DBA Sempra

    SRE ·NYSE ·Gas & Other Services Combined ·Inc. in CA
    Other securities: SREA
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    ITEM 1. BUSINESS
    OVERVIEW
    We are a holding company whose principal businesses are regulated utilities in California and Texas. Our businesses invest in and operate electric and gas utilities and other energy infrastructure that provide energy services to customers.
    Sempra was formed in 1998 through a business combination of Enova Corporation and Pacific Enterprises, the holding companies of our regulated public utilities in California: SDG&E, which began operations in 1881, and SoCalGas, which began operations in 1867. We have since expanded our regulated public utility presence into Texas through our 80.25% interest in Oncor and 50% interest in Sharyland Utilities. Sempra Infrastructure’s assets include investments in the U.S. and Mexico with a focus on LNG, energy networks and low carbon solutions.
    Business Strategy
    Sempra’s mission is to build America’s leading utility growth business. We are primarily focused on the largest economies in the U.S., California and Texas, where we are investing in regulated utilities with a view toward producing stable cash flows and improved earnings visibility. Our goal is to deliver safe, reliable and affordable energy to customers while increasing shareholder value.
    DESCRIPTION OF BUSINESS BY SEGMENT
    Sempra’s business activities are organized under the following reportable segments:
    ▪Sempra California
    ▪Sempra Texas Utilities
    ▪Sempra Infrastructure
    SDG&E and SoCalGas each have one reportable segment.
    2025 Form 10-K | 12
    Sempra California
    SDG&E
    SDG&E is a regulated public utility that provides electric services to a population of, at December 31, 2025, approximately 3.6 million and natural gas services to approximately 3.3 million of that population, covering an approximate 4,100 square mile service territory in Southern California that encompasses San Diego County and an adjacent portion of Orange County.
    SDG&E’s assets at December 31, 2025 covered the following territory:
    We describe SDG&E’s electric utility operations below. We describe SDG&E’s natural gas utility operations below in “Sempra California’s Natural Gas Utility Operations.” For a discussion of the risks and uncertainties facing SDG&E’s business, see “Part I – Item 1A. Risk Factors” and “Part II – Item 7. MD&A – Capital Resources and Liquidity – Sempra California.”
    Electric Transmission and Distribution System. Service to SDG&E’s customers is supported by its electric transmission and distribution system, which includes substations and overhead and underground lines. These electric facilities are primarily in the San Diego, Imperial and Orange counties of California and in Arizona and Nevada and consisted of 2,018 miles of transmission lines, 24,210 miles of distribution lines and 158 substations at December 31, 2025. Occasionally, various areas of the service territory require expansion to accommodate customer growth and maintain reliability and safety.
    SDG&E’s 500-kV Southwest Powerlink transmission line, which is shared with Arizona Public Service Company and Imperial Irrigation District, extends from Palo Verde, Arizona to San Diego, California. SDG&E’s share of the line is 1,163 MW, although it can be less under certain system conditions. SDG&E’s Sunrise Powerlink is a 500-kV transmission line constructed by SDG&E that extends across Southern California. Both of these lines are operated by the California ISO and together provide SDG&E with import capability of 3,900 MW of power.
    2025 Form 10-K | 13
    Mexico’s Baja California transmission system is connected to SDG&E’s system via two 230-kV interconnections with combined capacity of up to 600 MW in the north-to-south direction and 800 MW in the south-to-north direction. However, it can be less under certain system conditions.
    SDG&E’s system is connected to Edison’s transmission system via five 230-kV transmission lines.
    Electric Resources. SDG&E supplies power from its own electric generation facilities and procures power on a long-term basis from other suppliers for resale through CPUC-approved PPAs or purchases on the spot market. SDG&E does not earn any return on commodity sales volumes. SDG&E’s electric resources at December 31, 2025 were as follows:
    ELECTRIC RESOURCES(1)
    Contract
    expiration date    		Net operating
     capacity (MW)    		% of total
    SDG&E:
    Owned generation facilities, natural gas(2)
    		1,217 26 %
    PPAs:
    Renewable energy:
    Wind2026 to 2042962 20 
    Solar2030 to 20431,546 32 
    Other2027 and thereafter30 1 
    Tolling and other2026 to 20421,023 21 
    Total4,778 100 %
    (1)    Excludes approximately 482 MW of energy storage owned and approximately 632 MW of energy storage contracted.
    (2)    SDG&E owns and operates four natural gas-fired power plants, three of which are in California and one is in Nevada.
    Charges under contracts with suppliers are based on the amount of energy received or are tolls based on available capacity. Tolling contracts are PPAs under which SDG&E provides natural gas to the energy supplier.
    SDG&E procures natural gas under short-term contracts for its owned generation facilities and for certain tolling contracts associated with PPAs. Purchases from various southwestern U.S. suppliers are primarily priced based on published monthly bid-week indices, which can be subject to volatility.
    SDG&E participates in the Western Systems Power Pool, which includes an electric-power and transmission-rate agreement that allows access to power trading with more than 300 member utilities, power agencies, energy brokers and power marketers throughout the U.S. and Canada. Participants can make power transactions on standardized terms, including market-based rates, preapproved by the FERC. Participation in the Western Systems Power Pool is intended to assist members in managing power delivery and price risk.
    Customers and Demand. SDG&E provides electric services through the generation, transmission and distribution of electricity to the following customer classes:
    ELECTRIC CUSTOMER METERS AND VOLUMES
    Customer meter count
    Volumes(1)
    (millions of kWh)
    December 31,Years ended December 31,
    2025

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    Financial statements

    data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

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    From 10-Q filed 2026-05-07 (period ending 2026-03-31).

    ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    OVERVIEW
    This combined MD&A includes the operational and financial results of the following three Registrants:
    ▪Sempra is a holding company whose principal businesses are regulated utilities in California and Texas. Our businesses invest in and operate electric and gas utilities and other energy infrastructure that provide energy services to customers.
    ▪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.
    ▪SoCalGas is a regulated public natural gas distribution utility, serving customers throughout most of Southern California and part of central California.
    This combined MD&A should be read in conjunction with the Condensed Consolidated Financial Statements and the Notes thereto in this report, and the Consolidated Financial Statements and the Notes thereto, “Part I – Item 1A. Risk Factors” and “Part II – Item 7. MD&A” in the Annual Report.
    Sempra has the following three reportable segments, which reflect how the CODM oversees operational and financial performance:
    ▪Sempra California
    ▪Sempra Texas Utilities
    ▪Sempra Infrastructure
    SDG&E and SoCalGas each have one reportable segment.
    85
    RESULTS OF OPERATIONS BY REGISTRANT
    Throughout this MD&A, our references to earnings represent earnings attributable to common shares. Variance amounts presented are the after-tax earnings impact (based on applicable statutory tax rates unless otherwise noted) and after NCI but before foreign currency and inflation effects, where applicable.
    We discuss herein Sempra’s results of operations and significant changes in earnings, revenues and costs by segment, as well as Parent and other, in the three months ended March 31, 2026 compared to the same period in 2025. We also discuss herein the impact of foreign currency and inflation rates on Sempra’s results of operations.
    RESULTS OF OPERATIONS
    RESULTS OF OPERATIONS
    (Dollars and shares in millions, except per share amounts)

    EARNINGS (LOSSES) BY SEGMENT
    (Dollars in millions)
     Three months ended March 31,
     20262025
    Sempra:
    Sempra California
    		$720 $724 
    Sempra Texas Utilities171 146 
    Sempra Infrastructure
    		262 146 
    Segment earnings attributable to common shares1,153 1,016 
    Parent and other
    		(116)(110)
    Earnings attributable to common shares
    		$1,037 $906 
    Sempra California
    Sempra California’s earnings are comprised of SDG&E and SoCalGas. Because changes in SDG&E’s and SoCalGas’ cost of natural gas and/or electricity are recovered in rates, changes in these costs are offset in the changes in revenues and therefore do not impact earnings, other than potential impacts related to the GCIM for SoCalGas that we describe below. In addition to the changes in cost or market prices, natural gas or electric revenues recorded during a period are impacted by the difference between customer billings and recorded or CPUC-authorized amounts. These differences are required to be balanced over time, resulting in over- and undercollected regulatory balancing accounts. We discuss balancing accounts and their effects further in Note 4 of the Notes to Condensed Consolidated Financial Statements in this report and in Note 4 of the Notes to Consolidated Financial Statements in the Annual Report.
    86
    In the three months ended March 31, 2026 compared to the same period in 2025, the decrease in earnings of $4 million (1%) was primarily due to:
    ▪$34 million lower income tax benefits primarily from flow-through items
    ▪$14 million higher net interest expense
    Offset by:
    ▪$38 million higher CPUC base operating margin, net of operating expenses, including $43 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD
    ▪$6 million regulatory award approved by the CPUC in 2026
    Sempra Texas Utilities
    In the three months ended March 31, 2026 compared to the same period in 2025, the increase in earnings of $25 million (17%) was primarily due to higher equity earnings from Oncor Holdings driven by:
    ▪overall higher revenues primarily attributable to:
    ◦the establishment of the UTM in June 2025 and the SRP
    ◦rate updates to reflect increases in invested capital
    ◦customer growth
    Offset by:
    ◦lower customer consumption primarily attributable to weather
    Offset by:
    ▪higher interest expense and depreciation expense associated with increases in invested capital
    ▪higher O&M
    Sempra Infrastructure
    In the three months ended March 31, 2026 compared to the same period in 2025, the increase in earnings of $116 million was primarily due to:
    ▪$58 million from asset and supply optimization driven by unrealized gains on commodity derivatives in 2026 compared to unrealized losses on commodity derivatives in 2025 due to changes in natural gas prices and higher optimization of transport and storage contracts
    ▪$36 million lower depreciation expense as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively
    ▪$35 million net income tax benefit in 2026 as a result of classifying SI Partners and Ecogas as held for sale, comprised of the following:
    ◦$33 million net income tax benefit to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners
    ◦$2 million income tax benefit to adjust a Mexican deferred income tax liability on our outside basis difference in Ecogas
    ▪$12 million favorable impact from foreign currency and inflation effects on our monetary positions in Mexico and associated undesignated derivatives, comprised of a $19 million favorable impact in 2026 compared to a $7 million favorable impact in 2025
    Offset by:
    ▪$11 million higher O&M from changes in provisions for expected credit losses
    ▪$9 million from revenues in 2025 driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025
    Parent and Other
    In the three months ended March 31, 2026 compared to the same period in 2025, the increase in losses of $6 million (5%) was primarily due to:
    ▪$17 million higher net interest expense
    ▪$14 million unfavorable impact from $4 million net investment losses in 2026 compared to $10 million net investment gains in 2025 on dedicated assets in support of our employee nonqualified benefit plan and deferred compensation plan
    Offset by:
    ▪$11 million preferred dividends in 2025 prior to the redemption of series C preferred stock
    87
    SIGNIFICANT CHANGES IN REVENUES AND COSTS
    The regulatory framework permits SDG&E and SoCalGas to recover certain program expenditures and other costs authorized by the CPUC (referred to as “refundable programs”), which may be subject to reviews for reasonableness.
    Utilities: Natural Gas Revenues and Cost of Natural Gas
    Our utilities revenues include natural gas revenues at Sempra California and Sempra Infrastructure, which includes Ecogas. Intercompany revenues are eliminated in Sempra’s Condensed Consolidated Statements of Operations.
    SDG&E and SoCalGas operate under a regulatory framework that permits the cost of natural gas purchased for core customers to be passed through to customers in rates substantially as incurred and without markup. The GCIM provides for SoCalGas to share in the savings and/or costs from buying natural gas for its core customers at prices below or above monthly market-based benchmarks. This mechanism permits full recovery of costs incurred when average purchase costs are within a price range around the benchmark price. Any higher costs incurred or savings realized outside this range are shared between SoCalGas and its core customers. We provide further discussion in Note 3 of the Notes to Consolidated Financial Statements in the Annual Report.
    UTILITIES: NATURAL GAS REVENUES AND COST OF NATURAL GAS
    (Dollars in millions)
     Three months ended March 31,
     20262025
    Sempra:
    Natural gas revenues:
    Sempra California$2,006 $2,341 
    Sempra Infrastructure27 26 
    Segment totals2,033 2,367 
    Eliminations and adjustments
    		(8)(5)
    Total$2,025 $2,362 
    Cost of natural gas(1):
    Sempra California$330 $485 
    Sempra Infrastructure7 11 
    Segment totals337 496 
    Eliminations and adjustments
    		(2)(3)
    Total$335 $493 
    (1)    Excludes depreciation and amortization, which are presented separately on Sempra’s Condensed Consolidated Statements of Operations.

    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s natural gas revenues decreased by $337 million (14%) driven by Sempra California, which included:
    ▪$164 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M
    ▪$155 million decrease in cost of natural gas sold, which we discuss below
    ▪$29 million lower regulatory revenues associated with the acceleration of self-developed software deductions, which are offset in income tax expense
    ▪$9 million lower regulatory revenues primarily from higher gas repairs tax benefits
    Offset by:
    ▪$37 million higher CPUC-authorized base revenues
    ▪$8 million regulatory award approved by the CPUC in 2026
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s cost of natural gas decreased by $158 million (32%) driven by Sempra California, which included:
    ▪$95 million lower volumes driven by weather
    ▪$60 million lower average natural gas prices
    88
    Utilities: Electric Revenues and Cost of Electric Fuel and Purchased Power
    Our utilities revenues include electric revenues at Sempra California, substantially all of which are at SDG&E. Intercompany revenues are eliminated in Sempra’s Condensed Consolidated Statements of Operations.
    SDG&E operates under a regulatory framework that permits it to recover the actual cost incurred to generate or procure electricity based on annual estimates of the cost of electricity supplied to customers. The differences in cost between estimates and actual are recovered or refunded in subsequent periods through rates.
    Utility cost of electric fuel and purchased power includes utility-owned generation, power purchased from third parties, and net power purchases and sales to/from the California ISO.
    UTILITIES: ELECTRIC REVENUES AND COST OF ELECTRIC FUEL AND PURCHASED POWER
    (Dollars in millions)
     Three months ended March 31,
     20262025
    Sempra:
    Electric revenues:
    Sempra California$1,225 $1,060 
    Eliminations and adjustments(1)(1)
    Total
    		$1,224 $1,059 
    Cost of electric fuel and purchased power(1):
    Sempra California$94 $73 
    Eliminations and adjustments(13)(21)
    Total
    		$81 $52 
    (1)    Excludes depreciation and amortization, which are presented separately on Sempra’s Condensed Consolidated Statements of Operations.

    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s electric revenues increased by $165 million (16%) driven by Sempra California, which included:
    ▪$99 million higher revenues from incremental and balanced capital projects, including $59 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD
    ▪$33 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are offset in income tax expense
    ▪$21 million increase in cost of electric fuel and purchased power, which we discuss below
    ▪$14 million higher revenues from transmission operations
    ▪$9 million higher regulatory revenues associated with refundable programs, which are fully offset in O&M
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s cost of electric fuel and purchased power increased by $29 million driven by Sempra California, which included:
    ▪$42 million lower sales to the California ISO due to lower market prices
    ▪$5 million higher purchased power primarily due to tolling agreements offset by lower utility-owned generation costs
    Offset by:
    ▪$26 million lower purchased power from the California ISO due to lower market prices
    89
    Energy-Related Businesses: Revenues and Cost of Sales
    ENERGY-RELATED BUSINESSES: REVENUES AND COST OF SALES
    (Dollars in millions)
     Three months ended March 31,
     20262025
    Sempra:
    Revenues:  
    Sempra Infrastructure
    		$416 $400 
    Parent and other(1)
    		(10)(19)
    Total
    		$406 $381 
    Cost of sales(2):
    		  
    Sempra Infrastructure$76 $119 
    (1)    Includes eliminations of intercompany activity.
    (2)    Excludes depreciation and amortization, which are presented separately on Sempra’s Condensed Consolidated Statements of Operations.

    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s revenues from energy-related businesses increased by $25 million (7%) primarily due to:
    ▪$36 million from asset and supply optimization from contracts to sell natural gas and LNG to third parties, including:
    ◦$80 million from $13 million unrealized gains in 2026 compared to $67 million unrealized losses in 2025 on commodity derivatives
    Offset by:
    ◦$41 million driven by lower natural gas prices associated with optimization of transport and storage contracts
    Offset by:
    ▪$19 million revenues in 2025 driven by a contract modification in December 2024 on an LNG storage and regasification agreement that ended in December 2025
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s cost of sales from energy-related businesses decreased by $43 million (36%) primarily due to:
    ▪$60 million driven by lower natural gas purchases related to asset and supply optimization
    Offset by:
    ▪$22 million unrealized losses in 2026 on commodity derivatives related to the PA LNG Phase 1 project
    Operation and Maintenance
    OPERATION AND MAINTENANCE
    (Dollars in millions)
     Three months ended March 31,
     20262025
    Sempra:
    Sempra California$1,016 $1,175 
    Sempra Texas Utilities2 2 
    Sempra Infrastructure221 174 
    Segment totals1,239 1,351 
    Parent and other(1)
    		3 (8)
    Total$1,242 $1,343 
    (1)    Includes eliminations of intercompany activity.

    90
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s O&M decreased by $101 million (8%) due to:
    ▪$159 million decrease at Sempra California primarily due to $155 million lower expenses associated with refundable programs, which costs are recovered in revenue
    Offset by:
    ▪ $47 million increase at Sempra Infrastructure due to:
    ◦$22 million from changes in provisions for expected credit losses
    ◦$18 million higher purchased services and maintenance expenses
    ◦$17 million higher development costs and certain non-capitalized expenses from projects under construction
    Offset by:
    ◦$14 million related to 2025 expected credit losses on a credit support agreement with a third-party financial institution and associated transaction fees
    ▪$11 million increase at Parent and other due to a $16 million change in deferred compensation from $7 million expense in 2026 compared to $9 million benefit in 2025
    Depreciation and Amortization
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s depreciation and amortization decreased by $19 million (3%) to $621 million primarily due to:
    ▪$73 million lower at Sempra Infrastructure as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively
    Offset by:
    ▪$55 million higher at Sempra California due to higher utility plant rate base
    Other Income, Net
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s other income, net, increased by $9 million (10%) to $100 million primarily due to:
    ▪$6 million higher non-service components of net periodic benefit cost at Sempra California
    ▪$4 million higher net gains from impacts associated with foreign exchange instruments and foreign currency transactions at Sempra Infrastructure, including:
    ◦$9 million gains in 2026 on foreign currency derivatives as a result of fluctuation of the Mexican peso
    Offset by:
    ◦$5 million from a $1 million loss in 2026 compared to $4 million gains in 2025 driven by foreign currency transactional effects
    Interest Expense
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s interest expense decreased by $51 million (12%) to $382 million due to:
    ▪$87 million at Sempra Infrastructure from:
    ◦$74 million favorable impact in interest expense from interest rate swaps related to the PA LNG Phase 1 project comprised of:
    •$84 million realized gains in 2026 from the termination of interest rate swaps, net of transaction costs
    Offset by:
    •$10 million higher unrealized losses
    Offset by:
    ▪$19 million at Sempra California from higher debt balances from debt issuances
    ▪$17 million at Parent and other from higher debt balances from debt issuances and higher borrowings on commercial paper offset by higher capitalization of interest expense in 2026 from projects under construction at Sempra Infrastructure
    91
    Income Taxes
    INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
    (Dollars in millions)
    Three months ended March 31,
    20262025
    Sempra:
    Income tax expense$65 $57 
    Income before income taxes and equity earnings$848 $651 
    Equity earnings, before income tax(1)
    		148 141 
    Pretax income
    		$996 $792 
    Effective income tax rate7 %7 %
    (1)    We discuss how we recognize equity earnings in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report.

    We report as part of our pretax results the income or loss attributable to NCI. However, we do not record income taxes for a portion of this income or loss, as some of our entities with NCI are currently treated as partnerships for U.S. income tax purposes, and thus we are only liable for income taxes on the portion of the earnings that are allocated to us. Our pretax income, however, includes 100% of these entities. If our entities with NCI grow, and if we continue to invest in such entities, the impact on our ETR may become more significant.
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s income tax expense increased by $8 million (14%) primarily due to:
    ▪higher pretax income
    ▪lower income tax benefit from lower ITCs from standalone energy storage projects
    Offset by:
    ▪$36 million net income tax benefit in 2026 as a result of classifying SI Partners and Ecogas as held for sale, comprised of the following:
    ◦$33 million net income tax benefit to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners
    ◦$3 million income tax benefit to adjust a Mexican deferred tax liability on our outside basis difference in Ecogas
    ▪$21 million higher income tax benefit attributable to NCI’s share of higher U.S. partnership’s pretax income
    ▪$8 million from $18 million income tax benefit in 2026 compared to $10 million income tax benefit in 2025 from foreign currency and inflation effects on our monetary positions in Mexico and associated undesignated derivatives
    ▪higher income tax benefits from flow-through items
    We discuss the impact of foreign currency exchange rates and inflation on income taxes below in “Impact of Foreign Currency and Inflation Rates on Results of Operations.” See Note 1 of the Notes to Condensed Consolidated Financial Statements in this report and Notes 1 and 8 of the Notes to Consolidated Financial Statements in the Annual Report for further details about our accounting for income taxes and items subject to flow-through treatment.
    92
    Equity Earnings
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s equity earnings increased by $42 million (13%) to $367 million primarily due to:
    ▪ $25 million at Oncor Holdings driven by:
    ◦overall higher revenues primarily attributable to:
    •the establishment of the UTM in June 2025 and the SRP
    •rate updates to reflect increases in invested capital
    •customer growth
    Offset by:
    •lower customer consumption primarily attributable to weather
    Offset by:
    ◦higher interest expense and depreciation expense associated with increases in invested capital
    ◦higher O&M
    ▪$7 million at Cameron LNG JV primarily from lower interest expense and higher maintenance revenues
    ▪$7 million at IMG due to lower income tax expense primarily from foreign currency and inflation effects
    Earnings Attributable to Noncontrolling Interests
    In the three months ended March 31, 2026 compared to the same period in 2025, Sempra’s earnings attributable to NCI increased by $105 million to $107 million primarily due to an increase in SI Partners subsidiaries’ net income driven by a favorable impact in interest expense from the termination of interest rate swaps in 2026 related to the PA LNG Phase 1 project and lower depreciation expense as a result of classifying SI Partners and Ecogas as held for sale in September 2025 and June 2025, respectively.


    93
    IMPACT OF FOREIGN CURRENCY AND INFLATION RATES ON RESULTS OF OPERATIONS
    Because Ecogas, our natural gas distribution utility in Mexico, uses the Mexican peso as its functional currency, its revenues and expenses are translated into U.S. dollars at average exchange rates for the period when included in Sempra’s results of operations. Year‑over‑year differences in average exchange rates used to translate Ecogas’ income statement activity can therefore create variances in our comparative results of operations. In the three months ended March 31, 2026 compared to the same period in 2025, the impact of changes in average foreign currency translation rates on our earnings was $1 million.
    We discuss further the impact of foreign currency and inflation rates on results of operations, including impacts on income taxes and related hedging activity, in “Part II – Item 7. MD&A – Impact of Foreign Currency and Inflation Rates on Results of Operations” in the Annual Report.
    The impact from fluctuations in foreign currency exchange rates and Mexican inflation on our results of operations is summarized in the following table.
    TRANSACTIONAL GAINS (LOSSES) FROM FOREIGN CURRENCY AND INFLATION EFFECTS
    (Dollars in millions)
     Total reported amountsTransactional gains (losses) included in reported amounts
     Three months ended March 31,
     2026202520262025
    Sempra:
    Other income, net$100 $91 $8 $4 
    Income tax expense(65)(57)18 10 
    Equity earnings367 325 3 (2)
    Net income1,150 919 29 12 
    Earnings attributable to noncontrolling interests(107)(2)(10)(4)
    Earnings attributable to common shares1,037 906 19 8 
    At March 31, 2026, SI Partners, which holds our foreign operations, is classified as held for sale. Upon completion of the sale, which we expect to occur in the second or third quarter of 2026, we will deconsolidate SI Partners and account for our remaining 25% interest under the equity method, which we expect will reduce volatility in our results of operations associated with foreign currency exchange rate fluctuations and Mexican inflation.
    94

    We discuss herein SDG&E’s results of operations and significant changes in earnings, revenues and costs in the three months ended March 31, 2026 compared to the same period in 2025.
    RESULTS OF OPERATIONS
    RESULTS OF OPERATIONS
    (Dollars in millions)
    In the three months ended March 31, 2026 compared to the same period in 2025, the increase in earnings of $15 million (5%) was primarily due to:
    ▪$32 million higher CPUC base operating margin, net of operating expenses, including $43 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD
    Offset by:
    ▪$9 million higher net interest expense
    ▪$8 million lower income tax benefits primarily from flow-through items
    SIGNIFICANT CHANGES IN REVENUES AND COSTS
    Electric Revenues and Cost of Electric Fuel and Purchased Power
    In the three months ended March 31, 2026 compared to the same period in 2025, SDG&E’s electric revenues increased by $164 million (15%) to $1.2 billion primarily due to:
    •$99 million higher revenues from incremental and balanced capital projects, including $59 million recognition of regulatory revenue reflecting returns on approved WMP capital projects resulting from the 2024 GRC Track 2 FD
    ▪$33 million higher regulatory revenues from lower ITCs from standalone energy storage projects, which are offset in income tax expense
    ▪$21 million increase in cost of electric fuel and purchased power, which we discuss below
    ▪$14 million higher revenues from transmission operations
    ▪$9 million higher regulatory revenues associated with refundable programs, which are fully offset in O&M
    In the three months ended March 31, 2026 compared to the same period in 2025, SDG&E’s cost of electric fuel and purchased power increased by $21 million (29%) to $94 million primarily due to:
    ▪$42 million lower sales to the California ISO due to lower market prices
    ▪$5 million higher purchased power primarily due to tolling agreements offset by lower utility-owned generation costs
    Offset by:
    ▪$26 million lower purchased power from the California ISO due to lower market prices
    95
    Natural Gas Revenues and Cost of Natural Gas
    In the three months ended March 31, 2026 and 2025, SDG&E’s average cost of natural gas per thousand cubic feet was $7.59 and $5.69, respectively. The average cost of natural gas sold at SDG&E is impacted by market prices, as well as transportation, tariff and other charges.
    In the three months ended March 31, 2026 compared to the same period in 2025, SDG&E’s natural gas revenues decreased by $37 million (10%) to $319 million primarily due to:
    ▪$27 million lower regulatory revenues associated with refundable programs, which are fully offset in O&M
    ▪$12 million lower revenues from incremental and balanced capital projects

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    Held by

    holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

    Holder Type ETF MF Position ($) % of holder Δ % of holder Holder AUM

    Recent insider activity

    Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 3 transactions across 3 insiders. Net: -7,028 shares, -$645,873.

    Date Insider Role Action Shares Price Value
    2026-05-18 Ferrero Pablo Director Sell -2,600 $89.53 -$232,778
    2026-05-14 DAY DIANA L Chief Legal Counsel Sell -3,300 $92.13 -$304,029
    2026-04-01 BIRD JUSTIN CHRISTOPHER Executive Vice President Sell -1,128 $96.69 -$109,066

    Source: SEC Form 4 filings.

    Next expected filings

    • ~2026-08-08 10-Q expected by 2026-08-12 (in 54 days)
    • ~2026-11-06 10-Q expected by 2026-11-10 (in 144 days)
    • ~2027-02-26 10-K expected by 2027-03-02 (in 256 days)
    • ~2027-05-08 10-Q expected by 2027-05-12 (in 327 days)

    Predicted from historical filing cadence; not an SEC commitment.

    Recent SEC filings

    • 2026-06-09 8-K Other Events; Financial Statements and Exhibits
    • 2026-06-05 424B2 Prospectus Supplement
    • 2026-05-15 8-K Other Events; Financial Statements and Exhibits
    • 2026-05-15 S-3ASR S-3ASR
    • 2026-05-12 8-K Other Events; Financial Statements and Exhibits
    • 2026-05-07 8-K Earnings Release; Financial Statements and Exhibits
    • 2026-05-07 10-Q Quarterly Report
    • 2026-03-20 8-K Other Events; Financial Statements and Exhibits
    • 2026-03-17 8-K Other Events; Financial Statements and Exhibits
    • 2026-03-13 8-K Other Events; Financial Statements and Exhibits
    • 2026-02-26 10-K Annual Report
    • 2026-02-26 8-K Earnings Release; Financial Statements and Exhibits
    • 2025-12-19 8-K Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
    • 2025-11-17 8-K Other Events
    • 2025-11-05 10-Q Quarterly Report