SEMPRA

Sempra is a holding company whose principal businesses are regulated utilities in California and Texas, investing in and operating electric and gas utilities and other energy infrastructure that provide energy services to customers. Sempra was formed in 1998 through a business combination of Enova Corporation and Pacific Enterprises, the holding companies of its regulated public utilities in California: SDG&E, which began operations in 1881, and SoCalGas, which began operations in 1867. Sempra has since expanded its regulated public utility presence into Texas through its 80.25% interest in Oncor and 50% interest in Sharyland Utilities. Sempra Infrastructure's assets include investments in the U.S. and Mexico with a focus on LNG, energy networks and low carbon solutions.

Sempra's business activities are organized under the following reportable segments: Sempra California, Sempra Texas Utilities, and Sempra Infrastructure. Sempra's mission is to build America's leading utility growth business, primarily focused on the largest economies in the U.S., California and Texas, where it is investing in regulated utilities with a view toward producing stable cash flows and improved earnings visibility. Sempra does not control Oncor Holdings or Oncor, and ring-fencing measures, governance mechanisms and commitments limit Sempra's ability to direct the management, policies and operations of Oncor Holdings and Oncor, including the deployment or disposition of their assets, declarations of dividends or other distributions, strategic planning and other important corporate matters and actions, including limited representation on the Oncor Holdings and Oncor boards of directors.

Sempra generates revenue through its regulated utilities in California and Texas, which provide electric and natural gas services to customers, and through its Sempra Infrastructure segment, which develops, constructs, operates and invests in energy infrastructure including LNG, energy networks and low carbon solutions. SDG&E provides electric services to a population of approximately 3.6 million and natural gas services to approximately 3.3 million of that population, covering an approximate 4,100 square mile service territory in Southern California. SoCalGas delivers natural gas to a population of approximately 21.3 million, covering an approximate 24,000 square mile service territory that encompasses Southern California and portions of central California. Oncor delivers electricity to more than 4.1 million homes and businesses and operates more than 145,000 circuit miles of transmission and distribution lines in a territory with an estimated population of approximately 14 million. Sempra Infrastructure owns or holds interests in assets including the Cameron LNG Phase 1 facility with a combined nameplate capacity of 13.9 Mtpa of LNG, the ECA Regas Facility capable of processing one Bcf of natural gas per day, and renewable energy generation facilities with total nameplate capacity of 1,044 MW.

SDG&E is a regulated public utility that provides electric services to a population of, at December 31, 2025, approximately 3.6 million and natural gas services to approximately 3.3 million of that population, covering an approximate 4,100 square mile service territory in Southern California that encompasses San Diego County and an adjacent portion of Orange County. SDG&E's electric transmission and distribution system includes 2,018 miles of transmission lines, 24,210 miles of distribution lines and 158 substations at December 31, 2025. SDG&E's 500-kV Southwest Powerlink transmission line has a share of 1,163 MW, and together with the Sunrise Powerlink provides SDG&E with import capability of 3,900 MW of power. SDG&E's electric resources at December 31, 2025 include owned generation facilities of 1,217 MW of natural gas-fired capacity, and PPAs for wind (962 MW), solar (1,546 MW), other renewable (30 MW), and tolling and other (1,023 MW), totaling 4,778 MW, and excludes approximately 482 MW of energy storage owned and approximately 632 MW of energy storage contracted. SDG&E's electric customer meter count was 1,547,824 at December 31, 2025, with volumes of 16,788 million kWh for the year ended December 31, 2025. At December 31, 2025, 2024 and 2023, the residential and commercial rooftop solar capacity in SDG&E's territory totaled 2,452 MW, 2,318 MW and 2,154 MW, respectively. SoCalGas is a regulated public utility that owns and operates a natural gas distribution, transmission and storage system that delivers natural gas to a population of, at December 31, 2025, approximately 21.3 million, covering an approximate 24,000 square mile service territory. At December 31, 2025, SoCalGas' natural gas facilities included 52,765 miles of distribution pipelines, 3,030 miles of transmission and storage pipelines, 48,900 miles of service pipelines and seven transmission compressor stations, and SDG&E's natural gas facilities consisted of 9,206 miles of distribution pipelines, 177 miles of transmission pipelines, 6,795 miles of service pipelines and one compressor station. SoCalGas owns four natural gas storage facilities with a combined working gas capacity of 137 Bcf and 122 injection, withdrawal and observation wells. The Aliso Canyon natural gas storage facility has a storage capacity of 86 Bcf and represents 63% of SoCalGas' working natural gas storage capacity, and at December 31, 2025, SoCalGas has been authorized by the CPUC to utilize up to 68.6 Bcf of working gas at the facility. SoCalGas' natural gas customer meter count was 6,210,543 at December 31, 2025, with volumes of 760 Bcf for the year ended December 31, 2025. SDG&E's natural gas customer meter count was 920,597 at December 31, 2025, with volumes of 78 Bcf for the year ended December 31, 2025.

Sempra Texas Utilities is comprised of Sempra's equity method investments in Oncor Holdings and Sharyland Holdings. Oncor Holdings is a wholly owned entity of Sempra that owns an 80.25% interest in Oncor. TTI owns the remaining 19.75% interest in Oncor. Sempra owns a 50% interest in Sharyland Holdings, which owns a 100% interest in Sharyland Utilities. Oncor is a regulated electricity transmission and distribution utility that operates in the north-central, eastern, western and panhandle regions of Texas. At December 31, 2025, Oncor had approximately 5,600 employees, including 860 employees covered under a collective bargaining agreement. At December 31, 2025, Oncor's transmission system included approximately 18,418 circuit miles of transmission lines, a total of 1,333 transmission and distribution substations, and interconnection to 230 third-party generation facilities totaling 63,670 MW. Oncor's distribution system included more than 4.1 million points of delivery at December 31, 2025 and consisted of 127,398 circuit miles of overhead and underground lines. Sharyland Utilities is a regulated electric transmission utility that owns and operates, at December 31, 2025, approximately 64 miles of electric transmission lines in south Texas. Sempra Infrastructure develops, constructs, operates and invests in energy infrastructure to help provide safe, sustainable and reliable access to cleaner energy in markets in the U.S., Mexico and globally. At December 31, 2025, Sempra, KKR Pinnacle and ADIA each hold a 70%, 20%, and 10% interest, respectively, in SI Partners. SI Partners owns a 100% interest in Sempra LNG Holding, LP and a 99.9% interest in IEnova at December 31, 2025. The Cameron LNG Phase 1 facility has three liquefaction trains with a combined nameplate capacity of 13.9 Mtpa of LNG with an export capacity of 12 Mtpa of LNG, or approximately 1.7 Bcf of natural gas per day. The ECA Regas Facility is capable of processing one Bcf of natural gas per day and has a storage capacity of 320,000 cubic meters in two tanks of 160,000 cubic meters each. The ECA LNG Phase 1 project will consist of a one-train natural gas liquefaction facility with a nameplate capacity of 3.25 Mtpa and an initial offtake capacity of 2.5 Mtpa. The PA LNG Phase 1 project will consist of two liquefaction trains with a nameplate capacity of approximately 13 Mtpa and an initial offtake capacity of approximately 10.5 Mtpa. The PA LNG Phase 2 project will include two liquefaction trains with a nameplate capacity of approximately 13 Mtpa. SI Partners' Energy Networks business line includes 1,985 miles of natural gas transmission pipelines, 17 natural gas compression stations and 139 miles of ethane pipelines in Mexico, with design capacity of over 16,900 MMcf per day of natural gas, 204 MMcf per day of ethane gas and 106,000 barrels per day of ethane liquid. Ecogas had approximately 3,246 miles of distribution pipeline, and approximately 169,000 customer meters serving more than 661,000 residential, commercial and industrial consumers with total distribution volume of 94.1 MMcf per day in 2025. SI Partners' refined products storage business has a combined storage capacity of 4.6 million barrels fully operating as of December 31, 2025. SI Partners' Low Carbon Solutions business line includes renewable energy generation facilities with total nameplate capacity of 1,044 MW related to its operating wind and solar power generation facilities. SI Partners owns and operates the TdM power plant, a 625 MW natural gas-fired, combined-cycle power plant. The Cimarrón Wind project is an approximately 320-MW wind generation facility.

In September 2025, Sempra entered into an agreement to sell a 45% equity interest in SI Partners to the KKR Partners for $9.99 billion ¹, subject to adjustments. Sempra expects the sale to close in the second or third quarter of 2026, subject to closing conditions. Subject to closing, the KKR Partners will own 65% of SI Partners, Sempra will own a 25% interest and ADIA will retain a 10% interest, with the KKR Partners assuming control. In December 2025, Sempra entered into an agreement to sell Ecogas to Gas Natural del Noroeste S.A. de C.V. for 9.0 billion Mexican pesos (approximately $500 million U.S. dollar-equivalent at December 31, 2025) ², subject to adjustments. Sempra expects to complete the sale in the second or third quarter of 2026, subject to closing conditions. In November 2024, Sempra established an ATM program, and as of February 26, 2026, 4,996,591 shares under existing forward sale agreements remain subject to future settlement ³. At February 19, 2026, Sempra had 653,284,140 shares of its common stock outstanding ⁴. The PA LNG Phase 2 project commenced construction in September 2025 after reaching a positive FID. The ECA LNG Phase 1 project achieved mechanical completion in December 2025, and Sempra expects the project to produce LNG cargoes for sale in the spring of 2026 and sales under the long-term SPAs to begin shortly after substantial completion when the facility commences commercial operations, which is targeted in the summer of 2026. The Cimarrón Wind project commenced energy generation in October 2025 during its commissioning phase, and Sempra expects commercial operations to commence in the first quarter of 2026.

For the fiscal year ended December 31, 2025, Sempra reported total revenues of $12.820 billion ⁵, compared to $12.714 billion ⁶ in 2024 and $16.720 billion ⁷ in 2023. Net income attributable to common shareholders was $2.876 billion ⁸ for 2025, compared to $2.064 billion ⁹ for 2024 and $2.075 billion ¹⁰ for 2023. Diluted earnings per common share were $4.53 ¹¹ for 2025, compared to $3.26 ¹² for 2024 and $3.28 ¹³ for 2023. Sempra's total assets at December 31, 2025 were $91.087 billion ¹⁴, compared to $87.725 billion ¹⁵ at December 31, 2024. Cash flows from operating activities were $4.947 billion ¹⁶ for 2025, compared to $4.542 billion ¹⁷ for 2024.

Sempra's mission is to build America's leading utility growth business, primarily focused on the largest economies in the U.S., California and Texas, where it is investing in regulated utilities with a view toward producing stable cash flows and improved earnings visibility. Sempra aims to have net-zero scope 1 and 2 GHG emissions by 2050 and has an interim aim of 50% scope 1 and 2 GHG emissions reductions by 2035 (this interim target is relative to a 2019 baseline, applies to Sempra California's operations and Sempra Infrastructure's Mexico (non-LNG) operations, and may be subject to further revision if Sempra's planned sale of a portion of its equity interest in SI Partners is completed). Sempra and its subsidiaries also continue to advocate for programs and initiatives that support regulatory, consumer and market demand for lower- and zero-carbon energy.

Sempra's growth vectors include the development and construction of LNG projects. The PA LNG Phase 1 project's first train remains on schedule, and Sempra continues to expect the first and second trains to commence commercial operations at or near the end of 2027 and in 2028, respectively. The PA LNG Phase 2 project is expected to have its third and fourth trains commence commercial operations in 2030 and 2031, respectively. The ECA LNG Phase 1 project is expected to produce LNG cargoes for sale in the spring of 2026 and sales under the long-term SPAs to begin shortly after substantial completion when the facility commences commercial operations, which is targeted in the summer of 2026. The Cimarrón Wind project, an approximately 320-MW wind generation facility, commenced energy generation in October 2025 during its commissioning phase, and Sempra expects commercial operations to commence in the first quarter of 2026. SI Partners is also pursuing or evaluating the Cameron LNG Phase 2 project and the ECA LNG Phase 2 project, though no FID has been reached for either of these potential projects. Sempra is also developing the potential Hackberry Carbon Sequestration project near Hackberry, Louisiana, together with TotalEnergies SE, Mitsui & Co., Ltd. and Mitsubishi Corporation.

Sempra's margin and cost outlook is influenced by regulatory mechanisms. SDG&E and SoCalGas are subject to CPUC GRC proceedings that set authorized base revenue requirements sufficient to allow them to recover their reasonable forecasted operating costs and to provide the opportunity to realize their authorized rates of return on their investments. The CPUC cost of capital proceeding every three years determines a utility's authorized capital structure and return on rate base. The CCM considers changes in the cost of capital using changes in interest rates as reflected by the applicable utility bond index published by Moody's for each 12-month period ending September 30. The CCM, if triggered, would automatically update the authorized cost of debt based on actual costs and update the authorized ROE upward or downward by 20% of the difference between the CCM benchmark rate and the applicable Moody's utility bond index during the measurement period. Oncor's authorized regulatory capital structure ratio is set at 57.5% debt to 42.5% equity, its authorized ROE at 9.70%, and its authorized cost of debt at 4.39% ¹⁸. In November 2025, the PUCT approved Sharyland Utilities' total revenue requirement at $53 million ¹⁹, with a capital structure ratio of 59% debt to 41% equity, an ROE of 9.60% ²⁰, and a long-term cost of debt of 4.52% ²¹.

Sempra's operational outlook includes the construction of the Port Arthur Pipeline Louisiana Connector, a 72-mile pipeline connecting the PA LNG Phase 1 project to Gillis, Louisiana, which is expected to be ready for service ahead of the PA LNG Phase 1 project's gas requirements. SI Partners is also constructing Louisiana Storage, a 12.5-Bcf salt dome natural gas storage facility to support the PA LNG Phase 1 project, including an 11-mile pipeline that will connect to the Port Arthur Pipeline Louisiana Connector, expected to be ready for service in time to support the needs of the PA LNG Phase 1 project. Sempra continues to advance its workforce modernization efforts to enhance operational performance, intending to shift its workforce toward higher-value roles through talent reskilling and upskilling, redeployment strategies, and driving adoption of artificial intelligence and modern technologies. As of December 31, 2025, Sempra had 15,938 employees ²², SDG&E had 4,448 employees ²³, and SoCalGas had 8,065 employees ²⁴.

Sempra's capital allocation strategy includes financing its five-year capital expenditures plan in a manner that will maintain its investment-grade credit ratings and capital structure. Sempra has an ATM program established in November 2024, and as of February 26, 2026, 4,996,591 shares under existing forward sale agreements remain subject to future settlement . Sempra's ability to pay dividends and meet its debt and other obligations largely depends on distributions from its subsidiaries and equity method investees. The limited partnership agreement of SI Partners requires that SI Partners distribute to the limited partners at least 85% of distributable cash of SI Partners and its subsidiaries on a quarterly basis, subject to certain exceptions and reserves.

Sempra faces headwinds and constraints including the impact of California wildfires, potential liability for damages regardless of fault, and any inability to recover all or a substantial portion of costs from insurance, the Wildfire Fund and the Continuation Account, rates from customers or a combination thereof. The electricity industry is undergoing significant change, and natural gas continues to be the subject of political and public debate, including a desire by some to reduce or eliminate reliance on natural gas as an energy source. Sempra's international businesses and operations expose it to increased legal, regulatory, tax, economic, geopolitical, credit and management oversight risks and challenges, including recent legal and regulatory changes in Mexico designed to increase the government's control and participation in the energy sector. The ECA LNG Phase 1 project's customers have a termination right if the project does not commence commercial operations under the SPAs by February 24, 2026, subject to certain additional conditions, for which Sempra has requested an extension. As of February 26, 2026, no customers have given notice of their intent to terminate the SPAs.

Sempra faces risks related to the evolving regulatory environment, including failures or delays in obtaining and maintaining franchises and other required approvals and potential negative impacts of its legislative and regulatory advocacy efforts. SDG&E has electric and natural gas franchises for the City of San Diego that went into effect in July 2021, providing SDG&E the opportunity to serve the City of San Diego for 20 years, consisting of 10-year agreements that will automatically renew for an additional 10 years unless the City Council voids the automatic renewal, and these franchise agreements have been challenged in a lawsuit. Sempra also faces risks related to environmental and climate change regulation and the costs of the energy transition, including the impact of climate policies, laws, rules, regulations, trends and required disclosures, including actions to reduce or eliminate reliance on natural gas, increased uncertainty in the political or regulatory environment for California natural gas distribution companies, the risk of nonrecovery for stranded assets, and uncertainty related to emerging technologies.

Sempra faces material risks from California wildfires, including potential liability for damages regardless of fault and any inability to recover all or a substantial portion of costs from insurance, the Wildfire Fund and the Continuation Account, rates from customers or a combination thereof. The planned sale of a 45% equity interest in SI Partners to the KKR Partners for $9.99 billion may not be completed or may not realize anticipated benefits, and the sale of Ecogas for 9.0 billion Mexican pesos (approximately $500 million U.S. dollar-equivalent at December 31, 2025) is subject to similar risks. Sempra's ability to pay dividends and meet its obligations largely depends on distributions from its subsidiaries and equity method investees, and Sempra's rights to the assets of its subsidiaries and equity method investees are structurally subordinated to the claims of each entity's trade and other creditors. The ECA LNG Phase 1 project's customers have a termination right if the project does not commence commercial operations under the SPAs by February 24, 2026, subject to certain additional conditions, for which Sempra has requested an extension. Sempra's international businesses and operations expose it to increased legal, regulatory, tax, economic, geopolitical, credit and management oversight risks and challenges, including recent legal and regulatory changes in Mexico designed to increase the government's control and participation in the energy sector.

Management's message emphasizes Sempra's mission to build America's leading utility growth business, with a primary focus on the largest economies in the U.S., California and Texas, where it is investing in regulated utilities with a view toward producing stable cash flows and improved earnings visibility. Key strategic priorities include executing the five-year capital expenditures plan, completing the planned sale of a 45% equity interest in SI Partners to the KKR Partners for $9.99 billion , completing the sale of Ecogas for 9.0 billion Mexican pesos (approximately $500 million U.S. dollar-equivalent at December 31, 2025) , and advancing LNG projects including the PA LNG Phase 1 project with first and second trains expected to commence commercial operations at or near the end of 2027 and in 2028, respectively, and the PA LNG Phase 2 project with third and fourth trains expected to commence commercial operations in 2030 and 2031, respectively. Management also emphasizes the goal of delivering safe, reliable and affordable energy to customers while increasing shareholder value, and the aim to have net-zero scope 1 and 2 GHG emissions by 2050 with an interim aim of 50% scope 1 and 2 GHG emissions reductions by 2035.