Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 320

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 8
Chunk 320
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% to SI Partners and 59.9% to Blackstone, subject to adjustments to Blackstone’s share of distributions discussed above.Call Rights and Redemption Features Under the PA2 JVCo LLCA, SI Partners has the right to appoint up to eight managers and Blackstone has the right to appoint up to two managers to PA2 JVCo’s board of managers, with voting power proportionate to their ownership interest. Blackstone has customary minority protections, including consent rights over significant actions such as amendments to the PA2 JVCo LLCA, incurrence of material indebtedness, and changes to the project budget.Call Options. The PA2 JVCo LLCA provides SI Partners with several call rights to purchase Blackstone’s equity interest under certain conditions or upon the occurrence of certain contingent events, including if Blackstone fails to fund required capital contributions or becomes subject to specific disqualifying events, and during certain defined time periods. Blackstone has a reciprocal call right if SI Partners becomes subject to similar disqualifying events, generally at fair market value in a bankruptcy scenario or 75% of fair market value for other disqualifying events.Contingent Redemption. Blackstone’s equity interest represents an NCI in PA2 JVCo and is classified as contingently redeemable because Blackstone has certain redemption and exit rights that are outside the control of SI Partners. These rights include, among others, the ability to require redemption upon (i) failure to complete construction by a specified date; (ii) sustained priority distributions to Blackstone above specified thresholds and for specified time periods as a result of extended periods of operational underperformance exceeding certain thresholds, termination of LNG offtake contracts that have not been replaced within a specified timeframe, or material breach of certain affiliate contracts; or (iii) the occurrence of certain monetization events, including a third-party sale of PA2 JVCo.

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Because these redemption features are contingent on events not solely within SI Partners’ control, we present Blackstone’s equity interest as a CRNCI, which appears between liabilities and equity in the mezzanine section of Sempra’s Condensed Consolidated Balance Sheet. We initially recorded the CRNCI at the amount for which Blackstone has a claim on the underlying net assets in liquidation at book value. At September 30, 2025, the CRNCI is not currently redeemable, nor is it probable that it will become redeemable because the forecasted completion of the PA LNG Phase 2 project is highly unlikely to occur beyond the contractually specified date in