Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 13

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 13
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ollars in millions) Total reported amountsTransactional(losses) gains includedin reported amounts Years ended December 31, 202420232022202420232022Sempra:Other income, net$136 $131 $24 $(14)$6 $(13)Income tax expense(219)(490)(556)336 (283)(169)Equity earnings1,609 1,481 1,498 64 (68)(36)Net income3,500 3,618 2,285 386 (345)(218)Earnings attributable to noncontrolling interests(638)(543)(146)(124)110 54 Earnings attributable to common shares2,817 3,030 2,094 262 (235)(164)

Foreign Currency Exchange Rate and Inflation Impacts on Income Taxes and Related Hedging Activity 

Our Mexican subsidiaries have U.S. dollar-denominated cash balances, receivables, payables and debt (monetary assets and liabilities) that are affected by Mexican currency exchange rate movements for Mexican income tax purposes. They also have significant deferred income tax assets and liabilities denominated in the Mexican peso that must be translated to U.S. dollars for financial reporting purposes. In addition, monetary assets and liabilities and certain nonmonetary assets and liabilities are adjusted for Mexican inflation for Mexican income tax purposes. As a result, fluctuations in both the currency exchange rate for the Mexican peso against the U.S. dollar and Mexican inflation may expose us to fluctuations in income tax expense, other income, net, and equity earnings. We may use foreign currency derivatives as a means to help manage exposure to the currency exchange rate on our monetary assets and liabilities, and this derivative activity impacts other income, net. However, we generally do not hedge our deferred income tax assets and liabilities, which makes us susceptible to volatility in income tax expense caused by exchange rate fluctuations and inflation. 

2024 Form 10-K  |  76

We discuss herein SDG&E’s results of operations and significant changes in earnings, revenues and costs for the year ended December 31, 2024 compared to the year ended December 31, 2023. For a discussion of SDG&E’s results of operations and significant changes in earnings, revenues and costs for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to “Part II – Item 7. MD&A – Results of Operations” in our