
Earnings	$	1.00	$	1.14	$	3.38	$	3.63
Weighted-average common shares outstanding	638,061		632,324		636,566		632,231

See Notes to Condensed Consolidated Financial Statements.


SEMPRA
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
	Sempra shareholders’ equity
	Pretax amount		Income tax benefit (expense)		Net-of-tax amount		Noncontrolling interests (after tax)		Total
	(unaudited)
	Three months ended September 30, 2024 and 2023
2024:
Net income	$	544	$	105	$	649	$	110	$	759
Other comprehensive income (loss):
Foreign currency translation adjustments	(12)		—		(12)		(5)		(17)
Financial instruments	(74)		20		(54)		(171)		(225)
Pension and other postretirement benefits	3		(1)		2		—		2
Total other comprehensive loss	(83)		19		(64)		(176)		(240)
Comprehensive income (loss)	$	461	$	124	$	585	$	(66)	$	519
2023:
Net income	$	680	$	52	$	732	$	122	$	854
Other comprehensive income (loss):
Foreign currency translation adjustments	(5)		—		(5)		(2)		(7)
Financial instruments	150		(39)		111		204		315
Pension and other postretirement benefits	2		(1)		1		—		1
Total other comprehensive income	147		(40)		107		202		309
Comprehensive income	$	827	$	12	$	839	$	324	$	1,163

	Nine months ended September 30, 2024 and 2023
2024:
Net income	$	2,123	$	63	$	2,186	$	325	$	2,511
Other comprehensive income (loss):
Foreign currency translation adjustments	(25)		—		(25)		(11)		(36)
Financial instruments	(26)		4		(22)		(2)		(24)
Pension and other postretirement benefits	16		(4)		12		—		12
Total other comprehensive loss	(35)		—		(35)		(13)		(48)
Comprehensive income	2,088		63		2,151		312		2,463
Preferred dividends of subsidiary	(1)		—		(1)		—		(1)
Comprehensive income, after preferred dividends of subsidiary	$	2,087	$	63	$	2,150	$	312	$	2,462
2023:
Net income	$	2,826	$	(499)	$	2,327	$	435	$	2,762
Other comprehensive income (loss):
Foreign currency translation adjustments	16		—		16		6		22
Financial instruments	158		(43)		115		206		321
Pension and other postretirement benefits	(8)		(2)		(10)		—		(10)
Total other comprehensive income	166		(45)		121		212		333
Comprehensive income	2,992		(544)		2,448		647		3,095
Preferred dividends of subsidiary	(1)		—		(1)		—		(1)
Comprehensive income, after preferred dividends of subsidiary	$	2,991	$	(544)	$	2,447	$	647	$	3,094

See Notes to Condensed Consolidated Financial Statements.


SEMPRA
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
	September 30,		December 31,
	2024		2023(1)
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	560	$	236
Restricted cash	22		49
Accounts receivable – trade, net	1,716		2,151
Accounts receivable – other, net	422		561
Due from unconsolidated affiliates	14		31
Income taxes receivable	152		94
Inventories	519		482
Prepaid expenses	314		273
Regulatory assets	59		226
Fixed-price contracts and other derivatives	111		122
Greenhouse gas allowances	1,169		1,189
Other current assets	41		56
Total current assets	5,099		5,470

Other assets:
Restricted cash	108		104
Regulatory assets	4,325		3,771
Greenhouse gas allowances	971		301
Nuclear decommissioning trusts	906		872
Dedicated assets in support of certain benefit plans	585		549
Deferred income taxes	144		129
Right-of-use assets – operating leases	888		723
Investment in Oncor Holdings	15,160		14,266
Other investments	2,412		2,244
Goodwill	1,602		1,602
Other intangible assets	299		318
Wildfire fund	268		269
Other long-term assets	1,706		1,603
Total other assets	29,374		26,751

Property, plant and equipment:
Property, plant and equipment	77,896		72,495
Less accumulated depreciation and amortization	(18,621)		(17,535)
Property, plant and equipment, net	59,275		54,960
Total assets	$	93,748	$	87,181

(1) Derived from audited financial statements.

See Notes to Condensed Consolidated Financial Statements.


SEMPRA
CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	September 30,		December 31,
	2024		2023(1)
	(unaudited)
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt	$	2,187	$	2,342
Accounts payable – trade	1,966		2,211
Accounts payable – other	227		224
Due to unconsolidated affiliates	—		5
Dividends and interest payable	816		691
Accrued compensation and benefits	541		526
Regulatory liabilities	523		553
Current portion of long-term debt and finance leases	1,212		975
Greenhouse gas obligations	1,169		1,189
Other current liabilities	1,202		1,374
Total current liabilities	9,843		10,090

Long-term debt and finance leases	30,964		27,759

Deferred credits and other liabilities:
Due to unconsolidated affiliates	347		307
Regulatory liabilities	4,118		3,739
Greenhouse gas obligations	495		—
Pension and other postretirement benefit plan obligations, net of plan assets	377		407
Deferred income taxes	5,404		5,254
Asset retirement obligations	3,710		3,642
Deferred credits and other	2,610		2,329
Total deferred credits and other liabilities	17,061		15,678

Commitments and contingencies (Note 11)

Equity:
Preferred stock (50,000,000 shares authorized):
Preferred stock, series C (900,000 shares outstanding)	889		889
Common stock (1,125,000,000 shares authorized; 633,214,870 and 631,431,732 shares outstanding at September 30, 2024 and December 31, 2023, respectively; no par value)	12,292		12,204
Retained earnings	16,707		15,732
Accumulated other comprehensive income (loss)	(185)		(150)
Total Sempra shareholders’ equity	29,703		28,675
Preferred stock of subsidiary	20		20
Other noncontrolling interests	6,157		4,959
Total equity	35,880		33,654
Total liabilities and equity	$	93,748	$	87,181

(1) Derived from audited financial statements.

See Notes to Condensed Consolidated Financial Statements.


SEMPRA
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in millions)
	Nine months ended September 30,
	2024		2023
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	2,511	$	2,762
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	1,811		1,651
Deferred income taxes and investment tax credits	(223)		234
Equity earnings	(1,235)		(1,086)
Share-based compensation expense	63		53
Fixed-price contracts and other derivatives	11		(580)
Bad debt expense	149		368
Other	7		6
Net change in working capital components	55		1,610
Distributions from investments	654		668
Changes in other noncurrent assets and liabilities, net	(261)		(557)
Net cash provided by operating activities	3,542		5,129

CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(5,765)		(6,074)
Expenditures for investments	(588)		(281)
Purchases of nuclear decommissioning and other trust assets	(658)		(462)
Proceeds from sales of nuclear decommissioning and other trust assets	704		503
Other	11		10
Net cash used in investing activities	(6,296)		(6,304)

CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	(1,121)		(1,109)
Preferred dividends paid	(22)		(22)
Issuances of common stock	26		—
Repurchases of common stock	(41)		(32)
Issuances of debt (maturities greater than 90 days)	6,437		6,911
Payments on debt (maturities greater than 90 days) and finance leases	(2,216)		(6,018)
(Decrease) increase in short-term debt, net	(929)		629
Advances from unconsolidated affiliates	85		31
Proceeds from sales of noncontrolling interests, net	—		1,238
Distributions to noncontrolling interests	(235)		(289)
Contributions from noncontrolling interests	1,121		1,036
Settlement of cross-currency swaps	—		(99)
Other	(39)		(78)
Net cash provided by financing activities	3,066		2,198

Effect of exchange rate changes on cash, cash equivalents and restricted cash	(11)		6

Increase in cash, cash equivalents and restricted cash	301		1,029
Cash, cash equivalents and restricted cash, January 1	389		462
Cash, cash equivalents and restricted cash, September 30	$	690	$	1,491

See Notes to Condensed Consolidated Financial Statements.


SEMPRA
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Dollars in millions)
	Nine months ended September 30,
	2024		2023
	(unaudited)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	$	814	$	836
Income tax payments, net of refunds	272		162

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued interest receivable added to note receivable	$	13	$	12
Repayments of advances from unconsolidated affiliate in lieu of distributions	62		36
Accrued capital expenditures	1,059		1,200
Increase in finance lease obligations for investment in PP&E	27		47
Decrease in ARO for investment in PP&E	(9)		(15)
Preferred dividends declared but not paid	22		22
Common dividends issued in stock	40		—
Common dividends declared but not paid	392		374
Contributions from NCI	—		200
Sale of NCI post-closing adjustment payable	—		11

See Notes to Condensed Consolidated Financial Statements.


SEMPRA
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Dollars in millions)
	Preferred stock		Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Sempra shareholders' equity		Non- controlling interests		Total equity
	(unaudited)
	Three months ended September 30, 2024
Balance at June 30, 2024	$	889	$	12,250	$	16,461	$	(121)	$	29,479	$	5,940	$	35,419

Net income					649				649		110		759
Other comprehensive loss							(64)		(64)		(176)		(240)

Share-based compensation expense			22						22				22
Dividends declared:
Series C preferred stock ($12.19/share)					(11)				(11)				(11)
Common stock ($0.62/share)					(392)				(392)				(392)

Issuances of common stock			21						21				21
Repurchases of common stock			(1)						(1)				(1)
Noncontrolling interest activities:
Contributions											335		335
Distributions											(32)		(32)
Balance at September 30, 2024	$	889	$	12,292	$	16,707	$	(185)	$	29,703	$	6,177	$	35,880

	Three months ended September 30, 2023
Balance at June 30, 2023	$	889	$	12,044	$	15,024	$	(121)	$	27,836	$	3,178	$	31,014

Net income					732				732		122		854
Other comprehensive income							107		107		202		309

Share-based compensation expense			22						22				22
Dividends declared:
Series C preferred stock ($12.19/share)					(11)				(11)				(11)
Common stock ($0.60/share)					(374)				(374)				(374)
Repurchases of common stock			(1)						(1)				(1)
Noncontrolling interest activities:
Contributions			(11)						(11)		507		496
Distributions											(37)		(37)
Sales			(16)				(46)		(62)		1,048		986
Balance at September 30, 2023	$	889	$	12,038	$	15,371	$	(60)	$	28,238	$	5,020	$	33,258

See Notes to Condensed Consolidated Financial Statements.


SEMPRA
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CONTINUED)
(Dollars in millions)
	Preferred stock		Common stock		Retained earnings		Accumulated other comprehensive income (loss)		Sempra shareholders' equity		Non- controlling interests		Total equity
	(unaudited)
	Nine months ended September 30, 2024
Balance at December 31, 2023	$	889	$	12,204	$	15,732	$	(150)	$	28,675	$	4,979	$	33,654

Net income					2,186				2,186		325		2,511
Other comprehensive loss							(35)		(35)		(13)		(48)

Share-based compensation expense			63						63				63
Dividends declared:
Series C preferred stock ($36.57/share)					(33)				(33)				(33)
Common stock ($1.86/share)					(1,177)				(1,177)				(1,177)
Preferred dividends of subsidiary					(1)				(1)				(1)
Issuances of common stock			66						66				66
Repurchases of common stock			(41)						(41)				(41)
Noncontrolling interest activities:
Contributions											1,121		1,121
Distributions											(235)		(235)
Balance at September 30, 2024	$	889	$	12,292	$	16,707	$	(185)	$	29,703	$	6,177	$	35,880

	Nine months ended September 30, 2023
Balance at December 31, 2022	$	889	$	12,160	$	14,201	$	(135)	$	27,115	$	2,141	$	29,256

Net income					2,327				2,327		435		2,762
Other comprehensive income							121		121		212		333

Share-based compensation expense			53						53				53
Dividends declared:
Series C preferred stock ($36.57/share)					(33)				(33)				(33)
Common stock ($1.79/share)					(1,123)				(1,123)				(1,123)
Preferred dividends of subsidiary					(1)				(1)				(1)
Repurchases of common stock			(32)						(32)				(32)
Noncontrolling interest activities:
Contributions			(145)						(145)		1,236		1,091
Distributions											(289)		(289)
Sales			2				(46)		(44)		1,285		1,241
Balance at September 30, 2023	$	889	$	12,038	$	15,371	$	(60)	$	28,238	$	5,020	$	33,258

See Notes to Condensed Consolidated Financial Statements.


SAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED STATEMENTS OF OPERATIONS
(Dollars in millions)
	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
	(unaudited)
Operating revenues:
Electric	$	1,073	$	1,254	$	3,282	$	3,343
Natural gas	170		188		695		1,014
Total operating revenues	1,243		1,442		3,977		4,357
Operating expenses:
Cost of electric fuel and purchased power	(5)		200		277		442
Cost of natural gas	38		45		177		462
Operation and maintenance	420		463		1,254		1,364
Depreciation and amortization	308		280		910		810
Franchise fees and other taxes	106		101		301		287
Total operating expenses	867		1,089		2,919		3,365
Operating income	376		353		1,058		992
Other income, net	30		25		86		75
Interest income	1		7		5		12
Interest expense	(131)		(126)		(390)		(367)
Income before income taxes	276		259		759		712
Income tax (expense) benefit	(15)		15		(89)		4
Net income/Earnings attributable to common shares	$	261	$	274	$	670	$	716

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) benefit		Net-of-tax amount
	(unaudited)
	Three months ended September 30, 2024 and 2023
2024:
Net income/Comprehensive income	$	276	$	(15)	$	261




2023:
Net income/Comprehensive income	$	259	$	15	$	274

	Nine months ended September 30, 2024 and 2023
2024:
Net income/Comprehensive income	$	759	$	(89)	$	670




2023:
Net income/Comprehensive income	$	712	$	4	$	716

See Notes to Condensed Financial Statements.


SAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED BALANCE SHEETS
(Dollars in millions)
	September 30,		December 31,
	2024		2023(1)
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	15	$	50
Accounts receivable – trade, net	867		870
Accounts receivable – other, net	108		141
Due from unconsolidated affiliates	8		—
Income taxes receivable, net	240		236
Inventories	182		153
Prepaid expenses	171		165
Regulatory assets	15		19
Greenhouse gas allowances	158		158
Other current assets	30		31
Total current assets	1,794		1,823

Other assets:
Regulatory assets	2,164		1,968
Greenhouse gas allowances	298		202
Nuclear decommissioning trusts	906		872
Right-of-use assets – operating leases	542		368
Wildfire fund	268		269
Other long-term assets	165		134
Total other assets	4,343		3,813

Property, plant and equipment:
Property, plant and equipment	32,480		30,918
Less accumulated depreciation and amortization	(7,852)		(7,369)
Property, plant and equipment, net	24,628		23,549
Total assets	$	30,765	$	29,185

(1) Derived from audited financial statements.

See Notes to Condensed Financial Statements.


SAN DIEGO GAS & ELECTRIC COMPANY
CONDENSED BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	September 30,		December 31,
	2024		2023(1)
	(unaudited)
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Short-term debt	$	384	$	—
Accounts payable	823		808
Due to unconsolidated affiliates	48		73
Interest payable	117		81
Accrued compensation and benefits	162		145
Accrued franchise fees	53		112
Regulatory liabilities	264		447
Current portion of long-term debt and finance leases	41		441
Greenhouse gas obligations	158		158
Asset retirement obligations	110		116
Other current liabilities	274		216
Total current liabilities	2,434		2,597

Long-term debt and finance leases	10,021		9,453

Deferred credits and other liabilities:
Regulatory liabilities	2,771		2,534
Greenhouse gas obligations	65		—
Pension obligation, net of plan assets	77		79
Deferred income taxes	3,080		2,873
Asset retirement obligations	771		778
Deferred credits and other	1,199		969
Total deferred credits and other liabilities	7,963		7,233

Commitments and contingencies (Note 11)

Shareholder's equity:
Preferred stock (45,000,000 shares authorized; none issued)	—		—
Common stock (255,000,000 shares authorized; 116,583,358 shares outstanding; no par value)	1,660		1,660
Retained earnings	8,695		8,250
Accumulated other comprehensive income (loss)	(8)		(8)
Total shareholder’s equity	10,347		9,902
Total liabilities and shareholder's equity	$	30,765	$	29,185

(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)
	Nine months ended September 30,
	2024		2023
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	670	$	716
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	910		810
Deferred income taxes and investment tax credits	94		(56)
Bad debt expense	46		94
Other	(19)		(30)
Net change in working capital components	(204)		269
Changes in noncurrent assets and liabilities, net	(54)		(319)
Net cash provided by operating activities	1,443		1,484

CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(1,838)		(1,893)
Purchases of nuclear decommissioning trust assets	(605)		(391)
Proceeds from sales of nuclear decommissioning trust assets	639		437
Other	11		9
Net cash used in investing activities	(1,793)		(1,838)

CASH FLOWS FROM FINANCING ACTIVITIES
Common dividends paid	(225)		(100)
Issuances of debt (maturities greater than 90 days)	594		1,389
Payments on debt (maturities greater than 90 days) and finance leases	(432)		(479)
Increase (decrease) in short-term debt, net	384		(205)
Debt issuance costs	(6)		(12)
Net cash provided by financing activities	315		593

(Decrease) increase in cash and cash equivalents	(35)		239
Cash and cash equivalents, January 1	50		7
Cash and cash equivalents, September 30	$	15	$	246

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	$	348	$	315

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures	$	214	$	237
Increase in finance lease obligations for investment in PP&E	8		7
Increase in ARO for investment in PP&E	—		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 September 30, 2024
Balance at June 30, 2024	$	1,660	$	8,659	$	(8)	$	10,311

Net income			261				261


Common stock dividends declared ($1.93/share)			(225)				(225)
Balance at September 30, 2024	$	1,660	$	8,695	$	(8)	$	10,347

	Three months ended September 30, 2023
Balance at June 30, 2023	$	1,660	$	7,856	$	(7)	$	9,509

Net income			274				274

Common stock dividends declared ($0.86/share)			(100)				(100)
Balance at September 30, 2023	$	1,660	$	8,030	$	(7)	$	9,683

	Nine months ended September 30, 2024
Balance at December 31, 2023	$	1,660	$	8,250	$	(8)	$	9,902

Net income			670				670


Common stock dividends declared ($1.93/share)			(225)				(225)
Balance at September 30, 2024	$	1,660	$	8,695	$	(8)	$	10,347

	Nine months ended September 30, 2023
Balance at December 31, 2022	$	1,660	$	7,414	$	(7)	$	9,067

Net income			716				716

Common stock dividends declared ($0.86/share)			(100)				(100)
Balance at September 30, 2023	$	1,660	$	8,030	$	(7)	$	9,683

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF OPERATIONS
(Dollars in millions)
	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
	(unaudited)

Operating revenues	$	1,054	$	1,313	$	4,168	$	6,574
Operating expenses:
Cost of natural gas	82		224		661		2,855
Operation and maintenance	678		733		1,998		2,073
Depreciation and amortization	228		211		675		625
Franchise fees and other taxes	66		64		200		209
Total operating expenses	1,054		1,232		3,534		5,762
Operating income	—		81		634		812
Other income (expense), net	13		(2)		73		(9)
Interest income	3		2		7		7
Interest expense	(82)		(70)		(237)		(210)
(Loss) income before income taxes	(66)		11		477		600
Income tax benefit (expense)	52		5		(1)		(68)
Net (loss) income	(14)		16		476		532
Preferred dividends	—		—		(1)		(1)
(Losses) earnings attributable to common shares	$	(14)	$	16	$	475	$	531

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
	Pretax amount		Income tax benefit (expense)		Net-of-tax amount
	(unaudited)
	Three months ended September 30, 2024 and 2023
2024:
Net loss/Comprehensive loss	$	(66)	$	52	$	(14)





2023:
Net income	$	11	$	5	$	16
Other comprehensive income (loss):
Pension and other postretirement benefits	1		(1)		—
Total other comprehensive income	1		(1)		—
Comprehensive income	$	12	$	4	$	16

	Nine months ended September 30, 2024 and 2023
2024:
Net income	$	477	$	(1)	$	476
Other comprehensive income (loss):
Financial instruments	1		—		1
Pension and other postretirement benefits	1		—		1
Total other comprehensive income	2		—		2
Comprehensive income	$	479	$	(1)	$	478
2023:
Net income	$	600	$	(68)	$	532
Other comprehensive income (loss):
Financial instruments	1		—		1
Pension and other postretirement benefits	2		(1)		1
Total other comprehensive income	3		(1)		2
Comprehensive income	$	603	$	(69)	$	534

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED BALANCE SHEETS
(Dollars in millions)
	September 30,		December 31,
	2024		2023(1)
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	2	$	2
Accounts receivable – trade, net	557		985
Accounts receivable – other, net	75		102
Due from unconsolidated affiliates	2		22
Inventories	283		277
Regulatory assets	43		204
Greenhouse gas allowances	928		950
Other current assets	105		100
Total current assets	1,995		2,642

Other assets:
Regulatory assets	2,075		1,715
Greenhouse gas allowances	551		62
Right-of-use assets – operating leases	20		29
Other long-term assets	705		645
Total other assets	3,351		2,451

Property, plant and equipment:
Property, plant and equipment	28,369		27,025
Less accumulated depreciation and amortization	(8,253)		(7,852)
Property, plant and equipment, net	20,116		19,173
Total assets	$	25,462	$	24,266

(1) Derived from audited financial statements.

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	September 30,		December 31,
	2024		2023(1)
	(unaudited)
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Short-term debt	$	500	$	946
Accounts payable – trade	477		811
Accounts payable – other	179		184
Due to unconsolidated affiliates	43		38
Accrued compensation and benefits	247		213
Regulatory liabilities	257		103
Current portion of long-term debt and finance leases	373		523
Greenhouse gas obligations	928		950
Asset retirement obligations	72		73
Other current liabilities	481		566
Total current liabilities	3,557		4,407

Long-term debt and finance leases	7,027		6,288

Deferred credits and other liabilities:
Regulatory liabilities	1,346		1,202
Greenhouse gas obligations	396		—
Pension obligation, net of plan assets	199		231
Deferred income taxes	1,821		1,586
Asset retirement obligations	2,845		2,774
Deferred credits and other	384		368
Total deferred credits and other liabilities	6,991		6,161

Commitments and contingencies (Note 11)

Shareholders’ equity:
Preferred stock (11,000,000 shares authorized; 862,043 shares outstanding)	22		22
Common stock (100,000,000 shares authorized; 91,300,000 shares outstanding; no par value)	2,316		2,316
Retained earnings	5,570		5,095
Accumulated other comprehensive income (loss)	(21)		(23)
Total shareholders’ equity	7,887		7,410
Total liabilities and shareholders’ equity	$	25,462	$	24,266

(1) Derived from audited financial statements.

See Notes to Condensed Financial Statements.


SOUTHERN CALIFORNIA GAS COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in millions)
	Nine months ended September 30,
	2024		2023
	(unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	476	$	532
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	675		625
Deferred income taxes and investment tax credits	4		79
Bad debt expense	70		272
Other	(21)		(9)
Net change in working capital components	321		(1)
Changes in noncurrent assets and liabilities, net	(155)		(234)
Net cash provided by operating activities	1,370		1,264

CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment	(1,491)		(1,451)
Net cash used in investing activities	(1,491)		(1,451)

CASH FLOWS FROM FINANCING ACTIVITIES
Preferred dividends paid	(1)		(1)
Issuances of debt (maturities greater than 90 days)	1,594		997
Payments on debt (maturities greater than 90 days) and finance leases	(517)		(1,115)
(Decrease) increase in short-term debt, net	(946)		320
Debt issuance costs	(9)		(9)
Net cash provided by financing activities	121		192

Increase in cash and cash equivalents	—		5
Cash and cash equivalents, January 1	2		21
Cash and cash equivalents, September 30	$	2	$	26

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest payments, net of amounts capitalized	$	189	$	183

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND FINANCING ACTIVITIES
Accrued capital expenditures	$	265	$	253
Increase in finance lease obligations for investment in PP&E	19		40
Decrease in ARO for investment in PP&E	(9)		(28)

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 September 30, 2024
Balance at June 30, 2024	$	22	$	2,316	$	5,584	$	(21)	$	7,901

Net loss					(14)				(14)


Dividends declared:
Preferred stock ($0.38/share)					—				—
Balance at September 30, 2024	$	22	$	2,316	$	5,570	$	(21)	$	7,887

	Three months ended September 30, 2023
Balance at June 30, 2023	$	22	$	2,316	$	4,899	$	(22)	$	7,215

Net income					16				16

Dividends declared:
Preferred stock ($0.38/share)					—				—
Balance at September 30, 2023	$	22	$	2,316	$	4,915	$	(22)	$	7,231

	Nine months ended September 30, 2024
Balance at December 31, 2023	$	22	$	2,316	$	5,095	$	(23)	$	7,410

Net income					476				476
Other comprehensive income							2		2

Dividends declared:
Preferred stock ($1.13/share)					(1)				(1)
Balance at September 30, 2024	$	22	$	2,316	$	5,570	$	(21)	$	7,887

	Nine months ended September 30, 2023
Balance at December 31, 2022	$	22	$	2,316	$	4,384	$	(24)	$	6,698

Net income					532				532
Other comprehensive income							2		2

Dividends declared:
Preferred stock ($1.13/share)					(1)				(1)
Balance at September 30, 2023	$	22	$	2,316	$	4,915	$	(22)	$	7,231

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, a California-based holding company, and its consolidated entities, which invest in, develop and operate energy infrastructure in North America, and provide electric and gas services to customers.

Sempra has three separate reportable segments, which we describe in Note 12. In the fourth quarter of 2023, Sempra realigned its reportable segments to reflect changes in how the CODM oversees our three platforms: Sempra California, Sempra Texas Utilities and Sempra Infrastructure. Our former SDG&E and SoCalGas reportable segments were combined into one operating and reportable segment, Sempra California, which is consistent with how the CODM assesses performance due to the similarities of their operations, including geographic location and regulatory framework in California. Sempra’s historical segment disclosures have been restated to conform with the current presentation, so that all discussions reflect the revised segment information of its three reportable segments. 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. SDG&E is a regulated public utility that provides electric service to San Diego and southern Orange counties and natural gas service to San Diego County. SDG&E has one reportable segment.

SoCalGas

SoCalGas’ common stock is wholly owned by Pacific Enterprises, which is a wholly owned subsidiary of Sempra. SoCalGas is a regulated public natural gas distribution utility, serving customers throughout most of Southern California and part of central California. SoCalGas has one reportable segment.

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 condensed consolidated financial statements of each Registrant.

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 September 30, 2024 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, 2023 balance sheet information in the Condensed Consolidated Financial Statements has been derived from our audited 2023 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, SI Partners, as well as certain holding companies and risk management activity. Certain business activities at Sempra Infrastructure are regulated by the CRE and the FERC and meet the regulatory accounting requirements of U.S. GAAP.

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 September 30, 2024 and December 31, 2023. 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 $1,144 million and $1,166 million at September 30, 2024 and December 31, 2023, 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.

Other Sempra

Oncor Holdings

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 $15,160 million and $14,266 million at September 30, 2024 and December 31, 2023, respectively.

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 was $1,068 million at September 30, 2024 and $1,008 million at December 31, 2023. 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 5.

CFIN

As we discuss in Note 5, 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 8). 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 activities related to the construction and future operation and maintenance of the liquefaction facility. As a result, we consolidate ECA LNG Phase 1. Sempra consolidated $1,715 million and $1,580 million of assets at September 30, 2024 and December 31, 2023, respectively, consisting primarily of PP&E, net, 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 $1,060 million and $1,029 million of liabilities at September 30, 2024 and December 31, 2023, respectively, consisting primarily of long-term debt 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 6, IEnova and TotalEnergies SE have provided guarantees for 83.4% and 16.6%, respectively, of the loan facility supporting construction of the liquefaction facility.

Port Arthur LNG

Port Arthur LNG is a VIE because its total equity at risk is not sufficient to finance its activities without additional subordinated financial support. We expect that Port Arthur LNG will require future capital contributions or other financial support to finance the construction of the PA LNG Phase 1 project. Sempra is the primary beneficiary of this VIE because we have the power to direct the activities related to the construction and future operation and maintenance of the liquefaction facility. As a result, we consolidate Port Arthur LNG. Sempra consolidated $5,446 million and $3,927 million of assets at September 30, 2024 and December 31, 2023, respectively, consisting primarily of PP&E, net, attributable to Port Arthur LNG that could be used only to settle obligations of this VIE and that are not available to settle obligations of Sempra, and $865 million and $600 million of liabilities at September 30, 2024 and December 31, 2023, respectively, consisting primarily of accounts payable and long-term debt attributable to Port Arthur LNG for which creditors do not have recourse to the general credit of Sempra.

CASH, CASH EQUIVALENTS AND RESTRICTED CASH

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. We provide information about the nature of restricted cash in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.


RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
	September 30, 2024		December 31, 2023
Sempra:
Cash and cash equivalents	$	560	$	236
Restricted cash, current	22		49
Restricted cash, noncurrent	108		104
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows	$	690	$	389

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 5.

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.

The implementation of customer assistance programs and higher 2023 winter season customer billings have resulted in certain SDG&E and SoCalGas customers exhibiting slower payment and higher levels of nonpayment than has been the case historically. In January 2024, the CPUC directed SDG&E and SoCalGas to offer long-term repayment plans to eligible residential customers with past-due balances.

SDG&E and SoCalGas have regulatory mechanisms to recover credit losses and thus record changes in the allowances for credit losses related to Accounts Receivable – Trade that are probable of recovery in regulatory accounts. We discuss regulatory accounts in Note 4 below and in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report.

Changes in allowances for credit losses for trade receivables and other receivables are as follows:


CHANGES IN ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	2024		2023
Sempra:
Allowances for credit losses at January 1	$	533	$	181
Provisions for expected credit losses	149		374
Write-offs	(169)		(74)
Allowances for credit losses at September 30	$	513	$	481
SDG&E:
Allowances for credit losses at January 1	$	144	$	78
Provisions for expected credit losses	46		96
Write-offs	(63)		(34)
Allowances for credit losses at September 30	$	127	$	140
SoCalGas:
Allowances for credit losses at January 1	$	331	$	98
Provisions for expected credit losses	70		276
Write-offs	(107)		(40)
Allowances for credit losses at September 30	$	294	$	334

Allowances for credit losses related to trade receivables and other receivables are included in the Condensed Consolidated Balance Sheets as follows:


ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	September 30,		December 31,
	2024		2023
Sempra:
Accounts receivable – trade, net	$	441	$	480
Accounts receivable – other, net	57		52
Other long-term assets	15		1
Total allowances for credit losses	$	513	$	533
SDG&E:
Accounts receivable – trade, net	$	94	$	116
Accounts receivable – other, net	26		27
Other long-term assets	7		1
Total allowances for credit losses	$	127	$	144
SoCalGas:
Accounts receivable – trade, net	$	255	$	306
Accounts receivable – other, net	31		25
Other long-term assets	8		—
Total allowances for credit losses	$	294	$	331

As we discuss below in “Note Receivable,” we have an interest-bearing promissory note due from KKR Pinnacle. 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 September 30, 2024 and December 31, 2023, $5 million and $6 million, respectively, of expected credit losses are included in Other Long-Term Assets on Sempra’s Condensed Consolidated Balance Sheets.

As we discuss in Note 5, 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 both September 30, 2024 and December 31, 2023, $5 million of expected credit losses are included in Deferred Credits and Other on Sempra’s Condensed Consolidated Balance Sheets.

TRANSACTIONS WITH AFFILIATES

We summarize amounts due from and to unconsolidated affiliates at the Registrants in the following table.


AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	September 30, 2024		December 31, 2023
Sempra:
Tax sharing arrangement with Oncor Holdings	$	8	$	25
Various affiliates	6		6
Total due from unconsolidated affiliates – current	$	14	$	31

TAG Pipelines – 5.5% Note due January 9, 2024(1)	$	—	$	(5)
Total due to unconsolidated affiliates – current	$	—	$	(5)

TAG Pipelines(1):
5.5% Note due January 14, 2025	$	—	$	(24)
5.5% Note due July 16, 2025	—		(23)
5.5% Note due January 14, 2026	(8)		(20)
5.5% Note due July 14, 2026	(12)		(11)
5.5% Note due January 19, 2027	(15)		(14)
5.5% Note due July 21, 2027	(18)		(17)
5.5% Note due January 19, 2028	(47)		—
5.5% Note due July 18, 2028	(41)		—
TAG Norte – 5.74% Note due December 17, 2029(1)	(206)		(198)
Total due to unconsolidated affiliates – noncurrent	$	(347)	$	(307)
SDG&E:
SoCalGas	$	8	$	—
Total due from unconsolidated affiliates – current	$	8	$	—

Sempra	$	(40)	$	(44)
SoCalGas	—		(21)
Various affiliates	(8)		(8)
Total due to unconsolidated affiliates – current	$	(48)	$	(73)

Income taxes due from Sempra(2)	$	251	$	246
SoCalGas:
SDG&E	$	—	$	21
Various affiliates	2		1
Total due from unconsolidated affiliates – current	$	2	$	22

Sempra	$	(35)	$	(38)
SDG&E	(8)		—
Total due to unconsolidated affiliates – current	$	(43)	$	(38)

Income taxes due from Sempra(2)	$	9	$	6

(1) U.S. dollar-denominated loans at fixed interest rates. Amounts include principal balances plus accumulated interest outstanding and VAT payable to the Mexican government.

(2) 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.

We summarize income statement information from unconsolidated affiliates in the following table.


INCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Sempra:
Revenues	$	11	$	10	$	31	$	34

Interest expense	5		3		12		11
SDG&E:
Revenues	$	6	$	5	$	17	$	15
Cost of sales	36		25		111		82
SoCalGas:
Revenues	$	43	$	29	$	124	$	91
Cost of sales(1)	(2)		2		(5)		37

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

Guarantees

Sempra provides guarantees related to Cameron LNG JV’s SDSRA and CFIN’s Support Agreement. We discuss these guarantees in Note 5.

INVENTORIES

The components of inventories are as follows:


INVENTORY BALANCES
(Dollars in millions)
	Sempra				SDG&E				SoCalGas
	September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
Natural gas	$	166	$	174	$	1	$	1	$	153	$	155
LNG	13		9		—		—		—		—
Materials and supplies	340		299		181		152		130		122
Total	$	519	$	482	$	182	$	153	$	283	$	277

DEDICATED ASSETS IN SUPPORT OF CERTAIN BENEFITS PLANS

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 $585 million and $549 million at September 30, 2024 and December 31, 2023, respectively.

WILDFIRE FUND

In July 2019, the Wildfire Legislation was signed into law to address certain issues related to catastrophic wildfires in California and their impact on electric IOUs. We discuss the Wildfire Legislation further in Note 1 of the Notes to Consolidated Financial Statements in the Annual Report.

SDG&E periodically evaluates the estimated period of benefit of the Wildfire Fund asset based on actual experience and changes in assumptions. In the second quarter of 2024, SDG&E revised its estimate of the period of benefit from 15 years to 25 years.

SDG&E submitted its request to the OEIS for its annual wildfire safety certification in October 2024. OEIS has until January 2025 to issue the certification or provide written notice explaining why additional time is needed. SDG&E’s existing certification remains valid until this pending request is resolved.

NOTE RECEIVABLE

In November 2021, Sempra loaned $300 million to KKR Pinnacle 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 Pinnacle. At September 30, 2024 and December 31, 2023, Other Long-Term Assets includes $345 million and $332 million, respectively, of outstanding principal, compounded interest and unamortized transaction costs, net of allowance for credit losses, on Sempra’s Condensed Consolidated Balance Sheets.

PROPERTY, PLANT AND EQUIPMENT

Sempra Infrastructure’s Sonora natural gas pipeline consists of two pipeline segments, the Sasabe-Puerto Libertad-Guaymas segment and the Guaymas-El Oro segment. Each segment has its own service agreement with the CFE. Following the start of commercial operations of the Guaymas-El Oro segment, Sempra Infrastructure reported damage to the pipeline in the Yaqui territory that has made that section inoperable since August 2017. Sempra Infrastructure and the CFE have agreed to an amendment to their transportation services agreement and to re-route the portion of the pipeline that is in the Yaqui territory, whereby the CFE would pay for the re-routing with a new tariff. This amendment will terminate if certain conditions are not met, and Sempra Infrastructure retains the right to terminate the transportation services agreement and seek to recover its reasonable and documented costs and lost profit. Sempra Infrastructure continues to acquire and pursue the necessary rights-of-way and permits for the re-routed portion of the pipeline. At September 30, 2024, Sempra Infrastructure had $404 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 re-route a portion of the pipeline and resume operations or if Sempra Infrastructure terminates the contract and is unable to obtain recovery.

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 September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Sempra	$	166	$	128	$	466	$	311
SDG&E	27		28		80		90
SoCalGas	25		20		75		55

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 PBOP		Total AOCI
	Three months ended September 30, 2024 and 2023
Sempra:
Balance at June 30, 2024	$	(49)	$	35	$	(107)	$	(121)
OCI before reclassifications	(12)		(49)		—		(61)
Amounts reclassified from AOCI	—		(5)		2		(3)
Net OCI	(12)		(54)		2		(64)
Balance at September 30, 2024	$	(61)	$	(19)	$	(105)	$	(185)

Balance at June 30, 2023	$	(38)	$	14	$	(97)	$	(121)
OCI before reclassifications	(5)		116		—		111
Amounts reclassified from AOCI(2)	—		(51)		1		(50)
Net OCI(2)	(5)		65		1		61
Balance at September 30, 2023	$	(43)	$	79	$	(96)	$	(60)
SDG&E:
Balance at June 30, 2024 and September 30, 2024					$	(8)	$	(8)





Balance at June 30, 2023 and September 30, 2023					$	(7)	$	(7)
SoCalGas:
Balance at June 30, 2024 and September 30, 2024			$	(10)	$	(11)	$	(21)





Balance at June 30, 2023 and September 30, 2023			$	(11)	$	(11)	$	(22)

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

(2) Total AOCI includes $(46) of financial instruments associated with sale of NCI to KKR Denali in 2023, which we discuss in Note 9 in “Noncontrolling Interests – SI Partners Subsidiaries.” 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 PBOP		Total AOCI
	Nine months ended September 30, 2024 and 2023
Sempra:
Balance at December 31, 2023	$	(36)	$	3	$	(117)	$	(150)
OCI before reclassifications	(25)		(1)		1		(25)
Amounts reclassified from AOCI	—		(21)		11		(10)
Net OCI	(25)		(22)		12		(35)
Balance at September 30, 2024	$	(61)	$	(19)	$	(105)	$	(185)

Balance at December 31, 2022	$	(59)	$	10	$	(86)	$	(135)
OCI before reclassifications	16		129		(13)		132
Amounts reclassified from AOCI(2)	—		(60)		3		(57)
Net OCI(2)	16		69		(10)		75
Balance at September 30, 2023	$	(43)	$	79	$	(96)	$	(60)
SDG&E:
Balance at December 31, 2023 and September 30, 2024					$	(8)	$	(8)





Balance at December 31, 2022 and September 30, 2023					$	(7)	$	(7)
SoCalGas:
Balance at December 31, 2023			$	(11)	$	(12)	$	(23)

Amounts reclassified from AOCI			1		1		2
Net OCI			1		1		2
Balance at September 30, 2024			$	(10)	$	(11)	$	(21)

Balance at December 31, 2022			$	(12)	$	(12)	$	(24)
Amounts reclassified from AOCI			1		1		2
Net OCI			1		1		2
Balance at September 30, 2023			$	(11)	$	(11)	$	(22)

(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 AOCI components	Amounts reclassified from AOCI				Affected line item on Condensed Consolidated Statements of Operations
	Three months ended September 30,
	2024		2023
Sempra:
Financial instruments:
Interest rate instruments	$	(3)	$	1	Interest expense
Interest rate instruments	(5)		(12)		Equity earnings(1)

Foreign exchange instruments	(1)		(1)		Other income, net
Foreign exchange instruments	(1)		(1)		Equity earnings(1)
Total, before income tax	(10)		(13)
	3		2		Income tax benefit (expense)
Total, net of income tax	(7)		(11)
	2		6		Earnings attributable to noncontrolling interests
Total, net of income tax and after NCI	$	(5)	$	(5)

Pension and PBOP(2):
Amortization of actuarial loss	$	2	$	1	Other income, net
Amortization of prior service cost	1		1		Other income, net
Total, before income tax	3		2
	(1)		(1)		Income tax benefit (expense)
Total, net of income tax	$	2	$	1

Total reclassifications for the period, net of income tax and after NCI	$	(3)	$	(4)

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

(2) Amounts are included in the computation of net periodic benefit cost (see “Pension and PBOP” below).


RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
(Dollars in millions)
Details about AOCI components	Amounts reclassified from AOCI				Affected line item on Condensed Consolidated Statements of Operations
	Nine months ended September 30,
	2024		2023
Sempra:
Financial instruments:
Interest rate instruments	$	(9)	$	1	Interest expense
Interest rate instruments	(20)		(33)		Equity earnings(1)
Foreign exchange instruments	(5)		—		Revenues: Energy-related businesses
	(2)		1		Other income, net
Foreign exchange instruments	(5)		1		Equity earnings(1)
Interest rate and foreign exchange instruments	—		(1)		Interest expense
	—		(6)		Other income, net
Total, before income tax	(41)		(37)
	9		5		Income tax benefit (expense)
Total, net of income tax	(32)		(32)
	11		18		Earnings attributable to noncontrolling interests
Total, net of income tax and after NCI	$	(21)	$	(14)

Pension and PBOP(2):
Amortization of actuarial loss	$	5	$	2	Other income, net
Amortization of prior service cost	2		2		Other income, net
Settlement charges	9		—		Other income, net
Total, before income tax	16		4
	(5)		(1)		Income tax benefit (expense)
Total, net of income tax	$	11	$	3

Total reclassifications for the period, net of income tax and after NCI	$	(10)	$	(11)







SoCalGas:
Financial instruments:
Interest rate instruments	$	1	$	1	Interest expense

Pension and PBOP(2):

Amortization of prior service cost	$	1	$	1	Other income (expense), net


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

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

(2) Amounts are included in the computation of net periodic benefit cost (see “Pension and PBOP” below).

Reclassifications out of AOCI to net income were negligible in the three months and nine months ended September 30, 2024 and 2023 for SDG&E, and in the three months ended September 30, 2024 and 2023 for SoCalGas.

PENSION AND PBOP

Net Periodic Benefit Cost

The following 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 Other Income, Net.


NET PERIODIC BENEFIT COST
(Dollars in millions)
	Pension				PBOP
	Three months ended September 30,
	2024		2023		2024		2023
Sempra:
Service cost	$	34	$	25	$	4	$	3
Interest cost	41		39		9		9
Expected return on assets	(40)		(42)		(19)		(17)
Amortization of:
Prior service cost (credit)	1		2		(1)		(1)
Actuarial loss (gain)	4		3		(4)		(5)
Net periodic benefit cost (credit)	40		27		(11)		(11)
Regulatory adjustments	20		30		10		10
Total expense (income) recognized	$	60	$	57	$	(1)	$	(1)
SDG&E:
Service cost	$	10	$	8	$	—	$	1
Interest cost	10		10		3		2
Expected return on assets	(10)		(9)		(3)		(2)
Amortization of:
Actuarial loss	3		2		—		—
Net periodic benefit cost	13		11		—		1
Regulatory adjustments	—		3		—		(1)
Total expense recognized	$	13	$	14	$	—	$	—
SoCalGas:
Service cost	$	21	$	15	$	3	$	2
Interest cost	26		24		7		7
Expected return on assets	(29)		(29)		(15)		(14)
Amortization of:
Prior service cost (credit)	1		1		(1)		(1)
Actuarial loss (gain)	1		1		(4)		(5)
Net periodic benefit cost (credit)	20		12		(10)		(11)
Regulatory adjustments	20		27		10		11
Total expense recognized	$	40	$	39	$	—	$	—


NET PERIODIC BENEFIT COST (CONTINUED)
(Dollars in millions)
	Pension				PBOP
	Nine months ended September 30,
	2024		2023		2024		2023
Sempra:
Service cost	$	99	$	82	$	11	$	10
Interest cost	124		118		27		28
Expected return on assets	(131)		(127)		(53)		(52)
Amortization of:
Prior service cost (credit)	4		4		(2)		(2)
Actuarial loss (gain)	10		7		(12)		(17)
Settlement charges	9		—		—		—
Net periodic benefit cost (credit)	115		84		(29)		(33)
Regulatory adjustments	21		88		28		32
Total expense (income) recognized	$	136	$	172	$	(1)	$	(1)
SDG&E:
Service cost	$	29	$	24	$	2	$	2
Interest cost	32		30		6		6
Expected return on assets	(33)		(29)		(7)		(6)
Amortization of:
Actuarial loss (gain)	6		4		(1)		(1)
Net periodic benefit cost	34		29		—		1
Regulatory adjustments	(7)		11		—		(1)
Total expense recognized	$	27	$	40	$	—	$	—
SoCalGas:
Service cost	$	59	$	49	$	8	$	7
Interest cost	78		75		21		21
Expected return on assets	(90)		(89)		(45)		(44)
Amortization of:
Prior service cost (credit)	3		3		(2)		(2)
Actuarial loss (gain)	1		1		(10)		(15)
Net periodic benefit cost (credit)	51		39		(28)		(33)
Regulatory adjustments	28		77		28		33
Total expense recognized	$	79	$	116	$	—	$	—

OTHER INCOME, NET

Other Income, Net, consists of the following:


OTHER INCOME (EXPENSE), NET
(Dollars in millions)
	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Sempra:
Allowance for equity funds used during construction	$	39	$	35	$	114	$	105
Investment gains (losses), net(1)	29		(19)		48		(2)
Gains on interest rate and foreign exchange instruments, net	1		1		2		5
Foreign currency transaction (losses) gains, net	(5)		(3)		(6)		1
Non-service components of net periodic benefit cost	(21)		(28)		(25)		(79)
Interest on regulatory balancing accounts, net	26		19		68		56
Sundry, net	(4)		(2)		(7)		(11)
Total	$	65	$	3	$	194	$	75
SDG&E:
Allowance for equity funds used during construction	$	21	$	21	$	60	$	67
Non-service components of net periodic benefit cost	(3)		(5)		4		(14)
Interest on regulatory balancing accounts, net	12		10		30		31
Sundry, net	—		(1)		(8)		(9)
Total	$	30	$	25	$	86	$	75
SoCalGas:
Allowance for equity funds used during construction	$	18	$	14	$	54	$	38
Non-service components of net periodic benefit cost	(16)		(22)		(12)		(60)
Interest on regulatory balancing accounts, net	14		9		38		25
Sundry, net	(3)		(3)		(7)		(12)
Total	$	13	$	(2)	$	73	$	(9)

(1) Represents net investment gains (losses) 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.

INCOME TAXES

We provide our calculations of ETRs in the following table.


INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
	Three months ended September 30,						Nine months ended September 30,
	2024			2023			2024			2023
Sempra:
Income tax (benefit) expense	$	(105)		$	(52)		$	(63)		$	499

Income before income taxes and equity earnings	$	200		$	323		$	1,213		$	2,175
Equity earnings, before income tax(1)	132			133			426			418
Pretax income	$	332		$	456		$	1,639		$	2,593

Effective income tax rate	(32)		%	(11)		%	(4)		%	19		%
SDG&E:
Income tax expense (benefit)	$	15		$	(15)		$	89		$	(4)
Income before income taxes	$	276		$	259		$	759		$	712
Effective income tax rate	5		%	(6)		%	12		%	(1)		%
SoCalGas:
Income tax (benefit) expense	$	(52)		$	(5)		$	1		$	68
(Loss) income before income taxes	$	(66)		$	11		$	477		$	600
Effective income tax rate	79		%	(45)		%	—		%	11		%

(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, 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

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

Under the IRA, in 2023, the scope of projects eligible for ITCs was expanded to include standalone energy storage projects, which are transferable under the IRA. The IRA also provided an election through 2024 that permits ITCs related to standalone energy storage projects to be returned to utility customers over a period that is shorter than the life of the applicable asset.

In April 2023, the IRS issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting for gas repairs expenditures. As a result of this Revenue Procedure, SoCalGas updated its assessment of prior years’ unrecognized income tax benefits and, in the nine months ended September 30, 2023, recorded an income tax benefit of $43 million for previously unrecognized income tax benefits pertaining to gas repairs expenditures. Sempra elected this change in tax accounting method in its consolidated 2023 income tax return filing, and Sempra, SDG&E and SoCalGas have applied this methodology in the calculation of their 2024 forecasted ETRs.

Sempra, SDG&E, and SoCalGas record regulatory liabilities for benefits that will be flowed through to customers in the future.

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 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”: ASU 2023-07 revises reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, public entities are required to disclose the title and position of the CODM and explain how the CODM uses the reported measures of profit or loss to assess segment performance. The standard also requires interim disclosure of certain segment-related disclosures that previously were required only on an annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Entities must adopt the changes to the segment reporting disclosures on a retrospective basis. We plan to adopt the standard on December 31, 2024.

ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”: ASU 2023-09 improves the transparency of income tax disclosures by requiring disaggregated information about each Registrant’s ETR reconciliation as well as information on income taxes paid. For each annual period, each Registrant will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5% of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate). ASU 2023-09 is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. We plan to adopt the standard on December 31, 2025 and are currently evaluating the effect of the standard on our financial reporting.

ASU 2024-03, “Disaggregation of Income Statement Expenses”: ASU 2024-03 mandates detailed disclosures on the disaggregation of income statement expenses. Public business entities are required to disclose in the notes to financial statements the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption. The standard also requires disclosure of the amount, and a qualitative description of, other items remaining in relevant expense captions that are not separately disaggregated. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and entities may adopt the standard on either a prospective or retrospective basis. We are currently evaluating the effect of the standard on our financial reporting and have not yet selected the year in which we will adopt the standard.

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 tables disaggregate our revenues from contracts with customers by major service line and market. We also provide a reconciliation to total revenues by segment for Sempra. The majority of our revenue is recognized over time.


DISAGGREGATED REVENUES
(Dollars in millions)
	Sempra
	Sempra California		Sempra Infrastructure		Consolidating adjustments and Parent and other		Sempra
	Three months ended September 30, 2024
By major service line:
Utilities	$	2,394	$	15	$	(7)	$	2,402
Energy-related businesses	—		179		(12)		167
Revenues from contracts with customers	$	2,394	$	194	$	(19)	$	2,569
By market:
Gas	$	1,237	$	83	$	(6)	$	1,314
Electric	1,157		111		(13)		1,255
Revenues from contracts with customers	$	2,394	$	194	$	(19)	$	2,569

Revenues from contracts with customers	$	2,394	$	194	$	(19)	$	2,569
Utilities regulatory revenues	(138)		—		—		(138)
Other revenues	—		344		1		345
Total revenues	$	2,256	$	538	$	(18)	$	2,776

	Three months ended September 30, 2023
By major service line:
Utilities	$	2,528	$	18	$	(5)	$	2,541
Energy-related businesses	—		369		(16)		353
Revenues from contracts with customers	$	2,528	$	387	$	(21)	$	2,894
By market:
Gas	$	1,275	$	234	$	(3)	$	1,506
Electric	1,253		153		(18)		1,388
Revenues from contracts with customers	$	2,528	$	387	$	(21)	$	2,894

Revenues from contracts with customers	$	2,528	$	387	$	(21)	$	2,894
Utilities regulatory revenues	197		—		—		197
Other revenues	—		242		1		243
Total revenues	$	2,725	$	629	$	(20)	$	3,334


DISAGGREGATED REVENUES (CONTINUED)
(Dollars in millions)
	Sempra
	Sempra California		Sempra Infrastructure		Consolidating adjustments and Parent and other		Sempra
	Nine months ended September 30, 2024
By major service line:
Utilities	$	8,129	$	63	$	(18)	$	8,174
Energy-related businesses	—		625		(49)		576
Revenues from contracts with customers	$	8,129	$	688	$	(67)	$	8,750
By market:
Gas	$	4,961	$	356	$	(15)	$	5,302
Electric	3,168		332		(52)		3,448
Revenues from contracts with customers	$	8,129	$	688	$	(67)	$	8,750

Revenues from contracts with customers	$	8,129	$	688	$	(67)	$	8,750
Utilities regulatory revenues	(107)		—		—		(107)
Other revenues	—		778		6		784
Total revenues	$	8,022	$	1,466	$	(61)	$	9,427

	Nine months ended September 30, 2023
By major service line:
Utilities	$	10,764	$	67	$	(16)	$	10,815
Energy-related businesses	—		916		(56)		860
Revenues from contracts with customers	$	10,764	$	983	$	(72)	$	11,675
By market:
Gas	$	7,158	$	605	$	(13)	$	7,750
Electric	3,606		378		(59)		3,925
Revenues from contracts with customers	$	10,764	$	983	$	(72)	$	11,675

Revenues from contracts with customers	$	10,764	$	983	$	(72)	$	11,675
Utilities regulatory revenues	76		—		—		76
Other revenues	—		1,502		(24)		1,478
Total revenues	$	10,840	$	2,485	$	(96)	$	13,229


DISAGGREGATED REVENUES
(Dollars in millions)
	SDG&E				SoCalGas
	Three months ended September 30,
	2024		2023		2024		2023
By major service line:
Revenues from contracts with customers – Utilities	$	1,327	$	1,438	$	1,110	$	1,120
By market:
Gas	$	167	$	182	$	1,110	$	1,120
Electric	1,160		1,256		—		—
Revenues from contracts with customers	$	1,327	$	1,438	$	1,110	$	1,120

Revenues from contracts with customers	$	1,327	$	1,438	$	1,110	$	1,120
Utilities regulatory revenues	(84)		4		(56)		193
Total revenues	$	1,243	$	1,442	$	1,054	$	1,313

	Nine months ended September 30,
	2024		2023		2024		2023
By major service line:
Revenues from contracts with customers – Utilities	$	3,836	$	4,603	$	4,416	$	6,252
By market:
Gas	$	658	$	988	$	4,416	$	6,252
Electric	3,178		3,615		—		—
Revenues from contracts with customers	$	3,836	$	4,603	$	4,416	$	6,252

Revenues from contracts with customers	$	3,836	$	4,603	$	4,416	$	6,252
Utilities regulatory revenues	141		(246)		(248)		322
Total revenues	$	3,977	$	4,357	$	4,168	$	6,574

REVENUES FROM CONTRACTS WITH CUSTOMERS

Remaining Performance Obligations

For contracts greater than one year, at September 30, 2024, 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 for contracts greater than one year at September 30, 2024.


REMAINING PERFORMANCE OBLIGATIONS(1)
(Dollars in millions)
	Sempra		SDG&E
2024 (excluding first nine months of 2024)	$	90	$	—
2025	321		4
2026	321		4
2027	321		4
2028	253		4
Thereafter	2,313		56
Total revenues to be recognized	$	3,619	$	72

(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 nine months ended September 30, 2024 or 2023. Sempra Infrastructure recorded a contract liability for funds held as collateral in lieu of a customer’s letters of credit primarily associated with its LNG storage and regasification agreement.


CONTRACT LIABILITIES
(Dollars in millions)
	2024		2023
Sempra:
Contract liabilities at January 1	$	(198)	$	(252)
Revenue from performance obligations satisfied during reporting period	5		9
Payments received in advance	(3)		(21)
Contract liabilities at September 30(1)	$	(196)	$	(264)
SDG&E:
Contract liabilities at January 1	$	(75)	$	(79)
Revenue from performance obligations satisfied during reporting period	3		3
Contract liabilities at September 30(2)	$	(72)	$	(76)

(1) Balances at September 30, 2024 include $4 in Other Current Liabilities and $192 in Deferred Credits and Other.

(2) Balances at September 30, 2024 include $3 in Other Current Liabilities and $69 in Deferred Credits and Other.

Receivables from Revenues from Contracts with Customers

The table below shows receivable balances, net of allowances for credit losses, associated with revenues from contracts with customers on the Condensed Consolidated Balance Sheets.


RECEIVABLES FROM REVENUES FROM CONTRACTS WITH CUSTOMERS
(Dollars in millions)
	September 30, 2024		December 31, 2023
Sempra:
Accounts receivable – trade, net(1)	$	1,490	$	1,951
Accounts receivable – other, net	20		15
Due from unconsolidated affiliates – current(2)	4		4
Other long-term assets(3)	20		—
Total	$	1,534	$	1,970
SDG&E:
Accounts receivable – trade, net(1)	$	867	$	870
Accounts receivable – other, net	19		13
Due from unconsolidated affiliates – current(2)	7		6
Other long-term assets(3)	6		—
Total	$	899	$	889
SoCalGas:
Accounts receivable – trade, net	$	557	$	985
Accounts receivable – other, net	1		2
Other long-term assets(3)	14		—
Total	$	572	$	987

(1) At September 30, 2024 and December 31, 2023, includes $223 and $148, respectively, of receivables due from customers that were billed on behalf of Community Choice Aggregators, which are not included in revenues.

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

(3) In January 2024, the CPUC directed SDG&E and SoCalGas to offer long-term repayment plans to eligible residential customers with past-due balances.

NOTE 4. REGULATORY MATTERS

REGULATORY ASSETS AND LIABILITIES

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)
	Sempra				SDG&E				SoCalGas
	September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
Fixed-price contracts and other derivatives	$	54	$	215	$	8	$	14	$	46	$	201
Deferred income taxes recoverable in rates	1,526		1,142		780		626		660		430
Pension and PBOP plan obligations	(255)		(212)		51		48		(306)		(260)
Employee benefit costs	24		24		3		3		21		21
Removal obligations	(3,261)		(3,082)		(2,650)		(2,468)		(611)		(614)
Environmental costs	148		139		115		105		33		34
Sunrise Powerlink fire mitigation	123		124		123		124		—		—
Regulatory balancing accounts(1)(2):
Commodity – electric	(223)		(233)		(223)		(233)		—		—
Commodity – gas, including transportation	(179)		(259)		46		52		(225)		(311)
Safety and reliability	1,192		959		276		207		916		752
Public purpose programs	(442)		(273)		(200)		(144)		(242)		(129)
Wildfire mitigation plan	811		685		811		685		—		—
Liability insurance premium	107		113		79		90		28		23
Other balancing accounts	306		373		(70)		(152)		376		525
Other regulatory (liabilities) assets, net(2)	(188)		(10)		(5)		49		(181)		(58)
Total	$	(257)	$	(295)	$	(856)	$	(994)	$	515	$	614

(1) At September 30, 2024 and December 31, 2023, the noncurrent portion of regulatory balancing accounts – net undercollected for Sempra was $2,090 and $1,913, respectively, for SDG&E was $979 and $950, respectively, and for SoCalGas was $1,111 and $963, respectively.

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

CPUC GRC

The CPUC uses GRCs to set revenues 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.

On October 18, 2024, the CPUC issued a proposed decision in the 2024 GRC for SDG&E’s and SoCalGas’ test year revenue requirements for 2024 and attrition year adjustments for 2025 through 2027.

The 2024 GRC proposed decision adopts a 2024 test year revenue requirement of $2,800 million for SDG&E’s combined operations ($2,198 million for its electric operations and $602 million for its natural gas operations), which is $207 million lower than the $3,007 million that SDG&E had requested in its updated application. The proposed 2024 combined revenue requirement, if adopted, represents an increase of $267 million (10.5%) compared to its authorized 2023 combined revenue requirement. The proposed post-test year revenue requirement, if adopted, would be annual increases of approximately 3.9% for 2025-2027 at SDG&E.

The 2024 GRC proposed decision adopts a 2024 test year revenue requirement of $4,062 million for SoCalGas, which is $372 million lower than the $4,434 million that SoCalGas had requested in its May 2022 application. The proposed 2024 revenue requirement, if adopted, represents an increase of $523 million (14.8%) over its authorized 2023 revenue requirement. The proposed post-test year revenue requirement, if adopted, would be annual increases of approximately 3.9% for 2025-2027 at SoCalGas.

Because a final decision for the 2024 GRC was not issued by September 30, 2024, SDG&E and SoCalGas recorded CPUC-authorized base revenues in the three months and nine months ended September 30, 2024 based on 2023 levels authorized under the 2019 GRC. The impact of the final decision, retroactive to January 1, 2024, as authorized by the CPUC, will be reflected in SDG&E’s and SoCalGas’ financial statements in the period in which the final decision is issued. We expect the CPUC to issue a final decision by the end of this year.

2024 GRC Track 2

In October 2023, SDG&E submitted a separate request to the CPUC in its 2024 GRC, known as a Track 2 request. This request seeks review and recovery of $1.5 billion of wildfire mitigation plan costs incurred from 2019 through 2022 that were in addition to amounts authorized in the 2019 GRC. SDG&E expects to receive a proposed reasonableness review decision for its Track 2 request in the first half of 2025.

Revenues associated with the Track 2 request amounts described above have been recorded in a regulatory account. In February 2024, the CPUC approved an interim cost recovery mechanism that would permit SDG&E to recover in rates $194 million and $96 million of this regulatory account balance in 2024 and 2025, respectively. Such recovery of SDG&E’s wildfire mitigation plan regulatory account balance will be subject to refund, contingent on the reasonableness review decision for its Track 2 request.

2024 GRC Track 3

SDG&E expects to submit in the first half of 2025 an additional request to the CPUC in its 2024 GRC, known as a Track 3 request, for review and recovery of its 2023 wildfire mitigation plan costs.

CPUC COST OF CAPITAL

The CPUC approved the following cost of capital for SDG&E and SoCalGas that became effective on January 1, 2023 and was to remain in effect through December 31, 2025, subject to the CCM.


AUTHORIZED COST OF CAPITAL FOR 2023

SDG&E							SoCalGas
Authorized weighting		Return on rate base		Weighted return on rate base(1)			Authorized weighting		Return on rate base		Weighted return on rate base
45.25	%	4.05	%	1.83	%	Long-Term Debt	45.60	%	4.07	%	1.86	%
2.75		6.22		0.17		Preferred Equity	2.40		6.00		0.14
52.00		9.95		5.17		Common Equity	52.00		9.80		5.10
100.00	%			7.18	%		100.00	%			7.10	%

(1) Total weighted return on rate base does not sum due to rounding differences.

On September 30, 2023, the CCM was triggered for SDG&E and SoCalGas. In December 2023, the CPUC approved the following authorized rates of return effective January 1, 2024.


AUTHORIZED COST OF CAPITAL FOR 2024

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	%	4.34	%	1.96	%	Long-Term Debt	45.60	%	4.54	%	2.07	%
2.75		6.22		0.17		Preferred Equity	2.40		6.00		0.14
52.00		10.65		5.54		Common Equity	52.00		10.50		5.46
100.00	%			7.67	%		100.00	%			7.67	%

In October 2023, the CPUC issued a ruling to initiate a second phase of the 2023-2025 cost of capital proceeding to evaluate potential modifications to the CCM. In October 2024, the CPUC issued a final decision to modify the CCM. The final decision reduces the upward or downward adjustment to authorized ROE, if the CCM is triggered, to 20% of the change in the benchmark rate during the measurement period from the current 50%. The final decision adopts this change effective January 1, 2025, reducing both SDG&E’s and SoCalGas’ ROE by 42 bps to 10.23% and 10.08%, respectively, and allowing SDG&E and SoCalGas to update their respective costs of preferred equity and debt for 2025. SDG&E and SoCalGas intend to file advice letters in November 2024 to address the implementation, subject to approval, of the updated cost of capital.

FERC RATE MATTERS

SDG&E files separately with the FERC for its authorized transmission revenue requirement and ROE on FERC-regulated electric transmission operations and assets. SDG&E’s currently effective TO5 settlement provides for an ROE of 10.60%, consisting of a base ROE of 10.10% plus an additional 50 bps for participation in the California ISO (the California ISO adder). In May 2024, the CPUC and other parties filed a petition and complaint with the FERC seeking an order that directs SDG&E to remove the California ISO adder from its currently effective TO5 settlement and refund the California ISO adder retroactively from June 1, 2019. In June 2024, SDG&E exercised its right to terminate the TO5 settlement. Accordingly, in October 2024, SDG&E submitted its TO6 filing to the FERC to be effective January 1, 2025, subject to refund. SDG&E’s TO6 filing proposes, among other items, an increase to SDG&E’s currently authorized base ROE from 10.10% to 11.75% and continuation of the California ISO adder. SDG&E expects further proceedings on these two matters.

NOTE 5. SEMPRA – 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. Distributions received from equity method investees are classified in the Condensed Consolidated Statements of Cash Flows as either a return on investment in operating activities or a return of investment in investing activities based on the “nature of the distribution” approach. 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 Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.

ONCOR HOLDINGS

We account for our 100% equity 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 nine months ended September 30, 2024 and 2023, Sempra contributed $578 million and $270 million, respectively, to Oncor Holdings, and Oncor Holdings distributed $314 million and $323 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 September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Operating revenues	$	1,660	$	1,592	$	4,610	$	4,227
Operating expenses	(1,109)		(1,007)		(3,203)		(3,007)
Income from operations	551		585		1,407		1,220
Interest expense	(170)		(140)		(481)		(396)
Income tax expense	(75)		(81)		(179)		(148)
Net income	320		376		791		672
NCI held by Texas Transmission Investment LLC	(63)		(75)		(157)		(135)
Earnings attributable to Sempra(1)	257		301		634		537

(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.

CAMERON LNG JV

In the nine months ended September 30, 2024 and 2023, Sempra Infrastructure contributed $10 million and $11 million, respectively, to Cameron LNG JV, and Cameron LNG JV distributed $353 million and $339 million, respectively, to Sempra Infrastructure.

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 $18 million at September 30, 2024, 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 are 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 Infrastructure’s $753 million proportionate share of the affiliate loans, based on SI Partners’ 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 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 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 recognizes 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 8). At September 30, 2024, the fair value of the Support Agreement was $24 million, of which $7 million is included in Other Current Assets and $17 million is included in Other Long-Term Assets on Sempra’s Condensed Consolidated Balance Sheet.

TAG NORTE

In the nine months ended September 30, 2024 and 2023, TAG Norte distributed $62 million and $36 million, respectively, to Sempra Infrastructure.

IMG

In the nine months ended September 30, 2023, IMG distributed $6 million to Sempra Infrastructure.

NOTE 6. 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 September 30, 2024, Sempra had an aggregate capacity of $9.9 billion under seven primary committed lines of credit, which provide liquidity and support our 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 in the following table.


COMMITTED LINES OF CREDIT
(Dollars in millions)
		September 30, 2024
Borrower	Expiration date of facility	Total facility		Commercial paper outstanding		Amounts outstanding		Letters of credit outstanding		Available unused credit
Sempra	October 2029(1)	$	4,000	$	(350)	$	—	$	—	$	3,650
SDG&E	October 2029(1)	1,500		(384)		—		—		1,116
SoCalGas	October 2029(1)	1,200		—		—		—		1,200
SI Partners and IEnova	September 2025	500		—		(390)		—		110
SI Partners and IEnova	August 2026	1,000		—		—		—		1,000
SI Partners and IEnova	August 2028	1,500		—		(551)		—		949
Port Arthur LNG	March 2030	200		—		—		(64)		136
Total		$	9,900	$	(734)	$	(941)	$	(64)	$	8,161

(1) In October 2024, Sempra, SDG&E and SoCalGas each amended their respective credit facility to extend the expiration date from October 2028 to October 2029.

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 September 30, 2024, each Registrant was in compliance with this ratio under its respective credit facility.

The three lines of credit that are shared by SI Partners and IEnova require that SI Partners maintain a ratio of consolidated adjusted net indebtedness to consolidated earnings before interest, taxes, depreciation and amortization (as defined in each credit facility) of no more than 5.25 to 1.00 at the end of each quarter. At September 30, 2024, SI Partners was in compliance with this ratio.

Uncommitted Line of Credit

ECA LNG Phase 1 has an uncommitted line of credit, which is generally used for working capital requirements. Borrowings can be in U.S. dollars or Mexican pesos. At September 30, 2024, an aggregate of $14 million, before reductions of any unamortized discounts, was outstanding, which were borrowed in Mexican pesos and bear interest at a variable rate based on the 28-day Interbank Equilibrium Interest Rate plus the applicable margin. Borrowings made in U.S. dollars bear interest at a variable rate based on the one-month or three-month SOFR plus the applicable margin and a credit adjustment spread of 10 bps. In August 2024, the facility was amended to decrease the capacity from $200 million to $100 million, extend the expiration date to August 2026, and adjust the applicable margin to 154 bps for amounts borrowed in Mexican pesos and 164 bps for amounts borrowed in U.S. dollars.

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 September 30, 2024, we had $491 million in standby letters of credit outstanding under these agreements.


UNCOMMITTED LETTERS OF CREDIT OUTSTANDING
(Dollars in millions)
	Expiration date range	September 30, 2024
SDG&E	January 2025 - November 2025	$	26
SoCalGas	October 2024 - November 2025	20
Other Sempra	October 2024 - November 2054	445
Total Sempra		$	491

Term Loan

In May 2024, SoCalGas entered into a $500 million, 364-day term loan facility with a maturity date of May 22, 2025. Upon execution, SoCalGas borrowed $300 million, net of negligible debt issuance costs, under the term loan facility and borrowed the remaining $200 million in August 2024. SoCalGas may request an increase in the term loan facility of up to $500 million prior to the maturity date, subject to lender approval. The outstanding borrowings bear interest at a per annum rate equal to term SOFR, plus 80 bps and a credit adjustment spread of 10 bps. SoCalGas used the proceeds to repay commercial paper and for other general corporate purposes. At September 30, 2024, the term loan is included in Short-Term Debt on SoCalGas’ Condensed Consolidated Balance Sheet.

Weighted-Average Interest Rates

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


WEIGHTED-AVERAGE INTEREST RATES

	September 30, 2024		December 31, 2023
Sempra	5.54	%	5.96	%
SDG&E	4.95		—
SoCalGas	5.82		5.44

LONG-TERM DEBT

SDG&E

In March 2024, SDG&E issued $600 million aggregate principal amount of 5.55% first mortgage bonds due in full upon maturity on April 15, 2054 and received proceeds of $587 million (net of debt discount, underwriting discounts and debt issuance costs of $13 million). 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 the net proceeds to repay commercial paper and for other general corporate purposes.

SoCalGas

In March 2024, SoCalGas issued $500 million aggregate principal amount of 5.60% first mortgage bonds due in full upon maturity on April 1, 2054 and received proceeds of $491 million (net of debt discount, underwriting discounts and debt issuance costs of $9 million). The first mortgage bonds are redeemable prior to maturity, subject to their terms, and in certain circumstances subject to make-whole provisions. SoCalGas used the net proceeds to repay outstanding indebtedness and for other general corporate purposes.

In August 2024, SoCalGas issued $600 million aggregate principal amount of 5.05% first mortgage bonds due in full upon maturity on September 1, 2034 and received proceeds of $592 million (net of debt discount, underwriting discounts and debt issuance costs of $8 million). The first mortgage bonds are redeemable prior to maturity, subject to their terms, and in certain circumstances subject to make-whole provisions. SoCalGas used the net proceeds to repay outstanding indebtedness and for other general corporate purposes.

Other Sempra

Sempra

In March 2024 and May 2024, Sempra issued $600 million and $500 million, respectively, of 6.875% fixed-to-fixed reset rate junior subordinated notes maturing on October 1, 2054. In March 2024, we received proceeds of $593 million (net of debt discount, underwriting discounts and debt issuance costs of $7 million). In May 2024, we received proceeds of $489 million (net of debt discount, underwriting discounts and debt issuance costs of $11 million, but excluding $7 million paid to us in respect of accrued interest from and including March 14, 2024 to, but excluding, May 31, 2024). In September 2024, Sempra issued $1.25 billion of 6.40% fixed-to fixed reset rate junior subordinated notes maturing on October 1, 2054, and we received proceeds of $1.235 billion (net of debt discounts, underwriting discounts and debt issuance costs of $15 million). We used, or plan to use, the proceeds from the offerings for general corporate purposes, including repayment of commercial paper and other indebtedness.

Interest on the notes accrues from and including March 14, 2024 (for the March 2024 and May 2024 issuances) and September 9, 2024 (for the September 2024 issuance) and is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2024 (for the March 2024 and May 2024 issuances) and April 1, 2025 (for the September 2024 issuance).

The notes bear interest, as follows:

▪from and including March 14, 2024 to, but excluding, October 1, 2029 at the rate of 6.875% per annum (for the March 2024 and May 2024 issuances), and from and including September 9, 2024 to, but excluding, October 1, 2034 at the rate of 6.40% per annum (for the September 2024 issuance); and

▪from and including October 1, 2029 (for the March 2024 and May 2024 issuances) and October 1, 2034 (for the September 2024 issuance), during each subsequent five-year period beginning on October 1 of every fifth year, at a rate per annum equal to the Five-year U.S. Treasury Rate (as defined in the notes) as of the day falling two business days before the first day of such five-year period plus a spread of 2.789% (for the March 2024 and May 2024 issuances) and 2.632% (for the September 2024 issuance), to be reset on October 1 of every fifth year beginning in 2029 (for the March 2024 and May 2024 issuances) and 2034 (for the September 2024 issuance).

We may redeem some or all of the notes before their maturity, as follows:

▪in whole or in part, (i) on any day in the period commencing on the date falling 90 days prior to, and ending on and including October 1, 2029 (for the March 2024 and May 2024 issuances) and October 1, 2034 (for the September 2024 issuance), and (ii) after those respective dates, on any interest payment date, at a redemption price in cash equal to 100% of the principal amount of the notes being redeemed, plus, subject to the terms of the notes, accrued and unpaid interest on the notes to be redeemed to, but excluding, the redemption date;

▪in whole but not in part, at any time following the occurrence and during the continuance of a tax event (as defined in the notes) at a redemption price in cash equal to 100% of the principal amount of the notes, plus, subject to the terms of the notes, accrued and unpaid interest on the notes to, but excluding, the redemption date; and

▪in whole but not in part, at any time following the occurrence and during the continuance of a rating agency event (as defined in the notes) at a redemption price in cash equal to 102% of the principal amount of the notes, plus, subject to the terms of the notes, accrued and unpaid interest on the notes to, but excluding, the redemption date.

The notes described above are unsecured obligations and rank junior and subordinate in right of payment to our existing and future senior indebtedness. The notes rank equally in right of payment with each other and with our existing 4.125% fixed-to-fixed reset rate junior subordinated notes due 2052 and 5.75% junior subordinated notes due 2079 and with any future unsecured indebtedness that we may incur if the terms of such indebtedness provide that it ranks equally with the notes in right of payment. The notes are effectively subordinated in right of payment to any secured indebtedness we have incurred or may incur (to the extent of the value of the collateral securing such secured indebtedness) and to all existing and future indebtedness and other liabilities and any preferred equity of our subsidiaries.

ECA LNG Phase 1

ECA LNG Phase 1 has a five-year loan agreement with a syndicate of seven external lenders that matures on December 9, 2025 for an aggregate principal amount of up to $1.3 billion. IEnova and TotalEnergies SE have provided guarantees for repayment of the loans plus accrued and unpaid interest of 83.4% and 16.6%, respectively. At September 30, 2024 and December 31, 2023, $1.0 billion and $832 million, respectively, of borrowings from external lenders were outstanding under the loan agreement, with a weighted-average interest rate of 7.56% and 8.31%, respectively.

Port Arthur LNG

Port Arthur LNG has a seven-year term loan facility agreement with a syndicate of lenders that matures on March 20, 2030 for an aggregate principal amount of approximately $6.8 billion. At September 30, 2024 and December 31, 2023, $420 million and $258 million, respectively, of borrowings were outstanding under the loan agreement, with an all-in weighted-average interest rate of 5.33% and 5.81%, respectively.

NOTE 7. 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 contracts that otherwise would have been accounted for as 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 amounts related to terminations or early settlements of 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 of variability of future cash flows of a given revenue or expense item, 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 risk, 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 limited by company policy. SDG&E’s risk management and transacting activity plans for electricity derivatives are also required to be filed with, and have been approved by, the CPUC. SoCalGas is also subject to certain regulatory requirements and thresholds related to natural gas procurement under the GCIM. 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 Natural Gas or in Cost of Electric Fuel and Purchased Power.

▪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 its assets which support the following businesses: LNG, natural gas pipelines 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.

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

The following table summarizes net energy derivative volumes.


NET ENERGY DERIVATIVE VOLUMES
(Quantities in millions)
Commodity	Unit of measure	September 30, 2024	December 31, 2023
Sempra:
Natural gas	MMBtu	455	361
Electricity	MWh	—	1
Congestion revenue rights	MWh	16	36
SDG&E:
Natural gas	MMBtu	18	17

Congestion revenue rights	MWh	16	36
SoCalGas:
Natural gas	MMBtu	405	268

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.

In March 2023, Port Arthur LNG entered into floating-to-fixed interest rate swaps maturing in 2048, which were designated as cash flow hedges. On September 30, 2024, Port Arthur LNG voluntarily de-designated those interest rate swaps that begin hedging interest payments in March 2026 to provide for future financing flexibility. At the time of de-designation, $40 million of deferred gains related to the de-designated notional amount were included in AOCI, which will remain in AOCI until the hedged interest payments impact earnings or such hedged interest payments become probable of not occurring. In October 2024, Port Arthur LNG received a cash settlement of $46 million, net of transaction costs, for the termination of $1.0 billion of the notional amount of both the designated and de-designated interest rate swaps, with the associated deferred gains remaining in AOCI.

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


INTEREST RATE DERIVATIVES
(Dollars in millions)
	September 30, 2024			December 31, 2023
	Notional amount		Maturities	Notional amount		Maturities
Sempra:
Cash flow hedges(1)	$	3,571	2024-2034	$	4,451	2024-2048
Undesignated derivatives(2)	4,163		2026-2048	—		—

(1) At September 30, 2024, cash flow hedges include Port Arthur LNG interest rate swaps with a maximum notional amount of $3,286 that mature in March 2026. At September 30, 2024 and December 31, 2023, cash flow hedges accrued interest based on a notional amount of $1,422 and $488, respectively.

(2) At September 30, 2024, undesignated derivatives consist of Port Arthur LNG de-designated interest rate swaps with a maximum notional amount of $4,163 that begin hedging interest payments in March 2026.

FOREIGN CURRENCY DERIVATIVES

We may 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.

In May 2024, Oncor entered into cross-currency swaps designated as fair value hedges intended to offset foreign currency exchange rate risk related to its Euro-denominated debt.

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 notional amounts of our foreign currency derivatives, excluding those in our equity method investments.


FOREIGN CURRENCY DERIVATIVES
(Dollars in millions)
	September 30, 2024			December 31, 2023
	Notional amount		Maturities	Notional amount		Maturities
Sempra:
Foreign currency derivatives	$	201	2024-2026	$	176	2024-2025

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. We discuss the fair value of derivative assets and liabilities in Note 8.


DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
	September 30, 2024
	Current assets: Fixed-price contracts and other derivatives(1)		Other long-term assets		Other current liabilities		Deferred credits and other
Sempra:
Derivatives designated as hedging instruments:
Interest rate instruments	$	14	$	23	$	—	$	(3)
Foreign exchange instruments	5		1		(1)		—
Derivatives not designated as hedging instruments:
Interest rate instruments	—		40		—		—
Commodity contracts not subject to rate recovery	22		37		(17)		(47)
Associated offsetting commodity contracts	(14)		(26)		14		26
Commodity contracts subject to rate recovery	5		7		(52)		(14)
Associated offsetting commodity contracts	(2)		(3)		2		3
Associated offsetting cash collateral	—		—		9		5
Net amounts presented on the balance sheet	30		79		(45)		(30)
Additional cash collateral for commodity contracts not subject to rate recovery	55		—		—		—
Additional cash collateral for commodity contracts subject to rate recovery	26		—		—		—
Total(2)	$	111	$	79	$	(45)	$	(30)
SDG&E:
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery	$	4	$	7	$	(11)	$	(8)
Associated offsetting commodity contracts	(1)		(3)		1		3
Associated offsetting cash collateral	—		—		9		5
Net amounts presented on the balance sheet	3		4		(1)		—
Additional cash collateral for commodity contracts subject to rate recovery	24		—		—		—
Total(2)	$	27	$	4	$	(1)	$	—
SoCalGas:
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery	$	1	$	—	$	(41)	$	(6)
Associated offsetting commodity contracts	(1)		—		1		—
Net amounts presented on the balance sheet	—		—		(40)		(6)
Additional cash collateral for commodity contracts subject to rate recovery	2		—		—		—
Total	$	2	$	—	$	(40)	$	(6)

(1) Included in Other Current Assets for SDG&E and SoCalGas.

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


DERIVATIVE INSTRUMENTS ON THE CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Dollars in millions)
	December 31, 2023
	Current assets: Fixed-price contracts and other derivatives(1)		Other long-term assets		Other current liabilities		Deferred credits and other
Sempra:
Derivatives designated as hedging instruments:
Interest rate instruments	$	17	$	70	$	—	$	—
Foreign exchange instruments	—		—		(9)		—
Derivatives not designated as hedging instruments:
Commodity contracts not subject to rate recovery	173		52		(170)		(56)
Associated offsetting commodity contracts	(169)		(51)		169		51
Commodity contracts subject to rate recovery	10		8		(228)		(9)
Associated offsetting commodity contracts	(5)		(2)		5		2
Associated offsetting cash collateral	—		—		12		7
Net amounts presented on the balance sheet	26		77		(221)		(5)
Additional cash collateral for commodity contracts not subject to rate recovery	74		—		—		—
Additional cash collateral for commodity contracts subject to rate recovery	22		—		—		—
Total(2)	$	122	$	77	$	(221)	$	(5)
SDG&E:
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery	$	9	$	8	$	(18)	$	(9)
Associated offsetting commodity contracts	(5)		(2)		5		2
Associated offsetting cash collateral	—		—		12		7
Net amounts presented on the balance sheet	4		6		(1)		—
Additional cash collateral for commodity contracts subject to rate recovery	21		—		—		—
Total(2)	$	25	$	6	$	(1)	$	—
SoCalGas:
Derivatives not designated as hedging instruments:
Commodity contracts subject to rate recovery	$	1	$	—	$	(210)	$	—
Net amounts presented on the balance sheet	1		—		(210)		—
Additional cash collateral for commodity contracts subject to rate recovery	1		—		—		—
Total	$	2	$	—	$	(210)	$	—

(1) Included in Other Current Assets for SDG&E and SoCalGas.

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

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


HEDGE IMPACTS
(Dollars in millions)
	Pretax (loss) gain recognized in OCI					Pretax gain (loss) reclassified from AOCI into earnings
	Three months ended September 30,					Three months ended September 30,
	2024		2023		Location	2024		2023
Sempra:
Cash flow hedges:
Interest rate instruments	$	(203)	$	320	Interest expense	$	3	$	(1)
Interest rate instruments	(33)		32		Equity earnings(1)	5		12

Foreign exchange instruments	2		8		Other income, net	1		1
Foreign exchange instruments	2		7		Equity earnings(1)	1		1
Fair value hedges:
Foreign exchange instruments	(3)		—		Equity earnings(1)	—		—
Total	$	(235)	$	367		$	10	$	13

	Nine months ended September 30,					Nine months ended September 30,
	2024		2023		Location	2024		2023
Sempra:
Cash flow hedges:
Interest rate instruments	$	5	$	337	Interest expense	$	9	$	(1)
Interest rate instruments	(8)		56		Equity earnings(1)	20		33
Foreign exchange instruments	14		—		Revenues: Energy- related businesses	5		—
					Other income, net	2		(1)
Foreign exchange instruments	12		1		Equity earnings(1)	5		(1)
Interest rate and foreign exchange instruments	—		7		Interest expense	—		1
					Other income, net	—		6
Fair value hedges:
Foreign exchange instruments	(10)		—		Equity earnings(1)	—		—
Total	$	13	$	401		$	41	$	37
SoCalGas:
Cash flow hedges:
Interest rate instruments	$	—	$	—	Interest expense	$	(1)	$	(1)

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

For Sempra, we expect that net gains before NCI of $31 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.

At September 30, 2024, the maximum length of time over which Sempra is hedging its exposure to the variability in future cash flows for forecasted transactions, excluding those forecasted transactions related to the payment of variable interest on existing financial instruments, is approximately 1.5 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 gain (loss) on derivatives recognized in earnings
		Three months ended September 30,				Nine months ended September 30,
	Location	2024		2023		2024		2023
Sempra:
Commodity contracts not subject to rate recovery	Revenues: Energy-related businesses	$	98	$	83	$	218	$	785
Commodity contracts subject to rate recovery	Cost of natural gas	(16)		(125)		(43)		(172)
Commodity contracts subject to rate recovery	Cost of electric fuel and purchased power	(10)		23		(29)		5
Interest rate instrument	Interest expense	—		—		—		(47)
Total		$	72	$	(19)	$	146	$	571
SDG&E:
Commodity contracts subject to rate recovery	Cost of electric fuel and purchased power	$	(10)	$	23	$	(29)	$	5
SoCalGas:
Commodity contracts subject to rate recovery	Cost of natural gas	$	(16)	$	(125)	$	(43)	$	(172)

CREDIT RISK RELATED 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 September 30, 2024 and December 31, 2023 was $114 million and $215 million, respectively. For SoCalGas, the total fair value of this group of derivative instruments in a liability position at September 30, 2024 and December 31, 2023 was $46 million and $210 million, respectively. SDG&E did not have this group of derivative instruments in a liability position at September 30, 2024 or December 31, 2023. At September 30, 2024, if the credit ratings of Sempra or SoCalGas were reduced below investment grade, $114 million and $46 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 8. 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 tables below set forth our financial assets and liabilities, by level within the fair value hierarchy, that were accounted for at fair value on a recurring basis at September 30, 2024 and December 31, 2023. 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, 2023.

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 instruments 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 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 5, 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 – Other Sempra.”


RECURRING FAIR VALUE MEASURES
(Dollars in millions)
	Level 1		Level 2		Level 3		Netting(1)		Total
	Fair value at September 30, 2024
Sempra:
Assets:
Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalents	$	15	$	3	$	—			$	18
Equity securities	315		4		—				319
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	45		25		—				70
Municipal bonds	—		287		—				287
Other securities	—		231		—				231
Total debt securities	45		543		—				588
Total nuclear decommissioning trusts(2)	375		550		—				925
Short-term investments held in Rabbi Trust	59		—		—				59
Support Agreement, net of related guarantee fees	—		—		24				24
Interest rate instruments	—		77		—		$	—	77
Foreign exchange instruments	—		6		—		—		6
Commodity contracts not subject to rate recovery	6		53		—		15		74
Commodity contracts subject to rate recovery	4		2		6		21		33
Total	$	444	$	688	$	30	$	36	$	1,198
Liabilities:
Interest rate instruments	$	—	$	3	$	—	$	—	$	3
Foreign exchange instruments	—		1		—		—		1
Commodity contracts not subject to rate recovery	—		64		—		(40)		24
Commodity contracts subject to rate recovery	18		48		—		(19)		47
Total	$	18	$	116	$	—	$	(59)	$	75

	Fair value at December 31, 2023
Sempra:
Assets:
Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalents	$	19	$	2	$	—			$	21
Equity securities	308		4		—				312
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	34		17		—				51
Municipal bonds	—		275		—				275
Other securities	—		220		—				220
Total debt securities	34		512		—				546
Total nuclear decommissioning trusts(2)	361		518		—				879
Short-term investments held in Rabbi Trust	67		—		—				67
Support Agreement, net of related guarantee fees	—		—		23				23
Interest rate instruments	—		87		—		$	—	87
Commodity contracts not subject to rate recovery	—		5		—		74		79
Commodity contracts subject to rate recovery	—		1		10		22		33
Total	$	428	$	611	$	33	$	96	$	1,168
Liabilities:
Foreign exchange instruments	$	—	$	9	$	—	$	—	$	9
Commodity contracts not subject to rate recovery	—		6		—		—		6
Commodity contracts subject to rate recovery	20		210		—		(19)		211
Total	$	20	$	225	$	—	$	(19)	$	226

(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.

(2) Excludes receivables (payables), net.


RECURRING FAIR VALUE MEASURES
(Dollars in millions)
	Level 1		Level 2		Level 3		Netting(1)		Total
	Fair value at September 30, 2024
SDG&E:
Assets:
Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalents	$	15	$	3	$	—			$	18
Equity securities	315		4		—				319
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	45		25		—				70
Municipal bonds	—		287		—				287
Other securities	—		231		—				231
Total debt securities	45		543		—				588
Total nuclear decommissioning trusts(2)	375		550		—				925
Commodity contracts subject to rate recovery	4		1		6		$	20	31
Total	$	379	$	551	$	6	$	20	$	956
Liabilities:
Commodity contracts subject to rate recovery	$	18	$	1	$	—	$	(18)	$	1


	Fair value at December 31, 2023
SDG&E:
Assets:
Nuclear decommissioning trusts:
Short-term investments, primarily cash equivalents	$	19	$	2	$	—			$	21
Equity securities	308		4		—				312
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	34		17		—				51
Municipal bonds	—		275		—				275
Other securities	—		220		—				220
Total debt securities	34		512		—				546
Total nuclear decommissioning trusts(2)	361		518		—				879
Commodity contracts subject to rate recovery	—		—		10		$	21	31
Total	$	361	$	518	$	10	$	21	$	910
Liabilities:
Commodity contracts subject to rate recovery	$	20	$	—	$	—	$	(19)	$	1

(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.

(2) Excludes receivables (payables), net.


RECURRING FAIR VALUE MEASURES
(Dollars in millions)
	Level 1		Level 2		Level 3		Netting(1)		Total
	Fair value at September 30, 2024
SoCalGas:
Assets:
Commodity contracts subject to rate recovery	$	—	$	1	$	—	$	1	$	2
Liabilities:
Commodity contracts subject to rate recovery	$	—	$	47	$	—	$	(1)	$	46

	Fair value at December 31, 2023
SoCalGas:
Assets:
Commodity contracts subject to rate recovery	$	—	$	1	$	—	$	1	$	2
Liabilities:
Commodity contracts subject to rate recovery	$	—	$	210	$	—	$	—	$	210

(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 classified as Level 3 in the fair value hierarchy for Sempra and SDG&E.


LEVEL 3 RECONCILIATIONS(1)
(Dollars in millions)
	Three months ended September 30,
	2024		2023
Balance at July 1	$	6	$	20
Realized and unrealized gains (losses), net	(3)		(2)
Allocated transmission instruments	1		1
Settlements	2		(1)
Balance at September 30	$	6	$	18
Change in unrealized gains relating to instruments still held at September 30	$	—	$	1

	Nine months ended September 30,
	2024		2023
Balance at January 1	$	10	$	35
Realized and unrealized gains (losses), net	(6)		(10)
Allocated transmission instruments	1		(1)
Settlements	1		(6)
Balance at September 30	$	6	$	18
Change in unrealized losses relating to instruments still held at September 30	$	(1)	$	(8)

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

Inputs used to determine the fair value of CRRs are reviewed and compared with market conditions to determine reasonableness.

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
2024	$	(3.69)	to	$	9.55	$	(0.44)
2023	(3.09)		to	10.71		(0.56)

The impact associated with discounting is not significant. 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 7.

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. Because unrealized gains and losses are recorded as regulatory assets and liabilities, they do not affect earnings.

Other Sempra

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.


LEVEL 3 RECONCILIATIONS
(Dollars in millions)
	Three months ended September 30,
	2024		2023
Balance at July 1	$	23	$	23
Realized and unrealized gains (losses), net(1)	3		(3)
Settlements	(2)		(2)
Balance at September 30(2)	$	24	$	18
Change in unrealized gains (losses) relating to instruments still held at September 30	$	3	$	(2)

	Nine months ended September 30,
	2024		2023
Balance at January 1	$	23	$	17
Realized and unrealized gains (losses), net(1)	7		7
Settlements	(6)		(6)
Balance at September 30(2)	$	24	$	18
Change in unrealized gains relating to instruments still held at September 30	$	6	$	7

(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 $17 in Other Long-term Assets at September 30, 2024 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, current and noncurrent accounts receivable, amounts due to/from unconsolidated affiliates with original maturities of less than 90 days, dividends and accounts payable due in one year or less, 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
	September 30, 2024
Sempra:

Long-term note receivable(1)	$	347		$	—		$	—		$	339		$	339
Long-term amounts due to unconsolidated affiliates	347			—			326			—			326
Total long-term debt(2)	31,224			—			29,765			—			29,765
SDG&E:
Total long-term debt(3)	$	8,950		$	—		$	8,247		$	—		$	8,247
SoCalGas:
Total long-term debt(4)	$	7,359		$	—		$	7,220		$	—		$	7,220

	December 31, 2023
Sempra:
Long-term note receivable(1)	$	334		$	—		$	—		$	318		$	318
Long-term amounts due to unconsolidated affiliates	312			—			283			—			283
Total long-term debt(2)	27,716			—			25,617			—			25,617
SDG&E:
Total long-term debt(3)	$	8,750		$	—		$	7,856		$	—		$	7,856
SoCalGas:
Total long-term debt(4)	$	6,759		$	—		$	6,442		$	—		$	6,442

(1) Before allowances for credit losses of $5 and $6 at September 30, 2024 and December 31, 2023, respectively. Excludes unamortized transaction costs of $3 and $4 at September 30, 2024 and December 31, 2023, respectively.

(2) After the effects of interest rate swaps. Before reductions of unamortized discount and debt issuance costs of $366 and $322 at September 30, 2024 and December 31, 2023, respectively, and excluding finance lease obligations of $1,318 and $1,340 at September 30, 2024 and December 31, 2023, respectively.

(3) Before reductions of unamortized discount and debt issuance costs of $97 and $89 at September 30, 2024 and December 31, 2023, respectively, and excluding finance lease obligations of $1,209 and $1,233 at September 30, 2024 and December 31, 2023, respectively.

(4) Before reductions of unamortized discount and debt issuance costs of $68 and $55 at September 30, 2024 and December 31, 2023, respectively, and excluding finance lease obligations of $109 and $107 at September 30, 2024 and December 31, 2023, respectively.

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

NOTE 9. SEMPRA – EQUITY AND EARNINGS PER COMMON SHARE

PREFERRED STOCK

On May 2, 2024, Sempra filed an amendment to its amended and restated articles of incorporation to implement the revocation of the series A preferred stock and series B preferred stock, all of which had previously been converted to Sempra common stock, thereby decreasing the number of authorized shares of series A preferred stock from 17,250,000 to zero and series B preferred stock from 5,750,000 to zero. Effective as of May 2, 2024, each such series of stock is no longer an authorized series of Sempra’s capital stock.

COMMON STOCK SPLIT IN THE FORM OF A STOCK DIVIDEND

On August 2, 2023, Sempra’s board of directors declared a two-for-one split of Sempra’s common stock in the form of a 100% stock dividend for shareholders of record at the close of business on August 14, 2023. Each such shareholder of record received one additional share of Sempra common stock for every then-held share of Sempra common stock, which was distributed after the close of trading on August 21, 2023. Sempra’s common stock began trading on a post-split basis effective August 22, 2023. Sempra’s common stock continues to have no par value with 1,125,000,000 authorized shares.

Except as expressly noted, all share and per share information related to issued and outstanding common stock and outstanding equity awards with respect to common stock has been retroactively adjusted to reflect the stock split and is presented on a post-split basis herein.

COMMON STOCK OFFERINGS

ATM Program

On November 6, 2024, we established an ATM program, providing for the offer and sale of shares of Sempra common stock having an aggregate gross sales price of up to $3.0 billion through agents acting as our sales agents or as forward sellers or directly to the agents as principals. The shares may be offered and sold in amounts and at times to be determined by us from time to time. The agents will be entitled to a commission that will not exceed 1.0% of the gross sales price of all shares sold through it as agent pursuant to the sales agreement.

Under the ATM program, we may enter into separate forward sale agreements with affiliates of the agents as forward purchasers. We expect to fully physically settle each forward sale agreement, if any. However, we will generally have the right, subject to certain exceptions, to elect to cash settle or net share settle all or any portion of our obligations under any such forward sale agreement. If we enter into a forward sale agreement with any forward purchaser, we expect that such forward purchaser (or its affiliate) will attempt to borrow from third parties and sell, through the relevant agent acting, as sales agent for such forward purchaser, shares of our common stock to hedge such forward purchaser’s exposure under such forward sale agreement. We will not receive any proceeds from any sale of shares borrowed by a forward purchaser (or its affiliate) and sold through a forward seller. The forward seller will receive a commission, in the form of a reduction to the initial forward price under the related forward sale agreement, at a mutually agreed rate that will not exceed (subject to certain exceptions) 1.0% of the volume-weighted average of the gross sales price per share of all of the borrowed shares of Sempra common stock sold through such forward seller.

We intend to use a substantial portion of the net proceeds we receive from the issuance and sale by us of any shares of our common stock to or through the agents and any net proceeds we receive through the settlement of any forward sale agreements with the forward purchasers for working capital and other general corporate purposes, including to partly finance anticipated increases to our long-term capital plan and to repay outstanding commercial paper and potentially other indebtedness.

November 2023 Forward Sale Agreements

In November 2023, we completed the offering of 19,242,010 shares of our common stock, no par value, in a registered public offering at $70.00 per share ($68.845 per share after deducting underwriting discounts), 17,142,858 shares of which were pursuant to forward sale agreements. We discuss the common stock offering in Note 14 of the Notes to Consolidated Financial Statements in the Annual Report.

As of November 6, 2024, a total of 17,142,858 shares of Sempra common stock from our November 2023 offering remain subject to future settlement under these forward sale agreements, which may be settled on one or more dates specified by us occurring no later than December 31, 2024, which is the final settlement date under the agreements. Although we expect to settle the forward sale agreements entirely by the physical delivery of shares of our common stock in exchange for cash proceeds, we may, subject to certain conditions, elect cash settlement or net share settlement for all or a portion of our obligations under the forward sale agreements. The forward sale agreements are also subject to acceleration by the counterparties to the agreements upon the occurrence of certain events.

COMMON STOCK REPURCHASES

In the nine months ended September 30, 2024 and 2023, we withheld 565,571 shares for $41 million and 411,447 shares for $32 million, respectively, of our common stock that would otherwise be issued to long-term incentive plan participants who do not elect otherwise upon the vesting of RSUs and exercise of stock options in an amount sufficient to satisfy minimum statutory tax withholding requirements. Such share withholding is considered a share repurchase for accounting purposes.

NONCONTROLLING INTERESTS

Ownership interests in a consolidated entity that are held by unconsolidated owners are accounted for and reported as NCI.

The following table summarizes net income attributable to Sempra and transfers (to) from NCI, which shows the effects of changes in Sempra’s ownership interest in its subsidiaries on Sempra’s shareholders’ equity.


NET INCOME ATTRIBUTABLE TO SEMPRA AND TRANSFERS (TO) FROM NCI
(Dollars in millions)
	Three months ended		Nine months ended
	September 30, 2023
Sempra:
Net income attributable to Sempra	$	732	$	2,327
Transfers (to) from NCI:
Decrease in shareholders’ equity for sales of NCI	(62)		(44)
Net transfers (to) from NCI	(62)		(44)
Change from net income attributable to Sempra and transfers (to) from NCI	$	670	$	2,283

SI Partners

Contributions from NCI. In the three months and nine months ended September 30, 2023, KKR Pinnacle used $14 million and $200 million, respectively, of a credit from Sempra pursuant to the SI Partners limited partnership agreement, to fund its share of contributions to SI Partners. As a result, we recorded a $200 million increase in equity held by NCI and a decrease in Sempra’s shareholders’ equity of $145 million, net of a tax benefit.

SI Partners Subsidiaries

Sale of NCI to KKR Denali. In September 2023, an indirect subsidiary of SI Partners completed the sale of a 60% interest in an SI Partners subsidiary (resulting in an indirect 42% NCI in the PA LNG Phase 1 project) to KKR Denali for aggregate cash consideration of $984 million, before post-closing adjustments recorded subsequently. As a result of this sale, we recorded a $1.1 billion increase in equity held by NCI and a decrease in Sempra’s shareholders’ equity of $56 million, including $11 million in transaction costs and net of a $22 million tax benefit.

The indirect subsidiary of SI Partners and KKR Denali have made capital contribution commitments to fund their respective equity share of the equity funding amount of anticipated development costs of the PA LNG Phase 1 project, except in certain budget overrun scenarios.

Sale of NCI to ConocoPhillips Affiliate. In March 2023, an indirect subsidiary of SI Partners completed the sale of an indirect 30% interest in an SI Partners subsidiary (resulting in an indirect 30% NCI in the PA LNG Phase 1 project) to an affiliate of ConocoPhillips for aggregate cash consideration of $254 million. As a result of this sale, we recorded a $234 million increase in equity held by NCI and an increase in Sempra’s shareholders’ equity of $12 million, net of $3 million in transaction costs and $5 million in tax expense.

The indirect subsidiary of SI Partners and the ConocoPhillips affiliate have made certain customary capital contribution commitments to fund their respective pro rata equity share of the total anticipated capital calls for the equity portion of the anticipated development costs of the PA LNG Phase 1 project. In addition, both SI Partners and ConocoPhillips have provided guarantees relating to their respective affiliate’s commitment to make its pro rata equity share of capital contributions to fund 110% of the development budget of the PA LNG Phase 1 project, in an aggregate amount of up to $9.0 billion. SI Partners’ guarantee covers 70% of this amount plus enforcement costs of its guarantee. As of September 30, 2024, an aggregate amount of $2.7 billion has been paid by SI Partners’ indirect subsidiary in satisfaction of its commitment to fund its portion of the development budget of the PA LNG Phase 1 project.

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 September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Sempra:
Numerator:
Earnings attributable to common shares	$	638	$	721	$	2,152	$	2,293

Denominator:
Weighted-average common shares outstanding for basic EPS(1)	633,752		630,036		633,342		629,963
Dilutive effect of common shares sold forward	2,312		—		1,375		—
Dilutive effect of stock options and RSUs(2)	1,997		2,288		1,849		2,268
Weighted-average common shares outstanding for diluted EPS	638,061		632,324		636,566		632,231

EPS:
Basic	$	1.01	$	1.14	$	3.40	$	3.64
Diluted	$	1.00	$	1.14	$	3.38	$	3.63

(1) Includes 615 and 716 fully vested RSUs held in our Deferred Compensation Plan for the three months ended September 30, 2024 and 2023, respectively, and 616 and 716 of such RSUs for the nine months ended September 30, 2024 and 2023, 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 nine months ended September 30, 2024 excludes 450,243 and 996,966 potentially dilutive shares, respectively, and the computation of diluted EPS for the three months and nine months ended September 30, 2023 excludes 624,242 and 470,804 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.

The potentially dilutive impact from the forward sale of our common stock pursuant to the forward sale agreements that we discuss above is reflected in our diluted EPS calculation using the treasury stock method. We anticipate there will be a dilutive effect on our EPS when the average market price of our common stock shares is above the applicable adjusted forward sale price, subject to increase or decrease based on the overnight bank funding rate, less a spread, and subject to decrease by amounts related to expected dividends on shares of our common stock during the term of the forward sale agreements. Additionally, if we decide to physically settle or net share settle the forward sale agreements, delivery of our shares to the forward purchasers on any such physical settlement or net share settlement of the forward sale agreements would result in dilution to our EPS.

Pursuant to Sempra’s share-based compensation plans, the Compensation and Talent Development Committee of Sempra’s board of directors granted 414,812 nonqualified stock options, 721,049 performance-based RSUs and 312,043 service-based RSUs in the nine months ended September 30, 2024, primarily in January.

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.

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 be completed around 2030. 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. SDG&E is responsible for approximately 20% of the total decommissioning cost.

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 2023, the CPUC granted SDG&E authorization to access NDT funds of up to $79 million for forecasted 2024 costs.

Nuclear Decommissioning Trusts

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 8.


NUCLEAR DECOMMISSIONING TRUSTS
(Dollars in millions)
	Cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
	September 30, 2024
Short-term investments, primarily cash equivalents	$	18	$	—	$	—	$	18
Equity securities	80		241		(2)		319
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies(1)	69		1		—		70
Municipal bonds(2)	290		3		(6)		287
Other securities(3)	233		4		(6)		231
Total debt securities	592		8		(12)		588
Receivables (payables), net	(19)		—		—		(19)
Total	$	671	$	249	$	(14)	$	906

	December 31, 2023
Short-term investments, primarily cash equivalents	$	21	$	—	$	—	$	21
Equity securities	89		225		(2)		312
Debt securities:
Debt securities issued by the U.S. Treasury and other U.S. government corporations and agencies	50		2		(1)		51
Municipal bonds	280		3		(8)		275
Other securities	228		3		(11)		220
Total debt securities	558		8		(20)		546
Receivables (payables), net	(7)		—		—		(7)
Total	$	661	$	233	$	(22)	$	872

(1) Maturity dates are 2025-2055.

(2) Maturity dates are 2024-2062.

(3) Maturity dates are 2024-2072.

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 September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Proceeds from sales	$	259	$	143	$	639	$	437
Gross realized gains	17		12		41		20
Gross realized losses	2		3		7		9

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

The present value of SDG&E’s ARO related to decommissioning costs for all three SONGS units was $480 million at September 30, 2024 and is based on a cost study prepared in 2020, which the CPUC approved in August 2024.

NUCLEAR INSURANCE

SDG&E and the other owners of SONGS have insurance to cover claims from nuclear liability incidents arising at SONGS. Currently, this insurance provides $500 million in coverage limits, the maximum amount available, including coverage for acts of terrorism. In addition, the Price-Anderson Act provides an additional $60 million of coverage. If a nuclear liability loss occurs at SONGS and exceeds the $500 million insurance limit, this additional coverage would be available to provide a total of $560 million in coverage limits per incident.

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 a negligible amount for retrospective premiums based on overall member claims.

The nuclear property insurance program includes an industry aggregate loss limit for non-certified acts of terrorism (as defined by the Terrorism Risk Insurance Act) of $3.24 billion. This is the maximum amount that will be paid to insured members who suffer losses or damages from these non-certified terrorist acts.

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 September 30, 2024, loss contingency accruals for legal matters that are probable and estimable were $53 million for Sempra, negligible for SDG&E and $28 million for SoCalGas.

SDG&E

City of San Diego Franchise Agreement

In 2021, two lawsuits were filed in the California Superior Court challenging various aspects of the natural gas and electric franchise agreements granted by the City of San Diego to SDG&E. Both lawsuits ultimately sought to void the franchise agreements. In one of the cases, judgment was granted in favor of SDG&E and the City of San Diego, and the plaintiff in that case has appealed. We expect a ruling on the appeal in the first quarter of 2025. In the second case, the court ruled in favor of SDG&E and the City of San Diego, upholding all terms of the franchise agreements, except for the two-thirds City Council vote requirement for termination if the City decides to terminate under certain circumstances. Under the court’s ruling, the City can instead terminate on a majority vote, so long as it satisfies repayment provisions under the franchise agreements. Both sides have appealed the ruling.

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.

In September 2021, SoCalGas and Sempra entered into an agreement with counsel to resolve approximately 390 lawsuits including approximately 36,000 plaintiffs (the Individual Plaintiffs) then pending against SoCalGas and Sempra related to the Leak for a payment of up to $1.8 billion. Over 99% of the Individual Plaintiffs participated and submitted valid releases, and SoCalGas paid $1.79 billion in 2022 under the agreement. The Individual Plaintiffs who did not participate in the settlement (the Non-Settling Individual Plaintiffs) are able to continue to pursue their claims. As of November 1, 2024, there are approximately 520 plaintiffs, who are either new plaintiffs or Non-Settling Individual Plaintiffs.

The new plaintiffs’ cases and Non-Settling Individual Plaintiffs’ cases are coordinated before a single court in the Los Angeles County Superior Court for pretrial management under a consolidated master complaint filed in November 2017, with one plaintiff’s case proceeding under a separate complaint. Both the consolidated master complaint and the separate complaint assert negligence, negligence per se, strict liability, negligent and intentional infliction of emotional distress and fraudulent concealment. The consolidated master complaint asserts additional causes of action for private and public nuisance (continuing and permanent), trespass, inverse condemnation, loss of consortium and wrongful death against SoCalGas and Sempra. The separate complaint asserts an additional cause of action for assault and battery. Both complaints seek compensatory and punitive damages for personal injuries, lost wages and/or lost profits, costs of future medical monitoring, and attorneys’ fees. The consolidated master complaint also seeks property damage and diminution in property value, injunctive relief and civil penalties.

At September 30, 2024, $21 million is accrued in Other Current Liabilities and $1 million is accrued in Deferred Credits and Other on SoCalGas’ and Sempra’s Condensed Consolidated Balance Sheets. These accruals do not include any amounts in excess of what has been reasonably estimated to resolve certain matters that we describe above, nor any amounts that may be necessary to resolve threatened litigation, other potential litigation or other costs. We are not able to reasonably estimate the possible loss or a range of possible losses in excess of the amounts accrued, which 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.

Aliso Canyon Natural Gas Storage Facility Regulatory Proceeding

In February 2017, the CPUC opened proceeding 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, as well as evaluating the impacts of reducing or eliminating the Aliso Canyon natural gas storage facility using the established framework and models. The next phase of the proceeding included engaging a consultant to analyze alternative means for meeting or avoiding the demand for the facility’s services if it were eliminated in either the 2027 or 2035 timeframe, and to 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. We expect a final decision by the end of this year.

In August 2023, 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 68.6 Bcf. The CPUC may issue future changes to this interim range of authorized gas inventory levels before issuing a final decision within the SB 380 OII proceeding.

At September 30, 2024, the Aliso Canyon natural gas storage facility had a net book value of $1.0 billion. 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, which could be material, and natural gas reliability and electric generation could be jeopardized.

Other Sempra

Energía Costa Azul

We describe below certain land 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 under construction and in development are expected to be situated or on which portions of the ECA Regas Facility that would be necessary for the operation of such 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 with a claimant 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:

▪The 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, as described above, had previously been issued in a ruling by the federal Agrarian Court and subsequently reversed by a federal court in Mexico. In April 2021, the proceeding in the Agrarian Court concluded with the court ordering that the administrative procedure be restarted. The administrative procedure at SEDATU may continue if SEDATU decides to reopen the matter.

In addition, a plaintiff filed a claim in the federal Agrarian Court that 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 federal appeal against the appellate court ruling. In August 2024, the Federal Collegiate Circuit Court ruled in favor of the ECA Regas Facility. The plaintiff has the option to file an appeal with the Mexican Supreme Court.

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 seeking revocation of 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 against the permits 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 to cancel the injunction but was not successful. The lower court’s ruling was favorable to the ECA Regas Facility, as the court determined that no harm has been caused to the plaintiff and dismissed the lawsuit. The claimant appealed and the appellate court’s ruling is pending.

▪In the second case, the initial request for a provisional injunction against the permits 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, holding that the natural gas liquefaction construction activities did not violate the injunction. The claimants appealed this ruling but were not successful. The lower court’s ruling was favorable to the ECA Regas Facility, as the court determined that no harm has been caused to the plaintiffs and dismissed the lawsuit. The claimants appealed and the appellate court’s ruling is pending.

▪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. The claimants appealed this ruling but were not successful. The lower court’s ruling was favorable to the ECA Regas Facility, as the court determined that no harm has been caused to the plaintiffs and dismissed the lawsuit. The claimants appealed and the appellate court’s ruling is pending.

Port Arthur LNG

The PA LNG Phase 1 project holds two Clean Air Act, Prevention of Significant Deterioration permits issued by the TCEQ, which we refer to as the “2016 Permit” and the “2022 Permit.” The 2022 Permit also governs emissions for the proposed PA LNG Phase 2 project. In November 2023, a panel of the U.S. Court of Appeals for the Fifth Circuit issued a decision to vacate and remand the 2022 Permit to the TCEQ for additional explanation of the agency’s permit decision. In February 2024, the court withdrew its opinion and referred the case to the Supreme Court of Texas to resolve the question of the appropriate standard to be applied by the TCEQ. The 2022 Permit is effective during the Texas Supreme Court’s review. The 2016 Permit was not the subject of, and is unaffected by, the pending litigation of the 2022 Permit. Construction of the PA LNG Phase 1 project is proceeding uninterrupted under existing permits, and we do not currently anticipate the pending litigation to materially impact the PA LNG Phase 1 project cost, schedule or expected commercial operations at this stage.

Litigation Related to Regulatory and Other Actions by the Mexican Government

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. The decree further purports to permit the CRE to revoke self-supply permits granted under the former electricity law, which were grandfathered when the new Electricity Industry Law was enacted, if it considers them to have been obtained improperly. According to the decree, these amendments were to become effective in March 2021, and SENER, the CRE and Centro Nacional de Control de Energía (Mexico’s National Center for Energy Control) 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. Numerous legal actions were taken against the decree, which resulted in Mexican courts issuing a suspension of the decree later in March 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. The super majority needed to find the amendment unconstitutional was not reached and the proceeding was therefore dismissed, leaving the amended Electricity Industry Law in place. However, the Court nevertheless found certain of the amendments, including the priority of dispatch for the CFE and other provisions that granted preference to the CFE over private companies, were invalid.

In January 2024, the Second Chamber of the Mexican Supreme Court definitively resolved an amparo in a separate case brought by a third party and ruled that certain provisions of the amendments of the Electricity Industry Law are unconstitutional, including the priority of dispatch for the CFE and other provisions that granted preference to the CFE over private companies. The Court also dismissed an amparo relating to the provision of the decree applicable to self-supply permits granted under the former electricity law, and established that its decision applies generally over all participants.

Sempra Infrastructure filed three lawsuits challenging the amendments to the Electricity Industry Law, including one concerning the provision permitting revocation of self-supply permits deemed improperly obtained. In each of them, Sempra Infrastructure obtained a favorable judgment in the lower court, all of which were challenged by the CRE. Following the criteria established by the Mexican Supreme Court, in July 2024, the Second Collegiate Court reversed the lower court’s decision and definitively dismissed one of the lawsuits filed by Sempra Infrastructure regarding the provision permitting revocation of self-supply permits. Consequently, the CRE may be required to seek to revoke such self-supply permits, under a legal standard that is ambiguous and not well defined under the law. Sempra Infrastructure supplies power pursuant to self-supply permits, and would be permitted to file amparos challenging the constitutionality of any such action. If such self-supply permits are revoked, it may result in increased costs for Sempra Infrastructure and for its power consumers, adversely affect our ability to develop new projects, result in decreased revenues and cash flows, and negatively impact our ability to recover the carrying values of our investments in Mexico, any of which could have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects. Final resolution regarding the two remaining lawsuits is still pending.

RBS Sempra Commodities – Resolved

Sempra holds an equity method investment in RBS Sempra Commodities LLP, a limited liability partnership in the process of being liquidated. In 2015, liquidators filed a claim in the High Court of Justice against The Royal Bank of Scotland plc (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 Sempra Energy Europe, a subsidiary of RBS Sempra Commodities LLP. The claim alleged 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 were liable to provide for equitable compensation due to dishonest assistance and compensation under the U.K. Insolvency Act of 1986. In January 2024, the parties settled the Liquidating Companies’ claim against the Defendants to fully resolve the matter; our share of such settlement was approximately £7.9 million (approximately $10 million in U.S. dollars at December 31, 2023). For the year ended December 31, 2023, we recorded $40 million in equity earnings from our investment in RBS Sempra Commodities LLP to reduce our estimate of our obligations to settle these VAT matters and related legal costs based on the settlement reached with the Liquidating Companies in January 2024.

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 November 1, 2024, one lawsuit is pending. Additionally, approximately 28,000 proofs of claim were filed, but not discharged, in advance of a December 2015 deadline to file a proof of claim in the EFH bankruptcy proceeding on behalf of persons who allege exposure to asbestos under similar circumstances and assert the right to file such lawsuits in the future. The costs to defend or resolve such claims and the amount of damages that may be 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, aircraft, machinery and equipment, warehouses and other operational facilities) and PPAs with renewable energy, energy storage and peaker plant facilities.

SDG&E entered into an energy storage tolling agreement that commenced in September 2024 and expires in August 2036. SDG&E recorded an operating lease right-of-use asset and operating lease liability of $202 million. Future minimum lease payments are $4 million in 2024, $23 million in each of 2025 through 2028 and $182 million thereafter.

Leases That Have Not Yet Commenced

SDG&E has entered into six PPAs, of which SDG&E expects two will commence in 2024, two will commence in 2025 and two will commence in 2026. SDG&E expects the future minimum lease payments to be $5 million in 2024, $41 million in 2025, $67 million in 2026, $68 million in both 2027 and 2028 and $777 million thereafter (through expiration in 2041).

SoCalGas has entered into a lease agreement for a new headquarters office space in Los Angeles that it expects will commence in 2026. In September 2024, SoCalGas prepaid $1 million and expects the future minimum lease payments to be $8 million in 2028 and $143 million thereafter (through expiration in 2041).

Sempra Infrastructure has entered into a lease agreement for tugboat services for the PA LNG Phase 1 project that it expects will commence in 2027. Sempra Infrastructure expects the future minimum lease payments to be $10 million in 2027, $12 million in 2028 and $210 million thereafter (through expiration in 2047, exclusive of certain renewal options) and total future minimum fixed payments for operation and maintenance services to be $184 million.

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 refined products 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
(Dollars in millions)
	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Sempra – Sales-type leases:
Interest income	$	1	$	2	$	4	$	5
Total revenues from sales-type leases(1)	$	1	$	2	$	4	$	5

Sempra – Operating leases:
Fixed lease payments	$	83	$	78	$	259	$	234
Variable lease payments	9		10		29		26
Total revenues from operating leases(1)	$	92	$	88	$	288	$	260

Depreciation expense	$	17	$	15	$	53	$	45

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

CONTRACTUAL COMMITMENTS

We discuss below significant changes in the first nine months of 2024 to contractual commitments discussed in Note 16 of the Notes to Consolidated Financial Statements in the Annual Report.

Natural Gas Contracts

SoCalGas’ natural gas contracts and transportation commitments have increased by approximately $340 million since December 31, 2023, primarily from entering into new natural gas contracts in the first nine months of 2024. At September 30, 2024, we expect future payments to decrease by $7 million in 2024, and increase by $36 million in 2025, $111 million in 2026, $119 million in 2027, and $81 million in 2028 compared to December 31, 2023.

Sempra Infrastructure’s natural gas contracts and transportation commitments have increased by approximately $474 million since December 31, 2023, primarily from entering into new natural gas contracts in the first nine months of 2024. We expect future payments to decrease by $17 million in 2024, and increase by $4 million in 2025, $76 million in 2026, $98 million in each of 2027 and 2028, and $215 million thereafter (through expiration in 2059) compared to December 31, 2023.

LNG Purchase Agreement

Sempra Infrastructure has an 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 2024 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 September 30, 2024, we expect the commitment amount to decrease by $321 million in 2024, $76 million in 2025, $51 million in 2026, $37 million in 2027, $45 million in 2028 and $30 million thereafter (through expiration in 2029) compared to December 31, 2023, reflecting changes in estimated forward prices since December 31, 2023 and actual transactions for the first nine months of 2024. These LNG commitment amounts are based on the assumption that all LNG cargoes under the agreement are delivered, less those already confirmed to be diverted as of September 30, 2024. Actual LNG purchases in the current and prior years have been significantly lower than the maximum amount provided under the agreement due to the supplier 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 $51 million for Sempra, $18 million for SDG&E and $20 million for SoCalGas at September 30, 2024.

NOTE 12. SEMPRA – SEGMENT INFORMATION

Sempra has three separately managed reportable segments, as follows:

▪Sempra California provides natural gas and electric service to Southern California and part of central California through Sempra’s wholly owned subsidiaries, SDG&E and SoCalGas.

▪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, 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.

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 Balance Sheets, Condensed Consolidated Statements of Cash Flows and Condensed Consolidated Statements of Operations. Amounts labeled as “All other” in the following tables consist primarily of activities of parent organizations.


SEGMENT INFORMATION
(Dollars in millions)
	September 30, 2024		December 31, 2023
ASSETS
Sempra California	$	56,220	$	53,430
Sempra Texas Utilities	15,292		14,392
Sempra Infrastructure	21,828		19,430
All other	1,434		967
Intersegment receivables	(1,026)		(1,038)
Total	$	93,748	$	87,181
EQUITY METHOD AND OTHER INVESTMENTS
Sempra Texas Utilities	$	15,280	$	14,380
Sempra Infrastructure	2,291		2,129
All other	1		1
Total	$	17,572	$	16,510

	Nine months ended September 30,
	2024		2023
EXPENDITURES FOR PROPERTY, PLANT & EQUIPMENT
Sempra California	$	3,329	$	3,344
Sempra Infrastructure	2,433		2,725
All other	3		5
Total	$	5,765	$	6,074


SEGMENT INFORMATION (CONTINUED)
(Dollars in millions)
	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
REVENUES
Sempra California	$	2,256	$	2,725	$	8,022	$	10,840
Sempra Infrastructure	538		629		1,466		2,485

Adjustments and eliminations	(1)		1		(1)		(1)
Intersegment revenues(1)	(17)		(21)		(60)		(95)
Total	$	2,776	$	3,334	$	9,427	$	13,229
DEPRECIATION AND AMORTIZATION
Sempra California	$	536	$	491	$	1,585	$	1,435
Sempra Infrastructure	76		71		221		210
All other	2		1		5		6
Total	$	614	$	563	$	1,811	$	1,651
INTEREST INCOME
Sempra California	$	4	$	9	$	12	$	19
Sempra Infrastructure	7		4		19		25
All other	6		7		17		17
Intercompany eliminations	—		(1)		(1)		(1)
Total	$	17	$	19	$	47	$	60
INTEREST EXPENSE
Sempra California	$	213	$	196	$	627	$	577
Sempra Texas Utilities	1		—		1		—
Sempra Infrastructure	—		7		—		127
All other	116		109		319		292
Intercompany eliminations	(2)		—		(3)		(1)
Total	$	328	$	312	$	944	$	995
INCOME TAX (BENEFIT) EXPENSE
Sempra California	$	(37)	$	(20)	$	90	$	64
Sempra Texas Utilities	1		—		1		—
Sempra Infrastructure	(43)		24		(67)		555
All other	(26)		(56)		(87)		(120)
Total	$	(105)	$	(52)	$	(63)	$	499
EQUITY EARNINGS
Equity earnings, before income tax:
Sempra Texas Utilities	$	2	$	2	$	6	$	5
Sempra Infrastructure	130		131		420		413
	132		133		426		418
Equity earnings, net of income tax:
Sempra Texas Utilities	261		305		646		548
Sempra Infrastructure	61		41		163		120
	322		346		809		668
Total	$	454	$	479	$	1,235	$	1,086
EARNINGS (LOSSES) ATTRIBUTABLE TO COMMON SHARES
Sempra California	$	247	$	290	$	1,145	$	1,247
Sempra Texas Utilities	261		305		646		548
Sempra Infrastructure	230		223		652		746
All other	(100)		(97)		(291)		(248)
Total	$	638	$	721	$	2,152	$	2,293

(1) Revenues for reportable segments include intersegment revenues of $6 and $11 for the three months ended September 30, 2024 and $16 and $44 for the nine months ended September 30, 2024; $5 and $16 for the three months ended September 30, 2023 and $14 and $81 for the nine months ended September 30, 2023 for Sempra California and Sempra Infrastructure, respectively.

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