How much could the Eaton Fire cost Edison International, and is it covered?

The filing does not quantify any potential liability. The investigation is ongoing and management says it is not speculating on outcomes. Under AB 1054, if SCE holds a valid safety certification and is found prudent, it does not have to reimburse the Wildfire Fund. If found imprudent, its reimbursement is capped at about 20% of T&D equity rate base over a three-year period (about $3.9 billion for 2024). Eligible claims above SCE's $1 billion annual insurance are paid from the Wildfire Fund, which management says would not require the use of SCE's balance sheet.

Why did core EPS decline in Q4 2024 even though full-year core EPS rose?

Q4 core EPS fell to $1.05 from $1.28 mainly because of higher operation and maintenance expense and higher interest expense, partly offset by Track 4 revenue from the 2021 GRC and a cost of capital adjustment. Parent and Other losses also increased on higher interest expense and 2023 gains on preferred stock repurchases. Full-year core EPS rose to $4.93 from $4.76 on higher authorized revenue and a higher authorized return, partly offset by higher interest expense.

What does the TKM settlement mean for 2025 earnings and beyond?

The TKM settlement adds $0.44 per share to 2025 guidance: a one-time $0.30 true-up for past interest expense and a recurring $0.14 annual reduction in unrecoverable interest expense. The recurring $0.14 is included in the 2028 EPS range and is part of the higher 2025 base of $5.84 used for the 5-7% growth target. The $1.6 billion recovery is expected to be financed through securitization, which management says will strengthen the balance sheet and credit metrics.

Why are quarterly results not comparable in 2025, and when will that change?

The 2025 GRC decision is still pending, so SCE is recording revenue at 2024 rates, adjusted for the change in ROE. Management says quarterly comparisons are not meaningful until the decision is issued. SCE has set up a memo account tracking the revenue differences, retroactive to January 1, 2025, and will record a true-up when the final decision arrives. Management hopes for a proposed decision in the first half of 2025.

Is the dividend safe after the wildfire-related uncertainty?

The board declared a quarterly common dividend of $0.8275 per share, payable April 30, 2025. Management said there is no change to its dividend policy, which targets a payout of 45-55% of SCE core earnings, and it cited 21 consecutive years of dividend growth. The filing does not guarantee future dividend levels, and the outcomes of the Eaton Fire investigation and the GRC could affect the company's financial outlook.

EIX 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed February 27, 2025. Cited figures are marked; the original filing is the authoritative source.

Edison International (EIX) reported fourth-quarter 2024 GAAP EPS of $0.88^a and core EPS of $1.05, down from $1.28 a year earlier, mainly due to higher operation and maintenance expense and higher interest expense.

Full-year 2024 GAAP EPS was $3.33^b and core EPS was $4.93, up from $4.76 in 2023 and above the midpoint of guidance. The results were overshadowed by the January 2025 Eaton and Palisades wildfires. The Eaton Fire cause remains under investigation, and management has not quantified any potential liability.

Management argues that the AB 1054 framework, the wildfire fund's $21 billion^c of claim-paying capacity, the liability cap, and SCE's safety certification protect the utility's financial position. The key positive development was CPUC unanimous approval of the TKM settlement, which allows SCE to recover about $1.6 billion, or 60%, of wildfire claims and costs from a pre-AB 1054 wildfire. Management raised 2025 core EPS guidance to $5.94-$6.34 from $5.50-$5.90, adding $0.44 per share: a one-time $0.30 true-up for historical interest expense plus an ongoing $0.14 annual interest expense reduction.

The company reaffirmed 5-7% core EPS growth from a $5.84 base in 2025 to $6.74^d-$7.14 in 2028. The 2025 General Rate Case (GRC) decision is still pending, so quarterly comparisons are not meaningful until it is issued, and revenue is being recorded at 2024 rates with a memo account to true up retroactively.

Investors should weigh the upside from cost recovery and guidance against the unresolved Eaton Fire investigation, the pending GRC decision, the Woolsey cost recovery proceeding (a $5.4 billion request), and the stated need for policymakers to strengthen the AB 1054 framework. The board declared a quarterly dividend of $0.8275 per share, and management said there is no change to dividend policy.

02—Key points

Key Highlights

Q4 2024 GAAP EPS was $0.88 and core EPS was $1.05, versus $0.99 and $1.28 in Q4 2023. Core earnings declined mainly on higher O&M and interest expense.
Full-year 2024 core EPS was $4.93, above the midpoint of guidance and up from $4.76 in 2023. GAAP EPS was $3.33, up from $3.12.
CPUC unanimously approved the TKM settlement, authorizing about $1.6 billion (60% of the request) of cost recovery for a pre-AB 1054 wildfire. SCE expects to file the TKM securitization application in March 2025.
2025 core EPS guidance was revised to $5.94-$6.34 (midpoint $6.14), including $0.44 from TKM: a $0.30 one-time true-up and a $0.14 annual interest expense reduction.
Management reaffirmed 5-7% core EPS CAGR from a $5.84 base in 2025 to $6.74-$7.14 in 2028, and projects a 2023-2028 capex forecast of $38-43 billion with rate base growth of about 6-8%.
The Eaton Fire cause is still undetermined and under investigation. Management said SCE would make a good faith showing of reasonable conduct if its transmission equipment is found to be associated with ignition, but gave no financial estimate. The Wildfire Fund has about $21 billion of claim-paying capacity, and SCE's 2024 liability cap is about $3.9 billion.
The quarterly common dividend of $0.8275 per share is payable April 30, 2025, and the December 2024 dividend increase of 6.1% marked the 21st consecutive annual increase.

03—Questions

Frequently Asked Questions

How much could the Eaton Fire cost Edison International, and is it covered?
The filing does not quantify any potential liability. The investigation is ongoing and management says it is not speculating on outcomes. Under AB 1054, if SCE holds a valid safety certification and is found prudent, it does not have to reimburse the Wildfire Fund. If found imprudent, its reimbursement is capped at about 20% of T&D equity rate base over a three-year period (about $3.9 billion for 2024). Eligible claims above SCE's $1 billion annual insurance are paid from the Wildfire Fund, which management says would not require the use of SCE's balance sheet.
Why did core EPS decline in Q4 2024 even though full-year core EPS rose?
Q4 core EPS fell to $1.05 from $1.28 mainly because of higher operation and maintenance expense and higher interest expense, partly offset by Track 4 revenue from the 2021 GRC and a cost of capital adjustment. Parent and Other losses also increased on higher interest expense and 2023 gains on preferred stock repurchases. Full-year core EPS rose to $4.93 from $4.76 on higher authorized revenue and a higher authorized return, partly offset by higher interest expense.
What does the TKM settlement mean for 2025 earnings and beyond?
The TKM settlement adds $0.44 per share to 2025 guidance: a one-time $0.30 true-up for past interest expense and a recurring $0.14 annual reduction in unrecoverable interest expense. The recurring $0.14 is included in the 2028 EPS range and is part of the higher 2025 base of $5.84 used for the 5-7% growth target. The $1.6 billion recovery is expected to be financed through securitization, which management says will strengthen the balance sheet and credit metrics.
Why are quarterly results not comparable in 2025, and when will that change?
The 2025 GRC decision is still pending, so SCE is recording revenue at 2024 rates, adjusted for the change in ROE. Management says quarterly comparisons are not meaningful until the decision is issued. SCE has set up a memo account tracking the revenue differences, retroactive to January 1, 2025, and will record a true-up when the final decision arrives. Management hopes for a proposed decision in the first half of 2025.
Is the dividend safe after the wildfire-related uncertainty?
The board declared a quarterly common dividend of $0.8275 per share, payable April 30, 2025. Management said there is no change to its dividend policy, which targets a payout of 45-55% of SCE core earnings, and it cited 21 consecutive years of dividend growth. The filing does not guarantee future dividend levels, and the outcomes of the Eaton Fire investigation and the GRC could affect the company's financial outlook.

04—Continue

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