8-K: Edison International Reports Strong 2024 Results, Revises 2025 EPS Guidance Upward

Edison International announces fourth-quarter and full-year 2024 results, exceeding expectations and revising its 2025 core EPS guidance upward to $5.94-$6.34, including the impact of the TKM settlement.

Summary

• Edison International reported fourth-quarter 2024 core EPS of $1.05 and full-year 2024 core EPS of $4.93, exceeding the midpoint of its guidance.
• The company has revised its 2025 core EPS guidance to $5.94-$6.34, incorporating the impact of the TKM settlement.
• Edison International is confident in achieving a 5-7% core EPS CAGR through 2028, starting from a higher base of $5.84 in 2025.
• The Board declared a first-quarter 2025 common stock dividend of 82.75 cents per share.
• SCE received approval for the TKM settlement agreement, allowing recovery of about $1.6 billion, or 60%, of wildfire claims payments and associated costs.
• SCE expects to file its TKM securitization application in March.
• The Woolsey cost recovery proceeding is underway, with intervenor testimony due in early June and rebuttal testimony in mid-July.
• SCE has installed over 6,400 miles of covered conductor and hardened nearly 90% of its distribution lines in high fire risk areas.
• The company is actively engaged in conversations with stakeholders to strengthen the AB 1054 regulatory framework.
• Former U.S. Secretary of Energy Jennifer Granholm will join the board of directors of both EIX and SCE.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results, a revised EPS guidance, and progress in wildfire mitigation. While acknowledging the ongoing Eaton Fire investigation and the need to strengthen the Wildfire Fund, the overall tone is optimistic and confident.

Positives

• Edison International exceeded its 2024 core EPS guidance.
• The TKM settlement was approved, allowing SCE to recover $1.6 billion in wildfire claims.
• The company raised its dividend by 6.1%, marking the 21st consecutive annual increase.
• SCE has made significant progress in hardening the grid, installing over 6,400 miles of covered conductor.
• The company is confident in its ability to meet its 2025 EPS guidance and deliver a 5 to 7% core EPS CAGR through 2028.
• The CPUC's approval of the TKM settlement signals a constructive cost recovery framework in California.
• The Wildfire Fund provides liquidity for paying claims, protecting utility balance sheets.

Negatives

• SCE's fourth-quarter 2024 core EPS decreased year over year due to higher operation and maintenance expense and higher interest expense.
• Edison International Parent and Others fourth-quarter 2024 core loss per share increased year over year, primarily due to higher interest expense and gains on preferred stock repurchases in 2023.
• The Eaton Fire cause remains undetermined, and the investigation is complex and will take several months or longer to complete.

Risks

• The Eaton Fire investigation is ongoing, and if SCE's equipment is found to be associated with the ignition, the company could face liabilities.
• The long-term durability of the Wildfire Fund is a concern, and the company is engaged in conversations with stakeholders to find solutions.
• The company is awaiting a proposed decision from the ALJ on its 2025 General Rate Case, which will impact its capital plan and EPS guidance.
• The Woolsey cost recovery proceeding is underway, and the outcome is uncertain.
• Extreme weather-related incidents, such as wildfires, debris flows, flooding, droughts, high wind events and extreme heat events and other natural disasters (such as earthquakes), could cause, among other things, worker and public safety issues, property damage, outages and other operational issues (such as issues due to damaged infrastructure), PSPS activations and unanticipated costs.

Future Outlook

Edison International expects 5-7% Core EPS growth for 2025-2028 and is focused on operational excellence, regulatory proceedings, and financial performance.

Management Comments

• 'We will continue to invest in SCEs important work to make its system safer for its customers and communities,' said Pedro J. Pizarro, president and CEO of Edison International.
• Pizarro added, 'We have been actively engaged in conversations with key stakeholders including other utilities, the Governors Office and legislative leaders to find solutions to support the safety of the community, effectively manage customer costs and reinforce confidence in Californias utilities.'

Industry Context

The report highlights the importance of grid resiliency and wildfire mitigation in the context of recent wildfires in Southern California and emphasizes the role of AB 1054 in addressing wildfire risk and ensuring the financial stability of California's utilities.

Comparison to Industry Standards

• The document does not contain specific comparisons to industry standards.
• However, it emphasizes the company's commitment to safety and reliability, which are key performance indicators for utilities.
• The company's wildfire mitigation efforts and investments in grid hardening are aligned with industry best practices for managing wildfire risk.
• The document mentions that California has a comprehensive wildfire risk reduction profile, benefiting customers and investors.

Management Changes

Stakeholder Impact

• Customers benefit from increased grid safety and reliability through wildfire mitigation efforts.
• Shareholders benefit from the company's strong financial performance and dividend increases.
• Communities impacted by wildfires are supported through SCE's reconstruction efforts and engagement with stakeholders.
• Employees are recognized for their tireless efforts in managing the response to the Southern California wildfires.

Next Steps

• SCE expects to file its TKM securitization application in March.
• SCE is awaiting a proposed decision from the ALJ on its 2025 General Rate Case.
• The Woolsey cost recovery proceeding is underway, with intervenor testimony due in early June and rebuttal testimony in mid-July.
• SCE will file an application for its NextGen ERP program.
• SCE will continue its progress towards resolving the Woolsey cost recovery proceeding.

Key Dates