Sempra(US:SRE)2025-08-07 20:15PART I – FINANCIAL INFORMATION Item 1. Financial Statements 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 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 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 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 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 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 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 Infrastructure291292298 Results of Operations by Registrant 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 recovery302 - 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 expenses303 - 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 sale304 Capital Resources and Liquidity 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, 2025377383 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 2431444452 Critical Accounting Estimates 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 consistent490 New Accounting Standards 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 Statements491 Item 3. Quantitative and Qualitative Disclosures About Market Risk 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, 2025493 - 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 debt495 - 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 adjustments497498 Item 4. Controls and Procedures 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, 2025500 - No material changes were made to the internal control over financial reporting for any of the registrants during the most recent fiscal quarter501 PART II – OTHER INFORMATION Item 1. Legal Proceedings 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 Statements502 Item 1A. Risk Factors 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 China504505 - 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 utilities505 - 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 projects507 Item 5. Other Information 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 quarter509 Item 6. Exhibits 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 rules510511512