10-QPeriod: Q3 FY2024

EDISON INTERNATIONAL Quarterly Report for Q3 Ended Sep 30, 2024

Filed October 29, 2024For Securities:EIX

Summary

Edison International reported improved financial performance in the third quarter of 2024 compared to the same period last year, driven primarily by Southern California Edison's (SCE) stronger earnings. Net income available to common shareholders rose to $516 million from $155 million in Q3 2023. This improvement was largely due to higher authorized revenues and an increased authorized rate of return for SCE, partially offset by higher interest expenses. Non-core items, particularly wildfire-related claims and expenses, continued to impact results, though the net charge from these items decreased year-over-year. The company continues to navigate significant wildfire-related liabilities, with substantial accruals and ongoing settlement processes. Capital expenditures remain robust, supporting grid modernization and infrastructure improvements. Looking ahead, the company faces regulatory decisions on its 2025 General Rate Case, which will influence future revenue requirements. While the company has improved its core earnings, the ongoing management of wildfire liabilities and the substantial capital investment program remain key areas of focus for investors. The company's liquidity remains adequate, with access to credit facilities and ongoing debt issuances to manage its financial obligations.

Financial Highlights

48 data points
Beta

Revenue

$5.20B

Net Income

$577.00M

11.1% Net Margin

EPS (Diluted)

$1.32

Total Assets

$84.75B

Cash & Equivalents

$200.00M

Free Cash Flow

$961.00M

Financial Statements
Beta
Revenue$5.20B
Operating Expenses$4.21B
Operating Income$995.00M
Interest Expense$477.00M
Net Income$577.00M
EPS (Basic)$1.33
EPS (Diluted)$1.32
Shares Outstanding (Basic)387.00M
Shares Outstanding (Diluted)390.00M

Key Highlights

  • 1Edison International's net income available to common shareholders increased significantly to $516 million in Q3 2024 from $155 million in Q3 2023, driven by SCE's improved performance.
  • 2SCE's core earnings increased due to higher authorized revenues from the Track 4 GRC and an increased authorized rate of return driven by the cost of capital adjustment mechanism.
  • 3Consolidated non-core items saw a reduced net loss compared to the prior year, largely due to lower charges for 2017/2018 Wildfire/Mudslide Events claims and expenses.
  • 4SCE filed its 2025 General Rate Case application requesting a test year 2025 revenue requirement of approximately $10.5 billion, with a CPUC decision still pending.
  • 5Capital expenditures for the nine months ended September 30, 2024, were $4.0 billion, primarily for transmission and distribution infrastructure, and wildfire mitigation.
  • 6The company continues to manage substantial liabilities related to the 2017/2018 Wildfire/Mudslide Events, with ongoing settlements and accruals for estimated losses.
  • 7SCE's liquidity remains strong, supported by a substantial revolving credit facility and ongoing access to capital markets for debt issuance.

Frequently Asked Questions

The significant increase in net income available to common shareholders to $516 million in the third quarter of 2024 from $155 million in the same period of 2023 was primarily driven by Southern California Edison's (SCE) improved earnings. This improvement was due to higher authorized revenues resulting from the recent General Rate Case (Track 4) and an increase in the authorized rate of return due to the cost of capital adjustment mechanism. Additionally, there was a reduction in non-core items, particularly wildfire-related claims and expenses, compared to the prior year.

Edison International and SCE continue to manage significant liabilities stemming from past wildfires. As of September 30, 2024, SCE had accrued estimated losses of $9.9 billion for the 2017/2018 Wildfire/Mudslide Events and had paid or was obligated to pay approximately $9.4 billion in settlements. While some cost recovery has been achieved through FERC rates, recovery of CPUC-jurisdictional costs remains uncertain and subject to regulatory approval, with ongoing proceedings for the Thomas, Koenigstein, Montecito, and Woolsey Fires. For other wildfires post-2018, the company has accrued estimated losses and expects that losses beyond insurance coverage will be manageable.

A significant regulatory development is the ongoing 2025 General Rate Case (GRC) proceeding for SCE. SCE has requested a test year 2025 revenue requirement of approximately $10.5 billion, which is subject to CPUC approval. The CPUC's final decision will impact SCE's revenue and ability to recover costs. Additionally, the CPUC modified the cost of capital adjustment mechanism, which will affect SCE's authorized return on equity starting in 2025, reducing the revenue requirement impact compared to previous expectations.

Edison International continues to invest significantly in its infrastructure. For the first nine months of 2024, SCE incurred $4.0 billion in capital expenditures, focused on transmission and distribution upgrades, grid modernization, and wildfire mitigation efforts. The company has a projected capital expenditure forecast of $32.2 billion to $37.5 billion for 2024-2028. These investments are crucial for enhancing grid reliability, safety, and supporting California's clean energy goals.