Financial Analysis

COMMITMENTS, CONTINGENCIES AND GUARANTEES 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 December 31, 2025, loss contingency accruals for legal matters that are probable and estimable were $38 million for Sempra, including $22 million for SoCalGas. We discuss our policy regarding accrual of legal fees in Note 1. SDG&E City of San Diego Franchise Agreements 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. Pending. In one of the cases, 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 requir …

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DEBT AND CREDIT FACILITIES SHORT-TERM DEBT Committed Lines of Credit At December 31, 2025, Sempra had an aggregate capacity of $10.2 billion under eight 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) December 31, 2025 Borrower Expiration date of facility Total facility Commercial paper outstanding Amounts outstanding Letters of credit outstanding Available unused credit Sempra October 2030 $ 4,000 $ (983) $ $ $ 3,017 SDG&E October 2030 1,500 (532) 968 SoCalGas October 2030 1,200 (504) 696 SI Partners and IEnova September 2026 500 (91) 409 SI Partners and IEnova August 2028 1,500 (266) 1,234 SI Partners and IEnova December 2028 (1) 1,000 1,000 Port Arthur LNG I March 2030 200 (87) 113 Port Arthur LNG II September 2030 300 (111) 189 Total $ 10,200 $ (2,019) $ (357) $ (198) $ 7,626 (1) In December 2025, SI Partners and IEnova amended their shared credit facility to extend the expiration date from August 2026 to December 2028. The principal terms of Sempras, SDG&Es and SoCalGas lines of credit reflected in the table above include the following: Each revolving credit faci …

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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 Year ended December 31, 2025 By major service line: Utilities $ 11,454 $ 78 $ (25) $ 11,507 Energy-related businesses 974 (63) 911 Revenues from contracts with customers $ 11,454 $ 1,052 $ (88) $ 12,418 By market: Gas $ 7,345 $ 642 $ (22) $ 7,965 Electric 4,109 410 (66) 4,453 Revenues from contracts with customers $ 11,454 $ 1,052 $ (88) $ 12,418 Revenues from contracts with customers $ 11,454 $ 1,052 $ (88) $ 12,418 Utilities regulatory revenues 364 364 Other revenues 913 7 920 Total revenues $ 11,818 $ 1,965 $ (81) $ 13,702 Year ended December 31, 2024 By major service line: Utilities $ 11,008 $ 78 $ (23) $ 11,063 Energy-related businesses 818 (63) 755 Revenues from contracts with customers $ 11,008 $ 896 $ (86) $ 11,818 By market: Gas $ 6,858 $ 471 $ (21) $ 7,308 Electric 4,150 425 (65) 4,510 Revenues from contracts with customers $ 11,008 $ 896 $ (86) $ 11,818 Revenues from contracts with customers $ 11,008 $ 896 $ (86) $ 11,818 Utilities regulatory revenues 374 374 Other revenues 986 7 993 Total revenues $ 11,382 $ 1,882 $ (79) $ 13,185 Year ended December 31, 2023 By major service line: Utilit …

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SHARE-BASED COMPENSATION SEMPRA EQUITY COMPENSATION PLANS Sempra has share-based compensation plans intended to align employee and shareholder objectives related to the long-term growth of Sempra. The plans permit a wide variety of share-based awards, including: nonqualified stock options incentive stock options restricted stock awards restricted stock units stock appreciation rights performance awards stock payments dividend equivalents Eligible employees, including those from SDG&E and SoCalGas, participate in Sempras share-based compensation plans as a component of their compensation package. In the three years ended December 31, 2025, Sempra had the following types of equity awards outstanding: Nonqualified Stock Options : Options to purchase common stock have an exercise price equal to the market price of the common stock at the date of grant, are service-based, become exercisable over a three-year period and expire 10 years from the date of grant. Unvested option awards are subject to forfeiture following a termination of employment, except where the retirement criteria under such awards have been met and subject to certain other exceptions described below. Performance-Based Restricted Stock Units : These RSU awards generally vest in Sempra common stock at the end of three -year performance periods based on Sempras total return to shareholders relative to that of specified market indices or based on the compound annual growth rate of Sempras EPS. The comparative mar …

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FAIR VALUE MEASUREMENTS 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 December 31, 2025 and 2024. 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. 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&Es 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 acti …

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INCOME TAXES We provide our calculations of ETRs in the following table. INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES (Dollars in millions) Years ended December 31, 2025 2024 2023 Sempra: Income tax expense $ 701 $ 219 $ 490 Income before income taxes and equity earnings $ 1,169 $ 2,110 $ 2,627 Equity earnings, before income tax (1) 620 603 633 Pretax income $ 1,789 $ 2,713 $ 3,260 Effective income tax rate 39 % 8 % 15 % SDG&E: Income tax (benefit) expense $ (128) $ 153 $ (26) Income before income taxes $ 435 $ 1,044 $ 910 Effective income tax rate (29) % 15 % (3) % SoCalGas: Income tax (benefit) expense $ (38) $ 31 $ (5) Income before income taxes $ 828 $ 987 $ 807 Effective income tax rate (5) % 3 % (1) % (1) We discuss how we recognize equity earnings in Note 5. 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 that will be flowed through to customers in the future, which impacts the ETR. As a result, changes in the relative size of these items compared to pretax income, from period to per …

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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 2023-09, Improvements to Income Tax Disclosures: ASU 2023-09 improves the transparency of income tax disclosures by requiring disaggregated information about each Registrants 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). We adopted the standard on December 31, 2025 on a retrospective basis. See revised disclosures for all periods presented in Note 8. 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 …

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EMPLOYEE BENEFIT PLANS For our employee benefit plans, we: recognize an asset for a plans overfunded status or a liability for a plans underfunded status in the balance sheet; measure a plans assets and its obligations that determine its funded status as of the end of the fiscal year; and recognize changes in the funded status of pension and PBOP plans in the year in which the changes occur. Generally, those changes are reported in OCI and as a separate component of shareholders equity. The detailed information presented below covers the employee benefit plans of primarily Sempra and its consolidated entities. Sempra has funded and unfunded noncontributory traditional defined benefit and cash balance plans, including separate plans for SDG&E and SoCalGas, which collectively cover all eligible employees. Pension benefits under the traditional defined benefit plans are based on service and final average earnings, while the cash balance plans provide benefits using a career average earnings methodology. IEnova has an unfunded noncontributory defined benefit plan covering all employees that provides defined benefits to retirees based on date of hire, years of service and final average earnings. Sempra also has PBOP plans, including separate plans for SDG&E and SoCalGas, which collectively cover all domestic and certain foreign employees. The life insurance plans are both contributory and noncontributory, and the health care plans are contributory. Participants contributio …

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REVENUES 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 Year ended December 31, 2025 By major service line: Utilities $ 11,454 $ 78 $ (25) $ 11,507 Energy-related businesses 974 (63) 911 Revenues from contracts with customers $ 11,454 $ 1,052 $ (88) $ 12,418 By market: Gas $ 7,345 $ 642 $ (22) $ 7,965 Electric 4,109 410 (66) 4,453 Revenues from contracts with customers $ 11,454 $ 1,052 $ (88) $ 12,418 Revenues from contracts with customers $ 11,454 $ 1,052 $ (88) $ 12,418 Utilities regulatory revenues 364 364 Other revenues 913 7 920 Total revenues $ 11,818 $ 1,965 $ (81) $ 13,702 Year ended December 31, 2024 By major service line: Utilities $ 11,008 $ 78 $ (23) $ 11,063 Energy-related businesses 818 (63) 755 Revenues from contracts with customers $ 11,008 $ 896 $ (86) $ 11,818 By market: Gas $ 6,858 $ 471 $ (21) $ 7,308 Electric 4,150 425 (65) 4,510 Revenues from contracts with customers $ 11,008 $ 896 $ (86) $ 11,818 Revenues from contracts with customers $ 11,008 $ 896 $ (86) $ 11,818 Utilities regulatory revenues 374 374 Other revenues 986 7 993 Total revenues $ 11,382 $ 1,882 $ (79) $ 13,185 Year ended December 31, 2023 By major service lin …

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SEGMENT INFORMATION SEMPRA 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. Sempra has the following three operating and reportable segments, which are managed separately based on services provided, geographic location and regulatory framework: Sempra California provides natural gas and electric service to Southern California and part of central California through Sempras wholly owned subsidiaries, SDG&E and SoCalGas, which are regulated public utilities. Sempra Texas Utilities holds our equity method 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 equity method investment in Sharyland Holdings, which owns Sharyland Utilities, a regulated electric transmission utility serving customers near the Texas-Mexico border. Sempra Infrastructure includes the operating companies of SI Partners, in which Sempra Infrastructure owns a 70% interest, as well as a holding company and certain services companies. Sempra Infrastructure develops, constructs, operates and invests in energy infrastructure to help provide safe, sustainable and reliable access to cleaner energy in markets in the U.S., Mexico and globally. Sempras …

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EQUITY AND EARNINGS PER COMMON SHARE PREFERRED STOCK Sempra and SDG&E are authorized to issue up to 50,000,000 and 45,000,000 shares of preferred stock, respectively. At December 31, 2025, Sempra had no preferred stock outstanding. At December 31, 2025 and 2024, SDG&E had no preferred stock outstanding. The rights, preferences, privileges and restrictions for any new series of preferred stock would be established by each companys board of directors at the time of issuance. We discuss SoCalGas preferred stock below. Sempra Series C Preferred Stock At December 31, 2024, Sempra had 900,000 shares of series C preferred stock outstanding. In 2025, Sempra provided notice of the redemption of all 900,000 issued and outstanding shares of our series C preferred stock for a redemption price of $1,000 per share, and paid $900 million with proceeds received from our August 2025 issuance of junior subordinated notes and short-term debt, which we discuss in Note 7. Upon notice of the redemption, we recognized $11 million of capitalized underwriting discounts and equity issuance costs in Preferred Deemed Dividends on the Sempra Consolidated Statement of Operations. On February 23, 2026, Sempra filed restated articles of incorporation that implemented the revocation of the series C preferred stock, such that the number of authorized shares of such series is decreased to zero and it is no longer an authorized series of Sempras capital stock. SoCalGas Preferred Stock SoCalGas is author …

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