Company: SREA
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001032208-25-000027
Chunk: 129

Company: SEMPRA
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 2
Chunk 129
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 continue to invest in such entities, the impact on our ETR may become more significant.

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s income tax expense decreased by $115 million primarily due to:

▪$63 million from $10 million income tax benefit in 2025 compared to $53 million income tax expense in 2024 from foreign currency and inflation effects on our monetary positions in Mexico

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

▪higher income tax benefits from flow-through items

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.

Equity Earnings

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s equity earnings decreased by $23 million (7%) to $325 million primarily due to:

▪$37 million at Oncor Holdings driven by:

◦higher interest expense and depreciation expense associated with increases in invested capital

◦higher O&M

Offset by:

◦overall higher revenues primarily attributable to:

•rate updates to reflect increases in invested capital

•higher customer consumption primarily attributable to weather

•customer growth

Offset by:

•decreases in transmission billing units

Offset by:

▪$7 million at Cameron LNG JV primarily from lower interest expense

▪$6 million at TAG Norte from lower income tax expense primarily from foreign currency and inflation effects

Earnings Attributable to Noncontrolling Interests

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s earnings attributable to NCI decreased by $67 million to $2 million primarily due to a decrease in SI Partners subsidiaries’ net income driven by unrealized losses in 2025 from interest rate swaps related to the PA LNG Phase 1 project.

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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