Company: SREA
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001032208-25-000027
Chunk: 283

Company: SEMPRA
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 8
Chunk 283
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 social impact permit challenges could materially adversely affect our existing natural gas regasification operations and proposed natural gas liquefaction projects at the site of the ECA Regas Facility and have a material adverse effect on Sempra’s business, results of operations, financial condition, cash flows and/or prospects.

Regulatory and Other Actions by the Mexican Government

In 2021, the Mexican government amended Mexico’s LIE and LH to empower Mexican regulators to, among other things, revoke or suspend permits under certain circumstances. In 2024, the Mexican government adopted changes to the Mexican Constitution to reinforce state control over strategic sectors by granting a central role to government entities like the CFE and PEMEX, which have been converted from for-profit state-owned enterprises into federal administrative agencies under SENER. Following these constitutional reforms, in March 2025, the Mexican government adopted energy-related laws (2025 Energy Laws), including the ESL, which repealed the LIE, and the HSL, which repealed the LH. The 2025 Energy Laws increase the government’s control and participation in the energy sector and may create novel challenges for infrastructure development and operations. Like the LIE and LH, the ESL and HSL give Mexican authorities broad discretion to revoke or suspend permits under certain circumstances.

Although the extent of the impact of the 2025 Energy Laws is uncertain, these laws and future implementation of regulations could adversely affect Sempra Infrastructure’s ability to operate its existing assets at their current levels, result in increased costs to Sempra Infrastructure and its customers, adversely impact Sempra Infrastructure’s ability to develop new projects in Mexico, result in decreased revenues or cash flows, and negatively impact Sempra Infrastructure’s ability to recover the carrying values of its investments in Mexico, any of which could have a material adverse impact on Sempra’s business, results of operations, financial condition, cash flow and/or prospects.

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Table of Contents

SOURCES AND USES OF CASH

The following tables include only significant changes in cash flow activities for each of the Registrants.

CASH FLOWS FROM OPERATING ACTIVITIES(Dollars in millions)Three months ended March 31,SempraSDG&ESoCalGas2025$1,482 $578 $779 20241,851 676 887 Change$(369)$(98)$(108)Change in regulatory accounts, current and noncurrent$(437)$(412)Change in accounts receivable(203)$(103)(88)Change in net margin posted, current and noncurrent