Company: SREA
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001032208-25-000027
Chunk: 85

Company: SEMPRA
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 85
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�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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Table of Contents

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 and expenses are translated into U.S. dollars at average exchange rates for the period for consolidation in Sempra’s results of operations. We discuss further the impact of foreign currency and inflation rates on results of operations, including impacts on income taxes and related hedging activity, in “Part II – Item 7. MD&A – Impact of Foreign Currency and Inflation Rates on Results of Operations” in the Annual Report.

Foreign Currency Translation 

Any difference in average exchange rates used for the translation of income statement activity from year to year can cause a variance in Sempra’s comparative results of operations. In the three months ended March 31, 2025 compared to the same period in 2024, the change in our earnings as a result of foreign currency translation rates was negligible.

Transactional Impacts

Income statement activities at our foreign operations and their JVs are also impacted by transactional gains and losses, a summary of which is shown in the table below:

TRANSACTIONAL GAINS (LOSSES) FROM FOREIGN CURRENCY AND INFLATION EFFECTS(Dollars in millions) Total reported amountsTransactional gains (losses) included in reported amounts Three months ended March 31, 2025202420252024Other income, net$91 $99 $4 $1 Income tax expense(57)(172)10