EIX

Business Context and Reporting Period

This Form 10-K covers the fiscal year ended December 31, 2024, for Edison International (EIX) and its wholly-owned subsidiary, Southern California Edison Company (SCE). Edison International is a holding company with no material operations of its own; its earnings are primarily derived from SCE, an investor-owned public utility serving approximately 5 million customers across 50,000 square miles of Southern, Central, and Coastal California. The filing also includes Edison Energy, LLC (Trio), a global energy advisory firm, though its activities are not material as a separate segment.

Key Financial Metrics

Note: Core earnings exclude non-core items such as wildfire claims and discrete legal/tax outcomes. The filing does not provide a specific consolidated profit margin percentage, but operating income for SCE was $2,996 million in 2024.

Material Changes vs. Prior Period

• Revenue Growth: SCE operating revenue increased by $1.272 billion, driven by higher CPUC-authorized revenues (Track 4), an increase in the authorized rate of return due to cost of capital adjustments, and higher pass-through expenses for wildfire mitigation and vegetation management.
• Expense Increases: Operation and maintenance expenses rose by $993 million, primarily due to higher wildfire mitigation costs, vegetation management, and uncollectible accounts. Interest expense increased by $219 million due to higher interest rates and additional long-term borrowings.
• Wildfire Claims: Net charges for wildfire-related claims decreased slightly to $647 million in 2024 from $665 million in 2023. However, the company recorded a $490 million increase in estimated losses for the 2017/2018 Wildfire/Mudslide Events during the first quarter of 2024.
• Rate Base Expansion: SCE's year-end rate base grew by $3.0 billion to $45.7 billion, reflecting continued infrastructure investment.

Guidance, Outlook, and Risks

Guidance and Outlook

• 2025 General Rate Case (GRC): SCE filed for a 2025 revenue requirement of approximately $10.5 billion. The CPUC has not yet issued a final decision. SCE expects to recognize revenue based on 2024 levels adjusted for the 2025 authorized Return on Equity (ROE) until a decision is made.
• Capital Program: SCE forecasts capital expenditures of $26.6 billion to $31.5 billion for 2025–2028. Approximately $13 billion is planned for infrastructure replacement to support electrification and grid resilience.
• Rate Growth: SCE projects its bundled system average rate will rise at or below a 2.6% compound annual growth rate from 2024 through 2028, assuming full recovery of 2017/2018 wildfire costs.
• Dividends: Edison International declared a dividend of $0.8275 per share in February 2025 and intends to maintain a payout ratio of 45%–55% of SCE's core earnings.

Risks and Contingencies

• Wildfire Liability (Eaton Fire): In January 2025, the Eaton Fire caused significant damage and loss of life. As of February 27, 2025, SCE has not determined if its equipment was associated with the ignition. Multiple lawsuits have been initiated. SCE has $1.0 billion in customer-funded self-insurance for 2025, with potential reimbursement from the Wildfire Insurance Fund for losses exceeding that amount.
• 2017/2018 Wildfire/Mudslide Events: The CPUC approved the TKM Settlement Agreement in January 2025, authorizing recovery of 60% (approx. $1.6 billion) of losses. Recovery for the Woolsey Fire remains pending, with SCE seeking $5.4 billion in rate recovery.
• Regulatory Prudency: There is substantial uncertainty regarding the CPUC's application of the prudency standard for pre-AB 1054 fires (like Woolsey and Creek), which could impact the recoverability of uninsured costs.
• Decommissioning: San Onofre decommissioning costs are estimated at $3.0 billion (SCE share $2.3 billion) through 2056. Cost overruns or delays could require additional contributions to the nuclear decommissioning trust.

Investor Verification Checklist

• Wildfire Cost Recovery: Verify the final CPUC decision on the 2025 GRC and the specific recovery amounts approved for the Woolsey Fire and other pre-AB 1054 events.
• Eaton Fire Liability: Monitor the outcome of the Los Angeles County Fire Department investigation and the status of the Eaton Fire litigation to assess potential uninsured losses.
• Capital Expenditure Execution: Track actual capital spending against the $26.6–$31.5 billion forecast for 2025–2028, particularly regarding wildfire mitigation and grid hardening.
• Interest Rate Sensitivity: Assess the impact of rising interest rates on interest expense and the cost of capital, given the company's significant debt load.
• Wildfire Insurance Fund Status: Monitor the solvency of the Wildfire Insurance Fund and any potential depletion that could affect the AB 1054 Liability Cap protections.