Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 248

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 248
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4 from the termination of interest rate swaps compared to $14 million settlement losses in 2023 on a contingent interest rate swap

◦$56 million lower interest expense due to higher capitalization of interest expense on projects under construction

Offset by:

▪$66 million at Sempra California from higher debt balances from debt issuances

▪$46 million at Parent and other from higher debt balances from debt issuances, offset by capitalization of interest expense in 2024 on projects under construction at Sempra Infrastructure

2024 Form 10-K  |  73

Income Taxes

INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES(Dollars in millions) Years ended December 31, 202420232022Sempra:Income tax expense$219 $490 $556 Income from continuing operations before income taxes and equity earnings$2,110 $2,627 $1,343 Equity earnings, before income tax(1)603 633 666 Pretax income$2,713 $3,260 $2,009 Effective income tax rate8 %15 %28 %

(1)    We discuss how we recognize equity earnings in Note 5 of the Notes to Consolidated Financial Statements.

We report as part of our pretax results the income or loss attributable to NCI. However, we do not record income taxes for a portion of this income or loss, as some of our entities with NCI are currently treated as partnerships for U.S. income tax purposes, and thus we are only liable for income taxes on the portion of the earnings that are allocated to us. Our pretax income, however, includes 100% of these entities. If our entities with NCI grow, and if we continue to invest in such entities, the impact on our ETR may become more significant.

In April 2023, the IRS issued Revenue Procedure 2023-15, which provides a safe harbor method of accounting for gas repairs expenditures. Sempra elected this change in tax accounting method in its consolidated 2023 income tax return filing.

Sempra records regulatory liabilities for benefits that will be flowed through to customers in the future.

In 2024 compared to 2023, Sempra’s income tax expense decreased by $271 million primarily due to:

▪$619 million from $336 million income tax benefit in 2024 compared to $283 million income tax expense in 202