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GENERAL INFORMATION AND OTHER FINANCIAL DATA (Tables)

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported on Sempra’s Condensed Consolidated Balance Sheets to the sum of such amounts reported on Sempra’s Condensed Consolidated Statements of Cash Flows.


RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(Dollars in millions)
	September 30, 2022		December 31, 2021
Cash and cash equivalents	$	685	$	559
Restricted cash, current	49		19
Restricted cash, noncurrent	52		3
Total cash, cash equivalents and restricted cash on the Condensed Consolidated Statements of Cash Flows	$	786	$	581

Accounts Receivable, Allowance for Credit Loss Table

We provide below allowances and changes in allowances for credit losses for trade receivables and other receivables. SDG&E and SoCalGas record changes in the allowances for credit losses related to Accounts Receivable – Trade in regulatory accounts.


CHANGES IN ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	2022		2021
Sempra:
Allowances for credit losses at January 1	$	136	$	138
Provisions for expected credit losses	111		96
Write-offs	(57)		(28)
Allowances for credit losses at September 30	$	190	$	206
SDG&E:
Allowances for credit losses at January 1	$	66	$	69
Provisions for expected credit losses	51		30
Write-offs	(30)		(16)
Allowances for credit losses at September 30	$	87	$	83
SoCalGas:
Allowances for credit losses at January 1	$	69	$	68
Provisions for expected credit losses	58		64
Write-offs	(27)		(12)
Allowances for credit losses at September 30	$	100	$	120

Allowances for credit losses related to accounts receivable are included in the Condensed Consolidated Balance Sheets as follows:


ALLOWANCES FOR CREDIT LOSSES
(Dollars in millions)
	September 30,		December 31,
	2022		2021
Sempra:
Accounts receivable – trade, net	$	151	$	94
Accounts receivable – other, net	37		39
Other long-term assets	2		3
Total allowances for credit losses	$	190	$	136
SDG&E:
Accounts receivable – trade, net	$	64	$	42
Accounts receivable – other, net	22		22
Other long-term assets	1		2
Total allowances for credit losses	$	87	$	66
SoCalGas:
Accounts receivable – trade, net	$	84	$	51
Accounts receivable – other, net	15		17
Other long-term assets	1		1
Total allowances for credit losses	$	100	$	69

Inventory Table

The components of inventories are as follows:


INVENTORY BALANCES
(Dollars in millions)
	Sempra				SDG&E				SoCalGas
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Natural gas	$	249	$	164	$	1	$	—	$	214	$	114
LNG	32		27		—		—		—		—
Materials and supplies	225		198		128		123		79		58
Total	$	506	$	389	$	129	$	123	$	293	$	172

Capitalized Financing Costs Table

The table below summarizes capitalized financing costs, comprised of AFUDC and capitalized interest.


CAPITALIZED FINANCING COSTS
(Dollars in millions)
	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Sempra	$	65	$	52	$	182	$	166
SDG&E	30		24		84		82
SoCalGas	19		18		54		49

Net Periodic Benefit Cost Table

The following tables provide the components of net periodic benefit cost. The components of net periodic benefit cost, other than the service cost component, are included in the Other (Expense) Income, Net, table below.


NET PERIODIC BENEFIT COST – SEMPRA
(Dollars in millions)
	Pension benefits				Other postretirement benefits
	Three months ended September 30,
	2022		2021		2022		2021
Service cost	$	27	$	36	$	4	$	6
Interest cost	29		28		7		7
Expected return on assets	(46)		(44)		(16)		(14)
Amortization of:
Prior service cost (credit)	3		3		(1)		(1)
Actuarial loss (gain)	8		12		(4)		(3)
Net periodic benefit cost (credit)	21		35		(10)		(5)
Regulatory adjustments	87		73		10		5
Total expense recognized	$	108	$	108	$	—	$	—

	Nine months ended September 30,
	2022		2021		2022		2021
Service cost	$	110	$	109	$	17	$	17
Interest cost	88		84		21		21
Expected return on assets	(137)		(130)		(48)		(44)
Amortization of:
Prior service cost (credit)	8		8		(2)		(2)
Actuarial loss (gain)	19		34		(11)		(7)
Settlement charges	—		7		—		—
Net periodic benefit cost (credit)	88		112		(23)		(15)
Regulatory adjustments	84		66		23		15
Total expense recognized	$	172	$	178	$	—	$	—


NET PERIODIC BENEFIT COST – SDG&E
(Dollars in millions)
	Pension benefits				Other postretirement benefits
	Three months ended September 30,
	2022		2021		2022		2021
Service cost	$	8	$	9	$	1	$	2
Interest cost	7		6		1		1
Expected return on assets	(13)		(11)		(2)		(2)
Amortization of:
Actuarial loss (gain)	—		1		(1)		(1)
Net periodic benefit cost (credit)	2		5		(1)		—
Regulatory adjustments	24		21		1		—
Total expense recognized	$	26	$	26	$	—	$	—

	Nine months ended September 30,
	2022		2021		2022		2021
Service cost	$	28	$	26	$	4	$	4
Interest cost	20		18		4		4
Expected return on assets	(35)		(36)		(7)		(7)
Amortization of:
Actuarial loss (gain)	1		2		(2)		(2)
Net periodic benefit cost (credit)	14		10		(1)		(1)
Regulatory adjustments	26		30		1		1
Total expense recognized	$	40	$	40	$	—	$	—


NET PERIODIC BENEFIT COST – SOCALGAS
(Dollars in millions)
	Pension benefits				Other postretirement benefits
	Three months ended September 30,
	2022		2021		2022		2021
Service cost	$	16	$	23	$	3	$	5
Interest cost	20		19		5		5
Expected return on assets	(30)		(27)		(13)		(12)
Amortization of:
Prior service cost (credit)	2		2		(1)		(1)
Actuarial loss (gain)	6		8		(3)		(2)
Net periodic benefit cost (credit)	14		25		(9)		(5)
Regulatory adjustments	63		52		9		5
Total expense recognized	$	77	$	77	$	—	$	—

	Nine months ended September 30,
	2022		2021		2022		2021
Service cost	$	72	$	73	$	13	$	13
Interest cost	61		59		16		16
Expected return on assets	(94)		(85)		(40)		(36)
Amortization of:
Prior service cost (credit)	6		6		(2)		(2)
Actuarial loss (gain)	14		27		(9)		(5)
Net periodic benefit cost (credit)	59		80		(22)		(14)
Regulatory adjustments	58		36		22		14
Total expense recognized	$	117	$	116	$	—	$	—

Earnings Per Share Computations Table

Basic EPS is calculated by dividing earnings attributable to common shares by the weighted-average number of common shares outstanding for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.


EARNINGS PER COMMON SHARE COMPUTATIONS
(Dollars in millions, except per share amounts; shares in thousands)
	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Numerator:
Earnings (losses) attributable to common shares	$	485	$	(648)	$	1,656	$	650

Denominator:
Weighted-average common shares outstanding for basic EPS(1)	314,724		319,144		315,301		309,350
Dilutive effect of stock options and RSUs(2)(3)	1,363		—		1,156		797
Dilutive effect of mandatory convertible preferred stock	—		—		—		707
Weighted-average common shares outstanding for diluted EPS	316,087		319,144		316,457		310,854

EPS:
Basic	$	1.54	$	(2.03)	$	5.25	$	2.10
Diluted	$	1.53	$	(2.03)	$	5.23	$	2.09

(1) Includes 401 and 451 fully vested RSUs held in our Deferred Compensation Plan for the three months ended September 30, 2022 and 2021, respectively, and 402 and 453 of such RSUs for the nine months ended September 30, 2022 and 2021, respectively. These fully vested RSUs are included in weighted-average common shares outstanding for basic EPS because there are no conditions under which the corresponding shares will not be issued.

(2) In the three months ended September 30, 2021, the total weighted-average number of potentially dilutive stock options and RSUs was 699. However, these securities were not included in the computation of EPS because to do so would have decreased loss per share.

(3) Due to market fluctuations of both Sempra common stock and the comparative indices used to determine the vesting percentage of our total shareholder return performance-based RSUs, which we discuss in Note 10 of the Notes to Consolidated Financial Statements in the Annual Report, dilutive RSUs may vary widely from period-to-period.

Schedule of Accumulated Other Comprehensive Income (Loss) Table

The following tables present the changes in AOCI by component and amounts reclassified out of AOCI to net income, after amounts attributable to NCI.


CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1)
(Dollars in millions)
	Foreign currency translation adjustments		Financial instruments		Pension and other postretirement benefits		Total accumulated other comprehensive income (loss)
	Three months ended September 30, 2022 and 2021
Sempra:
Balance at June 30, 2022	$	(65)	$	(30)	$	(72)	$	(167)
OCI before reclassifications	—		40		—		40
Amounts reclassified from AOCI	—		5		2		7
Net OCI	—		45		2		47
Balance at September 30, 2022	$	(65)	$	15	$	(70)	$	(120)

Balance at June 30, 2021	$	(88)	$	(265)	$	(91)	$	(444)
OCI before reclassifications(2)	—		15		(8)		7
Amounts reclassified from AOCI	—		16		3		19
Net OCI(2)	—		31		(5)		26
Balance at September 30, 2021	$	(88)	$	(234)	$	(96)	$	(418)
SDG&E:
Balance at June 30, 2022					$	(10)	$	(10)

Amounts reclassified from AOCI					1		1
Net OCI					1		1
Balance at September 30, 2022					$	(9)	$	(9)

Balance at June 30, 2021					$	(10)	$	(10)

Amounts reclassified from AOCI					1		1
Net OCI					1		1
Balance at September 30, 2021					$	(9)	$	(9)
SoCalGas:
Balance at June 30, 2022			$	(12)	$	(17)	$	(29)

Amounts reclassified from AOCI			—		1		1
Net OCI			—		1		1
Balance at September 30, 2022			$	(12)	$	(16)	$	(28)

Balance at June 30, 2021			$	(13)	$	(17)	$	(30)
Amounts reclassified from AOCI			—		1		1
Net OCI			—		1		1
Balance at September 30, 2021			$	(13)	$	(16)	$	(29)

(1) All amounts are net of income tax, if subject to tax, and after NCI.

(2) Total AOCI includes $4 of foreign currency translation adjustments and $2 of financial instruments associated with the IEnova cash tender offer, which we discuss below in “Other Noncontrolling Interests – Sempra Infrastructure.” This transaction did not impact the Condensed Consolidated Statement of Comprehensive Income (Loss).


CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) BY COMPONENT(1) (CONTINUED)
(Dollars in millions)
	Foreign currency translation adjustments		Financial instruments		Pension and other postretirement benefits		Total accumulated other comprehensive income (loss)
	Nine months ended September 30, 2022 and 2021
Sempra:
Balance at December 31, 2021	$	(79)	$	(156)	$	(83)	$	(318)
OCI before reclassifications	4		151		7		162
Amounts reclassified from AOCI(2)	10		20		6		36
Net OCI(2)	14		171		13		198
Balance at September 30, 2022	$	(65)	$	15	$	(70)	$	(120)

Balance at December 31, 2020	$	(64)	$	(331)	$	(105)	$	(500)
OCI before reclassifications(3)	(24)		52		(3)		25
Amounts reclassified from AOCI	—		45		12		57
Net OCI(3)	(24)		97		9		82
Balance at September 30, 2021	$	(88)	$	(234)	$	(96)	$	(418)
SDG&E:
Balance at December 31, 2021					$	(10)	$	(10)

Amounts reclassified from AOCI					1		1
Net OCI					1		1
Balance at September 30, 2022					$	(9)	$	(9)

Balance at December 31, 2020					$	(10)	$	(10)

Amounts reclassified from AOCI					1		1
Net OCI					1		1
Balance at September 30, 2021					$	(9)	$	(9)
SoCalGas:
Balance at December 31, 2021			$	(13)	$	(18)	$	(31)
Amounts reclassified from AOCI			1		2		3
Net OCI			1		2		3
Balance at September 30, 2022			$	(12)	$	(16)	$	(28)

Balance at December 31, 2020			$	(13)	$	(18)	$	(31)
Amounts reclassified from AOCI			—		2		2
Net OCI			—		2		2
Balance at September 30, 2021			$	(13)	$	(16)	$	(29)

(1) All amounts are net of income tax, if subject to tax, and after NCI.

(2) Total AOCI includes $9 of foreign currency translation adjustments associated with sale of NCI to ADIA, which we discuss below in “Other Noncontrolling Interests – Sempra Infrastructure.” This transaction did not impact the Condensed Consolidated Statement of Comprehensive Income (Loss).

(3) Total AOCI includes $(20) of foreign currency translation adjustments and $(12) of financial instruments associated with the IEnova exchange offer and cash tender offer, which we discuss below in “Other Noncontrolling Interests – Sempra Infrastructure.” These transactions did not impact the Condensed Consolidated Statement of Comprehensive Income (Loss).

Reclassifications out of AOCI Table


RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
Details about accumulated other comprehensive income (loss) components	Amounts reclassified from accumulated other comprehensive income (loss)				Affected line item on Condensed Consolidated Statements of Operations
	Three months ended September 30,
	2022		2021
Sempra:


Financial instruments:
Interest rate instruments	$	2	$	(1)	Interest Expense
Interest rate instruments	1		19		Equity Earnings(1)




Interest rate and foreign exchange instruments	3		5		Other (Expense) Income, Net
Total, before income tax	6		23
	(2)		(7)		Income Tax (Expense) Benefit
Total, net of income tax	4		16
	1		—		Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCI	$	5	$	16

Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	2	$	3	Other (Expense) Income, Net
Amortization of prior service cost	1		1		Other (Expense) Income, Net

Total, before income tax	3		4
	(1)		(1)		Income Tax (Expense) Benefit
Total, net of income tax	$	2	$	3

Total reclassifications for the period, net of income tax and after NCI	$	7	$	19
SDG&E:
Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	1	$	—	Other Income, Net
Amortization of prior service cost	—		1		Other Income, Net
Total reclassifications for the period, net of income tax	$	1	$	1
SoCalGas:



Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	—	$	1	Other Expense, Net
Amortization of prior service cost	1		—		Other Expense, Net




Total reclassifications for the period, net of income tax	$	1	$	1

(1) Equity earnings at our foreign equity method investees are recognized after tax.

(2) Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).


RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (CONTINUED)
(Dollars in millions)
Details about accumulated other comprehensive income (loss) components	Amounts reclassified from accumulated other comprehensive income (loss)				Affected line item on Condensed Consolidated Statements of Operations
	Nine months ended September 30,
	2022		2021
Sempra:
Foreign currency translation adjustments	$	1	$	—	Operation and Maintenance

Financial instruments:
Interest rate instruments	$	1	$	—	Interest Expense
Interest rate instruments	28		57		Equity Earnings(1)
Foreign exchange instruments	(2)		1		Revenues: Energy-Related Businesses
	1		—		Other (Expense) Income, Net
Foreign exchange instruments	(1)		1		Equity Earnings(1)
Interest rate and foreign exchange instruments	(1)		—		Interest Expense
	(3)		4		Other (Expense) Income, Net
Total, before income tax	23		63
	(7)		(16)		Income Tax (Expense) Benefit
Total, net of income tax	16		47
	4		(2)		Earnings Attributable to Noncontrolling Interests
Total, net of income tax and after NCI	$	20	$	45

Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	6	$	6	Other (Expense) Income, Net
Amortization of prior service cost	3		3		Other (Expense) Income, Net
Settlement charges	—		7		Other (Expense) Income, Net
Total, before income tax	9		16
	(3)		(4)		Income Tax (Expense) Benefit
Total, net of income tax	$	6	$	12

Total reclassifications for the period, net of income tax and after NCI	$	27	$	57
SDG&E:
Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	1	$	—	Other Income, Net
Amortization of prior service cost	—		1		Other Income, Net
Total reclassifications for the period, net of income tax	$	1	$	1
SoCalGas:
Financial instruments:
Interest rate instruments	$	1	$	—	Interest Expense

Pension and other postretirement benefits(2):
Amortization of actuarial loss	$	1	$	1	Other Expense, Net
Amortization of prior service cost	1		1		Other Expense, Net


Total, net of income tax	$	2	$	2

Total reclassifications for the period, net of income tax	$	3	$	2

(1) Equity earnings at our foreign equity method investees are recognized after tax.

(2) Amounts are included in the computation of net periodic benefit cost (see “Pension and Other Postretirement Benefits” above).

Ownership Interests Held By Others Table

The following table provides information about NCI held by others in subsidiaries or entities consolidated by us and recorded in Other Noncontrolling Interests in Total Equity on Sempra’s Condensed Consolidated Balance Sheets.


OTHER NONCONTROLLING INTERESTS
(Dollars in millions)
	Percent ownership held by noncontrolling interests				Equity held by noncontrolling interests
	September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Sempra Infrastructure:
SI Partners	30.0	%	20.0	%	$	2,192	$	1,384
SI Partners subsidiaries(1)	0.1 - 16.6		0.1 - 16.6		47		34
Total Sempra					$	2,239	$	1,418

(1) SI Partners has subsidiaries with NCI held by others. Percentage range reflects the highest and lowest ownership percentages among these subsidiaries.

Transactions with Affiliates Table

We summarize amounts due from and to unconsolidated affiliates at Sempra, SDG&E and SoCalGas in the following table.


AMOUNTS DUE FROM (TO) UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	September 30, 2022		December 31, 2021
Sempra:
Tax sharing arrangement with Oncor Holdings	$	41	$	18
Various affiliates	11		5
Total due from unconsolidated affiliates – current	$	52	$	23

Sempra Infrastructure – IMG – Note due March 15, 2022, net of allowance for credit losses of $1 at December 31, 2021(1)	$	—	$	637
Total due from unconsolidated affiliates – noncurrent	$	—	$	637




Sempra Infrastructure(2):
TAG Pipelines Norte, S. de R.L. de C.V.:
5.5% Note due January 9, 2024	$	(39)	$	(69)
5.5% Note due January 14, 2025	(22)		(21)
5.5% Note due July 16, 2025	(21)		(20)
5.5% Note due January 14, 2026	(18)		—
5.5% Note due July 14, 2026	(11)		—
TAG – 5.74% Note due December 17, 2029	(185)		(177)
Total due to unconsolidated affiliates – noncurrent	$	(296)	$	(287)
SDG&E:



Sempra	$	(64)	$	(40)
SoCalGas	(24)		(48)
Various affiliates	(5)		(9)
Total due to unconsolidated affiliates – current	$	(93)	$	(97)

Income taxes due from Sempra(3)	$	37	$	19
SoCalGas:
SDG&E	$	24	$	48
Various affiliates	—		1
Total due from unconsolidated affiliates – current	$	24	$	49

Sempra	$	(42)	$	(36)
Total due to unconsolidated affiliates – current	$	(42)	$	(36)

Income taxes due from Sempra(3)	$	9	$	6

(1) At December 31, 2021, represents a Mexican peso-denominated revolving line of credit for up to 14.2 billion Mexican pesos or approximately $691 U.S. dollar-equivalent at a variable interest rate based on the 91-day Interbank Equilibrium Interest Rate plus 220 bps (8.06% at December 31, 2021). At December 31, 2021, $2 of accrued interest receivable is included in Due from Unconsolidated Affiliates – Current. In March 2022, Sempra Infrastructure amended and restated the revolving line of credit to a U.S. dollar-denominated note in the amount of $625 at a variable interest rate based on the adjusted 1-month Secured Overnight Financing Rate plus 180 bps and extended the maturity date to March 15, 2023. In July 2022, this note receivable was paid in full.

(2) U.S. dollar-denominated loans at fixed interest rates. Amounts include principal balances plus accumulated interest outstanding.

(3) SDG&E and SoCalGas are included in the consolidated income tax return of Sempra, and their respective income tax expense is computed as an amount equal to that which would result from each company having always filed a separate return. Amounts include current and noncurrent income taxes due to/from Sempra.

The following table summarizes income statement information from unconsolidated affiliates.


INCOME STATEMENT IMPACT FROM UNCONSOLIDATED AFFILIATES
(Dollars in millions)
	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Sempra:
Revenues	$	10	$	7	$	32	$	22
Cost of sales	—		—		—		11
Interest income	2		11		16		38
Interest expense	4		4		12		11
SDG&E:
Revenues	$	4	$	3	$	12	$	7
Cost of sales	17		20		67		75
SoCalGas:
Revenues	$	24	$	24	$	73	$	72
Cost of sales(1)	(1)		(2)		(5)		1

(1) Includes net commodity costs from natural gas transactions with unconsolidated affiliates.

Other Income and Expense Table

Other (expense) income, net, consists of the following:


OTHER (EXPENSE) INCOME, NET
(Dollars in millions)
	Three months ended September 30,				Nine months ended September 30,
	2022		2021		2022		2021
Sempra:
Allowance for equity funds used during construction	$	35	$	31	$	104	$	103
Investment (losses) gains, net(1)	(13)		—		(60)		28
(Losses) gains on interest rate and foreign exchange instruments, net	(3)		(3)		2		(26)
Foreign currency transaction gains (losses), net(2)	4		(17)		(18)		(10)
Non-service components of net periodic benefit cost	(77)		(66)		(45)		(52)
Interest on regulatory balancing accounts, net	7		2		12		5
Sundry, net	7		(2)		2		4
Total	$	(40)	$	(55)	$	(3)	$	52
SDG&E:
Allowance for equity funds used during construction	$	22	$	18	$	64	$	63
Non-service components of net periodic benefit cost	(17)		(15)		(8)		(10)
Interest on regulatory balancing accounts, net	5		2		9		5
Sundry, net	2		(1)		3		3
Total	$	12	$	4	$	68	$	61
SoCalGas:
Allowance for equity funds used during construction	$	14	$	13	$	40	$	36
Non-service components of net periodic benefit cost	(58)		(49)		(32)		(30)
Interest on regulatory balancing accounts, net	2		—		3		—
Sundry, net	(1)		(3)		(16)		(8)
Total	$	(43)	$	(39)	$	(5)	$	(2)

(1) Represents net investment (losses) gains on dedicated assets in support of our executive retirement and deferred compensation plans. These amounts are offset by corresponding changes in compensation expense related to the plans, recorded in O&M on the Condensed Consolidated Statements of Operations.

(2) Includes losses of $11 in the nine months ended September 30, 2022 and losses of $18 and $13 in the three months and nine months ended September 30, 2021, respectively, from translation to U.S. dollars of a Mexican peso-denominated loan to IMG, which are offset by corresponding amounts included in Equity Earnings on the Condensed Consolidated Statements of Operations.

Income Tax Expense and Effective Income Tax Rates Table

We provide our calculations of ETRs in the following table.


INCOME TAX EXPENSE (BENEFIT) AND EFFECTIVE INCOME TAX RATES
(Dollars in millions)
	Three months ended September 30,						Nine months ended September 30,
	2022			2021			2022			2021
Sempra:
Income tax expense (benefit)	$	21		$	(342)		$	435		$	(45)

Income (loss) before income taxes and equity earnings	$	165		$	(1,365)		$	1,194		$	(316)
Equity earnings, before income tax(1)	134			137			436			457
Pretax income (loss)	$	299		$	(1,228)		$	1,630		$	141

Effective income tax rate	7		%	28		%	27		%	(32)		%
SDG&E:
Income tax expense	$	35		$	90		$	141		$	168
Income before income taxes	$	306		$	295		$	822		$	771
Effective income tax rate	11		%	31		%	17		%	22		%
SoCalGas:
Income tax (benefit) expense	$	(28)		$	(437)		$	75		$	(335)
(Loss) income before income taxes	$	(110)		$	(1,563)		$	415		$	(959)
Effective income tax rate	25		%	28		%	18		%	35		%

(1) We discuss how we recognize equity earnings in Note 6 of the Notes to Consolidated Financial Statements in the Annual Report.