EDISON INTERNATIONAL [EIX] Filings

10-Q 1 eix-20240930x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2024
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to


Commission File Number	Exact Name of Registrant as specified in its charter	State or Other Jurisdiction of Incorporation or Organization	IRS Employer Identification Number
1-9936	EDISON INTERNATIONAL	California	95-4137452
1-2313	SOUTHERN CALIFORNIA EDISON COMPANY	California	95-1240335


EDISON INTERNATIONAL	SOUTHERN CALIFORNIA EDISON COMPANY

2244 Walnut Grove Avenue	2244 Walnut Grove Avenue
(P.O. Box 976)	(P.O. Box 800)
Rosemead, California 91770	Rosemead, California 91770
(Address of principal executive offices)	(Address of principal executive offices)
(626) 302-2222	(626) 302-1212
(Registrant's telephone number, including area code)	(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Edison International:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	EIX	NYSE LLC

Southern California Edison Company: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Edison International	Yes ☑ No ☐	Southern California Edison Company	Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


Edison International	Yes ☑ No ☐	Southern California Edison Company	Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-12 of the Exchange Act.


Edison International	Large Accelerated Filer	Accelerated Filer	Non-accelerated Filer	Smaller Reporting Company	Emerging growth company
	☑	☐	☐	☐	☐
Southern California Edison Company	Large Accelerated Filer	Accelerated Filer	Non-accelerated Filer	Smaller Reporting Company	Emerging growth company
	☐	☐	☑	☐	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Edison International

☐

Southern California Edison Company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).


Edison International	Yes ☐ No ☑	Southern California Edison Company	Yes☐ No ☑

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:


Common Stock outstanding as of October 22, 2024:
Edison International	387,150,269 Shares
Southern California Edison Company	434,888,104 Shares

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TABLE OF CONTENTS

		SEC Form 10-Q
		Reference Number
GLOSSARY	iv
FORWARD-LOOKING STATEMENTS	1
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4	Part I, Item 2
MANAGEMENT OVERVIEW	4
Highlights of Operating Results	4
2025 General Rate Case	6
Cost of Capital Trigger	7
Capital Program	7
Southern California Wildfires and Mudslides	8
RESULTS OF OPERATIONS	9
Southern California Edison Company	9
Three months ended September 30, 2024 versus September 30, 2023	10
Earning Activities	10
Cost-Recovery Activities	11
Nine months ended September 30, 2024 versus September 30, 2023	12
Earning Activities	12
Cost-Recovery Activities	13
Supplemental Operating Revenue Information	14
Income Taxes	14
Edison International Parent and Other	14
Loss from Operations	14
LIQUIDITY AND CAPITAL RESOURCES	14
Southern California Edison Company	14
Available Liquidity	15
Regulatory Proceedings	15
Capital Investment Plan	17
Decommissioning of San Onofre	17
Margin and Collateral Deposits	17
Edison International Parent and Other	18
Edison International Income taxes	19
Historical Cash Flows	19
Southern California Edison Company	19
Edison International Parent and Other	22
Contingencies	22
MARKET RISK EXPOSURES	22

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CRITICAL ACCOUNTING ESTIMATES AND POLICIES	22
NEW ACCOUNTING GUIDANCE	23
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	23	Part I, Item 3
FINANCIAL STATEMENTS	24	Part I, Item 1
Edison International Consolidated Statements of Income	24
Edison International Consolidated Statements of Comprehensive Income	25
Edison International Consolidated Balance Sheets	26
Edison International Consolidated Statements of Cash Flows	28
SCE Consolidated Statements of Income	29
SCE Consolidated Statements of Comprehensive Income	29
SCE Consolidated Balance Sheets	30
SCE Consolidated Statements of Cash Flows	32
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	33
Note 1. Summary of Significant Accounting Policies	33
Note 2. Consolidated Statements of Changes in Equity	37
Note 3. Variable Interest Entities	40
Note 4. Fair Value Measurements	42
Note 5. Debt and Credit Agreements	45
Note 6. Derivative Instruments	46
Note 7. Revenue	48
Note 8. Income Taxes	49
Note 9. Compensation and Benefit Plans	50
Note 10. Investments	51
Note 11. Regulatory Assets and Liabilities	52
Note 12. Commitments and Contingencies	53
Note 13. Equity	66
Note 14. Accumulated Other Comprehensive Loss	67
Note 15. Other Income	67
Note 16. Supplemental Cash Flows Information	68
Note 17. Related-Party Transactions	68
CONTROLS AND PROCEDURES	69	Part I, Item 4
Disclosure Controls and Procedures	69
Changes in Internal Control Over Financial Reporting	69
Jointly Owned Utility Plant	69
LEGAL PROCEEDINGS	69	Part II, Item 1
2017/2018 Wildfire/Mudslide Events	69
Environmental Proceedings	70

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UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	70	Part II, Item 2
Share Repurchase Program	70
Purchases of Equity Securities by Edison International and Affiliated Purchasers	71
OTHER INFORMATION	71	Part II Item 5
EXHIBITS	72	Part II, Item 6
SIGNATURES	73

This combined Form 10-Q is separately filed by Edison International and SCE. Information contained in this document relating to SCE is filed by Edison International and separately by SCE. SCE makes no representation as to information relating to Edison International or its subsidiaries, except as it may relate to SCE and its subsidiaries.

iii

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GLOSSARY

The following terms and abbreviations appearing in the text of this report have the meanings indicated below.


2017/2018 Wildfire/Mudslide Events		the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire, collectively
2023 Form 10-K		Edison International's and SCE's combined Annual Report on Form 10-K for the year ended December 31, 2023
2023 MD&A		Edison International's and SCE's MD&A for the calendar year 2023, which was included in the 2023 Form 10-K
AB 1054		California Assembly Bill 1054, executed by the governor of California on July 12, 2019
AB 1054 Excluded Capital Expenditures		$1.6 billion in wildfire risk mitigation capital expenditures that SCE has excluded from the equity portion of SCE's rate base as required under AB 1054
AB 1054 Liability Cap		a cap on the aggregate requirement to reimburse the Wildfire Insurance Fund over a trailing three calendar year period which applies if certain conditions are met and is equal to 20% of the equity portion of the utility's transmission and distribution rate base, excluding general plant and intangibles, in the year of the applicable prudency determination
ARO(s)		asset retirement obligation(s)
CAISO		California Independent System Operator
Cal Advocates		the California Public Advocates Office
CAL OES		California Governor's Office of Emergency Services
Capistrano Wind		a group of wind projects referred to as Capistrano Wind
Capital Structure Compliance Period		January 1, 2023 to December 31, 2025, the current compliance period for SCE's CPUC authorized capital structure
CCAs		community choice aggregators which are cities, counties, and certain other public agencies with the authority to generate and/or purchase electricity for their local residents and businesses
CPUC		California Public Utilities Commission
CSRP		Customer Service Re-platform, a customer service system implemented in April 2021
DGC		the decommissioning general contractor engaged by SCE to undertake a significant scope of decommissioning activities at San Onofre
ECS		SCE commercial telecommunications services operated under the name of Edison Carrier Solutions
EIS		Edison Insurance Services, Inc., a wholly-owned subsidiary of Edison International licensed to provide insurance to Edison International and its subsidiaries
Electric Service Provider		an entity other than an investor-owned utility or CCA that provides electric power and ancillary services to retail customers
ERRA		Energy Resource Recovery Account
Fast curve settings		protective settings, used to mitigate the risk of wildfires in high fire risk areas, that enable SCE to more quickly shut off power when an electrical fault occurs than under traditional settings
FERC		Federal Energy Regulatory Commission
Fitch		Fitch Ratings, Inc.
GAAP		generally accepted accounting principles in the United States
GHG		greenhouse gas
GRC		general rate case
IRA		Inflation Reduction Act of 2022
Koenigstein Fire		a wind-driven fire that originated near Koenigstein Road in the City of Santa Paula in Ventura County, California, on December 4, 2017
MD&A		Management's Discussion and Analysis of Financial Condition and Results of Operations

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Montecito Mudslides		the debris flows and flooding in Montecito, Santa Barbara County, California, that occurred in January 2018
Moody's		Moody's Investors Service, Inc.
MW		Megawatt(s)
NDCTP		Nuclear Decommissioning Cost Triennial Proceeding, a CPUC proceeding to review decommissioning costs
NERC		North American Electric Reliability Corporation
NRC		United States Nuclear Regulatory Commission
OEIS		Office of Energy Infrastructure Safety of the California Natural Resources Agency
Other 2017/2018 Wildfires		Collectively, all the wildfires that originated in Southern California in 2017 or 2018 where SCE's equipment has been or may be alleged to be associated with the fire's ignition, except for the Thomas Fire, the Koenigstein Fire and the Woolsey Fire
Other Wildfires		Collectively, the Other 2017/2018 Wildfires and the Post-2018 Wildfires
PABA		Portfolio Allocation Balancing Account
Palo Verde		nuclear electric generating facility located near Phoenix, Arizona in which SCE holds a 15.8% ownership interest
PBOP(s)		postretirement benefits other than pension(s)
PG&E		Pacific Gas & Electric Company
Post-2018 Wildfires		Collectively, all the wildfires that originated in Southern California after 2018 where SCE's equipment has been or may be alleged to be associated with the fire's ignition
PSPS		Public Safety Power Shutoff(s)
ROE		return on common equity
RPS		California's Renewables Portfolio Standard
S&P		Standard & Poor's Financial Services LLC
San Onofre		retired nuclear generating facility located in south San Clemente, California in which SCE holds a 78.21% ownership interest
SCE		Southern California Edison Company, a wholly-owned subsidiary of Edison International
SCE Recovery Funding LLC		a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE
SDG&E		San Diego Gas & Electric Company
SEC		U.S. Securities and Exchange Commission
SED		Safety and Enforcement Division of the CPUC
SED Agreement		an agreement dated October 21, 2021 between SCE and the SED regarding the 2017/2018 Wildfire/Mudslide Events and three other 2017 wildfires
Thomas Fire		a wind-driven fire that originated in the Anlauf Canyon area of Ventura County, California, on December 4, 2017
TKM		collectively, the Thomas Fire, the Koenigstein Fire and the Montecito Mudslides
TKM Settlement Agreement		a settlement agreement entered into between SCE and the California Public Advocates Office in August 2024 in the CPUC-jurisdictional rate recovery proceeding related to TKM
Track 4		Track 4 of the 2021 GRC, which addressed SCE's revenue requirement for 2024
Trio		Edison Energy, LLC, an indirect wholly-owned non-utility subsidiary of Edison International, a global energy advisory firm providing integrated sustainability and energy solutions to commercial, industrial and institutional customers doing business as "Trio"
WCCP		Wildfire Covered Conductor Program
WMP		a wildfire mitigation plan required to be filed under AB 1054 to describe a utility's plans to construct, operate, and maintain electrical lines and equipment that will help minimize the risk of catastrophic wildfires caused by such electrical lines and equipment
Wildfire Insurance Fund		the insurance fund established under AB 1054
Woolsey Fire		a wind-driven fire that originated in Ventura County in November 2018

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FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Edison International's and SCE's current expectations and projections about future events based on Edison International's and SCE's knowledge of present facts and circumstances and assumptions about future events and include any statements that do not directly relate to a historical or current fact. Other information distributed by Edison International and SCE that is incorporated in this report, or that refers to or incorporates this report, may also contain forward-looking statements. In this report and elsewhere, the words "expects," "believes," "anticipates," "estimates," "projects," "intends," "plans," "probable," "may," "will," "could," "would," "should," "targets," and variations of such words and similar expressions, or discussions of strategy or plans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause results to differ from those currently expected, or that otherwise could impact Edison International and SCE, include, but are not limited to the:

●

ability of SCE to recover its costs through regulated rates, timely or at all, including uninsured wildfire-related and debris flow-related costs (including amounts paid for self-insured retention and co-insurance), costs incurred to mitigate the risk of utility equipment causing future wildfires, and increased costs due to supply chain constraints, inflation and rising interest rates;

●

impact of affordability of customer rates on SCE's ability to execute its strategy, including the impact of affordability on the regulatory approval of operations and maintenance expenses, and proposed capital investment projects;

●

ability of SCE to implement its operational and strategic plans, including its WMP and capital investment program;

●

risks of regulatory or legislative restrictions that would limit SCE's ability to implement operational measures to mitigate wildfire risk, including PSPS and fast curve settings, when conditions warrant or would otherwise limit SCE's operational practices relative to wildfire risk mitigation;

●

ability of SCE to obtain safety certifications from OEIS;

●

risk that AB 1054 does not effectively mitigate the significant exposure faced by California investor-owned utilities related to liability for damages arising from catastrophic wildfires where utility facilities are alleged to be a substantial cause, including the longevity of the Wildfire Insurance Fund and the CPUC's interpretation of and actions under AB 1054, including its interpretation of the prudency standard clarified by AB 1054;

●

risks associated with the operation of electrical facilities, including worker and public safety issues, the risk of utility assets causing or contributing to wildfires, failure, availability, efficiency, and output of equipment and facilities, and availability and cost of spare parts;

●

physical security of Edison International's and SCE's critical assets and personnel and the cybersecurity of Edison International's and SCE's critical information technology systems for grid control, and business, employee and customer data;

●

ability of Edison International and SCE to effectively attract, manage, develop and retain a skilled workforce, including its contract workers;

●

decisions and other actions by the CPUC, the FERC, the NRC and other governmental authorities, including decisions and actions related to nationwide or statewide crisis, approval of regulatory proceeding settlements, determinations of authorized rates of return or return on equity, the recoverability of wildfire-related and debris flow-related costs, issuance of SCE's wildfire safety certification, wildfire mitigation efforts, approval and implementation of electrification programs, and delays in executive, regulatory and legislative actions;

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●

potential for penalties or disallowances for non-compliance with applicable laws and regulations, including fines, penalties and disallowances related to wildfires where SCE's equipment is alleged to be associated with ignition;

●

extreme weather-related incidents (including events caused, or exacerbated, by climate change, such as wildfires, debris flows, flooding, droughts, high wind events and extreme heat events) and other natural disasters (such as earthquakes), which could cause, among other things, worker and public safety issues, property damage, rotating outages and other operational issues (such as issues due to damaged infrastructure), PSPS activations and unanticipated costs;

●

cost and availability of labor, equipment and materials, including as a result of supply chain constraints and inflation;

●

ability of Edison International or SCE to borrow funds and access bank and capital markets on reasonable terms;

●

risks associated with the decommissioning of San Onofre, including those related to worker and public safety, public opposition, permitting, governmental approvals, on-site storage of spent nuclear fuel and other radioactive material, delays, contractual disputes, and cost overruns;

●

risks associated with cost allocation resulting in higher rates for utility bundled service customers because of possible customer bypass or departure for other electricity providers such as CCAs and Electric Service Providers;

●

risks inherent in SCE's capital investment program, including those related to project site identification, public opposition, environmental mitigation, construction, permitting, contractor performance, changes in the CAISO's transmission plans, and governmental approvals;

●

actions by credit rating agencies to downgrade Edison International or SCE's credit ratings or to place those ratings on negative watch or negative outlook;

●

changes in tax laws and regulations, at both the state and federal levels, or changes in the application of those laws, that could affect recorded deferred tax assets and liabilities, effective tax rates and cash flows;

●

changes in future taxable income, or changes in tax law, that would limit Edison International's and SCE's realization of expected net operating loss and tax credit carryover benefits prior to expiration;

●

changes in interest rates and potential future adjustments to SCE's ROE based on changes in Moody's utility bond rate index;

●

changes in rates of inflation (including whether inflation-related adjustments to SCE's authorized revenues allowed by the public utility regulators are commensurate with inflation rates);

●

governmental, statutory, regulatory, or administrative changes or initiatives affecting the electricity industry, including the market structure rules applicable to each market adopted by the NERC, CAISO, Western Electricity Coordinating Council, and similar regulatory bodies in adjoining regions, and changes in the United States' and California's environmental priorities that lessen the importance placed on GHG reduction and other climate related priorities;

●

availability and creditworthiness of counterparties and the resulting effects on liquidity in the power and fuel markets and/or the ability of counterparties to pay amounts owed in excess of collateral provided in support of their obligations; and

●

cost of fuel for generating facilities and related transportation, which could be impacted by, among other things, disruption of natural gas storage facilities, to the extent not recovered, timely or at all, through regulated rate cost escalation provisions or balancing accounts.

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Additional information about risks and uncertainties, including more detail about the factors described in this report, is contained throughout this report and in the 2023 Form 10-K, including the "Risk Factors" section. Readers are urged to read this entire report, including information incorporated by reference, as well as the 2023 Form 10-K, and carefully consider the risks, uncertainties, and other factors that affect Edison International's and SCE's businesses. Forward-looking statements speak only as of the date they are made and neither Edison International nor SCE are obligated to publicly update or revise forward-looking statements. Readers should review future reports filed by Edison International and SCE with the SEC. Edison International and SCE post or provide direct links to (i) certain SCE and other parties' regulatory filings and documents with the CPUC and the FERC and certain agency rulings and notices in open proceedings in a section titled "SCE Regulatory Highlights," (ii) certain documents and information related to Southern California wildfires which may be of interest to investors in a section titled "Southern California Wildfires," and (iii) presentations, documents and information that may be of interest to investors in a section titled "Presentations and Updates" at www.edisoninvestor.com in order to publicly disseminate such information. The reports, presentations, documents and information contained on, or connected to, the Edison International investor website are not deemed part of, and are not incorporated by reference into, this report.

The MD&A for the nine months ended September 30, 2024 discusses material changes in the consolidated financial condition, results of operations and other developments of Edison International and SCE since December 31, 2023 and as compared to the nine months ended September 30, 2023. This discussion presumes that the reader has read or has access to the 2023 MD&A.

Except when otherwise stated, references to each of Edison International or SCE mean each such company with its subsidiaries on a consolidated basis. References to "Edison International Parent and Other" mean Edison International Parent and its subsidiaries other than SCE and its subsidiaries and "Edison International Parent" mean Edison International on a stand-alone basis, not consolidated with its subsidiaries. Unless otherwise described, all the information contained in this report relates to both filers.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT OVERVIEW

Highlights of Operating Results

Edison International is the ultimate parent holding company of SCE and Edison Energy, LLC, doing business as Trio ("Trio"). SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area across Southern, Central and Coastal California. Trio is a global energy advisory firm providing integrated sustainability and energy solutions to commercial, industrial and institutional customers. Trio's business activities are currently not material to report as a separate business segment.

Edison International's earnings are prepared in accordance with GAAP. Management uses core earnings (loss) internally for financial planning and for analysis of performance. Core earnings (loss) are also used when communicating with investors and analysts regarding Edison International's earnings results to facilitate comparisons of the company's performance from period to period. Core earnings (loss) are a non-GAAP financial measure and may not be comparable to those of other companies. Core earnings (loss) are defined as earnings attributable to Edison International shareholders less non-core items. Non-core items include income or loss from discontinued operations and income or loss from significant discrete items that management does not consider representative of ongoing earnings, such as write downs, asset impairments and other income and expense related to changes in law, outcomes in tax, regulatory or legal proceedings, and exit activities, including sale of certain assets and other activities that are no longer continuing.

Beginning July 1, 2023, SCE implemented a customer-funded wildfire self-insurance program. With the commencement of this program, Edison International and SCE no longer consider claims-related losses for wildfires to be representative of ongoing earnings and treat such costs as non-core items. For additional information on the customer-funded self-insurance program, see "Management Overview—Customer-Funded Self-Insurance" in the 2023 MD&A.

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	Three months ended						Nine months ended
	September 30,						September 30,
(in millions)	2024		2023		Change		2024		2023		Change
Net income (loss) available to Edison International
SCE	$	602	$	239	$	363	$	1,190	$	1,029	$	161
Edison International Parent and Other		(86)		(84)		(2)		(246)		(210)		(36)
Edison International		516		155		361		944		819		125
Less: Non-core items
SCE
2017/2018 Wildfire/Mudslide Events claims and expenses, net of recoveries		(7)		(458)		451		(485)		(560)		75
Other Wildfires claims and expenses, net of recoveries¹		(3)		(7)		4		(124)		(7)		(117)
Wildfire Insurance Fund expense		(36)		(54)		18		(109)		(159)		50
Severance costs, net of recovery		(44)		—		(44)		(44)		—		(44)
2021 NDCTP disallowance		—		—		—		—		(30)		30
Customer cancellations of certain ECS data services		—		—		—		—		(17)		17
Insurance recovery related to employment litigation matter		—		—		—		—		10		(10)
Income tax benefit²		25		145		(120)		213		214		(1)
Edison International Parent and Other
Customer revenues for EIS insurance contract, net of (claims)		(1)		(3)		2		(2)		42		(44)
Income tax benefit (expense)²		—		1		(1)		—		(9)		9
Total non-core items		(66)		(376)		310		(551)		(516)		(35)
Core earnings (loss)
SCE		667		613		54		1,739		1,578		161
Edison International Parent and Other		(85)		(82)		(3)		(244)		(243)		(1)
Edison International	$	582	$	531	$	51	$	1,495	$	1,335	$	160

1	Charges of $4 million related to claims from wildfires ignited prior to July 1, 2023 are included in core earnings for the nine months ended September 30, 2023. Core earnings in periods before the third quarter of 2023 have not been recast to exclude these charges.

2	SCE and Edison International Parent and Other non-core items are tax-effected at an estimated statutory rate of approximately 28%; customer revenues (claims) for EIS insurance contract are tax-effected at the federal statutory rate of 21%.

Edison International's third quarter 2024 earnings increased $361 million from the third quarter of 2023, resulting from an increase in SCE's earnings of $363 million and an increase in Edison International Parent and Other's loss of $2 million. SCE's higher net income consisted of $54 million of higher core earnings and $309 million of lower non-core loss. Edison International Parent and Other's loss increased due to $3 million of higher core loss, partially offset by $1 million of lower non-core loss. Edison International's earnings for the nine months ended September 30, 2024 increased $125 million from the nine months ended September 30, 2023, resulting from an increase in SCE's earnings of $161 million and an increase in Edison International Parent and Other's loss of $36 million. SCE's higher net income consisted of $161 million of higher core earnings. Edison International Parent and Other's loss increased due to $35 million of lower earnings in non-core items and $1 million increase in core loss.

The increase in SCE's core earnings for both the three and nine months ended September 30, 2024 from the same periods in 2023 was primarily due to higher revenue authorized in Track 4 and an increase in the authorized rate of return resulting from the cost of capital adjustment mechanism, partially offset by higher interest expense. The increase in core earnings for the nine months period was also due to recognition of previously unrecognized return on rate base related to emergency restoration related capital expenditures.

Edison International Parent and Other's core loss for the three and nine months ended September 30, 2024 were both in line with the same periods in the prior year.

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Consolidated non-core items for the nine months ended September 30, 2024 and 2023 primarily included:

●

Charges of $485 million ($349 million after-tax) recorded in 2024 and $560 million ($404 million after-tax) recorded in 2023 for 2017/2018 Wildfire/Mudslide Events claims and related legal expenses, net of expected FERC recoveries. See "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies" for further information.

●

Charges of $124 million ($90 million after-tax) recorded in 2024 and $7 million ($5 million after-tax) recorded in 2023 for Other Wildfires claims and related legal expenses, net of expected insurance and regulatory recoveries. See "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies" for further information.

●

Charges of $109 million ($78 million after-tax) recorded in 2024 and $159 million ($114 million after-tax) recorded in 2023 from the amortization of SCE's contributions to the Wildfire Insurance Fund. See "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies" for further information.

●

Severance costs of $44 million ($32 million after-tax), net of expected FERC recovery, recorded in the third quarter of 2024 due to current and probable reductions in workforce. See "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies" for further information.

●

A charge of $30 million ($21 million after-tax) recorded in 2023 for a disallowance related to the 2021 NDCTP. See "Liquidity and Capital Resources—SCE—Decommissioning of San Onofre" for more information.

●

A charge of $17 million ($12 million after-tax) recorded in 2023 related to customer cancellations of certain ECS data services.

●

Insurance recovery of $10 million ($7 million after-tax) recorded in 2023 related to settlement of an employment litigation matter. SCE and Edison International settled the matter following an atypical jury award.

●

Expected wildfire claims of $2 million ($2 million after-tax) insured by EIS recorded in 2024 and net earnings of $42 million ($33 million after-tax) recorded in 2023 related to customer revenues for an EIS insurance contract offset by expected wildfire claims insured by EIS. See "Notes to Consolidated Financial Statements— Note 12. Commitments and Contingencies" for further information.

See "Results of Operations" for discussion of SCE's and Edison International Parent and Other's results of operations.

2025 General Rate Case

As discussed in the 2023 Form 10-K, SCE filed its 2025 GRC application with the CPUC in May 2023, for the four-year period 2025 – 2028. In its application, SCE requested that the CPUC authorize a test year 2025 revenue requirement of approximately $10.3 billion. This represents a $1.9 billion, or 23% increase over the approximately $8.4 billion 2024 revenue requirement adopted in Track 4, prior to adjustments for updated operations and maintenance escalation rates, the CPUC's decisions to adopt SCE's 2023 to 2025 cost of capital, and the expanded customer-funded self-insurance for wildfire-related claims.

In February 2024, intervenors to the 2025 GRC proceeding, including Cal Advocates and The Utility Reform Network ("TURN"), submitted testimony in response to SCE's application. Cal Advocates and TURN recommended reductions to SCE's requests for load growth investments, infrastructure replacement, targeted undergrounding of conductors, and other areas of SCE's application.

Cal Advocates in its testimony proposed a test year 2025 revenue requirement of approximately $9.3 billion, representing an increase of approximately 11% over the 2024 revenue requirement adopted in Track 4, before the adjustments described above. While TURN did not calculate a test year 2025 revenue requirement in connection with its proposals in its testimony,

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SCE estimates that TURN's proposals would result in a test year 2025 revenue requirement of approximately 12% over the 2024 revenue requirement adopted in Track 4, before the adjustments described above.

In June 2024, following amendments and other revisions to rebuttal testimony, SCE updated its 2025 revenue requirement request to $10.5 billion, and proposed post-test year revenue requirement increases of approximately $670 million, $750 million and $730 million in 2026, 2027 and 2028, respectively. The updated 2025 revenue requirement included a $220 million increase associated with the cost of capital adjustment authorized by the CPUC in a separate proceeding, which was subsequently modified by a CPUC decision in October 2024, as discussed in "—Cost of Capital Trigger."

In July 2024, the CPUC issued a decision approving SCE's request in the 2025 GRC to extend the wildfire customer-funded self-insurance through the 2025 GRC period.

In October 2024, the CPUC approved the establishment of a memorandum account to track changes in the revenue requirement between January 1, 2025, and the implementation date of the final decision, in the event that the decision is not issued in time for implementation by January 2025. While SCE and certain parties have entered into stipulations to resolve certain contested areas in the 2025 GRC, SCE cannot predict the revenue requirement the CPUC will ultimately authorize or forecast the timing of a final decision.

Cost of Capital Trigger

As discussed in the 2023 Form 10-K, the cost of capital adjustment mechanism set by the CPUC provides for an adjustment to SCE's authorized cost of capital that, when triggered, will impact SCE's results of operations and cash flows. In 2023, the cost of capital adjustment mechanism was triggered and resulted in an increase to SCE's CPUC-authorized ROE from 10.05% to 10.75% effective January 1, 2024. The resulting increase to SCE's 2024 GRC-related revenue requirement was $201 million. The cost of capital adjustment mechanism was not triggered in 2024.

In October 2024, the CPUC issued a decision modifying the cost of capital adjustment mechanism that changes the mechanism's adjustment ratio from 50% to 20% effective on January 1, 2025, and also applies to the increase that most recently triggered it in 2023. As a result, SCE's 2025 CPUC-authorized ROE will be adjusted to 10.33%. The decision reduces SCE's updated 2025 GRC-related revenue requirement by approximately $117 million. For further information, see "—2025 General Rate Case." For additional information on the cost of capital adjustment mechanism, see "Business—SCE—Overview of Ratemaking Process—CPUC" in the 2023 Form 10-K.

Capital Program

Total capital expenditures (including accruals) were $4.0 billion and $3.9 billion for the nine months ended September 30, 2024 and 2023, respectively. As discussed in the 2023 Form 10-K, SCE forecasts total capital expenditures ranging from $32.2 billion to $37.5 billion for 2024 – 2028, and weighted average annual rate base from $43.0 billion to $60.6 billion for 2024 – 2028. These capital program and rate base projections incorporate the amounts requested in the 2025 GRC application and do not reflect subsequent updates included in SCE's amended and revised rebuttal testimony. For further information regarding the capital expenditures, see "Liquidity and Capital Resources—SCE—Capital Investment Plan" below and "Management Overview—Capital Program" in the 2023 MD&A.

In May 2023, the CAISO released its 2022 – 2023 Transmission Plan based on the CPUC's projections that more than 40 gigawatts of new resources need to be added in California by 2032. As the incumbent transmission owner for a portion of these transmission projects, SCE expects to construct projects requiring capital investment of at least $2.0 billion, most of which will be incurred beyond 2028. In May 2024, the CAISO released its 2023 – 2024 Transmission Plan which identified four additional transmission projects expected to be constructed by SCE with anticipated capital expenditures of approximately $40 million in 2027 and $48 million in 2029.

In addition to projects awarded to incumbent transmission owners, the CAISO identified projects eligible for competitive solicitation. On May 20, 2024, SCE, in association with Lotus Infrastructure Global Operations, LLC ("Lotus"), was selected

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as the approved project sponsor for a 30-mile overhead transmission line project connecting San Diego and Orange Counties. The project is expected to be in-service in 2032. Subject to contract finalization with the CAISO and Lotus, under the terms of the commercial arrangement with Lotus, Lotus is expected to finance and construct the project. Upon the in-service date, SCE will purchase the entire project from Lotus for approximately $325 million, subject to certain adjustments, and lease 25% of the transmission capability to Lotus. Under the proposed lease agreement, Lotus will pay approximately $81 million in prepaid rent as well as 25% of the ongoing operations and maintenance costs. As a result, SCE expects to place approximately $244 million into its transmission rate base in 2032.

Southern California Wildfires and Mudslides

2017/2018 Wildfire/Mudslide Events

As discussed in the 2023 Form 10-K, multiple lawsuits and investigations related to the 2017/2018 Wildfire/Mudslide Events have been initiated against SCE and Edison International. SCE has previously entered into settlements with a number of local public entities, subrogation and individual plaintiffs in the TKM and Woolsey Fire litigations and under the SED Agreement. As of October 22, 2024, in addition to the outstanding claims of approximately 440 of the approximately 15,000 initial individual plaintiffs, there were alleged and potential claims of certain public entity plaintiffs, including CAL OES, outstanding.

Through September 30, 2024, SCE has accrued estimated losses of $9.9 billion, recoveries from insurance of $2.0 billion, all of which have been collected, and expected recoveries through FERC electric rates of $440 million, $376 million of which has been collected, related to the 2017/2018 Wildfire/Mudslide Events claims. The after-tax net charges to earnings recorded through September 30, 2024 have been $5.4 billion.

Estimated losses for the 2017/2018 Wildfire/Mudslide Events litigation are based on a number of assumptions and are subject to change as additional information becomes available. Actual losses incurred may be higher or lower than estimated based on several factors, including the uncertainty in estimating damages that have been or may be alleged. For instance, SCE will receive additional information with respect to damages claimed as the claims mediation and trial processes progress. Other factors that can cause actual losses incurred to be higher or lower than estimated include the ability to reach settlements and the outcomes of settlements reached through the ongoing claims mediation processes, uncertainties related to the impact of outcomes of wildfire litigation against other parties and increasingly negative jury sentiments in general litigation, uncertainties related to the sufficiency of insurance held by plaintiffs, uncertainties related to the litigation processes, including whether plaintiffs will ultimately pursue claims, uncertainty as to the legal and factual determinations to be made during litigation, including uncertainty as to the contributing causes of the 2017/2018 Wildfire/Mudslide Events, the complexities associated with fires that merge and whether inverse condemnation will be held applicable to SCE with respect to damages caused by the Montecito Mudslides, and the uncertainty as to how these factors impact future settlements.

As of September 30, 2024, SCE had paid $9.3 billion under executed settlements and had $78 million to be paid under executed settlements, including $58 million to be paid under the SED Agreement, related to the 2017/2018 Wildfire/Mudslide Events. After giving effect to all payment obligations under settlements entered into through September 30, 2024, Edison International's and SCE's best estimate of expected losses for remaining alleged and potential claims related to the 2017/2018 Wildfire/Mudslide Events was $491 million. Edison International and SCE may incur a material loss in excess of amounts accrued in connection with the remaining alleged and potential claims related to the 2017/2018 Wildfire/Mudslide Events.

CPUC-Jurisdictional Rate Recovery

In August 2023, SCE filed an application to seek CPUC-jurisdictional rate recovery of prudently incurred losses related to the Thomas Fire, the Koenigstein Fire and the Montecito Mudslides. SCE also sought recovery of approximately $65 million in restoration costs in the proceeding. In August 2024, SCE and Cal Advocates filed a joint motion in the proceeding seeking

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approval of the TKM Settlement Agreement between SCE and Cal Advocates. One party to the proceeding, the Wild Tree Foundation, has opposed the TKM Settlement Agreement.

Under the TKM Settlement Agreement, if approved by the CPUC, SCE will be authorized to recover 60%, or approximately $1.6 billion, of approximately $2.7 billion of losses, consisting of approximately $1.3 billion of uninsured claims paid as of May 31, 2024, and $0.3 billion of costs, composed of legal and financing costs incurred as of May 31, 2024 and estimated ongoing financing costs. SCE will also be authorized to recover 60% of claims paid and related costs incurred after May 31, 2024, other than for $125 million of uninsured claims and related financing costs which SCE waived its right to seek recovery of under the SED Agreement. Subject to approval of the TKM Settlement Agreement, SCE will request approval from the CPUC to finance the amounts authorized under the TKM Settlement Agreement through the issuance of securitized bonds. Further, SCE will be authorized to recover approximately $55 million of approximately $65 million in restoration costs incurred. In the TKM Settlement Agreement, SCE also agreed to $50 million of shareholder-funded wildfire- and public safety-related system enhancements. If the TKM Settlement Agreement is approved, SCE will be allowed to permanently exclude any after-tax charges to equity associated with the costs disallowed or funded by shareholders in the TKM Settlement Agreement and the debt issued to finance those costs from SCE's CPUC regulatory capital structure.

In October 2024, SCE filed an application to seek CPUC-jurisdictional rate recovery of $5.4 billion of prudently incurred losses related to the Woolsey Fire, consisting of approximately $4.4 billion of uninsured claims paid as of August 31, 2024 and $1.0 billion of associated costs, composed of legal and financing costs incurred as of August 31, 2024 and estimated ongoing financing costs. SCE is also seeking recovery of approximately $84 million in restoration costs in the proceeding.

Because the CPUC's decision in a cost recovery proceeding involving SDG&E arising from several 2007 wildfires in SDG&E's service area is the only directly comparable precedent available, SCE believes that there is substantial uncertainty regarding how the CPUC will interpret and apply its prudency standard to an investor-owned utility in wildfire claims related cost-recovery proceedings for fires ignited prior to the adoption of AB 1054 on July 12, 2019. Accordingly, while the CPUC has not made a determination regarding SCE's prudency relative to any of the 2017/2018 Wildfire/Mudslide Events, SCE is unable to conclude, at this time, that uninsured CPUC-jurisdictional wildfire-related costs related to the 2017/2018 Wildfire/Mudslide Events are probable of recovery through electric rates. If, and when, the CPUC adopts a final decision approving the TKM Settlement Agreement, SCE will record a regulatory asset for recoveries permitted under the agreement. SCE does not expect to record a regulatory asset for recoveries related to the Woolsey Fire at that time. SCE will continue to evaluate the facts and circumstances of the Woolsey Fire cost recovery proceeding in determining if and when a regulatory asset may be recorded.

For further information on Southern California Wildfires and Mudslides, see "Risk Factors," "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054," "Business—Southern California Wildfires" in the 2023 Form 10-K and "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides" in this report.

RESULTS OF OPERATIONS

SCE

SCE's results of operations are derived mainly through two sources:

●

Earning activities – representing revenue authorized by the CPUC and the FERC, which is intended to provide SCE with a reasonable opportunity to recover its costs and earn a return on its net investment in generation, transmission and distribution assets. The annual revenue requirements are composed of authorized operation and maintenance costs, depreciation, taxes and a return consistent with the capital structure. Also, included in earnings activities are revenue or penalties related to incentive mechanisms, other operating revenue, and regulatory charges or disallowances.

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●

Cost-recovery activities – representing CPUC- and FERC- authorized balancing accounts, which allow for recovery of specific project or program costs, subject to reasonableness review or compliance with upfront standards, as well as non-bypassable rates collected for SCE Recovery Funding LLC. Cost-recovery activities include rates which provide recovery, subject to reasonableness review of, among other things, fuel costs, purchased power costs, public purpose related-program costs (including energy efficiency and demand-side management programs), certain operation and maintenance expenses (including vegetation management and wildfire insurance), and repayment of bonds and financing costs of SCE Recovery Funding LLC. SCE earns no return on these activities.

The following table is a summary of SCE's results of operations for the periods indicated.

Three months ended September 30, 2024 versus September 30, 2023


	Three months ended September 30, 2024						Three months ended September 30, 2023
			Cost-						Cost-
	Earning		Recovery		Total		Earning		Recovery		Total
(in millions)	Activities		Activities		Consolidated		Activities		Activities		Consolidated
Operating revenue	$	2,606	$	2,582	$	5,188	$	2,387	$	2,300	$	4,687
Purchased power and fuel		—		1,898		1,898		—		1,988		1,988
Operation and maintenance		685		679		1,364		552		302		854
Wildfire-related claims, net of insurance recoveries		—		—		—		479		—		479
Wildfire Insurance Fund expense		36		—		36		54		—		54
Depreciation and amortization		698		12		710		650		15		665
Property and other taxes		163		4		167		133		5		138
Total operating expenses		1,582		2,593		4,175		1,868		2,310		4,178
Operating income (loss)		1,024		(11)		1,013		519		(10)		509
Interest expense		(390)		(13)		(403)		(353)		(16)		(369)
Other income, net		102		24		126		102		26		128
Income before income taxes		736		—		736		268		—		268
Income tax expense (benefit)		95		—		95		(1)		—		(1)
Net income		641		—		641		269		—		269
Less: Preference stock dividend requirements		39		—		39		30		—		30
Net income available to common stock	$	602	$	—	$	602	$	239	$	—	$	239

Earning Activities

Earning activities were primarily affected by the following:

●	Higher operating revenue of $219 million is primarily due to:

●

An increase in CPUC-related revenue of $188 million due to higher revenue authorized in Track 4 and an increase in the authorized rate of return resulting from the cost of capital adjustment mechanism. See "Management Overview—Cost of Capital Trigger" for more information.

●

An increase in CPUC-related revenue of $24 million due to higher wildfire mitigation expenses authorized for recovery in 2024. See "Liquidity and Capital Resources—SCE—Regulatory Proceedings" for more information.

●	Higher operation and maintenance expense of $133 million is primarily due to:

●

An increase in wildfire mitigation expense of $99 million due to higher amounts authorized in Track 4, and the recognition of previously deferred costs (offset in revenue above).

●

Severance costs of $47 million recorded in 2024 due to current and probable reductions in workforce.

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●

Charges for wildfire-related claims, net of insurance recoveries, were $479 million in 2023, primarily related to the 2017/2018 Wildfire/Mudslide Events and Other Wildfires. See "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides."

●

Lower wildfire insurance fund amortization expense of $18 million due to the change in the estimated life of the Wildfire Insurance Fund in the first quarter of 2024, which increased the amortization period of SCE's contributions in 2024. See "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies" for further information.

●	Higher depreciation and amortization expense of $48 million primarily due to an increase in plant balances.

●	Higher property and other taxes of $30 million primarily due to an increase in assessed property value.

●	Higher interest expense of $37 million primarily due to higher interest rates and additional long-term borrowings.

●	See "Income Taxes" below for the explanation of the $96 million increase in income tax expense.

Cost-Recovery Activities

Operating revenue and the corresponding operating expenses in cost-recovery activities were primarily affected by the following:

●	Lower purchased power and fuel expense of $90 million, primarily due to lower purchased power and gas prices, partially offset by increase in purchased power volume.

●	Higher operation and maintenance expense of $377 million primarily due to:

●

An increase in vegetation management expense of $261 million due to higher amounts authorized in Track 4 and the recognition of previously deferred costs.

●

An increase in expense of $53 million primarily due to higher expected uncollectible expenses in 2024.

●

An increase in expense of $39 million related to public purpose programs.

●

An increase in expense of $36 million related to higher transmission access charges.

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Nine months ended September 30, 2024 versus September 30, 2023


	Nine months ended September 30, 2024						Nine months ended September 30, 2023
			Cost-						Cost-
	Earning		Recovery		Total		Earning		Recovery		Total
(in millions)	Activities		Activities		Consolidated		Activities		Activities		Consolidated
Operating revenue	$	7,662	$	5,914	$	13,576	$	6,787	$	5,799	$	12,586
Purchased power and fuel		—		4,140		4,140		—		4,453		4,453
Operation and maintenance		2,159		1,754		3,913		1,828		1,342		3,170
Wildfire-related claims, net of insurance recoveries		614		—		614		575		—		575
Wildfire Insurance Fund expense		109		—		109		159		—		159
Depreciation and amortization		2,101		35		2,136		1,937		32		1,969
Property and other taxes		461		13		474		405		20		425
Total operating expenses		5,444		5,942		11,386		4,904		5,847		10,751
Operating income (loss)		2,218		(28)		2,190		1,883		(48)		1,835
Interest expense		(1,144)		(41)		(1,185)		(968)		(29)		(997)
Other income, net		339		69		408		298		77		375
Income before income taxes		1,413		—		1,413		1,213		—		1,213
Income tax expense		94		—		94		96		—		96
Net income		1,319		—		1,319		1,117		—		1,117
Less: Preference stock dividend requirements		129		—		129		88		—		88
Net income available to common stock	$	1,190	$	—	$	1,190	$	1,029	$	—	$	1,029

Earning Activities

Earning activities were primarily affected by the following:

●	Higher operating revenue of $875 million is primarily due to:

●

An increase in CPUC-related revenue of $533 million due to higher revenue authorized in Track 4 and an increase in the authorized rate of return resulting from the cost of capital adjustment mechanism. See "Management Overview—Cost of Capital Trigger" for more information.

●

An increase in CPUC-related revenue of $355 million due to higher wildfire mitigation and emergency restoration expenses authorized for recovery in 2024. See "Liquidity and Capital Resources—SCE—Regulatory Proceedings" for more information.

●	Higher operation and maintenance expense of $331 million is primarily due to:

●

An increase in expense of $200 million related to emergency restoration costs authorized for recovery in 2024 (offset in revenue above).

●

An increase in wildfire mitigation expense of $146 million due to higher amounts authorized in Track 4, and recognition of previously deferred costs (offset in revenue above).

●

Severance costs of $47 million recorded in 2024 due to current and probable reductions in workforce.

●

A decrease in expense of $30 million related to CSRP revenue requirement approved in 2023 (offset in revenue above).

●

In 2023, SCE recognized a $30 million disallowance related to the 2021 NDCTP.

●

In 2023, SCE recorded a charge of $17 million related to customer cancellations of certain ECS data services.

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●

Charges for wildfire-related claims, net of insurance recoveries, were $614 million and $575 million in 2024 and 2023, respectively, related to the 2017/2018 Wildfire/Mudslide Events and Other Wildfires. See "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides."

●

Lower wildfire insurance fund amortization expense of $50 million due to the change in the estimated life of the Wildfire Insurance Fund, which increased the amortization period of SCE's contributions in 2024. See "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies" for further information.

●	Higher depreciation and amortization expense of $164 million primarily due to increased plant balances and the recognition of $48 million of previously deferred wildfire mitigation and emergency restoration related depreciation expense in 2024 (offset in revenue above).

●	Higher property and other taxes of $56 million primarily due to increased assessed property value and the recognition of $8 million of previously deferred wildfire mitigation and emergency restoration related property tax in 2024 (offset in revenue above).

●	Higher interest expense of $176 million primarily due to increased interest rates on long-term debt and balancing account overcollections, as well as additional long-term borrowings.

●	Higher other income of $41 million primarily due to increased equity allowance for funds used during construction and increased interest rates applied to balancing account undercollections.

●	Higher preference stock dividend requirements of $41 million primarily due to increased preference stock outstanding.

●	See "Income Taxes" below for the explanation of the $2 million decrease in income tax expense.

Cost-Recovery Activities

Operating revenue and the corresponding operating expenses in cost-recovery activities were primarily affected by the following:

●	Lower purchased power and fuel costs of $313 million, primarily due to lower purchased power and gas prices, partially offset by increase in purchased power volume.

●