Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 53

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 53
---
 total capitalization, which is the sum of total debt and equity, and our debt-to-capitalization ratio, which is calculated as total debt as a percentage of total capitalization, was as follows:

TOTAL CAPITALIZATION AND DEBT-TO-CAPITALIZATION RATIO(Dollars in millions)Total capitalizationDebt-to-capitalization ratioDecember 31,2024202320242023Sempra$73,636 $64,730 49 %48 %SDG&E21,041 19,796 50 50 SoCalGas16,602 15,167 51 51 

In 2024 compared to 2023, Sempra’s total capitalization increased by $8.9 billion (14%) due to:

▪increase in long-term debt

▪increase in equity primarily from comprehensive income exceeding dividends, issuances of common stock and contributions from NCI

Offset by:

▪decrease in short-term debt

▪distributions to NCI

In 2024 compared to 2023, SDG&E’s and SoCalGas’ total capitalization increased by $1.2 billion (6%) and $1.4 billion (9%), respectively, due to increases in equity from comprehensive income exceeding dividends and increases in debt.

CRITICAL ACCOUNTING ESTIMATES

Management views the accounting estimates that we describe below as critical because their application is the most relevant, judgmental and/or material to our financial position and results of operations, and/or because they require the use of material judgments and estimates. We discuss critical accounting estimates that are material to our financial statements with the Audit Committee of Sempra’s board of directors.

REGULATORY ACCOUNTING

Sempra, SDG&E, SoCalGas

As regulated entities, SDG&E’s and SoCalGas’ customer rates, as set and monitored by regulators, are designed to recover the cost of providing service and to provide the opportunity to realize their authorized rates of return on their investments. SDG&E and SoCalGas assess probabilities of future rate recovery associated with regulatory account balances at the end of each reporting period and whenever new and/or unusual events occur, such as:

▪changes in the regulatory and political environment or the utility’s competitive position

▪issuance of a regulatory commission order

▪passage of new legislation

2024 Form 10-K  |  101

To the extent that circumstances associated with regulatory balances change, the regulatory balances are evaluated and adjusted if