Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026, for Edison International (EIX) and its primary subsidiary, Southern California Edison Company (SCE). Edison International is a holding company primarily engaged in the business of supplying and delivering electricity through SCE to approximately 50,000 square miles in Southern, Central, and Coastal California. During the second quarter of 2026, Edison International completed the disposition of its former non-utility subsidiary, Trio.
Key Financial Metrics
| Metric (in millions) | Edison International (3 Months) | Edison International (6 Months) | SCE (3 Months) | SCE (6 Months) |
|---|---|---|---|---|
| Operating Revenue | $4,357 | $8,460 | $4,348 | $8,444 |
| Net Income Available to Common Shareholders | $534 | $1,065 | $643 | $1,262 |
| Core Earnings (Non-GAAP) | $592 | $1,142 | $672 | $1,307 |
| Operating Cash Flow (6 Months) | $2,697 | N/A | $2,900 | N/A |
| Capital Expenditures (6 Months) | $3,385 | N/A | $3,384 | N/A |
| Total Assets (June 30, 2026) | $96,171 | N/A | $96,018 | N/A |
| Debt to Total Capitalization Ratio | 0.66 to 1 | N/A | 0.57 to 1 | N/A |
Material Changes vs. Prior Period
- Quarterly Performance: Edison International's net income available to common shareholders increased by $191 million (56%) to $534 million for the three months ended June 30, 2026, compared to $343 million in the same period of 2025. This was driven by a $200 million increase in SCE's net income, partially offset by a $9 million increase in losses from Edison International Parent and Other.
- Year-to-Date Performance: For the six months ended June 30, 2026, net income decreased by $714 million to $1,065 million compared to $1,779 million in 2025. The decline was primarily due to a $916 million non-core benefit recorded in 2025 related to the TKM Settlement Agreement, which was not present in 2026.
- Core Earnings Growth: Despite the GAAP net income decline year-to-date, Core Earnings (excluding non-core wildfire items and discrete events) increased by $240 million to $1,142 million for the six months ended June 30, 2026, reflecting the adoption of the 2025 General Rate Case (GRC) final decision.
- Dispositions: Edison International recognized a $23 million loss on the disposition of Trio in the second quarter of 2026.
Guidance, Outlook, and Risks
Wildfire Contingencies and the Eaton Fire
The most significant risk factor remains wildfire liability. Regarding the January 2025 Eaton Fire:
- Liability: SCE has recorded $1.6 billion in losses related to settlements entered into as of June 30, 2026. However, the company states it is currently unable to reasonably estimate a range of total losses due to the complexity of pending litigation (approx. 2,000 lawsuits) and uncertainties regarding the Wildfire Recovery Compensation Program.
- Recoveries: SCE expects recoveries of $917 million from customer-funded self-insurance, $645 million from the Wildfire Fund, and $70 million through FERC rates. The net after-tax charge to earnings recorded to date is $9 million.
- Prudency: SCE held a valid safety certification at the time of the fire and expects to be presumed prudent unless "serious doubt" is raised in the CPUC proceeding. If found imprudent, SCE's reimbursement obligation to the Wildfire Fund is capped at approximately $4.3 billion unless willful disregard is found.
Regulatory and Legislative Risks
- California Wildfire Legislation: The company faces risks related to the longevity of the Wildfire Fund and the CPUC's interpretation of the prudency standard. A CEA report in April 2026 highlighted that inaction on wildfire risk could lead to credit downgrades and financial stress.
- Rate Recovery: SCE's ability to recover costs through regulated rates, particularly uninsured wildfire costs, remains a critical uncertainty.
Capital Program
SCE forecasts total capital expenditures ranging from $37.5 billion to $40.6 billion for 2026–2030. Total capital expenditures for the six months ended June 30, 2026, were $3.1 billion.
Investor Verification Checklist
- Eaton Fire Exposure: Verify the status of the ~2,000 pending lawsuits and the timeline for the bellwether jury trial set for January 2027.
- Wildfire Fund Solvency: Monitor the claims-paying capacity of the Wildfire Fund's Initial Account and any legislative changes to SB 254 or AB 1054.
- CPUC Prudency Determination: Track the CPUC's review of SCE's conduct regarding the Eaton Fire ignition, as this determines the extent of cost recovery and potential reimbursement obligations to the Wildfire Fund.
- Core Earnings vs. GAAP: Analyze the divergence between GAAP net income and Core Earnings to understand the impact of discrete wildfire settlements and regulatory recoveries.
- Capital Expenditure Execution: Review progress on the $37.5B–$40.6B capital program, specifically grid hardening and transmission projects approved by CAISO.