When evaluating our company and its businesses and any investment in our or their securities, you should carefully consider the following risk factors and all other information contained in this report and the other documents we file with the SEC (including those filed subsequent to this report). We also may be materially harmed by risks and uncertainties not currently known to us or that we currently consider immaterial. If any of these risks occur, our results of operations, financial condition, cash flows and/or prospects could be materially adversely affected, our actual results could differ materially from those expressed or implied in our forward-looking statements, and the trading prices of our securities and those of our businesses could decline. These risk factors are not prioritized in order of importance or materiality, and they should be read together with the other information in this report, including in the Consolidated Financial Statements and in “Part II – Item 7. MD&A.”

RISKS RELATED TO SEMPRA

Operational and Structural Risks

Sempra’s ability to pay dividends and meet its obligations largely depends on the performance of its subsidiaries and entities accounted for as equity method investments.

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. SI Partners, which primarily constitutes our Sempra Infrastructure reportable segment, will be accounted for as an equity method investment subject to closing the planned sale of 45% of our equity interest, which we expect to occur in the second or third quarter of 2026. Our ability to pay dividends and meet our debt and other obligations largely depends on distributions from our subsidiaries and equity method investees, which in turn depend on their ability to execute their business strategies and generate cash flows in excess of their own expenditures, dividend payments to third-party owners (if any) and debt and other obligations. In addition, our subsidiaries and entities accounted for as equity method investments are all separate and distinct legal entities that are not obligated to pay dividends or make loans or distributions to us and could be precluded from doing so by legislation, regulation or contractual restrictions, in times of financial distress or in other circumstances. Any inability to access capital from our subsidiaries and equity method investees could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.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. When Sempra is a creditor of any such entity, its rights as a creditor are effectively subordinated to any security interest in the entity’s assets and any indebtedness of the entity senior to that held by Sempra. In addition, Sempra may elect to make additional capital contributions to its subsidiaries or equity method investments, which are not required to be repaid and are structurally subordinated to claims by creditors of the applicable subsidiary.

Our investments in businesses we do not control expose us to risks.

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 discuss these investments in Note 5 of the Notes to Consolidated Financial Statements. In some cases, we engage in arrangements with or for these businesses that could expose us to risks in addition to our investment, including guarantees, indemnities and loans. For businesses we do not control, we are subject to the decisions of others, which may be adverse to our interests. When we share control of a business with other owners, any disagreements among the owners about strategy, financial, operational, transactional or other important matters could hinder the business from moving forward with key initiatives or taking other actions and could negatively affect the relationships among the owners and the efficient functioning of the business. In addition, irrespective of whether we control these businesses, we would be responsible for certain liabilities or losses related to these businesses, may be subject to disproportional funding obligations for certain matters or priority distributions in favor of other partners or members, and may be required or elect to make additional capital contributions to these businesses. Any such circumstance could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

Financial and Capital Stock-Related Risks

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

The execution of our five-year capital expenditures plan may not be completed in accordance with current expectations or produce the desired results. Factors that have historically impacted and could continue to impact the amount, timing and types of capital expenditures we make include the cost and availability of financing; economic and market conditions; regulatory decisions; changes in tax law; business opportunities providing desirable rates of return; forecasts related to safety, reliability and load growth, gas system planning and transportation electrification; safety and environmental requirements and climate-related policies; and cooperation of third parties, including customers, partners, suppliers, lenders and others. We discuss these and other relevant factors with respect to each of our businesses below. We aim to finance our five-year capital expenditures plan in a manner that will maintain our investment-grade credit ratings and capital structure, but we may not be able to do so. Any failure to successfully execute our capital expenditures plan could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.

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

In November 2024, Sempra established an ATM program, which we discuss in Note 13 of the Notes to Consolidated Financial Statements. We are permitted to sell shares of our common stock in the ATM program pursuant to forward sale agreements, including 4,996,591 shares under existing forward sale agreements that remain subject to future settlement as of February 26, 2026. These forward sale agreements grant each counterparty (forward purchaser) the right to accelerate its forward sale agreement (or, in certain cases, the portion affected by the relevant event) and require us to physically settle the forward sale agreement upon the occurrence of certain events, some of which are not within our control.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 such cases, we could be required to issue and deliver shares of our common stock under the terms of the physical settlement, which would result in dilution to our EPS and may adversely affect the market price of our common stock and any series of preferred stock we may issue in the future.The forward price that we expect to receive upon physical settlement of a forward sale agreement will be subject to adjustment on a daily basis based on a floating interest rate factor. If the specified daily rate is less than the applicable spread on any day, this will result in a daily reduction of the forward price. In addition, the forward price will be subject to decrease on certain dates specified in the relevant forward sale agreement by the amount per share of quarterly dividends we expect to declare on our common stock during the term of such forward sale agreement.We generally have the right, in lieu of physical settlement of any forward sale agreement, to elect cash or net share settlement in respect of any or all of the shares of our common stock subject to each forward sale agreement. If we elect to cash or net share settle all or any part of any forward sale agreement, we would expect to issue a substantially lower number of shares than if we settled by physical delivery, but would not receive the cash for the shares that would have otherwise been issued if we settled the entire forward sale agreement by physical delivery and, as a result, would not derive the same liquidity or credit metrics benefits.

RISKS RELATED TO ALL SEMPRA BUSINESSES

Operational Risks

Our infrastructure and its supporting systems subject us to risks.

Our facilities and the systems that interconnect and/or manage them are subject to risks of, among other things: ▪equipment or process failures due to aging infrastructure or otherwise▪human error▪loss or outage of a key technology platform or system▪shortages of or delays in obtaining equipment, materials, supplies, commodities or labor, which have been and may continue to be exacerbated by supply chain and gas transportation capacity constraints, tight labor markets, and cost increases due to inflation, tariffs or otherwise, that may not be recoverable in a timely manner or at all▪operational restrictions resulting from governmental interventions, including environmental requirements, or permitting delays ▪inability to enter into, maintain, extend or replace long-term supply or transportation contracts▪performance below expected levelsOur 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 significant costs that may not be recoverable in a timely manner or at all. We often rely on third parties, including contractors, to perform work related to these projects and other activities, which may subject us to liability for safety issues or lower standards of work quality. Because some of our facilities are interconnected with those of third parties, including customer-side-of-meter facilities, natural gas pipelines and power generation facilities, the operation of our facilities could also be materially adversely affected by these or similar risks to such third-party systems, which may be unanticipated or uncontrollable by us.

Cybersecurity and Technology Resiliency

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, represent large-scale opportunities for attacks on or failures of our information systems, the energy grid and our other infrastructure. Our digitalization and grid modernization efforts, including the networking of operational technology assets such as substations, continue to increase the potential vulnerabilities and points of failure in our systems. We are also at risk of attacks on, vulnerabilities in or other failures of technologies and systems used by certain third-party vendors, regulators and/or ISOs, including third-party systems that are integral to our electric utilities’ operations in their respective ISO markets. Viruses, ransomware, malware and other forms of cyber-attacks targeting utility systems and other energy infrastructure continue to increase in sophistication, magnitude and frequency, may not be recognized until launched against a target and may further escalate during periods of heightened geopolitical tensions. Adversaries increasingly use artificial intelligence to develop new hacking tools, exploit vulnerabilities, obscure malicious activities and increase the difficulty of detecting threats. Accordingly, we may be unable to anticipate these techniques or to implement adequate preventative measures, making it impossible to eliminate these risks.Although we make significant investments in risk management, technology resiliency and cybersecurity measures for the protection of our systems and data, these measures could be insufficient or otherwise fail, particularly against unknown software flaws, insider threats, attacks involving sophisticated adversaries, including nation-state actors, or outages involving key technology vendors and systems. The costs and operational consequences of implementing, maintaining and enhancing these measures are significant and expected to increase to address evolving cyber risks. We increasingly rely on third-party vendors to deploy new technologies and host, maintain and update our systems (including providing security updates), and these third parties may not have adequate risk management, technology resiliency and cybersecurity measures with respect to their systems or may fail to timely provide and install software updates. Certain of our key externally hosted systems depend on global cloud service providers as well as their respective vendors, some of which have experienced significant system failures and outages in the past.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 access to our systems or data or efforts to otherwise disrupt our operations. Any actual or perceived noncompliance with applicable legal or regulatory requirements or any incidents impacting our or our vendors’ systems, the integrity of our data or assets or the energy grid could result in disruptions to our business operations; legal or regulatory compliance failures; inability to produce accurate and timely financial statements; energy delivery failures; financial and reputational loss; litigation; and fines or penalties, any of which could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. Although we currently maintain cyber liability insurance, this insurance is limited in scope and subject to exceptions, conditions and coverage limitations and may not cover the costs associated with a cybersecurity incident, and this insurance may not continue to be available on acceptable terms.

Data Security and Governance

Our businesses collect, process and retain large volumes of data, including personal, sensitive and confidential information from customers, employees, contractors and other third parties. SDG&E and SoCalGas are increasingly required to disclose large amounts of data (including customer personal information and energy use data) to support state energy initiatives, increasing the risks of inadvertent disclosure or unauthorized access of sensitive information. Our businesses operating in California are subject to the California Consumer Privacy Act, which requires companies that collect information about California residents to, among other things, disclose their data collection, use and sharing practices; allow consumers to opt out of certain data sharing with third parties; and assume liability for unauthorized disclosure of certain highly sensitive personal information. Certain of our other businesses may operate in jurisdictions with similar laws.

Financial Risks

Our debt service obligations expose us to risks.

We have significant debt service obligations and an ongoing need for significant amounts of additional capital, which could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects by, among other things:▪making it more difficult and costly to service, pay or refinance debts as they come due, particularly when interest rates increase or economic or industry conditions are otherwise unfavorable▪limiting flexibility to pursue strategic opportunities or react to business developments or industry changes causing lenders to require materially adverse terms for new debt, such as restricting uses of proceeds, imposing liens on our assets and limiting our ability to incur additional debt, pay dividends, repurchase stock, or receive distributions from subsidiaries or equity method investees

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

Our businesses are capital-intensive, with significant and increasing capital spending expected in future periods. In general, we rely on long-term debt to fund a significant portion of our capital expenditures and to repay or refinance outstanding debt, and we rely on short-term debt to fund a significant portion of day-to-day operations. Certain of our businesses also rely on other funding sources, such as Sempra Infrastructure’s use of capital contributions from its owners and various forms of project financing, which may involve guarantees, indemnities or other arrangements that expose us to additional risks, such as potential losses upon the occurrence of events related to the development, construction, operation or financing of the applicable projects. Sempra has also raised and may continue to seek capital by issuing equity, including in our ATM program, or selling equity interests in our subsidiaries or investments.External sources of capital may not be adequate or available on reasonable terms, in a timely manner or at all. Limitations on the availability of credit, increases in interest rates or credit spreads due to inflation or otherwise or other negative effects on the terms of any financing we pursue could cause us to fund operations and capital expenditures at a higher cost or fail to raise our targeted amount of funds, which could negatively impact our ability to meet contractual and other commitments, progress development projects, make non-safety related capital expenditures and effectively sustain operations. Any of these outcomes could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.In addition to market and economic conditions, factors that can affect the availability and cost of capital include:▪adverse changes to laws and regulations▪for Sempra and SDG&E, risks related to California wildfires ▪for Sempra, SDG&E and SoCalGas, any deterioration of or uncertainty in the political or regulatory environment for companies operating in California▪credit ratings downgrades

Legal and Regulatory Risks

We face 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 our legislative and regulatory advocacy efforts.

The industries in which we operate are subject to extensive regulation, increasing regulatory uncertainty and political influence and polarization. Our businesses require numerous permits, licenses, rights-of-way, franchises, certificates and other approvals from federal, state, local and foreign governmental agencies. These approvals may not be granted in a timely manner (including due to potential staffing and funding issues at regulatory agencies) or at all or may be modified, rescinded or fail to be extended for a variety of reasons, including due to legal or regulatory changes or political considerations. The City of San Diego is studying the feasibility of municipalization as a potential alternative to SDG&E’s existing electric franchise agreement, and various aspects of SDG&E’s natural gas and electric franchise agreements have also been challenged in a lawsuit that we discuss in Note 16 of the Notes to Consolidated Financial Statements. At SI Partners, amendments to Mexico’s Constitution and the 2025 Energy Laws have increased government control and participation in the energy sector and may create novel challenges for infrastructure development and operations. Obtaining or maintaining required approvals could result in higher costs or the imposition of conditions or restrictions on our operations. Further, noncompliance by us or certain of our customers with the terms of these approvals could result in their modification, suspension or rescission and subject us to reduced revenue, fines and penalties. If any of these approvals are suspended, rescinded or otherwise terminated or modified in a manner that makes our continued operation of the applicable business prohibitively expensive or otherwise impracticable, we may be required to adjust or temporarily or permanently cease certain of our operations, sell the associated assets or remove them from service and/or construct new assets intended to bypass the impacted area, in which case we may lose some of our rate base or revenue-generating assets, our development and construction projects may be negatively affected and we may incur impairment charges or other costs that may not be recoverable. The occurrence of any of these events could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

Environmental and Climate Change Regulation

We are subject to extensive federal, state, regional, local, tribal and foreign laws and regulations relating to climate change and environmental protection. To comply with these laws and regulations, we must expend significant capital and employee resources on environmental monitoring, surveillance and other measures to track and disclose performance; acquisition and installation of pollution control equipment; implementation of environmental safety practices; other mitigation efforts; and emissions fees, taxes, penalties and other payments. These requirements could increase as a result of various factors we may not control, including changes to laws and regulations, many of which are becoming more burdensome in light of increasing environmental concerns and related changes to legal and regulatory frameworks; increased readiness and enforcement activities; delays in the renewal and issuance of permits; evolving expectations of investors and other stakeholders; and changes to the mix of energy we transmit and distribute, any of which could negatively impact our operations, costs and corporate planning, demand for our services, customer affordability, and the scope and economics of proposed infrastructure projects or other capital expenditures. In particular, legislation and regulation designed to reduce GHG emissions and mitigate climate change are proliferating, as we discuss in “Part I – Item 1. Environmental Matters.” California’s goals are facing cost pressures and may experience delays or other challenges that could cause the state to modify its laws and rules, resulting in significant uncertainty. Any failure to comply with these or other environmental laws and regulations may subject us to fines and penalties, including criminal penalties in some cases, and/or curtailment of our operations.In addition, we are generally responsible for hazardous substances and other contamination on, and the conditions of, our projects and properties, regardless of when these conditions arose and whether they are known or unknown. We have been and may in the future be required to pay environmental remediation costs at former facilities and off-site waste disposal sites where any of our businesses is identified as a PRP under federal, state and local environmental laws. For our regulated utilities, some or all of these costs may not be recoverable in rates.

Other Energy Transition Risks

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 investors and other stakeholders and uncertainty in long-term investor support, including some investors reducing participation in or divesting from our sector. Maintaining investor confidence and attracting capital at a competitive cost will depend, in part, on demonstrating our ability to address material business risks related to climate and our efforts to help achieve the goals of our consumers and the markets and jurisdictions where we operate. In an effort to maintain a sustainable and durable business risk profile and continue to focus on value creation, Sempra updated its climate aspirations to reflect the changing policy, regulatory, commercial and technological landscape, including stakeholders’ evolving focus on reliability, resiliency and affordability and the pace and impact of climate and other public policies. 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’s, SDG&E’s and SoCalGas’ abilities to advance their respective net-zero and other climate objectives and meet the demand for lower-carbon and reliable energy in California and elsewhere will depend on many factors, some of which we do not control, including supportive federal and state energy laws, policies, incentives, tax credits and regulatory decisions; cost and affordability considerations; development, commercialization and regulatory acceptance of affordable, alternative and lower-carbon energy sources, including cleaner fuels; successful research and development efforts focused on lower carbon technologies that are economically and technically feasible; cooperation from our partners, financing sources and commercial counterparties; and consumers’ decisions and preferences. In addition, we will need to continue to expend capital and employee resources to develop and deploy new technologies and modernize grid systems, which may not be recoverable in rates or, with respect to our businesses that are not regulated utilities, may not be able to be passed through to customers. Even if such costs are recoverable, these costs, coupled with necessary safety and reliability investments, may negatively impact the affordability of SDG&E’s and SoCalGas’ services and, for our businesses that are not regulated utilities, may cause costs to increase to levels that reduce customer demand and growth. Moreover, forecasting specified targets over longer-term periods is inherently uncertain and could be significantly impacted by the trajectory of the energy transition. As a result, although we are dedicated to making progress on our climate aims and are continuing to develop capabilities designed to reduce GHG emissions from our own operations as well as to support consumers’ and markets’ climate goals and applicable legislative and regulatory mandates, we may not be successful in achieving these objectives. We could suffer difficulties attracting investors and business partners, reputational harm and other negative effects if we do not meet or if we further modify our GHG emissions reduction aims or there are negative views about our environmental disclosures or practices generally. 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 transportation electrification, which generally assume that California will continue to pursue consistent environmental and climate-related policies. If the federal government continues to reduce its support for grid and infrastructure modernization or takes further action to prohibit California from pursuing its environmental and climate-related policies, or if California changes its policies, the assumptions and forecasts underlying our capital expenditure plans may prove to be inaccurate, and our investment plans could suffer significant negative effects.The occurrence of any of these risks could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.

RISKS RELATED TO SEMPRA CALIFORNIA

Operational Risks

Wildfires in California pose risks to Sempra, SDG&E and SoCalGas.

More and Increasingly Severe Wildfires

In recent years, California has experienced some of the largest wildfires (measured by acres burned and/or structures destroyed) in its history. Frequent and severe drought conditions, inconsistent and extreme swings in precipitation, changes in vegetation, unseasonably warm temperatures, low humidity, strong winds and other factors have increased the duration of the wildfire season and the intensity, prevalence and difficulty of preventing and containing wildfires in California, including in SDG&E’s and SoCalGas’ service territories. Changing weather patterns, including as a result of climate change, could exacerbate these conditions. Certain California local land use policies and forestry management practices, as well as expanded construction and development of residential and commercial projects in high-risk fire areas, could lead to increased third-party claims and greater losses related to fires for which SDG&E or SoCalGas may be liable. The LA Fires burned in SoCalGas’ service territory. The California Department of Forestry and Fire Protection estimates that the Palisades and Eaton fires destroyed approximately 16,200 structures and damaged approximately 2,000 structures. Although the majority of SoCalGas’ infrastructure in the fire-affected areas is underground, these fires resulted in service disruptions, response costs and damage to some of SoCalGas’ infrastructure and third-party property. SoCalGas and Sempra are subject to pending litigation with respect to the operation of SoCalGas’ system and damage sustained as a result of the fires, which we discuss in Note 16 of the Notes to Consolidated Financial Statements. As with other litigation, the timing, impacts and ultimate outcome of these matters is inherently uncertain and may result in substantial costs, some or all of which may not be recoverable from insurance, third parties or in customer rates. We discuss these and other risks associated with litigation above under “Risks Related to All Sempra Businesses – Operational Risks.”

More and Increasingly Severe Wildfires

In recent years, California has experienced some of the largest wildfires (measured by acres burned and/or structures destroyed) in its history. Frequent and severe drought conditions, inconsistent and extreme swings in precipitation, changes in vegetation, unseasonably warm temperatures, low humidity, strong winds and other factors have increased the duration of the wildfire season and the intensity, prevalence and difficulty of preventing and containing wildfires in California, including in SDG&E’s and SoCalGas’ service territories. Changing weather patterns, including as a result of climate change, could exacerbate these conditions. Certain California local land use policies and forestry management practices, as well as expanded construction and development of residential and commercial projects in high-risk fire areas, could lead to increased third-party claims and greater losses related to fires for which SDG&E or SoCalGas may be liable. The LA Fires burned in SoCalGas’ service territory. The California Department of Forestry and Fire Protection estimates that the Palisades and Eaton fires destroyed approximately 16,200 structures and damaged approximately 2,000 structures. Although the majority of SoCalGas’ infrastructure in the fire-affected areas is underground, these fires resulted in service disruptions, response costs and damage to some of SoCalGas’ infrastructure and third-party property. SoCalGas and Sempra are subject to pending litigation with respect to the operation of SoCalGas’ system and damage sustained as a result of the fires, which we discuss in Note 16 of the Notes to Consolidated Financial Statements. As with other litigation, the timing, impacts and ultimate outcome of these matters is inherently uncertain and may result in substantial costs, some or all of which may not be recoverable from insurance, third parties or in customer rates. We discuss these and other risks associated with litigation above under “Risks Related to All Sempra Businesses – Operational Risks.”

The Wildfire Legislation

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 Consolidated Financial Statements. The 2019 Wildfire Legislation established the Wildfire Fund and the 2025 Wildfire Legislation established the Continuation Account, which offer liquidity to reimburse wildfire-related claims incurred by participating California electric IOUs in excess of $1 billion, subject to the coverage of each fund. The Wildfire Legislation’s legal standards for the recovery of wildfire costs may not be implemented effectively or applied consistently. Moreover, the Wildfire Fund and the Continuation Account, if it becomes operative, could be materially reduced, exhausted, or terminated due to claims by SDG&E or other participating IOUs related to fires caused by utility conduct or operations, or SDG&E could fail to maintain a valid annual safety certification from the OEIS or meet other requirements, any of which could result in SDG&E losing eligibility for the Wildfire Legislation’s liability cap and the other protections afforded by these funds. As a result, a fire resulting from the conduct or operations of any participating California electric IOU could have a material adverse effect on Sempra’s and SDG&E’s results of operations, financial condition, cash flows and/or prospects, with potentially material additional exposure if SDG&E’s conduct or operations is determined to be a cause of a fire and SDG&E is found to have acted imprudently. In February 2026, a participating IOU publicly disclosed that it has received, or expects to receive, approximately $1.26 billion in aggregate reimbursements from the Wildfire Fund for eligible claims related to wildfires that occurred in 2019 and 2021. Also in February 2026, another participating IOU publicly disclosed it has received, or expects to receive, approximately $134 million in aggregate reimbursements from the Wildfire Fund for losses incurred and expected to be incurred in connection with one of the LA Fires, the cause of which remains under investigation and has not been conclusively determined. The administrator of the Wildfire Fund has confirmed that this wildfire qualifies as a “covered wildfire” for purposes of accessing the Wildfire Fund, and the scope of potential damages caused by this fire could materially reduce or exhaust the Wildfire Fund. The participating IOU stated that it is currently unable to reasonably estimate a range of potential losses associated with this event. Accordingly, SDG&E is unable to estimate a range of potential loss resulting from any reduction in available coverage from the Wildfire Fund. In addition to the risks described above, a material reduction, exhaustion or termination of the Wildfire Fund may require SDG&E to recognize a reduction to its Wildfire Fund asset up to its carrying value.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 whose equipment is determined to be a cause of a fire. In such an event, the utility would be responsible for the costs of damages, including business interruption losses, interest and attorneys’ fees, even if the utility is not found negligent. In the past, the CPUC has denied recovery of incurred costs associated with wildfire claims despite the doctrine of inverse condemnation, which was historically based on the ability of a utility to pass such costs through to rate payers. The doctrine of inverse condemnation also is not exclusive of other theories of liability, such as negligence, under which additional liabilities, such as fire suppression, clean-up and evacuation costs, medical expenses, and personal injury, punitive and other damages, could be imposed. We are unable to predict the impact of the Wildfire Legislation on SDG&E’s ability to recover costs and expenses if SDG&E’s equipment is determined to be a cause of a fire.The 2025 Wildfire Legislation also established a multi-stakeholder task force, coordinated by the Wildfire Fund’s administrator, to prepare and submit to the California legislature and Governor of California on or before April 1, 2026, a report that evaluates and sets forth recommendations on new models to complement or replace the Wildfire Fund and, if it becomes operative, the Continuation Account. We are unable to predict the impact on Sempra or SDG&E of further legislative or regulatory action with respect to the Wildfire Fund or the Continuation Account or wildfire claims liability generally.

Cost Recovery Through Insurance or Rates

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&E’s equipment (or, to a lesser extent, SoCalGas’ equipment) has become increasingly difficult and costly. If these conditions continue or worsen, including as a result of the LA Fires, insurance for wildfire liabilities may become unavailable or may become prohibitively expensive and we may be denied recovery of insurance cost increases through the regulatory process. In addition, insurance for wildfire liabilities may not be sufficient to cover all losses we may incur, or it may not be available to meet the $1.0 billion of primary insurance required by the Wildfire Legislation. Wildfire insurance may also become prohibitively expensive or unavailable for homeowners and businesses in SDG&E’s service territory, potentially increasing SDG&E’s financial exposure if a wildfire is found to be caused by SDG&E’s equipment. We may be unable to recover in rates or from the Wildfire Fund or the Continuation Account the amount of any uninsured losses (including amounts paid for self-insurance and other costs). A loss that is not fully insured, is not sufficiently covered by the Wildfire Fund or the Continuation Account and/or cannot be recovered in customer rates could materially adversely affect Sempra’s and one or both of SDG&E’s and SoCalGas’ results of operations, financial condition, cash flows and/or prospects.

Regulatory Actions Related to Wildfire Mitigation Efforts

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 fully recoverable in rates. SDG&E is required by California law to submit WMPs for approval by the OEIS and could be subject to increased risks if these plans are not approved in a timely manner or SDG&E is determined to not have substantially complied with its approved plans, including the risk of fines or penalties for non-implementation or denial of its safety certification. Moreover, wildfire mitigation investments incremental to those authorized in a GRC may be subject to reasonableness reviews after they are made and could be subject to disallowances as a result of such reviews, as was the case with the FD issued in connection with SDG&E’s Track 2 request in its 2024 GRC. One of SDG&E’s wildfire mitigation strategies is to de-energize certain circuits for safety when there is elevated weather-related wildfire ignition risk. These “public safety power shutoffs” have been subject to scrutiny by various stakeholders, including customers, regulators and lawmakers, which could increase the risk of regulatory fines and penalties, claims for damages and reputational harm if SDG&E is found not to have acted within applicable guidelines and regulations. Such costs may not be recoverable in rates. Unrecoverable costs, adverse legislation or rulemaking, stakeholder scrutiny, ineffective wildfire mitigation measures or other negative effects associated with these efforts could materially adversely affect Sempra’s and SDG&E’s results of operations, financial condition, cash flows and/or prospects.

The electricity industry is undergoing significant change.

Electric utilities in California are experiencing increasing deployment of solar and wind generation, including DER, energy storage and energy efficiency and demand management technologies, and California’s environmental policy objectives are accelerating the pace and scope of these changes. This growth will require further modernization of the electric grid to, among other things, accommodate increasing two-way flows of electricity and increase the grid’s capacity to interconnect these resources. In addition, attaining California’s clean energy goals will require sustained investments in transmission and distribution grid modernization, renewable energy integration projects, operational and data management systems, and electric vehicle and energy storage infrastructure, which may increase exposure to overall grid instability and technology obsolescence. The growth of third-party energy storage alternatives and other technologies also may increasingly compete with SDG&E’s traditional transmission and distribution infrastructure in delivering electricity to consumers. Certain FERC transmission development projects are open to competition, allowing independent developers to compete with incumbent utilities for the construction and operation of transmission facilities. The CPUC is conducting various proceedings regarding DER, including the evaluation of special programs and pilot projects; changes to the planning and operation of the electric grid to prepare for higher penetration of DER; future grid modernization investments; the deferral of traditional grid investments by DER; and the role of the electric grid operator. These proceedings and the broader changes in California’s electricity industry could result in new regulations, policies and/or operational changes that could materially adversely affect Sempra’s and SDG&E’s results of operations, financial condition, cash flows and/or prospects.

Legal and Regulatory Risks

SDG&E and SoCalGas are subject to extensive regulation.

Rates and Other Financial Matters

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 FERC. The CPUC also regulates SDG&E’s and SoCalGas’ sales of securities, rates of return, capital structure, rates of depreciation, long-term resource procurement and other financial matters in various ratemaking proceedings. The CPUC periodically approves SDG&E’s and SoCalGas’ customer rates based on authorized capital expenditures, operating costs, including income taxes, and an authorized rate of return on investments while incorporating a risk-based decision-making framework, as well as certain settlements with third parties and mandatory social programs. The timing and outcome of ratemaking proceedings can be affected by various factors, many of which are not in our control, including the level of opposition by intervening parties; any rejection by the CPUC of settlements with third parties; increasing levels of regulatory review; changes in the political, regulatory, or legislative environments; and the opinions of regulators, customers and other stakeholders. These ratemaking proceedings include decisions about major programs in which SDG&E and SoCalGas make investments under an approved CPUC framework, such as wildfire mitigation, pipeline and storage integrity and safety enhancement programs, but which investments may remain subject to CPUC filings or reasonableness reviews that may result in the disallowance of incurred costs, as was the case with SDG&E’s Track 2 request in its 2024 GRC. SDG&E and SoCalGas also may be required to make investments and incur other costs before they can request rate recovery for certain projects or to comply with proposed legislative and regulatory requirements, including those related to California’s climate goals and policies, before finalization of the requirements and corresponding ratemaking mechanisms, which investments may not ultimately be fully recoverable. Recovery may be delayed and/or insufficient if ratemaking mechanisms involve a significant time lag between when costs are incurred and when those costs are recovered in rates or if there are material differences between the authorized costs embedded in rates (which are set on a prospective basis) and the actual costs incurred. As was the case with respect to the 2024 GRC FD, delays may also result from the regulatory process and the CPUC may deny recovery altogether on the basis that costs were not reasonably or prudently incurred or for other reasons, such as customer affordability. Even if recoverable, simultaneously investing in support of necessary safety and reliability and regulatory requirements and demand for reliable lower-carbon energy may negatively impact the affordability of SDG&E’s and SoCalGas’ services and their and Sempra’s results of operations, financial condition, cash flows and/or prospects.

Rates and Other Financial Matters

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 FERC. The CPUC also regulates SDG&E’s and SoCalGas’ sales of securities, rates of return, capital structure, rates of depreciation, long-term resource procurement and other financial matters in various ratemaking proceedings. The CPUC periodically approves SDG&E’s and SoCalGas’ customer rates based on authorized capital expenditures, operating costs, including income taxes, and an authorized rate of return on investments while incorporating a risk-based decision-making framework, as well as certain settlements with third parties and mandatory social programs. The timing and outcome of ratemaking proceedings can be affected by various factors, many of which are not in our control, including the level of opposition by intervening parties; any rejection by the CPUC of settlements with third parties; increasing levels of regulatory review; changes in the political, regulatory, or legislative environments; and the opinions of regulators, customers and other stakeholders. These ratemaking proceedings include decisions about major programs in which SDG&E and SoCalGas make investments under an approved CPUC framework, such as wildfire mitigation, pipeline and storage integrity and safety enhancement programs, but which investments may remain subject to CPUC filings or reasonableness reviews that may result in the disallowance of incurred costs, as was the case with SDG&E’s Track 2 request in its 2024 GRC. SDG&E and SoCalGas also may be required to make investments and incur other costs before they can request rate recovery for certain projects or to comply with proposed legislative and regulatory requirements, including those related to California’s climate goals and policies, before finalization of the requirements and corresponding ratemaking mechanisms, which investments may not ultimately be fully recoverable. Recovery may be delayed and/or insufficient if ratemaking mechanisms involve a significant time lag between when costs are incurred and when those costs are recovered in rates or if there are material differences between the authorized costs embedded in rates (which are set on a prospective basis) and the actual costs incurred. As was the case with respect to the 2024 GRC FD, delays may also result from the regulatory process and the CPUC may deny recovery altogether on the basis that costs were not reasonably or prudently incurred or for other reasons, such as customer affordability. Even if recoverable, simultaneously investing in support of necessary safety and reliability and regulatory requirements and demand for reliable lower-carbon energy may negatively impact the affordability of SDG&E’s and SoCalGas’ services and their and Sempra’s results of operations, financial condition, cash flows and/or prospects.

Operational Matters

Our operations are subject to CPUC rules (and similar FERC rules), commonly referred to as “affiliate rules,” relating to transactions among SDG&E, SoCalGas and other Sempra businesses. These rules primarily impact market transactions and marketing activities involving transmission supply and capacity, including sales or other trades of natural gas or electricity within or among SDG&E and SoCalGas and Sempra and its covered affiliates. Noncompliance with these rules, as well as any changes or additions to these rules or their interpretations, could materially adversely affect our operations and, in turn, our results of operations, financial condition, cash flows and/or prospects.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 funding of lobbying or other political activities, promotional advertising and certain other costs, as well as citation and enforcement programs concerning matters such as safety activity, disconnection and billing practices, commodity pricing, resource adequacy and environmental compliance. Many of these standards and citation and enforcement programs are becoming more stringent and could subject a utility to significant penalties and fines, as well as higher operating costs. The CPUC conducts reviews and audits of the matters under its authority and may launch investigations or open proceedings at its discretion, the results of which could include citations, disallowances, fines and penalties, as well as requirements for corrective or mitigation actions to address any noncompliance, any of which may not be sufficiently funded by customer rates or at all. Any such occurrence could result in other regulatory exposure, significant litigation, and reputational harm and could have a material adverse effect on Sempra’s, SDG&E’s and SoCalGas’ results of operations, financial condition, cash flows and/or prospects.The FERC enforces mandatory reliability standards developed by the North American Electric Reliability Corporation, including standards designed to protect the power system against potential disruptions from cyber and physical security breaches. Under the Energy Policy Act of 2005, the FERC can impose penalties (up to $1.6 million per day per violation) for any failure to comply with these standards, which could have a material adverse effect on Sempra’s and SDG&E’s results of operations, financial condition, cash flows and/or prospects.

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

Regulatory and Legislative Changes and Influence of Other Organizations

SDG&E and SoCalGas incur significant capital, operating and other costs associated with regulatory compliance. Sempra, SDG&E and SoCalGas may be materially adversely affected by revisions or reinterpretations of existing or new legislation, regulations, decisions, orders or interpretations of the CPUC, the FERC or other regulatory bodies, any of which could change how SDG&E and SoCalGas operate, affect their ability to recover various costs through rates or adjustment mechanisms, require them to incur additional compliance or other costs, including fines and penalties, or otherwise materially adversely affect their and Sempra’s results of operations, financial condition, cash flows and/or prospects.SDG&E and SoCalGas are also affected by numerous advocacy groups, including California Public Advocates Office, The Utility Reform Network, Utility Consumers’ Action Network and the Sierra Club. Success by any of these groups in directly or indirectly influencing legislators and regulators could have a material adverse effect on Sempra’s, SDG&E’s and SoCalGas’ results of operations, financial condition, cash flows and/or prospects.

Failure by the CPUC to adequately reform SDG&E’s electric rate structure could negatively impact Sempra and SDG&E.

The NEM program is an electric billing tariff mechanism designed to promote the installation of on-site renewable energy generation (primarily solar) for residential and business customers. Depending on when the on-site generation is installed, NEM customers receive a full retail rate or a reduced retail rate for energy they generate but do not use that is fed to the utility’s power grid, which results in these customers not paying their proportionate share of the cost of maintaining and operating the electric transmission and distribution system, subject to certain exceptions, but still receiving electricity from the system when their self-generation is inadequate to meet their electricity needs. As more and higher electric-use customers switch to NEM and self-generate energy, the burden on remaining non-NEM customers, who effectively subsidize the unpaid NEM costs, increases, which in turn encourages more self-generation and further increases rate pressure on remaining non-NEM customers.In December 2023, a new Net Billing Tariff was implemented for customers who interconnect their qualifying on-site renewable energy generation after April 2023. The new Net Billing Tariff revised the NEM structure for new customers with a retail export compensation rate that is better aligned with the value provided to the grid by behind-the-meter energy generation systems and retail import rates that encourage electrification and adoption of solar systems paired with storage. The new Net Billing Tariff is designed to compensate customers for the value of their exports to the grid based on avoided cost. In addition, prior to the fourth quarter of 2025, the electric residential rate structure in California was primarily based on consumption volume, which placed a higher rate burden on customers with higher electric use while subsidizing lower-use customers. In response to California legislation adopted in 2022, the CPUC broadly restructured the way certain residential fixed costs are collected, moving away from volumetric -only charges and incorporating an income-based fixed charge for default residential rates. The intent of such a fixed charge is to allow the utility to collect a greater portion of its fixed costs on a non-volumetric basis, advance the state’s climate goals through end-use electrification and provide a more affordable rate design on average for lower-income customers. The residential fixed charge was implemented in the fourth quarter of 2025. Depending on the effectiveness of the new Net Billing Tariff and fixed charge, which are uncertain, the risks associated with the existing NEM tariff and rate design could continue or increase, including adverse impacts on electricity rates and the reliability of the transmission and distribution system and the potential for increases in customer dissatisfaction, likelihood of noncompliance with CPUC or other safety or operational standards, and power procurement, operating, capital and other costs that may not be recoverable, any of which could have a material adverse effect on Sempra’s and SDG&E’s results of operations, financial condition, cash flows and/or prospects.

RISKS RELATED TO SEMPRA TEXAS UTILITIES

Operational and Structural Risks

Ring-fencing measures, governance mechanisms and commitments limit our ability to influence the management, policies and operations of Oncor.

Various “ring-fencing” measures, governance mechanisms and commitments are in place that create legal and financial separation between Oncor Holdings, Oncor and their subsidiaries, on the one hand, and Sempra and its affiliates and subsidiaries, on the other hand. These measures are designed to enhance Oncor’s separateness from its owners and mitigate the risk that Oncor would be negatively impacted by a bankruptcy or other adverse financial development affecting its owners. These measures subject us and Oncor to various restrictions, including:▪seven members of Oncor’s 13-person board of directors must be independent directors in all material respects under the rules of the NYSE in relation to Sempra and its affiliates and any other owners of Oncor, and also must have no material relationship with Sempra or its affiliates or any other owners of Oncor currently or within the previous 10 years; of the six remaining directors, two must be designated by Sempra, two must be designated by Oncor’s minority owner, TTI, and two must be current or former Oncor officers▪Oncor will not pay dividends or other distributions (except for contractual tax payments) if (i) a majority of Oncor’s independent directors or any of the directors appointed by TTI determines that it is in the best interest of Oncor to retain such amounts to meet expected future requirements, (ii) the payment would cause Oncor’s debt-to-equity ratio to exceed the debt-to-equity ratio approved by the PUCT, or (iii) unless otherwise allowed by the PUCT, Oncor’s senior secured debt credit rating by any of the Rating Agencies falls below BBB (or Baa2 for Moody’s)▪certain “separateness measures” must be maintained to reinforce the legal and financial separation of Oncor from Sempra, including a requirement that dealings between Oncor and Sempra or Sempra’s affiliates (other than Oncor Holdings and its subsidiaries) must be on an arm’s-length basis, limitations on affiliate transactions and a prohibition on pledging Oncor assets or membership interests for any entity other than Oncor▪a majority of Oncor’s independent directors and the directors designated by TTI that are present and voting (with at least one required to be present and voting) must approve any annual or multi-year budget if the aggregate amount of capital expenditures or O&M in the budget differs by more than 10% from the corresponding amounts in the budget for the preceding fiscal year or multi-year period, as applicableAs a result of these measures, we do not control Oncor Holdings or Oncor, and we have limited 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, risk management, climate-related activities, cybersecurity practices and other important matters. Moreover, all directors of Oncor, including the directors we have appointed, have considerable autonomy and have a duty to act in the best interest of Oncor consistent with the approved ring-fence and Delaware law, which may in some cases be contrary to our interests. To the extent the directors approve or Oncor otherwise pursues actions that are not in our interest, our results of operations, financial condition, cash flows and/or prospects may be materially adversely affected.

Industry-Related Risks

Changes in the regulation of Oncor or the regulation or operation of the electric utility industry and/or ERCOT market could negatively affect Oncor.

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 Sempra California,” particularly with respect to our operational risks, financial risks and specifically regulation by federal, state, and local legislative and regulatory authorities regarding rates and other financial and operational matters. Oncor is subject to a complex regulatory oversight structure with several different regulators, including the PUCT, FERC, North American Electric Reliability Corporation and Texas Reliability Entity, Inc. Oncor operates in the ERCOT market, which is subject to oversight by the PUCT and the Texas legislature, either of which could impose changes to the ERCOT market that could impact Oncor. In ERCOT, rates are set by the PUCT based on a historical test year, and as a result, the rates Oncor is allowed to charge generally will not exactly match its costs at any given point in time and it may not be able to timely or fully recover its actual costs and/or earn its full return on invested capital, particularly during periods of increased capital spending by Oncor, high inflation, or increases in interest rates, storm-related costs, and other operating costs relative to Oncor’s most recent base rate review. Further, the levels and timing of any approved recovery could significantly differ from Oncor’s requests. In addition to requests to recover its costs, Oncor’s rate proceedings may contain other requests. Failure to receive approval of its requests in any rate proceeding could adversely impact Oncor, and those impacts could be material.The costs and burdens of complying with the various federal, state, and local legislative and regulatory requirements applicable to Oncor and adjusting Oncor’s business and operations in response to legislative and regulatory developments, including changes in ERCOT, and any fines or penalties that could result from any noncompliance, may have a material adverse effect on Oncor. In addition, insufficient electric generation capacity within ERCOT or significant changes within ERCOT or to the ERCOT market structure that impact transmission and distribution utilities, including adverse publicity or public perception or additional regulatory requirements or oversight, could materially adversely affect Oncor. Moreover, legislative, regulatory, market or industry activities could adversely impact Oncor’s collections and cash flows and jeopardize the predictability of utility earnings. For instance, in June 2025, legislation was signed into law to reduce regulatory lag on transmission and distribution capital investments through the UTM process, which we describe in “Part I – Item 1. Business – Ratemaking Mechanisms.” Oncor anticipates filing a UTM on or after March 16, 2026 for eligible transmission and distribution investments placed into service after December 31, 2024 through December 31, 2025, and as a result has recorded regulatory assets for recoverable costs associated with those investments and recognized a corresponding amount in other regulated revenues. However, the PUCT has not finalized rules with respect to use of the UTM, and as a result any positions Oncor has taken with respect to interpreting the legislation could be revised as a result of the PUCT’s final rules and interpretations, and such revisions could have a material adverse impact on our results of operations, financial condition, cash flows and/or prospects.Additionally, projected load growth across the ERCOT system could, if not sufficiently addressed through generation resources, system design and reliability measures, negatively impact electric infrastructure reliability and potentially cause system-wide stresses, which may be exacerbated by extreme weather events, climate-related conditions, wildfires, cyberattacks and other emergencies. Oncor is not a generator of electricity and has no control over the generation supply in ERCOT. If electricity generation is inadequate or disrupted, Oncor’s electricity delivery services may be interrupted or diminished, which could have an adverse impact on our results of operations, financial condition, cash flows and/or prospects.Oncor is subject to periodic audits of its compliance with operations and critical infrastructure protection standards, including reliability and cybersecurity standards, as well as periodic inspections of its facilities for compliance with weatherization standards. Oncor is also required to report to the PUCT on its reliability and weather preparedness. If Oncor is found to be noncompliant with applicable reliability, service quality, weatherization or other standards, it could be subject to reputational harm, regulatory scrutiny or sanctions, including monetary penalties. If Oncor does not successfully manage these risks and respond to any other applicable legislative, regulatory, market or industry developments, Oncor could suffer a deterioration in its results of operations, financial condition, cash flows and/or prospects, which could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

Financial Risks

Oncor’s capital expenditures plan may not be executed as planned or achieve its business objectives.

Oncor’s capital expenditures plan may not be successful or completed in accordance with currently forecasted amounts, and the capital expenditures Oncor currently intends to make may not be implemented as contemplated or produce the desired improvements to service and reliability or cost management. A significant portion of Oncor’s five-year capital expenditures plan is attributable to addressing expected growth in ERCOT. Changes to the timing, location or scope of these planned projects or to the overall projected demand growth in Oncor’s service territory could materially impact Oncor’s capital expenditures plan and consequently our capital expenditures plan, which could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.Oncor’s capital expenditures plan contemplates the large-scale buildout of new transmission lines, including the planned introduction of the 765-kV voltage class to the ERCOT market through ERCOT’s 765-kV Strategic Transmission Expansion Plan. In addition, Oncor’s capital expenditures plan includes projects to service increasing amounts of transmission interconnection requests from LC&I customers, including data centers. Data center development in Oncor’s service territory is expected to drive increasing electric demand and require a rapid and significant increase in Oncor’s grid infrastructure. The resources required to serve these new LC&I requests, including activities related to the planning, analysis, financing, and construction of transmission infrastructure required to meet the projected demand of these customers, are significant in terms of both cost and time, and Oncor may not be able to effectively or efficiently plan, receive required regulatory approvals for, finance, and execute on these requests. Additionally, forecasting future demand involves the risk that one or more high-usage customers may decide not to take energy, to take less energy than anticipated, or not to take service on the anticipated schedule, which may result in lower than expected demand growth. In addition, various statutes, regulatory requirements, and ERCOT rules and policies increasingly govern the connection of new LC&I customers to the grid and these regulations and procedures are under significant and rapidly evolving scrutiny, development and modification. How these provisions are ultimately implemented could significantly impact the desirability of the ERCOT market to prospective customers or Oncor’s ability to interconnect projects on their requested timelines. Certain of these new customers may be transitory and exit Oncor’s service territory for reasons outside of Oncor’s control. If expected projects in Oncor’s service territory are cancelled or do not materialize or actual demand is lower than projected for any of the reasons described above or any others, Oncor’s ability to obtain cost recovery from the PUCT for related expenditures or the affordability of Oncor’s customer rates may be adversely impacted, which could materially adversely impact our results of operations, financial condition, cash flows and/or prospects.

Oncor’s capital expenditures plan will result in significant liquidity needs that may necessitate additional investments.

Oncor’s business is capital-intensive, with significant expected increases to capital spending in future periods.Oncor relies on external financing as a significant source of liquidity for its capital requirements. In the past, Oncor has financed much of its cash needs from operations and with proceeds from indebtedness, but these sources of capital may not be adequate or available in a timely manner, on reasonable terms or at all. Oncor’s access to capital and credit markets and its cost of debt could be directly affected by changes to its credit ratings or ratings outlook. Adverse action with respect to Oncor’s credit ratings or ratings outlooks generally causes debt issuance and borrowing costs to increase. Moreover, legislative, regulatory, market or industry activities could negatively impact Oncor’s credit ratings or ratings outlooks. For example, rating agencies have noted concern that, in Texas, regulators have mandated equity ratios significantly lower than the national average for rate-making purposes. Additionally, in July 2025, S&P lowered Oncor’s senior secured debt and commercial paper ratings, citing elevated wildfire risk as a result of changing climate conditions and the lack of certain legal protections for wildfire litigation in Texas. 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 raise capital on favorable terms. Any such investments could be substantial, would reduce the cash available to us for other purposes, may not be recovered, and could increase our indebtedness, any of which could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

RISKS RELATED TO SEMPRA INFRASTRUCTURE

Operational Risks

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.

Energy Infrastructure Projects

We are involved in a number of energy infrastructure projects in various stages of development and construction, which subject us to numerous risks. Success in developing each project depends on, among other things:▪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 viable▪project assessment and design and our ability to foresee and incorporate emerging trends and technologies▪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 external approval requirements, and many of the other factors described in this risk factor▪negotiation of satisfactory EPC agreements and renegotiation in the event of delays in reaching an FID or other specified deadlines ▪identification of suitable partners, customers, contractors, suppliers and other necessary counterparties▪progressing relationships from MOUs, HOAs or other non-binding arrangements to execution of binding, definitive agreements▪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, including reaching an FID within agreed timelines▪timely receipt and maintenance of required governmental permits, licenses and other authorizations on acceptable terms▪our project partners’, contractors’, equipment providers’, lenders’ and other vendors’ and counterparties’ willingness and financial or other ability to fulfill their contractual commitments

Energy Infrastructure Projects

We are involved in a number of energy infrastructure projects in various stages of development and construction, which subject us to numerous risks. Success in developing each project depends on, among other things:▪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 viable▪project assessment and design and our ability to foresee and incorporate emerging trends and technologies▪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 external approval requirements, and many of the other factors described in this risk factor▪negotiation of satisfactory EPC agreements and renegotiation in the event of delays in reaching an FID or other specified deadlines ▪identification of suitable partners, customers, contractors, suppliers and other necessary counterparties▪progressing relationships from MOUs, HOAs or other non-binding arrangements to execution of binding, definitive agreements▪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, including reaching an FID within agreed timelines▪timely receipt and maintenance of required governmental permits, licenses and other authorizations on acceptable terms▪our project partners’, contractors’, equipment providers’, lenders’ and other vendors’ and counterparties’ willingness and financial or other ability to fulfill their contractual commitments

LNG Projects

In addition to the risks described above that are applicable to all our energy infrastructure projects, our LNG projects, which we discuss in “Part II – Item 7. MD&A – Capital Resources and Liquidity – Sempra Infrastructure,” also face distinct disadvantages relative to some LNG projects being pursued by other project developers, including:▪The proposed Cameron LNG Phase 2 project is subject to certain restrictions and conditions under the JV project financing agreements for the Cameron LNG Phase 1 facility and requires unanimous consent of all the members, including with respect to the equity investment obligation of each member. We may not be able to satisfy these conditions, receive members’ consent, obtain satisfactory conclusion on the EPC process, or obtain the extension of our non-FTA approval, in which case our ability to develop the Cameron LNG Phase 2 project would be jeopardized.▪The ECA LNG projects under construction and in development are subject to the Mexican regulatory process and an overlay of U.S. regulation for natural gas exports to LNG facilities in Mexico, which are not well developed and, among other factors, contributed to delays in obtaining a necessary permit from the Mexican government for the ECA LNG Phase 1 project and could cause similar delays or other hurdles in the future. In September 2025, we submitted a filing with the DOE to extend the construction deadline associated with our non-FTA permits for the ECA LNG Phase 1 project until the end of summer 2026, but we may not receive this extension on a timely basis or at all. In addition, the Baja California region does not have extensive sources of natural gas, and at times, natural gas supply to the region is severely constrained and may impact our costs and our ability to source all feed gas required under our ECA LNG Phase 1 supply contracts. Further, while we do not expect the construction or operation of the ECA LNG Phase 1 project to disrupt operations at the ECA Regas Facility, we expect construction of the proposed ECA LNG Phase 2 project would conflict with the current operations at the ECA Regas Facility, which currently has a firm storage and nitrogen injection service agreement with Shell that expires in May 2028.▪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 increased time and costs to develop and construct the project due to lack of existing infrastructure. The PA LNG Phase 2 project under construction is located at the site of the PA LNG Phase 1 project and is therefore subject to potential disadvantages, such as increased complexity of integrating new facilities with existing infrastructure.Development and operation of these or any other LNG projects will depend on the expansion of our existing pipeline interconnections or the ability to permit and construct new pipeline facilities, each of which may require us to enter into additional pipeline interconnection agreements with third-party pipelines, which may not be possible on reasonable terms or at all.

Financial Risks

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

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. Certain of these contracts are at fixed prices, and their profitability may be negatively affected by inflation, tariffs, rising interest rates and changes in applicable exchange rates. We aim to mitigate these risks by, among other things, using variable pricing tied to market indices, contracting for direct pass-through of operating costs and/or entering into hedges. However, these measures may not fully or substantially offset any increases in operating expenses or financing costs and their use could introduce additional risks, any of which could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.

Our international businesses and operations expose us to foreign currency exchange rate and inflation risks.

Our operations in Mexico pose foreign currency exchange rate and inflation risks. Exchange and inflation rates with respect to Mexico and fluctuations in those rates may have an impact on the revenue, cash flows and costs from our international operations, which could materially adversely affect our results of operations, financial condition, cash flows and/or prospects. We sometimes attempt to hedge cross-currency transactions and earnings exposure through various means, including financial instruments and short-term investments, but these hedges may not fully achieve our objectives of mitigating earnings volatility that would otherwise occur due to exchange rate fluctuations. Because we do not hedge our net investments in foreign countries, we are susceptible to volatility in OCI caused by exchange rate fluctuations for entities whose functional currencies are not the U.S. dollar. Moreover, Mexico has experienced periods of high inflation and exchange rate instability in the past, and severe devaluation of the Mexican peso could result in governmental intervention to institute restrictive exchange control policies, as has occurred in Mexico and other Latin American countries. We discuss our foreign currency exposure at our Mexican subsidiaries in “Part II – Item 7. MD&A” and “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk.”

Our businesses are exposed to fluctuations in commodity prices.

We buy energy-related commodities from time to time for pipeline operations, LNG facilities or power plants to satisfy contractual obligations with customers. The regional and other markets in which we purchase these commodities are competitive and can be subject to significant pricing volatility. Our results of operations, financial condition, cash flows and/or prospects could be materially adversely affected if the prevailing market prices for natural gas, LNG, electricity or other commodities we buy change in a direction or manner not anticipated and for which we have not provided adequately through purchase or sale commitments or other hedging transactions.As we discuss in “Part II – Item 7A. Quantitative and Qualitative Disclosures About Market Risk,” SI Partners enters into hedging transactions to help mitigate commodity price risk and optimize the value of its LNG, natural gas pipelines and storage, and power-generating assets. Some of these derivatives that we use as economic hedges do not meet the requirements for hedge accounting, or hedge accounting is not elected, and as a result, the changes in fair value of these derivatives are recorded in earnings. Consequently, significant changes in commodity prices have in the past and could in the future result in earnings volatility, which may be material, as the economic offset of these derivatives may not be recorded at fair value.

Legal and Regulatory Risks

Our international businesses and operations expose us to increased legal, regulatory, tax, economic, geopolitical, credit and management oversight risks and challenges.

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. Conducting these activities in foreign jurisdictions subjects us to complex management, security, political, legal, economic and financial risks that vary by country, many of which may differ from and potentially be greater than those associated with our wholly domestic businesses, and the occurrence of any of these risks could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects. These risks include the following and the other risks discussed in this risk factor below: ▪compliance with tax, trade, environmental and other foreign laws and regulations, including legal limitations on ownership in some foreign countries and inadequate or inconsistent enforcement of regulations▪actions by local regulatory bodies, such as the CNE, including setting rates and tariffs that may be earned by or charged to our businesses▪adverse changes in social, geopolitical, economic or market conditions▪adverse rulings by or instability in foreign courts or tribunals▪challenges obtaining, maintaining and complying with permits or approvals▪difficulty enforcing contractual and property rights and differing legal standards▪expropriation or theft of assets▪the stability of foreign governments or such foreign governments’ relations with the U.S. government▪changes in the priorities and budgets of international customers, which may be driven by many of the factors listed above, among others

Mexican Government Influence on Economic and Energy Matters

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.In 2024, the Mexican government adopted changes to the Mexican Constitution to reinforce state control over strategic sectors by granting a central role to government entities like the CFE and PEMEX, which have been converted from for-profit state-owned enterprises into public state-owned enterprises. Following these constitutional reforms, in March 2025, the Mexican government adopted the 2025 Energy Laws, which increase the government’s control and participation in the energy sector and may create novel challenges for infrastructure development and operations. Like the LIE and LH, the 2025 Energy Laws give Mexican authorities broad discretion to revoke or suspend permits under certain circumstances. In October 2025, the Mexican government enacted new regulations regarding the 2025 Energy Laws, which provide further detail on the legal and regulatory framework of the energy sector. These new regulations provide state-owned companies preferential treatment regarding open access, increase oversight by regulators and obligations for private companies and reduce the maximum term of certain permits for new projects. For the power sector, the new regulations provide for state prevalence and additional requirements for private projects, increase oversight by regulators and sanctions and establish that self-supply permits remain valid and can migrate voluntarily to the wholesale electricity market. Additionally, in December 2025, the Mexican government released proposed regulations that could adversely impact our self-supply power plants and the development of new power export projects by potentially increasing tariff rates and thereby reducing the competitiveness of projects operating under the self-supply framework.

Mexican Government Influence on Economic and Energy Matters

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.In 2024, the Mexican government adopted changes to the Mexican Constitution to reinforce state control over strategic sectors by granting a central role to government entities like the CFE and PEMEX, which have been converted from for-profit state-owned enterprises into public state-owned enterprises. Following these constitutional reforms, in March 2025, the Mexican government adopted the 2025 Energy Laws, which increase the government’s control and participation in the energy sector and may create novel challenges for infrastructure development and operations. Like the LIE and LH, the 2025 Energy Laws give Mexican authorities broad discretion to revoke or suspend permits under certain circumstances. In October 2025, the Mexican government enacted new regulations regarding the 2025 Energy Laws, which provide further detail on the legal and regulatory framework of the energy sector. These new regulations provide state-owned companies preferential treatment regarding open access, increase oversight by regulators and obligations for private companies and reduce the maximum term of certain permits for new projects. For the power sector, the new regulations provide for state prevalence and additional requirements for private projects, increase oversight by regulators and sanctions and establish that self-supply permits remain valid and can migrate voluntarily to the wholesale electricity market. Additionally, in December 2025, the Mexican government released proposed regulations that could adversely impact our self-supply power plants and the development of new power export projects by potentially increasing tariff rates and thereby reducing the competitiveness of projects operating under the self-supply framework.

U.S. and Foreign Laws and International Relations

Our international business activities are subject to laws and regulations in the U.S. and Mexico and other countries where we do business related to foreign operations and doing business internationally, including the U.S. Foreign Corrupt Practices Act, the Mexican Federal Anticorruption Law in Public Contracting (Ley Federal Anticorrupción en Contrataciones Públicas) and similar laws, and are sensitive to geopolitical factors in each of these countries. The current and the last U.S. Administrations have taken different stances with respect to international trade agreements, tariffs, immigration and other matters of foreign policy that impact trade and foreign relations. We discuss developments in tariff policies above under “Risks Related to All Sempra Businesses – Operational Risks.” Shifts in other aspects of foreign policy could create uncertainty and result in or increase adverse effects on our businesses. Violations or alleged violations of the laws referred to above, as well as foreign policy positions or sanctions, could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

We face risks related to unsettled property rights and titles in Mexico.

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. In addition, we have and may in the future seek to obtain long-term leases or rights-of-way from governmental agencies or other third parties to operate our energy infrastructure on land we do not own. In addition to the risks associated with such property ownership and use that we describe above under “Risks Related to All Sempra Businesses – Operational Risks,” disputes regarding ownership or rights to any of these properties could lead to difficulties developing, constructing and, if completed, operating the affected facilities or proposed projects. Any of these outcomes could have a material adverse effect on our results of operations, financial condition, cash flows and/or prospects.SI Partners’ energy infrastructure assets may be considered by the Mexican government to be a public service or essential for the provision of a public service, in which case these assets and the related businesses could be subject to expropriation or nationalization, loss of concessions, renegotiation or annulment of existing contracts, and other similar risks. Any such occurrence could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.

Risk Related to Planned Sales of Certain Assets and Businesses

We may be unable to complete or realize the anticipated benefits from our planned sales of certain of our assets and businesses as part of our capital recycling program.

As we discuss in Note 6 of the Notes to Consolidated Financial Statements, in September 2025, we entered into an agreement to sell a 45% equity interest in SI Partners to the KKR Partners for $9.99 billion, subject to adjustments. We expect this sale to close in the second or third quarter of 2026, subject to certain conditions, including receipt of antitrust approvals in Mexico; receipt of other third-party consents or waivers, including from certain lenders, partners and others; the absence of a material adverse effect on SI Partners; the absence of specific downgrade events under certain financing arrangements; and other customary closing conditions. Additionally, in December 2025, we entered into an agreement to sell Ecogas. We expect to complete the sale of Ecogas in the second or third quarter of 2026, subject to closing conditions. These pending sales may not be completed in a timely manner or at all. Applicable regulatory authorities and other third parties may withhold the necessary approvals, seek to block or challenge the transactions in the case of certain regulatory authorities, or impose burdensome or costly requirements as conditions to approval. If the required approvals or consents are not received, the other closing conditions are not satisfied or waived, or any of the foregoing is not achieved in a timely manner or on satisfactory terms, then we may need to incur additional costs to complete these transactions, which costs could be significant, or the transactions may be abandoned, delayed or restructured, which would prevent us from realizing the potential benefits of the transactions while still bearing the substantial costs incurred to pursue them.Even if they close, any efficiencies and benefits we expect from these transactions, including with respect to our capital recycling program, might be delayed or not realized. Our expectations are based on a number of assumptions, estimates, projections and other uncertainties about, among other things, closing and post-closing payments; purchase price adjustments; transaction-related tax and accounting impacts; performance by the KKR Partners of their respective contractual obligations; transition services and employee matters; the results of operations of SI Partners after the closing of the proposed transactions; and other factors beyond our control. Moreover, the planned decrease in our ownership of SI Partners would also decrease our share of the cash flows, profits and other benefits from this business. Additionally, the KKR Partners collectively would generally have control of SI Partners, subject to certain minority consent rights so long as the minority partners maintain specified ownership thresholds. The KKR Partners may not manage SI Partners in accordance with our current expectations, which could materially adversely affect the value of our minority ownership interest.Any of these outcomes could materially adversely affect our results of operations, financial condition, cash flows and/or prospects.