Sempra (SRE) Financial History

We are engaged in a dispute regarding our title to property in Mexico adjacent to and owned by the ECA Regas Facility, which we discuss in Note 16 of the Notes to Consolidated Financial Statements.

Our international business activities are subject to laws and regulations in the U.S.

The Mexican government exercises significant and increasing influence over the Mexican energy sector and has adopted additional changes that could impact private investment in this sector.

▪changes in the priorities and budgets of international customers, which may be driven by many of the factors listed above, among others

▪the stability of foreign governments or such foreign governments’ relations with the U.S.

▪actions by local regulatory bodies, such as the CNE, including setting rates and tariffs that may be earned by or charged to our businesses

We own or have interests in a variety of energy infrastructure assets in Mexico, and we do business with companies based in foreign markets, including particularly our LNG export operations.

We buy energy-related commodities from time to time for pipeline operations, LNG facilities or power plants to satisfy contractual obligations with customers.

SI Partners seeks long-term contracts for services and commodities to better utilize its facilities, reduce volatility in earnings and support the construction of new infrastructure.

Fixed-price long-term contracts for services or commodities expose our businesses to risks.

▪deliver the natural gas, LNG, electricity and LPG we sell to customers or use at our LNG facilities

We rely on transportation assets and services, much of which we do not control, to deliver natural gas and electricity.

SI Partners’ ability to secure new or maintain or extend existing long-term sales or capacity agreements for its natural gas pipeline operations depends on, among other factors, demand for and supply of LNG and/or nat…

SI Partners’ obligations and those of its counterparties, such as its LNG customers, are contractually subject to suspension or termination for force majeure events, which generally are beyond the control of the parties.

Certain of SI Partners’ projects, including the ECA Regas Facility, Cameron LNG JV and all of its LNG projects under construction, have long-term agreements with a limited number of customers.

We are exposed to additional competitive risks in connection with our LNG projects.

We face risks from increasing competition.

The capital requirements for our LNG projects can be significant, even if we do not reach a positive FID.

▪The PA LNG Phase 1 project under construction is located at a greenfield site and is therefore subject to certain disadvantages relative to projects being constructed or developed at brownfield sites, such as increas…

▪The ECA LNG projects under construction and in development are subject to the Mexican regulatory process and an overlay of U.S.

▪timely, satisfactory and on-budget completion of construction, which could be negatively affected by engineering problems; stakeholder relations issues, such as the opposition by some members of the Yaqui tribe to th…

▪our project partners’, contractors’, equipment providers’, lenders’ and other vendors’ and counterparties’ willingness and financial or other ability to fulfill their contractual commitments

▪timely receipt and maintenance of required governmental permits, licenses and other authorizations on acceptable terms

▪negotiation and maintenance of satisfactory equity, purchase, sale, supply, transportation and other appropriate commercial agreements, and satisfaction of any conditions to effectiveness of such agreements, includin…

▪progressing relationships from MOUs, HOAs or other non-binding arrangements to execution of binding, definitive agreements

▪negotiation of satisfactory EPC agreements and renegotiation in the event of delays in reaching an FID or other specified deadlines

▪our ability to reach a positive FID or meet other milestones, which may be influenced by factors outside our control, including the global economy and energy and financial markets, actions by regulators, internal and…

▪our financial condition and cash flows and other factors that impact our ability to invest sufficient funds in the project, including for preliminary activities conducted before we determine whether the project is vi…

Because our commitments to the PUCT prohibit us from making loans to Oncor, we may elect to increase our capital contributions to Oncor if it is unable to meet its capital requirements, access sufficient capital, or r…

Oncor operates in the electric utility industry and is subject to many of the same or similar risks as SDG&E and SoCalGas as we describe above under “Risks Related to All Sempra Businesses” and “Risks Related to Sempr…

In December 2023, a new Net Billing Tariff was implemented for customers who interconnect their qualifying on-site renewable energy generation after April 2023.

Regulatory and Legislative Changes and Influence of Other Organizations

We discuss various CPUC and FERC proceedings relating to SDG&E and SoCalGas in Note 4 of the Notes to Consolidated Financial Statements.

Additionally, the CPUC has regulatory authority related to safety standards and practices, reliability and planning, competitive conditions and a wide range of other operational matters, including restrictions on fund…

The FERC regulates electric transmission rates, transmission and wholesale sales of electricity in interstate commerce, transmission access, rates of return and rates of depreciation on electric transmission investmen…

A CPUC cost of capital proceeding every three years determines a utility’s authorized capital structure and return on rate base.

The CPUC regulates SDG&E’s and SoCalGas’ customer rates and conditions of service, except for SDG&E’s interstate electric transmission and wholesale electric rates and conditions of service, which are regulated by the…

SDG&E maintains the SONGS NDT to provide funds for nuclear decommissioning.

SDG&E has a 20% ownership interest in SONGS, which we discuss in Note 15 of the Notes to Consolidated Financial Statements.

Although we expend significant resources on measures designed to mitigate wildfire risks, these measures may not be effective in preventing wildfires or reducing our wildfire-related losses, and their costs may not be…

As a result of California’s doctrine of inverse condemnation, substantial losses recorded by insurance companies, and increased wildfire risk, obtaining insurance coverage for wildfires potentially associated with SDG…

The Wildfire Legislation did not change the doctrine of inverse condemnation, which imposes strict liability for certain types of claims (meaning that liability is irrespective of negligence or intent) on a utility wh…

In July 2019 and September 2025, respectively, the 2019 Wildfire Legislation and the 2025 Wildfire Legislation (collectively, the Wildfire Legislation) were signed into law, which we discuss in Note 1 of the Notes to…

Future wildfires in SDG&E’s or SoCalGas’ service territories could compromise SDG&E’s and SoCalGas’ electric and natural gas infrastructure and result in further service disruptions, which could have a material advers…

In recent years, California has experienced some of the largest wildfires (measured by acres burned and/or structures destroyed) in its history.

Our businesses are involved in a number of lawsuits, appeals, binding arbitrations, regulatory investigations and other proceedings.

We develop our capital expenditure plans based on assumptions and forecasts as well as regulatory and compliance requirements, including those related to safety, reliability and load growth, gas system planning, and t…

The energy transition in California and elsewhere, including decarbonization goals and increasingly divergent investor sentiment regarding climate change efforts, has led to contradictory expectations from various inv…

Any of these outcomes could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

Additionally, California laws requiring expansive disclosures on GHG emissions and other environmental measures, targets and claims subject us to potential liability for these disclosures as well as significant compli…

The impacts from efforts to mitigate climate change and related regulations may increase the costs we incur to procure and transmit energy and provide other services.

From time to time, we invest funds in projects prior to receiving all regulatory approvals.

Our businesses require numerous permits, licenses, rights-of-way, franchises, certificates and other approvals from federal, state, local and foreign governmental agencies.

Sempra, SDG&E and SoCalGas provide defined benefit pension and PBOP plans to eligible employees and retirees.

Market performance, significant transactions or changes in other assumptions could require unplanned contributions to pension and PBOP plans.

We test long-lived assets, including equity method investments, for recoverability when events or changes in circumstances have occurred that may affect the recoverability or the estimated useful lives of the assets.

An impairment of our long-lived assets could result in a material charge to earnings.

Although we aim to maintain or improve these credit ratings, they could be downgraded or subject to other negative rating actions at any time, such as S&P’s January 2025 actions that revised Sempra’s outlook to negati…

In an effort to maintain these credit ratings, we may seek to reduce our outstanding indebtedness or our need for additional indebtedness by reducing or postponing discretionary, non-safety or reliability related capi…

▪for SDG&E and SoCalGas, a deterioration of the legislative or regulatory environment, including credit negative outcomes of regulatory proceedings

▪for Sempra, expansion of unregulated businesses in a manner inconsistent with its present level of credit quality

▪weakening of certain financial measures or failure to meet certain financial credit metrics

Credit rating agencies routinely evaluate Sempra, SDG&E, SoCalGas, SI Partners and certain of our other businesses, whose ratings are based on many factors, including, as applicable, the ability to generate cash flows…

▪for Sempra, SDG&E and SoCalGas, any deterioration of or uncertainty in the political or regulatory environment for companies operating in California

External sources of capital may not be adequate or available on reasonable terms, in a timely manner or at all.

Our businesses are capital-intensive, with significant and increasing capital spending expected in future periods.

The availability and cost of financing could be negatively affected by market and economic conditions and other factors.

Our businesses depend on the performance of business partners, customers, suppliers, contractors, and other counterparties under contractual and other arrangements to provide, among other things, services, supplies, e…

Our businesses depend on recruiting, developing and retaining qualified personnel.

We participate in research, development and demonstration projects and other activities designed to develop and implement new technologies in the energy space, including those related to hydrogen, liquefaction, energy…

We diligently analyze the financial viability of acquisitions, divestitures, partnerships and JVs we pursue.

We actively seek opportunities in the market through acquisitions, partnerships, JVs and divestitures, and we may be unable to complete or realize the anticipated benefits from such transactions.

Our businesses collect, process and retain large volumes of data, including personal, sensitive and confidential information from customers, employees, contractors and other third parties.

Although we have not experienced a material breach of our information systems or data, we and some of our vendors have been and will likely continue to be subject to breaches of and attempts to gain unauthorized acces…

Our significant reliance on complex technologies and increasing deployment of new technologies, such as advanced forms of automation and artificial intelligence and virtualization of many business activities, represen…

Our employees and contractors may be harmed and our facilities and infrastructure may be damaged as a result of physical risks, such as extreme temperatures, storms, droughts and other severe weather; natural disaster…

The occurrence of any of these events could affect supply and demand for electricity, natural gas or other forms of energy, cause unplanned outages, damage our assets and/or operations or those of third parties on whi…

▪worksite accidents and other incidents impacting the health, safety or security of employees, contractors, the public or our infrastructure

Additional risks associated with our facilities and systems, which may be beyond our control, include:

Our businesses undertake capital investment projects to construct, replace, operate, maintain and upgrade facilities and systems, but such projects may not be completed or effective at managing these risks and involve…

At February 19, 2026, we had 653,284,140 shares of our common stock outstanding.

A forward purchaser’s decision to exercise this right and require us to physically settle the relevant shares will be made irrespective of our interests, including our capital and other needs.

In November 2024, Sempra established an ATM program, which we discuss in Note 13 of the Notes to Consolidated Financial Statements.

Settlement provisions contained in forward sale agreements in connection with our ATM program subject us to certain risks.

The execution of our five-year capital expenditures plan may not be completed in accordance with current expectations or produce the desired results.

Successfully executing our five-year capital expenditures plan is subject to risks.

We have been and may in the future be subject to activist shareholder attention, including proxy solicitations, shareholder proposals or other attempts to effect changes in or assert influence on our board of director…

We have investments in businesses we do not control or manage or in which we share control, including Oncor and SI Partners (subject to closing our planned sale of a portion of our equity interest in SI Partners).

We are a holding company and substantially all the assets that produce our earnings are owned by our subsidiaries or equity method investees, which are entities we do not control.

If future governmental actions are proposed and passed or otherwise become effective, if efforts to enjoin enforcement or suspend or overturn adopted governmental actions fail, or if other similar actions by the Mexic…

Subsequent to the federal elections in Mexico in 2024 and, as noted above, the Mexican government has begun to introduce significant changes to the Mexican Constitution, which will require changes in laws, policies, a…

With respect to midstream and downstream activities, Mexico’s Hydrocarbons Law gives SENER and the CRE significant powers to suspend permits when a danger to national security, energy security, or the national economy…

Mexican governmental actions in the past several years in the electricity market include resolutions, orders, decrees, regulations and proposed and adopted amendments to Mexican law that could, among other things, thr…

▪demand for hydrocarbon fuels, such as natural gas imported from the U.S., may be impacted by geopolitical factors

▪the timing and outcome of ratemaking proceedings can be affected by various factors, many of which are not in our control and recovery may be delayed and/or insufficient to recover our costs

risks could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.

Sempra Infrastructure’s business is capital-intensive, with significant and increasing capital spending expected in future periods.

Sempra Infrastructure’s business is capital-intensive and relies on various types of financing arrangements, which may not be adequate or available in the future.

▪obtaining satisfactory financing for the project, particularly when inflation and interest rates are volatile

▪implementation of new or changes to existing laws or regulations that impact our infrastructure or the energy sector generally