Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 186

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 2
Chunk 186
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 from standalone energy storage projects

In the nine months ended September 30, 2025 compared to the same period in 2024, Sempra had an income tax expense in 2025 compared to an income tax benefit in 2024 primarily due to:

▪$552 million net income tax expense in 2025 as a result of management’s decision to classify SI Partners and Ecogas as held for sale, comprised of the following:

◦$705 million income tax expense to adjust deferred income tax liabilities primarily related to outside basis differences in our investment in SI Partners 

◦$153 million income tax expense for changes in state income tax apportionment

◦$38 million income tax expense due to the recognition of a Mexican deferred tax liability on our outside basis differences in Ecogas

Offset by:

◦$344 million income tax benefit from changes to a valuation allowance against certain tax credit carryforwards 

▪$368 million from $157 million income tax expense in 2025 compared to $211 million income tax benefit in 2024 from foreign currency and inflation effects on our monetary positions in Mexico

▪$78 million income tax expense in 2025 from changes to a valuation allowance against foreign tax credits that were carried forward from the implementation of the TCJA

▪$30 million income tax benefit in 2024 from an outside basis difference in a domestic partnership investment

Offset by:

▪higher income tax benefit from flow-through items, including $73 million income tax benefit in 2025 from the election to accelerate self-developed software deductions 

▪higher income tax benefit in 2025 from higher ITCs from standalone energy storage projects

We discuss the impact of foreign currency exchange rates and inflation on income taxes below in “Impact of Foreign Currency and Inflation Rates on Results of Operations.” See Note 1 of the Notes to Condensed Consolidated Financial Statements in this report and Notes 1 and 7 of the Notes to Consolidated Financial Statements in the Annual Report for further details about our accounting for income taxes and items subject to flow-through treatment.

107

Equity Earnings

In the three months ended September 30, 2025 compared to the same period in 2024, Sempra’s equity earnings increased by $18 million (4%) to $472 million primarily due to:

▪$45 million at Oncor Holdings driven by:

◦overall higher revenues primarily attributable to:

•rate updates to reflect increases in invested capital

•increase due