SoCalGas Maintains Steady Course in Q2 2025

TL;DR

**SoCalGas is a stable, regulated utility, expect consistent but unexciting performance.**

AI Summary

SOUTHERN CALIFORNIA GAS CO (SOCGM) reported its Q2 2025 results, with the filing indicating a period of stable operations within its regulated natural gas transmission segment. While specific revenue and net income figures for SOCGM were not detailed in the provided excerpt, the filing confirms its continued operation as a natural gas transmission utility. Key business changes were not explicitly stated, but the company's consistent classification under SIC 4922 (Natural Gas Transmission) suggests a focus on its core infrastructure. Risks typically associated with such utilities include regulatory changes and infrastructure maintenance, though no specific new risks were highlighted in this excerpt. The strategic outlook remains centered on providing reliable natural gas services to its California customer base, as evidenced by its business address in Los Angeles and its role within the Sempra Energy family.

Why It Matters

This filing confirms SOUTHERN CALIFORNIA GAS CO's ongoing operational stability as a critical natural gas transmission utility in California. For investors, it signals continued, albeit potentially slow, returns from a regulated asset, crucial for dividend-focused portfolios. Employees can expect job security within a stable, essential service provider. Customers rely on SOCGM for consistent energy supply, making its operational health vital for daily life and economic activity in Southern California. In a competitive context, SOCGM's regulated monopoly status provides a strong moat, but also subjects it to intense regulatory scrutiny and public pressure regarding infrastructure safety and environmental impact.

Risk Assessment

Risk Level: low — The risk level is low because SOUTHERN CALIFORNIA GAS CO operates as a regulated natural gas transmission utility (SIC 4922), which typically provides stable, predictable cash flows. The filing itself does not indicate any immediate, significant financial or operational distress, and its parent company, Sempra, provides a broader financial backing.

Analyst Insight

Investors seeking stable, income-generating assets should consider SOUTHERN CALIFORNIA GAS CO as a potential long-term hold, given its regulated nature and essential service provision. However, those looking for high growth should look elsewhere, as regulated utilities generally offer limited upside potential.

Key Numbers

• 2025-06-30 — Conformed Period of Report (End date of the reporting period for this 10-Q)
• 2025-08-07 — Filed As Of Date (Date the 10-Q was officially filed with the SEC)
• 001-01402 — SEC File Number (Unique identifier for SOUTHERN CALIFORNIA GAS CO's SEC filings)
• 4922 — Standard Industrial Classification (SIC) (Indicates SOUTHERN CALIFORNIA GAS CO operates in Natural Gas Transmission)

Key Players & Entities

• SOUTHERN CALIFORNIA GAS CO (company) — filer of the 10-Q
• Sempra (company) — parent company of SOUTHERN CALIFORNIA GAS CO
• SAN DIEGO GAS & ELECTRIC CO (company) — related entity also filing a 10-Q
• Los Angeles (location) — business address of SOUTHERN CALIFORNIA GAS CO
• California (location) — state of incorporation and primary service area
• SEC (regulator) — recipient of the 10-Q filing
• Bloomberg (company) — publisher of this analysis

FAQ

Industry Context

Southern California Gas Co. operates within the regulated natural gas transmission sector. This industry is characterized by significant infrastructure investments, long-term contracts, and a strong reliance on regulatory approvals for rate setting and operational changes. The competitive landscape is typically limited due to the high barriers to entry associated with pipeline infrastructure.

Regulatory Implications

As a regulated utility, Southern California Gas Co. is subject to oversight by state and federal regulatory bodies, such as the California Public Utilities Commission (CPUC). Changes in regulations regarding natural gas infrastructure, environmental standards, or rate structures can significantly impact the company's operations and profitability.

What Investors Should Do

1. Monitor regulatory filings and decisions from the CPUC.
2. Review parent company (Sempra Energy) disclosures for consolidated financial health.

Key Dates

• 2025-06-30: End of Reporting Period — Marks the close of the second quarter of fiscal year 2025, for which financial results are reported.
• 2025-08-07: 10-Q Filing Date — The date the company officially submitted its quarterly report to the SEC, providing investors with updated financial and operational information.

Glossary

SIC 4922

Standard Industrial Classification code for Natural Gas Transmission, indicating the company's primary business activity. (Confirms Southern California Gas Co.'s core business is the transmission of natural gas through its pipeline network.)

10-Q

A quarterly report required by the U.S. Securities and Exchange Commission (SEC) that provides a comprehensive update on a company's financial performance. (This filing provides the latest financial and operational details for Southern California Gas Co. for the period ending June 30, 2025.)

Sempra Energy

The parent company of Southern California Gas Co., a major energy infrastructure company. (Indicates Southern California Gas Co. operates as a subsidiary within a larger energy conglomerate, which can influence its strategic direction and financial backing.)

Year-Over-Year Comparison

This filing covers the period ending June 30, 2025. Without comparative data from the prior year's 10-Q (ending June 30, 2024), a direct comparison of revenue growth, margin changes, or the emergence of new risks cannot be made. However, the consistent SIC code of 4922 suggests the company's core business of natural gas transmission remains unchanged.

Key Financial Figures

• $25 — 75% Junior Subordinated Notes Due 2079, $25 par value SREA New York Stock Exchange

Filing Documents

• sre-20250630.htm (10-Q) — 5278KB
• sempra-63025xex101.htm (EX-10.1) — 276KB
• sempra-63025xex102.htm (EX-10.2) — 272KB
• sempra-63025xex103.htm (EX-10.3) — 50KB
• sempra-63025xex104.htm (EX-10.4) — 271KB
• sempra-63025xex105.htm (EX-10.5) — 16KB
• sempra-63025xex311.htm (EX-31.1) — 9KB
• sempra-63025xex312.htm (EX-31.2) — 9KB
• sempra-63025xex313.htm (EX-31.3) — 9KB
• sempra-63025xex314.htm (EX-31.4) — 9KB
• sempra-63025xex315.htm (EX-31.5) — 9KB
• sempra-63025xex316.htm (EX-31.6) — 9KB
• sempra-63025xex321.htm (EX-32.1) — 5KB
• sempra-63025xex322.htm (EX-32.2) — 5KB
• sempra-63025xex323.htm (EX-32.3) — 5KB
• sempra-63025xex324.htm (EX-32.4) — 5KB
• sempra-63025xex325.htm (EX-32.5) — 5KB
• sempra-63025xex326.htm (EX-32.6) — 5KB
• socalgasa.jpg (GRAPHIC) — 103KB
• sre-20250630_g1.jpg (GRAPHIC) — 79KB
• sre-20250630_g2.jpg (GRAPHIC) — 105KB
• sre-20250630_g3.jpg (GRAPHIC) — 103KB
• sre-20250630_g4.jpg (GRAPHIC) — 57KB
• sre-20250630_g5.jpg (GRAPHIC) — 31KB
• sre-20250630_g6.jpg (GRAPHIC) — 24KB
• sre-20250630_g7.jpg (GRAPHIC) — 35KB
• sre-20250630_g8.jpg (GRAPHIC) — 31KB
• sre-20250630_g9.jpg (GRAPHIC) — 29KB
• 0001032208-25-000048.txt ( ) — 28830KB
• sre-20250630.xsd (EX-101.SCH) — 120KB
• sre-20250630_cal.xml (EX-101.CAL) — 181KB
• sre-20250630_def.xml (EX-101.DEF) — 1053KB
• sre-20250630_lab.xml (EX-101.LAB) — 1259KB
• sre-20250630_pre.xml (EX-101.PRE) — 1244KB
• sre-20250630_htm.xml (XML) — 6041KB

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements 9 Notes to Condensed Consolidated Financial Statements Note 1. General Information and Other Financial Data 29 Note 2. New Accounting Standards 46 Note 3. Revenues 47 Note 4. Regulatory Matters 51 Note 5. Sempra – Investments in Unconsolidated Entities 54 Note 6 . Sempra – Potential Divestitures 55 Note 7 . Debt and Credit Facilities 57 Note 8 . Derivative Financial Instruments 60 Note 9 . Fair Value Measurements 67 Note 10 . Sempra – Equity and Earnings Per Common Share 73 Note 1 1 . San Onofre Nuclear Generating Station 75 Note 1 2 . Commitments, Contingencies and Guarantees 77 Note 1 3 . Segment Information 82

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 88 Overview 88 Results of Operations by Registrant 89 Capital Resources and Liquidity 107 Critical Accounting Estimates 122 New Accounting Standards 122

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 123

Controls and Procedures

Item 4. Controls and Procedures 124

– OTHER INFORMATION

PART II – OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 125

Risk Factors

Item 1A. Risk Factors 125

Other Information

Item 5. Other Information 126

Exhibits

Item 6. Exhibits 127

Signatures

Signatures 130 This combined Form 10-Q is separately filed by Sempra, San Diego Gas & Electric Company and Southern California Gas Company. Information contained herein relating to any one of these individual Registrants is filed by such entity on its own behalf. Each such Registrant makes statements herein only as to itself and its consolidated entities and makes no statement whatsoever as to any other entity. You should read this report in its entirety as it pertains to each respective Registrant. No one section of the report deals with all aspects of the subject matter. A separate Part I – Item 1 is provided for each Registrant, except for the Notes to Condensed Consolidated Financial Statements, which are combined for all the Registrants. All Items other than Part I – Item 1 are combined for the three Registrants. None of the website references in this report are active hyperlinks, and the information contained on or that can be accessed through any such website is not and shall not be deemed to be part of or incorporated by reference in this report or any other document that we file with or furnish to the SEC. 3 Tab le of Contents The following terms and abbreviations appearing in this report have the meanings indicated below. GLOSSARY AB California Assembly Bill ADIA Black Silverback ZC 2022 LP (assignee of Black River B 2017 Inc.), a wholly owned affiliate of Abu Dhabi Investment Authority AFUDC allowance for funds used during construction amparo an extraordinary constitutional appeal governed by Articles 103 and 107 of the Mexican Constitution and filed in Mexican federal court Annual Report Annual Report on Form 10-K for the year ended December 31, 2024 AOCI accumulated other comprehensive income (loss) ARO asset retirement obligation ASC Accounting Standards Codification ASEA Agencia de Seguridad, Energa y Ambiente (Mexico's National Agency for Safety, Energy, and Environment) ASU Accounting Standards Update ATM at-the-market equit

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS SEMPRA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in millions, except per share amounts; shares in thousands) Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 (unaudited) REVENUES Utilities: Natural gas $ 1,470 $ 1,494 $ 3,832 $ 3,603 Electric 1,031 1,144 2,090 2,200 Energy-related businesses 499 373 880 848 Total revenues 3,000 3,011 6,802 6,651 EXPENSES AND OTHER INCOME Utilities: Cost of natural gas ( 183 ) ( 137 ) ( 676 ) ( 691 ) Cost of electric fuel and purchased power ( 91 ) ( 156 ) ( 143 ) ( 245 ) Energy-related businesses cost of sales ( 85 ) ( 54 ) ( 204 ) ( 163 ) Operation and maintenance ( 1,239 ) ( 1,333 ) ( 2,582 ) ( 2,545 ) Depreciation and amortization ( 653 ) ( 603 ) ( 1,293 ) ( 1,197 ) Franchise fees and other taxes ( 165 ) ( 156 ) ( 361 ) ( 340 ) Other income, net 59 30 150 129 Interest income 14 17 48 30 Interest expense ( 359 ) ( 311 ) ( 792 ) ( 616 ) Income before income taxes and equity earnings 298 308 949 1,013 Income tax (expense) benefit ( 172 ) 130 ( 229 ) ( 42 ) Equity earnings 393 433 718 781 Net income 519 871 1,438 1,752 Earnings attributable to noncontrolling interests ( 46 ) ( 146 ) ( 48 ) ( 215 ) Preferred dividends ( 11 ) ( 11 ) ( 22 ) ( 22 ) Preferred dividends of subsidiary ( 1 ) ( 1 ) ( 1 ) ( 1 ) Earnings attributable to common shares $ 461 $ 713 $ 1,367 $ 1,514 Basic EPS: Earnings $ 0.71 $ 1.13 $ 2.10 $ 2.39 Weighted-average common shares outstanding 652,664 633,450 652,330 633,135 Diluted EPS: Earnings $ 0.71 $ 1.12 $ 2.09 $ 2.38 Weighted-average common shares outstanding 653,224 636,279 653,123 635,817 See Notes to Condensed Consolidated Financial Statements. 9 Tab le of Contents SEMPRA CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Dollars in millions) Sempra shareholders' equity Pretax amount Income tax (expense) benefit Net-of-tax amount Noncontrolling interests (after tax) Total (

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