Company: SREA
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001032208-25-000048
Chunk: 162

Company: SEMPRA
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 2
Chunk 162
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$467 $468 $1,259 $1,307 Effective income tax rate37 %(28)%18 %3 %

(1)    We discuss how we recognize equity earnings in Note 5 of the Notes to Consolidated Financial Statements in the Annual Report.

We report as part of our pretax results the income or loss attributable to NCI. However, we do not record income taxes for a portion of this income or loss, as some of our entities with NCI are currently treated as partnerships for U.S. income tax purposes, and thus we are only liable for income taxes on the portion of the earnings that are allocated to us. Our pretax income, however, includes 100% of these entities. If our entities with NCI grow, and if we continue to invest in such entities, the impact on our ETR may become more significant.

In the three months ended June 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:

▪$308 million from $122 million income tax expense in 2025 compared to $186 million income tax benefit in 2024 from foreign currency and inflation effects on our monetary positions in Mexico

▪$38 million income tax expense in 2025 due to the recognition of a Mexican deferred tax liability on our outside basis difference in Ecogas as a result of management’s decision to hold the asset for sale

Offset by:

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

In the six months ended June 30, 2025 compared to the same period in 2024, Sempra’s income tax expense increased by $187 million primarily due to:

▪$245 million from $112 million income tax expense in 2025 compared to $133 million income tax benefit in 2024 from foreign currency and inflation effects on our monetary positions in Mexico

▪$38 million income tax expense in 2025 due to the recognition of a Mexican deferred tax liability on our outside basis difference in Ecogas as a result of management’s decision to hold the asset for sale

Offset by:

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

▪higher income tax benefits from flow-through items

▪lower pretax income

We discuss the impact of foreign currency exchange rates