Business Context and Reporting Period
This Form 8-K, dated December 18, 2025, reports on Edison International (EIX) and its principal subsidiary, Southern California Edison Company (SCE). The filing details a final decision by the California Public Utilities Commission (CPUC) regarding SCE's 2026 cost of capital and reaffirms the company's long-term and 2025 earnings guidance.
Key Financial Metrics and Capital Structure
The filing provides specific data on the authorized cost of capital and capital structure for 2025 and 2026, but does not report current period revenue, profit, cash flow, or debt levels.
| Component | 2026 Capital Structure | 2026 Cost of Capital | 2025 Capital Structure | 2025 Cost of Capital |
|---|---|---|---|---|
| Long-Term Debt | 43.00% | 4.71% | 43.00% | 4.58% |
| Preferred Equity | 5.00% | 6.89% | 5.00% | 6.42% |
| Common Equity | 52.00% | 10.03% | 52.00% | 10.33% |
| Rate of Return | 7.59% | 7.66% | 7.59% | 7.66% |
Material Changes Versus Prior Period
- Cost of Capital: The CPUC extended the current cost of capital mechanism. The authorized rate of return decreased slightly from 7.66% in 2025 to 7.59% in 2026.
- Component Rates: The cost of long-term debt increased from 4.58% to 4.71%, and preferred equity increased from 6.42% to 6.89%. Conversely, the cost of common equity decreased from 10.33% to 10.03%.
- Capital Structure: The mix of debt, preferred equity, and common equity remained unchanged between 2025 and 2026.
Guidance, Outlook, and Management Commentary
Edison International reaffirmed its long-term and 2025 earnings guidance following the CPUC decision.
Long-Term Guidance (2025–2028)
- Core EPS Growth: Compound annual growth rate of 5%–7%, targeting 2028 Core EPS of $6.74–$7.14.
- Rate Base Growth: Compound annual growth of 7%–8% for 2024–2028.
- Capital Plan: $28–$29 billion for 2025–2028.
- Equity Needs: No annual equity needs anticipated for 2025–2028.
- Shareholder Returns: Management projects total shareholder returns of 11%–13%, combining a ~6% dividend yield with 5%–7% core EPS growth.
2025 Earnings Guidance
The guidance range remains unchanged from October 28, 2025, to December 18, 2025:
- Basic EPS: $8.05 – $8.30
- Non-Core Items: $2.10 per share (based on $808 million recorded for the nine months ended September 30, 2025).
- Core EPS: $5.95 – $6.20
Note: Basic EPS guidance incorporates non-core items only through September 30, 2025.
Investor Verification Checklist
- Verify the impact of the 2026 cost of capital decision on future rate cases and regulatory recovery.
- Confirm the composition of the $808 million in non-core items recorded through September 30, 2025, and assess the likelihood of similar discrete items in the fourth quarter.
- Monitor the execution of the $28–$29 billion capital plan against the projected 7%–8% rate base growth.
- Review the 10-K and 10-Q filings for detailed revenue, cash flow, and debt maturity profiles not included in this 8-K.