Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 55

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 1
Chunk 55
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 to complete the closing when all closing conditions are satisfied, Sempra will receive a termination fee of $414 million. Any party may terminate the agreement if the closing has not occurred within 12 months after signing.Subject to closing, the KKR Partners will own 65% of SI Partners, Sempra will retain a 25% interest and ADIA will retain a 10% interest. As we discuss below, the KKR Partners will have control of SI Partners and Sempra and ADIA will have certain minority rights in SI Partners. As a result of our loss of control upon completion of the sale, we will deconsolidate SI Partners and account for our 25% interest in SI Partners under the equity method within the existing Sempra Infrastructure segment.In connection with signing the agreement for the sale, in September 2025, we classified SI Partners as held for sale, ceased recording depreciation and amortization, and recognized $514 million in Income Tax Expense on Sempra’s Condensed Consolidated Statements of Operations to (i) adjust deferred income tax liabilities related to outside basis differences in our investment in SI Partners, (ii) account for changes to state income tax apportionment, and (iii) account for valuation allowances against certain tax credit carryforwards. The amount of this charge is based on certain assumptions and could change substantially in subsequent quarters and at the closing due to, among other things, changes to current carrying values, changes in forecasted taxable income, purchase price adjustments, and changes to tax positions and other assumptions.Post-Closing Limited Partnership Agreement. At closing, we will enter into an amended and restated limited partnership agreement with the KKR Partners and ADIA. The limited partnership agreement provides that the KKR Partners will have the right to appoint four managers, Sempra will have the right to appoint two managers, and ADIA will have the right to appoint one manager to the SI Partners board of managers, with matters decided by majority vote based on the limited partners’ ownership percentages. The minority partners will have certain minority consent rights so long as they maintain specified ownership thresholds. Subject to exceptions and limitations, SI Partners will be prohibited from taking certain actions, including, among others: (i) redeeming units or making distributions to its limited partners other than on a pro rata basis or as expressly permitted under the partnership agreement; (ii) under certain circumstances, transferring, disposing or issuing equity securities in any subsidiary undertaking or owning a project that has reached a positive FID; (iii) appointing a replacement chief executive officer