Sempra (SRE) SEC Filings & Earnings Calls

Increased debt burden with fixed 5.5% coupon; refinancing risk at maturity.

“$500M in new debt at 5.5% due 2036.”

Increased debt load may pressure future cash flows, but typical for regulated utility.

“Issuance of $500M in bonds increases long-term debt.”

Interest Rate Risk

“interest expense increased by $71 million (20%) to $430 million primarily due to: $28 million at Sempra California from higher debt balances from debt issuances” · word for word

Foreign Currency Risk

“$31 million from $26 million net losses in 2026 compared to $5 million net gains in 2025 from impacts associated with foreign exchange instruments and foreign currency transactions driven by $31 million higher losses on foreign currency derivatives as a result of fluctuation of the Mexican peso at Sempra Infrastructure” · word for word

Regulatory Disallowance Risk

“$25 million charge in 2025 from disallowed regulatory recovery of COVID-19 costs” · word for word

Regulatory disallowances and foreign currency exposure in Mexico.

“Impact from regulatory disallowances $0; foreign currency and inflation on monetary positions in Mexico $71M.”

Transition risk mitigated by internal appointment and overlap period.

“Effective date on or around closing of Sempra Infrastructure sale, expected Q3 2026.”

Regulatory risk: final CPUC decision may materially differ from requests.

“The CPUC's final decision may materially differ from what is requested in the GRC applications.”

Increased leverage; floating rate exposure.

“Notes bear interest at Compounded SOFR + 0.670%.”

Increased leverage at subsidiary level.

“Bonds issued by Southern California Gas Company, an indirect subsidiary.”

Foreign currency and inflation exposure in Mexico operations.

“Impact from foreign currency and inflation on monetary positions in Mexico and associated undesignated derivatives: ($19M) in Q1 2026.” · word for word

Interest rate swap losses related to Port Arthur LNG project.

“Net unrealized losses on interest rate swaps related to Port Arthur LNG Phase 1 project: $11M.” · word for word

California wildfire liability

“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” · word for word

Regulatory disallowances

“decisions, disallowances or denials of cost recovery, audits, investigations, inquiries, ordered studies, regulations, legislative actions, denials or revocations of permits, consents, approvals or other authorizations, renewals of franchises, and other actions” · word for word

LNG project execution risk

“the success of business development efforts, construction projects, acquisitions, divestitures, and other significant transactions, such as the planned sale of a portion of our equity interest in SI Partners, including risks related to, as applicable, (i) being able to reach a positive FID, (ii) negotiating pricing and other terms in definitive contracts, (i” · word for word

Interest rate and inflation risk

“the impact on affordability of customer rates, cost of capital and operating margin due to (i) volatility in inflation, interest rates, commodity prices, tariff rates, and foreign currency exchange rates” · word for word

Regulatory lag risk: new rates effective 45 days after order, surcharge recovery timing may create cash flow timing mismatch.

“surcharge the difference between the new billing rates and Oncor’s current rates for the period from January 1, 2026 through the effective date of the new rates, which will be 45 days from the date of the final order” · word for word

LNG Project Execution Risk

“Sempra faces execution risks related to the construction of large liquefied natural gas projects, including the Port Arthur LNG project.” · word for word

California Wildfire Liability Risk

“The credit rating could be lowered if Sempra subsidiary San Diego Gas & Electric were to cause a significant wildfire.” · word for word

Regulatory Risk in California and Texas

“Analysts have pointed to Sempra's exposure to 'regulatory shifts and policy risks' in its key markets of California and Texas as a major risk factor.” · word for word

Credit Rating Negative Outlook

“S&P Global assigned a 'negative outlook' to Sempra's credit rating.” · word for word

EPS Growth Underperformance

“The 2023-2025 awards based on EPS growth did not vest, based on a 1.7% EPS CAGR (as adjusted for LTIP purposes) over the three-year period covered by the awards, which is below the awards' performance threshold.” · word for word

Settlement subject to FERC approval; delay or denial could affect expected benefits.

“The terms of the settlement are subject to approval by the FERC, which is expected in the second half of 2026.” · word for word

Increased debt load with long-term maturities; interest expense will increase.

“$625M at 5.200% due 2036 and $475M at 5.950% due 2056”

Increased debt load from bond issuance, though typical for utility financing.

“Issuance of $1.1B in first mortgage bonds.”

Increased debt load; interest expense will rise.

“$800M in new debt at 5.250% annual interest.”

Regulatory disallowances and foreign currency impacts create earnings volatility.

“Impact from regulatory disallowances $457M in 2025; Impact from foreign currency and inflation on monetary positions in Mexico $180M in 2025”

Wildfire liability

“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” · word for word

Regulatory disallowances

“decisions, disallowances or denials of cost recovery, audits, investigations, inquiries, ordered studies, regulations, denials or revocations of permits, consents, approvals or other authorizations, renewals of franchises, and other actions” · word for word

Project execution risk

“Project development activities may not be successful, projects under construction may not be completed on schedule or within budget, and completed projects may not operate at expected levels or generate expected earnings or cash flows” · word for word

Climate policy risk

“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” · word for word

Regulatory approval risk; PUCT may modify or reject the stipulation.

“The PUCT may choose to adopt, modify, or reject the stipulation and the proposed order included in the stipulation.” · word for word

Wildfire litigation exposure from Eaton and Palisades fires; potential liability and cost recovery risk.

“Edison filed cross-claims in the ongoing Eaton Fire litigation against more than a dozen defendants, including Southern California Gas Company (SoCalGas)... SoCalGas also intends to pursue recovery from Edison for damages to the SoCalGas system through all available causes of action and remedies.” · word for word

Regulatory disallowance risk from CPUC Track 2 PD could materially impact earnings.

“SDG&E estimates this PD will result in a $471 million after tax charge... These estimates may differ substantially from actual results depending on various factors, including the timing and outcome of the FD in 2026.” · word for word

Regulatory disallowance risk: CPUC PD denies significant portion of requested wildfire mitigation costs and reduces authorized ROE, pressuring earnings and investment returns.

“PD denies $242M capital and $193M O&M costs; authorizes 35bp lower ROE; revenue requirement $427M lower than requested.”

Sempra Infrastructure held for sale classification triggers large deferred tax liability

“$705 million income tax expense in 2025 to adjust deferred income tax liabilities related to outside basis differences in our investment in SI Partners as a result of management's decision to classify the asset as held for sale” · word for word

Foreign currency and inflation exposure in Mexico

“$100 million unfavorable impact from foreign currency and inflation effects on our monetary positions in Mexico” · word for word

Customer early termination of firm transportation agreements

“$26 million unfavorable impact related to a customer's early termination of firm transportation agreements” · word for word

Higher interest expense from debt issuances

“interest expense increased by $75 million (23%) to $403 million primarily due to higher debt balances from debt issuances” · word for word

Regulatory disallowances and foreign currency impacts could affect GAAP earnings.

“Impact from regulatory disallowances $25M; Impact from foreign currency and inflation on monetary positions in Mexico $121M (9 months)”