Core Points - Sempra Infrastructure and EQT Corporation have signed a 20-year sales and purchase agreement for the supply of 2 million tonnes per annum (Mtpa) of liquefied natural gas (LNG) from the Port Arthur LNG Phase 2 project [1][2] - The agreement is aimed at enhancing U.S. energy exports and supporting global energy security while promoting lower-carbon solutions [2] - The Port Arthur LNG Phase 2 project is expected to have a total liquefaction capacity of approximately 26 Mtpa, doubling the capacity from Phase 1 [5] Company Developments - Sempra Infrastructure has secured all major permits for the Port Arthur LNG Phase 2 project, including project approval from the Federal Energy Regulatory Commission and export authorization from the U.S. Department of Energy [3] - Bechtel has been selected for the engineering, procurement, and construction of the Port Arthur LNG Phase 2 facility, with a final investment decision targeted for 2025 [4] - The project has already attracted interest from other buyers, including a 20-year SPA with JERA Co., Inc. for 1.5 Mtpa and an expanded alliance with ConocoPhillips for 4 Mtpa [2] Industry Context - The Port Arthur LNG Phase 2 project is strategically positioned to meet global energy demand and is part of a broader effort to fortify America's role as a leading energy exporter [2] - The project aligns with the U.S. government's goals of enhancing energy security and supporting local economic development through natural gas projects [2]

Core Viewpoint - Sempra Infrastructure and ConocoPhillips have signed a 20-year sale and purchase agreement for 4 million tonnes per annum (Mtpa) of LNG from the Port Arthur LNG Phase 2 project, highlighting the growing role of U.S. LNG in global energy security [1][2]. Group 1: Project Details - The Port Arthur LNG Phase 2 project will include two liquefaction trains with a production capacity of approximately 13 Mtpa, increasing the total capacity of the facility to about 26 Mtpa [3]. - ConocoPhillips previously secured 5 Mtpa of offtake capacity for 20 years from the Phase 1 project, where it holds a 30% equity stake [2]. - In July 2025, Sempra Infrastructure entered into another 20-year SPA with JERA Co. Inc. for 1.5 Mtpa of LNG offtake from the Phase 2 project [4]. Group 2: Regulatory and Development Progress - The project has received all major permits, including approval from the Federal Energy Regulatory Commission in September 2023 and export authorization from the U.S. Department of Energy in May 2025 [5]. - Bechtel has been selected for the engineering, procurement, and construction of the Port Arthur LNG Phase 2 facility [6]. Group 3: Strategic Importance - The partnership between Sempra and ConocoPhillips aims to connect U.S. natural gas producers with growing international markets, contributing to economic growth and job creation domestically [2]. - Sempra's ongoing initiatives for 2025 focus on unlocking value in the LNG sector, positioning the company for future growth and long-term shareholder value [8].

Company Overview - Sempra (SRE) is based in San Diego and operates in the Utilities sector, with a year-to-date share price change of -6.66% [3] - The company currently pays a dividend of $0.64 per share, resulting in a dividend yield of 3.15%, which is lower than the Utility - Gas Distribution industry's yield of 3.56% and significantly higher than the S&P 500's yield of 1.48% [3] Dividend Performance - Sempra's annualized dividend of $2.58 has increased by 4% from the previous year, with a historical average annual increase of 4.28% over the last five years [4] - The company's current payout ratio is 55%, indicating that it distributes 55% of its trailing 12-month earnings per share as dividends [4] Earnings Expectations - The Zacks Consensus Estimate for Sempra's earnings in 2025 is projected at $4.68 per share, reflecting a year-over-year growth rate of 0.65% [5] - The company is expected to experience earnings expansion in the current fiscal year [5] Investment Appeal - Sempra is considered an attractive dividend play and a compelling investment opportunity, currently holding a Zacks Rank of 2 (Buy) [6]

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=10&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements for Sempra, SDG&E, and SoCalGas for Q2 2025, detailing their financial performance and position [Sempra Financial Statements](index=10&type=section&id=Sempra%20Financial%20Statements) Sempra's YTD 2025 revenues increased to **$6.80 billion**, but net income decreased to **$1.44 billion**, with total assets growing to **$99.9 billion** Sempra Condensed Consolidated Statements of Operations Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $3,000M | $3,011M | $6,802M | $6,651M | | **Net Income** | $519M | $871M | $1,438M | $1,752M | | **Earnings Attributable to Common Shares** | $461M | $713M | $1,367M | $1,514M | | **Diluted EPS** | $0.71 | $1.12 | $2.09 | $2.38 | Sempra Condensed Consolidated Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $4,169M | $5,285M | | **Property, Plant and Equipment, Net** | $64,802M | $61,437M | | **Total Assets** | $99,907M | $96,155M | | **Long-Term Debt and Finance Leases** | $34,936M | $31,558M | | **Total Sempra Shareholders' Equity** | $31,697M | $31,222M | | **Total Liabilities and Equity** | $99,907M | $96,155M | Sempra Condensed Consolidated Statements of Cash Flows Highlights (YTD, in millions) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $2,266M | $2,520M | | **Net Cash Used in Investing Activities** | ($5,563M) | ($4,168M) | | **Net Cash Provided by Financing Activities** | $1,891M | $1,618M | | **Decrease in Cash, Cash Equivalents and Restricted Cash** | ($1,406M) | ($38M) | [San Diego Gas & Electric Company (SDG&E) Financial Statements](index=18&type=section&id=San%20Diego%20Gas%20%26%20Electric%20Company%20%28SDG%26E%29%20Financial%20Statements) SDG&E's YTD 2025 operating revenues slightly decreased to **$2.68 billion**, while net income increased to **$456 million**, with total assets reaching **$31.9 billion** SDG&E Condensed Statements of Operations Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $1,262M | $1,355M | $2,682M | $2,734M | | **Operating Income** | $288M | $325M | $678M | $682M | | **Net Income** | $175M | $186M | $456M | $409M | SDG&E Condensed Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $31,854M | $30,773M | | **Property, Plant and Equipment, Net** | $25,841M | $25,111M | | **Long-Term Debt and Finance Leases** | $10,093M | $10,018M | | **Total Shareholder's Equity** | $11,020M | $10,564M | [Southern California Gas Company (SoCalGas) Financial Statements](index=24&type=section&id=Southern%20California%20Gas%20Company%20%28SoCalGas%29%20Financial%20Statements) SoCalGas's YTD 2025 operating revenues increased to **$3.29 billion**, net income rose to **$528 million**, and total assets grew to **$26.1 billion** SoCalGas Condensed Statements of Operations Highlights (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Operating Revenues** | $1,268M | $1,309M | $3,288M | $3,114M | | **Operating Income** | $181M | $204M | $708M | $634M | | **Net Income** | $85M | $131M | $528M | $490M | SoCalGas Condensed Balance Sheet Highlights (in millions) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $26,065M | $25,358M | | **Property, Plant and Equipment, Net** | $21,414M | $20,754M | | **Long-Term Debt and Finance Leases** | $7,622M | $7,031M | | **Total Shareholders' Equity** | $8,691M | $8,161M | [Notes to Condensed Consolidated Financial Statements](index=30&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details accounting policies and financial data, covering consolidation, VIEs, credit losses, regulatory matters, debt, derivatives, and segment information [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=88&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Sempra's and its subsidiaries' financial condition and operational results, analyzing performance drivers, segment results, capital resources, liquidity, and critical accounting estimates [Overview](index=88&type=section&id=Overview) This overview details Sempra's operational and financial results, analyzed across its three reportable segments: Sempra California, Sempra Texas Utilities, and Sempra Infrastructure - Sempra operates through three reportable segments: Sempra California (SDG&E and SoCalGas), Sempra Texas Utilities (investment in Oncor), and Sempra Infrastructure[291](index=291&type=chunk)[292](index=292&type=chunk)[298](index=298&type=chunk) [Results of Operations by Registrant](index=89&type=section&id=Results%20of%20Operations%20by%20Registrant) Sempra's Q2 2025 consolidated earnings decreased to **$461 million**, primarily due to foreign currency impacts at Sempra Infrastructure, while YTD earnings were **$1.37 billion** Sempra Earnings Attributable to Common Shares by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Sempra California** | $259 | $316 | $983 | $898 | | **Sempra Texas Utilities** | $208 | $202 | $354 | $385 | | **Sempra Infrastructure** | $72 | $291 | $218 | $422 | | **Parent and other** | ($78) | ($96) | ($188) | ($191) | | **Total Sempra** | **$461** | **$713** | **$1,367** | **$1,514** | - Sempra California's YTD earnings increased by **$85 million (9%)** due to higher CPUC base operating margin and income tax benefits, partially offset by higher interest expense and a disallowed regulatory recovery[302](index=302&type=chunk) - Sempra Texas Utilities' YTD earnings decreased by **$31 million (8%)** primarily due to lower equity earnings from Oncor Holdings, driven by higher interest, depreciation, and O&M expenses[303](index=303&type=chunk) - Sempra Infrastructure's YTD earnings decreased by **$204 million (48%)**, mainly due to a **$202 million** unfavorable impact from foreign currency and inflation in Mexico and a **$26 million** tax expense for holding Ecogas for sale[304](index=304&type=chunk) [Capital Resources and Liquidity](index=107&type=section&id=Capital%20Resources%20and%20Liquidity) Sempra maintains strong liquidity with **$7.6 billion** in available credit, made **$5.6 billion** in YTD capital expenditures, and is advancing major LNG projects Available Funds at June 30, 2025 (in millions) | Registrant | Unrestricted Cash & Equivalents | Available Unused Credit | | :--- | :--- | :--- | | **Sempra** | $155 | $7,628 | | **SDG&E** | $28 | $1,500 | | **SoCalGas** | $0 | $989 | - Sempra established a **$3.0 billion** ATM program in November 2024, with approximately **$2.6 billion** remaining available for sale as of June 30, 2025[377](index=377&type=chunk)[383](index=383&type=chunk) Capital Expenditures and Investments YTD (in millions) | Segment | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | **Sempra California** | $2,315 | $2,212 | | **Sempra Texas Utilities** | $971 | $385 | | **Sempra Infrastructure** | $2,323 | $1,619 | | **Total Sempra** | **$5,612** | **$4,217** | - Sempra Infrastructure is advancing several major LNG projects, including the construction of ECA LNG Phase 1 (expected completion in 2026) and PA LNG Phase 1 (expected completion in 2027-2028), and the development of Cameron LNG Phase 2 and PA LNG Phase 2[431](index=431&type=chunk)[444](index=444&type=chunk)[452](index=452&type=chunk) [Critical Accounting Estimates](index=122&type=section&id=Critical%20Accounting%20Estimates) The company's critical accounting estimates, detailed in the Annual Report on Form 10-K, remain materially unchanged - The company's critical accounting estimates are detailed in the Annual Report and remain consistent[490](index=490&type=chunk) [New Accounting Standards](index=122&type=section&id=New%20Accounting%20Standards) Recent accounting pronouncements and their potential impact on financial reporting are discussed in Note 2 of the financial statements - Details on new accounting standards are provided in Note 2 of the Notes to Condensed Consolidated Financial Statements[491](index=491&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=123&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from commodity prices, interest rates, and foreign currency, with a **10%** commodity price change impacting derivatives by **$16 million** and all segments experiencing inflationary pressures - A hypothetical **10%** change in commodity prices would result in a **$16 million** change in the fair value of Sempra Infrastructure's commodity derivatives as of June 30, 2025[493](index=493&type=chunk) - A **10%** change in interest rates on variable-rate debt would impact annual earnings by approximately **$4 million** for long-term debt and **$7 million** for short-term debt[495](index=495&type=chunk) - All segments are experiencing inflationary pressures on costs such as labor, materials, and supplies, with recovery at regulated utilities subject to regulatory lag and Sempra Infrastructure potentially not fully recovering costs through contractual adjustments[497](index=497&type=chunk)[498](index=498&type=chunk) [Item 4. Controls and Procedures](index=124&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures for Sempra, SDG&E, and SoCalGas were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The principal executive and financial officers of Sempra, SDG&E, and SoCalGas concluded that their respective disclosure controls and procedures were effective as of June 30, 2025[500](index=500&type=chunk) - No material changes were made to the internal control over financial reporting for any of the registrants during the most recent fiscal quarter[501](index=501&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=125&type=section&id=Item%201.%20Legal%20Proceedings) No new material legal proceedings are reported beyond those detailed in Note 12 of the financial statements and other relevant sections - Material legal proceedings are discussed in Note 12 of the Notes to Condensed Consolidated Financial Statements[502](index=502&type=chunk) [Item 1A. Risk Factors](index=125&type=section&id=Item%201A.%20Risk%20Factors) The company faces material risks from changing global market conditions, including tariffs and trade actions, which could increase costs, delay projects, and reduce profitability - The company faces significant risks from changing global market conditions, including the imposition of tariffs by the U.S. on imported materials like steel and aluminum, and on goods from China[504](index=504&type=chunk)[505](index=505&type=chunk) - These tariffs are expected to increase costs for construction, pipeline transportation, and electricity procurement, potentially causing delays, cost overruns, or reduced profitability for development projects and impacting rate recovery at regulated utilities[505](index=505&type=chunk) - Retaliatory actions by other countries, such as tariffs on U.S. LNG, could negatively impact demand for the company's LNG exports and adversely affect its LNG projects[507](index=507&type=chunk) [Item 5. Other Information](index=126&type=section&id=Item%205.%20Other%20Information) No material undisclosed events or Rule 10b5-1 trading arrangement adoptions or terminations by directors or officers occurred during the last fiscal quarter - No Sempra, SDG&E, or SoCalGas director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the last fiscal quarter[509](index=509&type=chunk) [Item 6. Exhibits](index=127&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including corporate governance documents, material contracts, and officer certifications - The Exhibit Index lists all required filings, including corporate governance documents, material contracts, and officer certifications pursuant to SEC rules[510](index=510&type=chunk)[511](index=511&type=chunk)[512](index=512&type=chunk)

Financial Data and Key Metrics Changes - The company reported second quarter 2025 adjusted EPS of $0.89, consistent with the prior period's results [7][27] - Full year 2025 adjusted EPS guidance remains affirmed at $4.3 to $4.7, with 2026 EPS guidance at $4.8 to $5.3 [8] - Second quarter 2025 GAAP earnings were $461 million or $0.71 per share, compared to $713 million or $1.12 per share in the same quarter of 2024 [26] Business Line Data and Key Metrics Changes - Sempra California saw a $5 million increase primarily from higher regulatory awards and electric transmission margin, offset by lower CPUC base operating margin [28] - Sempra Texas reported $6 million of higher equity earnings due to increased invested capital and customer growth, despite higher operating and interest expenses [29] - Sempra Infrastructure experienced a $26 million increase in revenues from contract modifications and higher power volumes [29] Market Data and Key Metrics Changes - The company is focusing on regulatory compacts in Texas, with the passage of House Bill 5247 expected to improve earned return on equity by 50 to 100 basis points over time [18] - The legislative environment in Texas is supportive of infrastructure expansion, enhancing growth opportunities for Sempra's Texas operations [17] Company Strategy and Development Direction - The company is transitioning towards a more utility-focused business model, with a capital plan targeting $13 billion in investments for 2025, primarily in U.S. utilities [8][12] - The Fit for 2025 campaign aims to improve customer affordability by reducing internal costs and enhancing productivity [13] - The company is advancing capital recycling initiatives and expects higher contributions from regulated utilities, improving overall credit and business risk profile [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 goals, citing steady execution on value creation initiatives [7] - The macroeconomic backdrop for LNG is strengthening, with growing demand in Europe and Asia expected to support Sempra's LNG assets [84][86] - The company anticipates significant growth opportunities in Texas, driven by legislative support and increasing demand for energy [17][44] Other Important Information - Sempra Infrastructure is making progress on major construction projects, including ECA LNG Phase 1 and Port Arthur LNG Phase 1, with expected revenue generation starting in 2026 [22][24] - The company has successfully hardened 100% of its transmission system in high fire threat areas, demonstrating commitment to operational excellence and safety [14] Q&A Session Summary Question: Can you provide details on the KKR LOI regarding the Sempra Infrastructure Partner sale process? - Management indicated that the LOI with KKR contemplates an equity sale in the 15% to 30% range, with flexibility based on valuation [34][36] Question: What is the timing of the capital plan update related to incremental capital at Encore in Texas? - Management expects to confirm the capital plan at the board meeting in October, with updates likely in 2026 following the base rate review [40][41] Question: How does the company view the LNG market and contracting opportunities for Port Arthur? - Management maintains a bullish outlook on LNG, driven by energy security needs in Europe and growing demand in Asia [84][86] Question: What is the expected impact of the Unified Tracker Mechanism (UTM) on earned ROE? - Management anticipates a positive impact on earned ROE of about 50 to 100 basis points, with the first UTM filing expected in the first half of next year [102][104]

Financial Data and Key Metrics Changes - The company reported second quarter 2025 adjusted EPS of $0.89, consistent with the prior period's results [6][27] - Full year 2025 adjusted EPS guidance remains affirmed at $4.3 to $4.7, with 2026 EPS guidance of $4.8 to $5.3 [6] - Second quarter 2025 GAAP earnings were $461 million or $0.71 per share, compared to $713 million or $1.12 per share in the same quarter of 2024 [26] Business Line Data and Key Metrics Changes - Sempra California saw a $5 million increase primarily from higher regulatory awards and electric transmission margin, offset by lower CPUC base operating margin [28] - Sempra Texas reported $6 million of higher equity earnings due to increased invested capital and customer growth, despite higher operating and interest expenses [29] - Sempra Infrastructure experienced a $26 million increase in revenues, mainly from a contract modification and higher power volumes [29] Market Data and Key Metrics Changes - The company is focusing on regulatory compacts in Texas, with the recently passed House Bill 5247 expected to improve earned return on equity by 50 to 100 basis points over time [16][30] - The legislative environment in Texas is supportive of infrastructure expansion, which is critical for the company's growth strategy [15] Company Strategy and Development Direction - The company is transitioning towards a more utility-focused business model, with a capital plan targeting $13 billion in investments for 2025, primarily in U.S. Utilities [6][11] - The Fit for 2025 campaign aims to improve customer affordability by reducing internal costs and enhancing productivity [12] - The company is advancing its capital recycling initiatives and expects higher contributions from regulated utilities, improving overall credit and business risk profile [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving solid financial performance for the year, with ongoing progress on value creation initiatives [27][30] - The company anticipates a notable increase in earnings contributions from regulated utilities, particularly in Texas, which is expected to enhance overall value [11][30] - Management highlighted the importance of legislative developments in Texas for future growth and profitability [16][30] Other Important Information - The company has made significant investments in operational excellence and safety measures, including wildfire mitigation efforts [13] - Sempra Infrastructure is advancing multiple construction projects, including ECA LNG Phase 1 and Port Arthur LNG Phase 1, which are expected to drive cash flow growth [21][23] Q&A Session Summary Question: Inquiry about KKR LOI and stake sales - Management indicated that the LOI with KKR contemplates an equity sale in the 15% to 30% range, with flexibility based on valuation [34][36] Question: Update on capital plan and execution confidence - Management confirmed that the incremental capital opportunities at Encore are outside the current base plan, with confidence in executing the capital plan due to supportive legislative developments [38][40] Question: LNG market and contracting opportunities - Management expressed a bullish view on LNG demand driven by energy security in Europe and growing needs in Asia, positioning Gulf Coast assets favorably [85][88] Question: Timing of UTM filings and ROE improvement - Management expects the first UTM filing in the first half of next year, anticipating a low-end impact on ROE this year, with potential for higher contributions in subsequent years [102][104]

Core Insights - Sempra Energy reported second-quarter 2025 adjusted earnings per share (EPS) of 89 cents, exceeding the Zacks Consensus Estimate of 83 cents by 7.2% and matching the prior year's figure [1][7] - The company's total revenues for the quarter were $3 billion, a decrease of 0.4% from $3.01 billion in the same quarter last year, and fell short of the Zacks Consensus Estimate of $3.15 billion by 4.8% [2] Revenue Breakdown - Sempra California segment earnings were $259 million, down from $316 million in the prior-year quarter [3] - Sempra Texas Utility segment earnings increased to $208 million from $202 million year-over-year [3] - Sempra Infrastructure reported earnings of $72 million, significantly lower than $291 million in the same quarter last year [3] - The Parent and Other segment reported a loss of $78 million, an improvement from a loss of $96 million in the prior-year period [3] Financial Position - As of June 30, 2025, Sempra Energy's cash and cash equivalents were $0.16 billion, a decrease from $1.57 billion as of December 31, 2024 [4] - Long-term debt and finance leases increased to $34.94 billion from $31.56 billion as of December 31, 2024 [4] - Cash flow from operating activities decreased from $2.52 billion at the end of Q2 2024 to $2.27 billion at the end of Q2 2025 [4] Future Guidance - The company reaffirmed its 2025 adjusted EPS guidance in the range of $4.30-$4.70, with the Zacks Consensus Estimate at $4.68 per share [5] - For 2026, Sempra Energy expects earnings to be in the range of $4.80-$5.30 per share, with the Zacks Consensus Estimate at $5.17 per share [5] - The company anticipates long-term EPS growth to be at the high end or above the previously projected range of 7-9% through 2029 [6][7]

Financial Performance - Reported Q2-2025 adjusted EPS of $0.89 and YTD-2025 adjusted EPS of $2.34[12] - Affirmed FY-2025 adjusted EPS guidance range of $4.30 - $4.70[12] - Affirmed FY-2026 EPS guidance range of $4.80 - $5.30[12] - Affirmed guidance at high-end or above projected EPS CAGR of 7% - 9% for 2025 through 2029[12] - Oncor invested $3 billion of CapEx, supporting premise count increase of 20,000[16] Strategic Initiatives - Invested over $5 billion of CapEx in 1H-2025[11] - Executed an effort to save $300 million by phasing out certain non-economic regulatory programs in California[11] - Initiated Ecogas sale process[11] - Extended ROFO process with existing limited partners and signed non-binding letter of intent with KKR[11] Operational Excellence and Infrastructure Development - Hardened 100% of SDGE's transmission system located in Tier 3 HFTD, with 100% of all HFTD transmission expected in 2028[11] - Safely completed 1,000th LNG cargo from Cameron LNG Phase 1 since start of operations[11] - SDGE awarded estimated $600 million of projects in finalized CAISO 2024 – 2025 Transmission Plan[16]

[Executive Summary](index=1&type=section&id=Executive%20Summary) Sempra reported Q2 2025 GAAP earnings of $461 million, affirmed 2025 adjusted EPS, and advanced capital recycling [Second-Quarter 2025 Financial Highlights](index=1&type=section&id=Second-Quarter%202025%20Financial%20Highlights) Sempra's Q2 2025 financial performance showed decreased GAAP earnings but increased adjusted earnings year-over-year | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | GAAP Earnings | $461 million | $713 million | -$252 million | | GAAP Diluted EPS | $0.71 | $1.12 | -$0.41 | | Adjusted Earnings | $583 million | $567 million | +$16 million | | Adjusted Diluted EPS | $0.89 | $0.89 | No Change | - Jeffrey W. Martin, chairman and CEO of Sempra, expressed satisfaction with the solid quarter and continued focus on disciplined execution of value creation initiatives for 2025, aiming for a more utility-centric business model[4](index=4&type=chunk) [Update on Value Creation Initiatives](index=2&type=section&id=Update%20on%20Value%20Creation%20Initiatives) Sempra progressed on capital recycling, including planned equity sales in Sempra Infrastructure and Ecogas México - Sempra made steady progress on its five value creation initiatives for 2025, particularly its ongoing capital recycling program[7](index=7&type=chunk) - The company extended the right of first offer process and signed a non-binding letter of intent with KKR for the planned sale of equity at Sempra Infrastructure[7](index=7&type=chunk) - The sales process for Ecogas México, S. de R.L. de C.V. continues to advance with strong interest from strategic and financial buyers[7](index=7&type=chunk) - Both transactions (Sempra Infrastructure equity and Ecogas México sale) are expected to close in the second or third quarter of 2026[7](index=7&type=chunk) [Earnings Guidance](index=3&type=section&id=Earnings%20Guidance) Sempra updated 2025 GAAP EPS guidance while affirming adjusted EPS and long-term growth projections | Guidance Metric | Range | Status | | :-------------- | :---- | :----- | | Full-year 2025 GAAP EPS | $4.05 to $4.45 | Updated (reflecting Q2 results) | | Full-year 2025 Adjusted EPS | $4.30 to $4.70 | Affirmed | | Full-year 2026 EPS | $4.80 to $5.30 | Affirmed | | Long-term EPS CAGR (2025-2029) | 7% to 9% | Affirmed (to high-end or above) | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section details Sempra's condensed consolidated statements of operations, balance sheets, and cash flows [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 saw stable total revenues but a significant decrease in net income and diluted EPS year-over-year | Metric (Millions USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Total Revenues | $3,000 | $3,011 | $6,802 | $6,651 | | Income before income taxes and equity earnings | $298 | $308 | $949 | $1,013 | | Net income | $519 | $871 | $1,438 | $1,752 | | Earnings attributable to common shares | $461 | $713 | $1,367 | $1,514 | | Diluted EPS | $0.71 | $1.12 | $2.09 | $2.38 | - Total revenues remained stable year-over-year for Q2, while YTD revenues increased[26](index=26&type=chunk) - Net income and earnings attributable to common shares decreased significantly in Q2 2025 compared to Q2 2024[26](index=26&type=chunk) [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased by **$3.75 billion**, driven by property, plant, and equipment, alongside rising long-term debt | Metric (Millions USD) | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Current Assets | $4,169 | $5,285 | -$1,116 | | Total Other Assets | $30,936 | $29,433 | +$1,503 | | Property, plant and equipment, net | $64,802 | $61,437 | +$3,365 | | Total Assets | $99,907 | $96,155 | +$3,752 | | Total Current Liabilities | $8,607 | $9,676 | -$1,069 | | Long-term debt and finance leases | $34,936 | $31,558 | +$3,378 | | Total Liabilities and Equity | $99,907 | $96,155 | +$3,752 | | Sempra shareholders' equity | $31,697 | $31,222 | +$475 | - Total assets increased by **$3.75 billion** from December 31, 2024, primarily driven by an increase in property, plant and equipment, net, and other assets[37](index=37&type=chunk) - Long-term debt and finance leases increased by **$3.38 billion**, while total current liabilities decreased by **$1.07 billion**[39](index=39&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased, while investing activities saw a substantial increase in cash used year-over-year | Metric (Millions USD) | YTD 2025 | YTD 2024 | Change | | :-------------------- | :------- | :------- | :----- | | Net cash provided by operating activities | $2,266 | $2,520 | -$254 | | Net cash used in investing activities | $(5,563) | $(4,168) | -$1,395 | | Net cash provided by financing activities | $1,891 | $1,618 | +$273 | | Decrease in cash, cash equivalents and restricted cash | $(1,406) | $(38) | -$1,368 | - Net cash provided by operating activities decreased by **$254 million** year-over-year for the six months ended June 30[41](index=41&type=chunk) - Investing activities saw a significant increase in cash used, primarily due to higher expenditures for property, plant and equipment (**$4.64 billion** in YTD 2025 vs. **$3.83 billion** in YTD 2024) and investments (**$972 million** vs. **$387 million**)[41](index=41&type=chunk) [Segment Performance and Operations](index=2&type=section&id=Segment%20Performance%20and%20Operations) Sempra's segments, Sempra Texas, California, and Infrastructure, reported varied Q2 2025 performance and strategic advancements [Sempra California](index=3&type=section&id=Sempra%20California) Sempra California focused on grid modernization, strategic capital investments, and cost-saving initiatives for customers - Sempra California is a dual-utility platform focused on connecting roughly **25 million** consumers to safe, reliable and affordable energy[11](index=11&type=chunk) - San Diego Gas & Electric Company (SDG&E) was awarded an estimated **$600 million** of projects in the California Independent System Operator's 2024-2025 Transmission Plan[11](index=11&type=chunk) - SDG&E and Southern California Gas Company (SoCalGas) invested over **$1.2 billion** of capital during the quarter to advance strategic programs and modernize energy networks[12](index=12&type=chunk) - SDG&E is executing initiatives to lower costs and improve productivity, including an effort to save customers nearly **$300 million** between 2026 and 2031 by phasing out certain non-economic regulatory programs[12](index=12&type=chunk) | Metric (Millions USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Earnings attributable to common shares | $259 | $316 | $983 | $898 | | Capital Expenditures for Property, Plant and Equipment | $1,221 | $1,069 | $2,315 | $2,212 | [Sempra Texas Utilities (Oncor)](index=2&type=section&id=Sempra%20Texas%20Utilities%20(Oncor)) Oncor benefited from new legislation, increased interconnection requests, and filed for a comprehensive base rate review - The state of Texas passed new legislation, including the Unified Tracker Mechanism (House Bill 5247), expected to reduce regulatory lag and improve earned returns on equity for qualifying utilities like Oncor[8](index=8&type=chunk) - Oncor Electric Delivery Company LLC (Oncor) had over **1,120** active transmission point of interconnection requests in queue, representing a nearly **40% increase** compared to Q2 2024[9](index=9&type=chunk) - Oncor increased its premises served by almost **20,000** in Q2 and built, rebuilt or upgraded nearly **600 circuit miles** of transmission and distribution power lines[9](index=9&type=chunk) - Oncor filed a request for a comprehensive base rate review with the Public Utility Commission of Texas, with a final order expected in Q1 2026[10](index=10&type=chunk) | Metric (Millions USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Earnings attributable to common shares | $208 | $202 | $354 | $385 | | Capital Expenditures for Investments | $485 | $192 | $971 | $385 | [Sempra Infrastructure](index=3&type=section&id=Sempra%20Infrastructure) Sempra Infrastructure advanced major construction projects, secured LNG export authorization, and signed a 20-year LNG supply agreement - Sempra Infrastructure continued to make progress on five significant construction projects, including infrastructure projects on both the Pacific and Gulf Coasts of North America[13](index=13&type=chunk) - The Port Arthur LNG Phase 2 development project received its non-FTA export authorization from the U.S. Department of Energy, allowing export of up to approximately **13.5 Mtpa** of U.S.-produced LNG[14](index=14&type=chunk) - Sempra Infrastructure executed a 20-year sale and purchase agreement with JERA Co. Inc. for the supply of **1.5 Mtpa** of LNG offtake from Phase 2[14](index=14&type=chunk) - Sempra continues to target making a financial investment decision on Port Arthur LNG Phase 2 in 2025[14](index=14&type=chunk) | Metric (Millions USD) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------- | :------ | :------ | :------- | :------- | | Earnings attributable to common shares | $72 | $291 | $218 | $422 | | Capital Expenditures for Property, Plant and Equipment | $1,081 | $827 | $2,322 | $1,617 | [Other Operating Statistics](index=14&type=section&id=Other%20Operating%20Statistics) This section provides key operational metrics for Sempra California, Oncor, Ecogas, and Termoeléctrica de Mexicali | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Sempra California Gas sales (Bcf) | 75 | 78 | 191 | 200 | | Sempra California Total gas customer meters (thousands) | N/A | N/A | 7,135 | 7,098 | | Sempra California Electric sales (millions of kWhs) | 610 | 661 | 1,325 | 1,596 | | Sempra California Total electric customer meters (thousands) | N/A | N/A | 1,540 | 1,525 | | Oncor Total deliveries (millions of kWhs) | 42,226 | 40,343 | 81,232 | 77,656 | | Oncor Total electric customer meters (thousands) | N/A | N/A | 4,084 | 4,008 | | Ecogas Natural gas customer meters (thousands) | N/A | N/A | 166 | 160 | | Sempra Infrastructure Termoeléctrica de Mexicali (millions of kWhs) | 776 | 650 | 1,478 | 1,630 | - Oncor's total electric deliveries increased by **4.67%** in Q2 2025 YoY and **4.61%** YTD 2025 YoY, reflecting strong economic growth in Texas[45](index=45&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) Sempra uses non-GAAP measures like adjusted earnings and EPS to clarify ongoing performance by excluding infrequent or volatile items [Reconciliation of Adjusted Earnings to GAAP Earnings](index=7&type=section&id=Reconciliation%20of%20Adjusted%20Earnings%20to%20GAAP%20Earnings) This section reconciles adjusted earnings to GAAP earnings by detailing specific excluded items and their financial impact - Adjusted earnings and EPS exclude items generally not related to ongoing business activities and/or infrequent in nature, such as regulatory disallowances, foreign currency and inflation impacts in Mexico, and net unrealized gains/losses on commodity and interest rate derivatives[28](index=28&type=chunk) | Excluded Item (Millions USD) | Q2 2025 Impact | YTD 2025 Impact | | :--------------------------- | :------------- | :-------------- | | Regulatory disallowances | $25 | $25 | | Foreign currency and inflation (Mexico) | $97 | $89 | | Net unrealized (gains) losses on commodity derivatives | $(25) | $10 | | Net unrealized (gains) losses on interest rate swaps (PA LNG Phase 1) | $(1) | $8 | | Tax items related to assets held for sale | $26 | $26 | [Reconciliation of Adjusted EPS Guidance to GAAP EPS Guidance](index=9&type=section&id=Reconciliation%20of%20Adjusted%20EPS%20Guidance%20to%20GAAP%20EPS%20Guidance) Sempra's 2025 adjusted EPS guidance excludes specific items to provide a consistent view of core business operations - Sempra's 2025 Adjusted EPS Guidance Range of **$4.30 to $4.70** excludes specific items, similar to historical adjusted earnings, to provide a meaningful comparison of business operations[33](index=33&type=chunk) - This guidance does not contemplate the anticipated impacts of the proposed sale of Ecogas and the proposed sale of an equity interest in Sempra Infrastructure Partners, which combined, are expected to be accretive[33](index=33&type=chunk) | Excluded Item (EPS Impact) | Full-Year 2025 | | :------------------------- | :------------- | | Impact from regulatory disallowances | $0.04 | | Impact from foreign currency and inflation on monetary positions in Mexico | $0.14 | | Net unrealized losses on commodity derivatives | $0.02 | | Net unrealized losses on interest rate swaps related to PA LNG Phase 1 project | $0.01 | | Tax items related to assets held for sale | $0.04 | [Additional Information](index=4&type=section&id=Additional%20Information) This section provides general information about Sempra and important disclaimers regarding forward-looking statements and associated risks [About Sempra](index=4&type=section&id=About%20Sempra) Sempra is a leading North American energy infrastructure company serving nearly **40 million** consumers across key markets - Sempra is a leading North American energy infrastructure company focused on delivering energy to nearly **40 million** consumers[18](index=18&type=chunk) - The company owns one of the largest energy networks on the continent, electrifying and improving energy resilience in significant economic markets including California, Texas, Mexico, and global energy markets[18](index=18&type=chunk) - Sempra is recognized as a leader in sustainable business practices and for its high-performance culture, demonstrated by its inclusion in the Dow Jones Sustainability Index North America[18](index=18&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section outlines the inherent risks and uncertainties associated with Sempra's forward-looking statements and future results - The press release contains forward-looking statements based on assumptions about the future, involving risks and uncertainties, and are not guarantees[19](index=19&type=chunk) - Factors that could cause actual results to differ materially include California wildfires, regulatory actions, success of business development efforts, changes to capital expenditure plans, changes in trade and foreign policy, litigation, cybersecurity threats, capital resource availability, and climate policies[21](index=21&type=chunk) - Investors should not rely unduly on any forward-looking statements, and further risks are discussed in Sempra's reports filed with the U.S. Securities and Exchange Commission (SEC)[23](index=23&type=chunk)

Financial Performance - Oncor reported a net income of $259 million for Q2 2025, an increase from $251 million in Q2 2024, driven by higher revenues from updated interim rates and customer growth [1][2] - For the first half of 2025, net income was $440 million, down from $476 million in the same period of 2024, primarily due to increased interest and depreciation expenses [2][3] Operational Highlights - Oncor is executing a record $7.1 billion annual capital expenditure plan for 2025, focusing on system resiliency and wildfire risk mitigation [3] - The company upgraded approximately 590 circuit miles of transmission and distribution lines in Q2 2025, reflecting ongoing growth in Texas [5] Legislative and Regulatory Developments - Texas House Bill 5247 allows Oncor to record costs related to capital investments and apply for interim rate adjustments, which is expected to benefit both the company and its customers [8][9] - Oncor filed a comprehensive base rate review request with the Public Utility Commission of Texas (PUCT) to adjust electric delivery rates, with a decision expected in Q1 2026 [11] Capital Expenditure and Future Plans - Oncor anticipates that its capital expenditures for the 2025-2029 period could exceed $12 billion, with an updated five-year capital plan to be presented in October 2025 [6][7] - The company is actively involved in the Electric Reliability Council of Texas (ERCOT) Strategic Transmission Expansion Plan, with joint filings outlining approximately $10 billion in projects [4] Liquidity and Credit Position - As of August 6, 2025, Oncor's available liquidity was approximately $3.9 billion, sufficient to meet capital expenditures and operational needs for at least the next twelve months [12] - S&P Global Ratings downgraded Oncor's issuer credit rating from "A" to "A-", citing elevated wildfire risks, but revised the outlook to stable [13] Customer and Market Growth - Oncor's active large commercial and industrial interconnection queue increased by approximately 38% year-over-year, indicating strong industrial growth within its service territory [5] - Total electric energy volumes increased by 4.7% in Q2 2025 compared to Q2 2024, driven by higher consumption in commercial and industrial sectors [23]