Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 384

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 384
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We accrue income tax to the extent we intend to repatriate cash to the U.S. from our continuing international operations. We currently do not record deferred income taxes for other basis differences between financial statement and income tax investment amounts in non-U.S. subsidiaries because they are indefinitely reinvested. We recognize income tax expense for basis differences related to global intangible low-taxed income as a period cost if and when incurred. We recognize interest and penalties related to income taxes in income tax expense.We provide additional information about income taxes in Note 7.

RESTRICTED NET ASSETSSempraAs we discuss below, SDG&E, SoCalGas and certain Other Sempra entities have restrictions on the amount of funds that can be transferred to Sempra by dividend, advance or loan as a result of conditions imposed by various regulators. Additionally, certain Other Sempra entities are subject to various financial and other covenants and other restrictions contained in debt and credit agreements (described in Note 6) and in other agreements that limit the amount of funds that can be transferred to Sempra. At December 31, 2024, Sempra was in compliance with all covenants related to its debt agreements.At December 31, 2024, the amount of restricted net assets of consolidated entities of Sempra that may not be distributed to Sempra in the form of a loan or dividend is $17.9 billion. Additionally, the amount of restricted net assets of our unconsolidated entities is $16.3 billion. Although the restrictions cap the amount of funding that the various operating subsidiaries can provide to Sempra, we do not believe these restrictions will have a significant impact on our ability to access cash to pay dividends and fund operating needs.As we discuss in Note 5, $2.9 billion of Sempra’s retained earnings represents undistributed earnings of equity method investments at December 31, 2024.SDG&E and SoCalGasThe CPUC’s regulation of SDG&E’s and SoCalGas’ capital structures limits the amounts available for dividends and loans to Sempra. At December 31, 2024, Sempra could have received combined loans and dividends of approximately $672 million from SDG&E and approximately $457 million from SoCalGas.The payment and amount of future dividends by SDG&E and SoCalGas are at the discretion of their respective boards of directors. The following restrictions limit the amount of retained earnings that may be paid as common stock dividends or loaned to Sempra from either