01—Abstract
Summary
Summary of the 8-K filed May 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Edison International (EIX) and Southern California Edison (SCE) furnished an April 30, 2024 business update presentation (Exhibit 99.1) under Regulation FD, to be used in investor and analyst meetings and posted to the company's investor website.
The deck reaffirms 2024 core EPS guidance of $4.75a–$5.05 and reiterates a 2023–2028 capital plan of $38–43 billion, implying roughly 6–8% rate base CAGR. It also reaffirms a 5–7% core EPS growth target for 2021–2025 (implying 2025 core EPS of $5.50–$5.90) and provides a 2025–2028 outlook of 5–7% EPS CAGR with minimal equity needs (about $0.4 billion). The most material investor items are wildfire-related.
In Q1 2024, management raised its best estimate of total losses from the 2017/2018 Thomas Fire, Koenigstein Fire, Montecito Mudslides (TKM) and Woolsey events by $490 millionb. SCE has an application pending for about $2.4 billion of TKM costs (with $5+ billion total cost recovery sought including Woolsey), and plans to file the Woolsey application in Q3 2024. Management also cites an 85–88% estimated reduction in catastrophic wildfire loss probability and continued progress on covered conductor and undergrounding.
The presentation highlights that cost recovery for these events would reduce interest costs and strengthen credit metrics, with potential avoided excess financing costs of up to $4.9 billionc. The filing is a presentation-only disclosure and contains no new financial results or material definitive agreements. Its significance lies in the company's reaffirmed guidance and in the updated wildfire-claim estimates and cost recovery timeline, which investors should track against the forward-looking risks listed in the filing.
02—Key points
Key Highlights
- Reaffirmed 2024 core EPS guidance of $4.75–$5.05 and 2025 core EPS guidance of $5.50–$5.90, with 5–7% EPS growth targeted for 2021–2025 and 2025–2028.
- Q1 2024 upward adjustment of $490 million to the best estimate of total losses for the 2017/2018 wildfire and mudslide events, with remaining individual plaintiff claims resolved to ~90%+ target.
- TKM cost recovery application seeks $2.4 billion (settlements, financing, and legal costs), with intervenor testimony due May 29, 2024, and a final decision possible as soon as Q1 2025.
- Woolsey cost recovery application targeted for Q3 2024, covering $5+ billion of costs including settlements, interest, and legal fees.
- Capital plan of $38–43 billion for 2023–2028 supports roughly 6–8% rate base CAGR, with a 2025 GRC request driving much of the increase.
- Wildfire mitigation results include 5,700+ miles of covered conductor and an estimated 85–88% reduction in catastrophic wildfire loss probability versus pre-2018 levels.
- Financing plan is nearly complete for 2024 with minimal equity needs, and the company targets 45–55% of SCE core earnings as dividend payout with 20 consecutive years of dividend growth.
03—Questions
Frequently Asked Questions
Did Edison International change its financial guidance in this filing?
No. The presentation affirms 2024 core EPS guidance of $4.75–$5.05 and reaffirms the 5–7% 2021–2025 core EPS growth target, which implies 2025 core EPS of $5.50–$5.90. It also provides a 2025 midpoint of $5.70 and a 2028 achievable EPS range of $6.60–$7.00.
How much did the estimated wildfire liability increase, and why?
In Q1 2024, management raised the best estimate of total losses for the 2017/2018 wildfire and mudslide events by $490 million. The increase was driven mainly by information from the Woolsey Fire mediation program deadline in February 2024, which led more plaintiffs to pursue claims, and by settlement outcomes that exceeded earlier estimates.
What is the status of cost recovery for the 2017/2018 wildfire events?
SCE filed a TKM application seeking about $2.4 billion, with intervenor testimony due May 29, 2024, and a final decision possible as soon as Q1 2025. A Woolsey cost recovery application is targeted for Q3 2024. Management says recovery would reduce financing costs and bill impacts, with about $0.63 per month per $1 billion recovered, offset by avoided financing costs.
What does the capital plan and rate base outlook look like?
SCE forecasts $38–43 billion of capital investment for 2023–2028, which supports roughly 6–8% rate base growth. Forecasts exclude additional opportunities. The 2025 General Rate Case (GRC) request is a key driver, and intervenor proposals (CalPA and TURN) would result in rate base growth close to SCE's range case forecast.
Is the dividend and financing outlook supportive of investors?
The company targets a dividend payout of 45–55% of SCE core earnings and cites 20 consecutive years of dividend growth. For 2025–2028, it expects about $27–32 billion of capital plan funding against $25–28 billion of operating cash flow, with incremental debt of $8–11 billion and only about $0.4 billion of equity. The 2024 financing plan is nearly complete, with minimal debt issuance needed beyond refinancing.
04—Continue