Company: SREA
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001032208-25-000048
Chunk: 164

Company: SEMPRA
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 2
Chunk 164
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 primarily from higher maintenance revenues and lower interest expense

Earnings Attributable to Noncontrolling Interests

In the three months ended June 30, 2025 compared to the same period in 2024, Sempra’s earnings attributable to NCI decreased by $100 million to $46 million primarily due to a decrease in SI Partners subsidiaries’ net income driven by foreign currency and inflation effects on our monetary positions in Mexico.

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s earnings attributable to NCI decreased by $167 million to $48 million primarily due to a decrease in SI Partners subsidiaries’ net income driven by foreign currency and inflation effects on our monetary positions in Mexico and unrealized losses in 2025 from interest rate swaps related to the PA LNG Phase 1 project.

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Table of Contents

IMPACT OF FOREIGN CURRENCY AND INFLATION RATES ON RESULTS OF OPERATIONS

Because our natural gas distribution utility in Mexico, Ecogas, uses its local currency as its functional currency, its revenues and expenses are translated into U.S. dollars at average exchange rates for the period for consolidation in Sempra’s results of operations. 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.

Foreign Currency Translation 

Any difference in average exchange rates used for the translation of income statement activity from year to year can cause a variance in Sempra’s comparative results of operations. In the three months and six months ended June 30, 2025 compared to the same periods in 2024, the change in our earnings as a result of foreign currency translation rates was negligible.

Transactional Impacts

Income statement activities at our foreign operations and their equity method investments are also impacted by transactional gains and losses, a summary of which is shown in the table below:

TRANSACTIONAL GAINS (LOSSES) FROM FOREIGN CURRENCY AND INFLATION EFFECTS(Dollars in millions) Total reported amountsTransactional gains (losses) included in reported amounts Three months ended June 30, 2025202420252024Other income, net$59 $30 $1 $(1)Income tax (expense) benefit(172)130 (122)186 Equity earnings393 433 (25