01—Abstract
Summary
Summary of the 10-K filed February 27, 2025. Cited figures are marked; the original filing is the authoritative source.
Edison International (EIX) reported 2024 GAAP net income attributable to common shareholders of $1,284 milliona (up from $1,197 million) and core earnings of $1,900 million (up from $1,825 million), driven by higher SCE revenue authorized in the 2024 Track 4 decision and a cost-of-capital adjustment that raised SCE's ROE to 10.75%.
SCE's rate base grew to $45.7 billionb, and total capital expenditures reached $5.7 billion in 2024, with a 2025-2028 forecast of $26.6 to $31.5 billion. Operating income rose and balance sheet metrics remained within covenant limits, though interest expense climbed sharply. The dominant investor concern is wildfire liability.
The filing reports $9.9 billionc of cumulative estimated losses for the 2017/2018 events (against $9.5 billion paid), a $490 million charge in 2024, and a $340 million remaining estimate. The January 2025 Eaton Fire, which destroyed about 6,000 single-residence structures and killed 17 people, is not yet attributed to SCE equipment, but SCE's transmission facilities lie in the preliminary area of origin and management cannot estimate a loss range. SCE has $1.0 billion of customer-funded self-insurance for 2025 wildfires, and recovery beyond that depends on the Wildfire Insurance Fund and the AB 1054 prudency standard, which the CPUC has not yet tested in a cost-recovery proceeding.
Credit and regulatory signals are mixed. S&P has SCE and the parent on Negative outlook, while Moody's and Fitch are Stable. The 2025 GRC decision is pending, and SCE's request implies a 23%d revenue increase.
The company is also issuing debt to refinance maturities and plans a $75 million buyback. Investors should weigh solid core earnings and a large capital plan against an unresolved Eaton Fire exposure that could be material.
02—Key points
Key Highlights
- Core earnings rose to $1.90 billion ($1,825M in 2023), while GAAP net income attributable to common shareholders increased to $1.28 billion, reflecting higher Track 4 revenue and a cost-of-capital uplift to a 10.75% ROE.
- SCE rate base reached $45.7 billion at year-end 2024 (up from $42.7 billion), and capital expenditures were $5.7 billion, with a 2025-2028 forecast of $26.6 to $31.5 billion pending the 2025 GRC decision.
- Eaton Fire (January 2025): about 6,018 single-residence structures destroyed and 17 civilian fatalities. SCE has not determined whether its equipment caused the fire, and losses cannot be estimated, though SCE transmission facilities are in the preliminary area of origin.
- Wildfire reserves: cumulative estimated losses of $9.9 billion for 2017/2018 events against $9.5 billion paid; $340 million remaining estimate; $490 million charge recorded in 2024. Other Wildfire Events carry $563 million of estimated losses.
- Wildfire protection: $1.0 billion of customer-funded self-insurance for 2025 wildfires, with Wildfire Insurance Fund reimbursement available above that level subject to fund capacity (about $21 billion initially).
- Credit ratings: Moody's Baa1 (parent Baa2), Fitch BBB, and S&P BBB with Negative outlook at both SCE and the parent. SCE debt-to-capitalization was 0.58x against a 0.65x covenant.
- Shareholder returns: the 2025 quarterly dividend was $0.8275 per share, with a target payout of 45% to 55% of SCE core earnings; $75 million buyback authorized for 2025.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 27, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $17.60B$16.34B | +7.7% |
| Operating Expenses | $14.67B$13.71B | +7.0% |
| Operating Income | $2.93B$2.63B | +11.5% |
| Net Income | $1.55B$1.41B | +9.9% |
| EPS (Basic) | $3.33$3.12 | +6.7% |
| EPS (Diluted) | $3.31$3.11 | +6.4% |
| Shares Outstanding (Basic) | 386.00M383.00M | +0.8% |
| Shares Outstanding (Diluted) | 388.00M385.00M | +0.8% |
05—Questions
Frequently Asked Questions
How much could the Eaton Fire ultimately cost Edison International?
The filing does not provide an estimate. Management says it cannot yet estimate a range of reasonably possible losses. Losses above SCE's $1.0 billion self-insurance coverage could be reimbursed from the Wildfire Insurance Fund, but only subject to fund approval and capacity, and any remaining uninsured costs would require CPUC prudency review under AB 1054. Investors should treat this as an open, potentially material exposure.
Is SCE's credit rating at risk?
S&P rates SCE and the parent BBB with a Negative outlook, which could lead to a downgrade if wildfire exposure rises. Moody's (Baa1 at SCE, Baa2 at the parent) and Fitch (BBB) have Stable outlooks. A downgrade would raise borrowing costs and could increase collateral requirements in SCE's power procurement contracts.
Why did interest expense rise so sharply?
Consolidated interest expense rose to $1.87 billion from $1.61 billion, mainly from higher rates on long-term debt and balancing account overcollections, additional long-term borrowings, and pass-through costs tied to AB 1054 securitization. Higher financing costs are partly recovered in rates, but they reduce earnings growth at the parent level.
What drives the outlook for SCE's earnings?
Growth depends on rate base expansion (projected to reach $60.6 billion by 2028 under the base case), the 2025 GRC decision, and the ROE, which was reset to 10.33% for 2025 after a modified cost-of-capital mechanism. SCE expects its bundled rate to grow at or below 2.6% a year through 2028, assuming full recovery of 2017/2018 wildfire costs. Investors should watch the GRC outcome, since SCE requested about a 23% increase and parties proposed much lower levels.
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