Company: SREA
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001032208-25-000027
Chunk: 84

Company: SEMPRA
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 84
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 from debt issuances

84

Table of Contents

Income Taxes

INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES(Dollars in millions)Three months ended March 31,20252024Sempra:Income tax expense$57 $172 Income before income taxes and equity earnings$651 $705 Equity earnings, before income tax(1)141 134 Pretax income$792 $839 Effective income tax rate7 %21 %

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

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 the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s income tax expense decreased by $115 million primarily due to:

▪$63 million from $10 million income tax benefit in 2025 compared to $53 million income tax expense in 2024 from foreign currency and inflation effects on our monetary positions in Mexico

▪higher income tax benefit in 2025 from higher ITCs from standalone energy storage projects

▪higher income tax benefits from flow-through items

We discuss the impact of foreign currency exchange rates and inflation on income taxes below in “Impact of Foreign Currency and Inflation Rates on Results of Operations.” See Note 1 of the Notes to Condensed Consolidated Financial Statements in this report and Notes 1 and 7 of the Notes to Consolidated Financial Statements in the Annual Report for further details about our accounting for income taxes and items subject to flow-through treatment.

Equity Earnings

In the three months ended March 31, 2025 compared to the same period in 2024, Sempra’s equity earnings decreased by $23 million (7%) to $325 million primarily due to:

▪$37 million at Oncor Holdings driven by:

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