Company: SREA
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001032208-25-000065
Chunk: 261

Company: SEMPRA
Filing Date: 2025-11-05
Form: 10-Q
Item: Item 8
Chunk 261
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 allowances for expected credit losses, if necessary, for trade and other accounts receivable using a combination of factors, including past-due status based on contractual terms, trends in write-offs, the age of the receivables and customer payment patterns, historical and industry trends, counterparty creditworthiness, economic conditions and specific events, such as bankruptcies, pandemics and other factors. We write off financial assets measured at amortized cost in the period in which we determine they are not recoverable. We record recoveries of amounts previously written off when it is known that they will be recovered.As we discuss below in “Note Receivable,” we have an interest-bearing promissory note due from KKR Pinnacle. On a quarterly basis, we evaluate credit losses and record allowances for expected credit losses on this note receivable, including compounded interest and unamortized transaction costs, based on published default rate studies, the maturity date of the instrument and an internally developed credit rating.SDG&E and SoCalGas have regulatory mechanisms to recover credit losses and thus record changes in the allowances for credit losses related to Accounts Receivable – Trade that are probable of recovery in regulatory accounts. We discuss regulatory accounts in Note 4.

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Changes in allowances for credit losses for trade receivables, other receivables and a note receivable are as follows:CHANGES IN ALLOWANCES FOR CREDIT LOSSES(Dollars in millions)20252024Sempra:Allowances for credit losses at January 1$519 $539 Provisions for expected credit losses(1)106 148 Write-offs(1) (147)(169)Reclassification to assets held for sale(134)— Allowances for credit losses at September 30$344 $518 SDG&E:Allowances for credit losses at January 1$114 $144 Provisions for expected credit losses40 46 Write-offs(61)(63)Allowances for credit losses at September 30$93 $127 SoCalGas:Allowances for credit losses at January 1$285 $331 Provisions for expected credit losses42 70 Write-offs(80)(107)Allowances for credit losses at September 30$247 $294 (1)    Includes activities within the disposal group that is held for sale.Allowances for credit losses related to trade receivables, other receivables and a note receivable are included in the Condensed Consolidated Balance Sheets as follows:ALLOWANCES