Executive Summary

Q1 2024: GAAP loss per share of $0.03 as wildfire-related charges drove an after-tax non-core net charge of $333M; Core EPS was $1.13, up 4c YoY, on higher authorized CPUC revenues and ROE, partly offset by higher interest expense .
Management affirmed 2024 Core EPS guidance of $4.75–$5.05 and reiterated 5–7% Core EPS CAGR targets for 2021–2025 and 2025–2028; Basic EPS guidance was lowered to $3.59–$3.89 solely to incorporate Q1 non-core items to date .
Wildfire update: best-estimate losses increased $490M (net $463M pre-tax; $333M after-tax) on Woolsey mediation developments and higher-than-expected settlement outcomes; SCE intends to seek full recovery in TKM/Woolsey proceedings; Woolsey filing targeted for Q3 2024 .
Strategic backdrop remains constructive: CPUC cost-of-capital mechanism lifts CPUC ROE to 10.75% for 2024–2025; CEMA PD would authorize $191M revenue over 12 months if adopted; S&P affirmed ratings/stable outlook and lowered downgrade FFO/debt threshold to 14% .
Likely stock catalysts: CPUC vote on 2022 CEMA PD, progress in TKM evidentiary schedule and Woolsey filing, and GRC 2025 proceedings; any visibility on wildfire cost recovery/financing (e.g., securitization) could reduce interest expense and support multiple expansion .

What Went Well and What Went Wrong

What Went Well
- Core EPS grew to $1.13 (+$0.04 YoY) on higher CPUC revenue (Track 4) and higher authorized ROE; management affirmed 2024 Core EPS and long-term growth targets .
- Regulatory momentum: favorable 2022 CEMA proposed decision ($191M revenue over 12 months; $312M capex fully approved if adopted) and ALJ PD to deny petition to suspend cost-of-capital mechanism .
- Wildfire risk profile: SCE estimates 85–88% reduction in probability of catastrophic loss versus pre-2018, driven predominantly by physical grid hardening (covered conductor/undergrounding), with >5,700 overhead miles hardened and >7,300 miles undergrounded as of Q1 .
- Quote: “We are pleased with our start to the year and are confident in affirming our 2024 core EPS guidance range… We also remain confident in delivering on our long-term EPS growth targets.” — CEO Pedro Pizarro .
What Went Wrong
- Wildfire charges: Q1 review increased best-estimate losses by $490M (net after-tax $333M) due to Woolsey mediation dynamics and higher settlement values; litigation environment remains unfavorable, increasing expected costs .
- Margin/expense pressure: Operating income fell to $245M (from $620M) as O&M rose to $1,317M (from $1,084M) and wildfire-related claims rose to $615M (from $96M); interest expense increased to $444M (from $361M) .
- Analyst concerns: potential for further revisions before Woolsey application and interest burden from wildfire-claims debt; management reiterated quarterly re-testing of estimates and targeted Q3 Woolsey filing .

Financial Results

Quarterly trend (select P&L and EPS)

Metric	Q3 2023	Q4 2023	Q1 2024
Operating revenue ($USD Millions)	4,702	N/A	4,078
Operating income ($USD Millions)	492	N/A	245
GAAP EPS ($)	0.40	N/A	(0.03)
Core EPS ($)	1.38	1.28	1.13

Q1 year-over-year detail (income statement)

Metric ($USD Millions unless noted)	Q1 2023	Q1 2024
Operating revenue	3,966	4,078
Purchased power and fuel	1,318	1,008
Operation and maintenance	1,084	1,317
Wildfire-related claims, net	96	615
Depreciation and amortization	656	702
Operating income	620	245
Interest expense	(361)	(444)
Net (loss) income to EIX common	310	(11)
Basic EPS ($)	0.81	(0.03)

EPS breakdown (Q1)

EPS ($)	Q1 2023	Q1 2024
SCE – Basic EPS	0.97	0.17
EIX Parent & Other – Basic EPS	(0.16)	(0.20)
EIX – Basic EPS	0.81	(0.03)
Non-core items – SCE	(0.32)	(1.16)
Non-core items – Parent & Other	0.04	—
Total non-core	(0.28)	(1.16)
SCE – Core EPS	1.29	1.33
Parent & Other – Core EPS	(0.20)	(0.20)
EIX – Core EPS	1.09	1.13

Segment breakdown: SCE drove the core uplift YoY; Parent & Other core loss held flat .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EIX Basic EPS	FY 2024	$4.75–$5.05 (as of Feb 22, 2024)	$3.59–$3.89 (as of Apr 30, 2024)	Lowered (reflects non-core through Q1)
EIX Core EPS	FY 2024	$4.75–$5.05 (as of Feb 22, 2024)	$4.75–$5.05 (as of Apr 30, 2024)	Maintained
Non-core items included (per share)	YTD Q1 2024	—	($1.16)	New non-core recorded
Long-term Core EPS growth	2021–2025	5–7%	5–7%	Maintained
Long-term Core EPS growth	2025–2028	5–7%	5–7%	Maintained
CPUC ROE (cost-of-capital mechanism)	2024–2025	10.05% (prior CPUC)	10.75% (advice letter to implement)	Raised via CCM

Additional regulatory tailwinds: PD in 2022 CEMA (would authorize $191M revenue over 12 months; $312M capex approval) if adopted; ALJ PD to deny petition to suspend CCM .

Earnings Call Themes & Trends

Topic	Q3 2023 (Prev-2)	Q4 2023 (Prev-1)	Q1 2024 (Current)	Trend
Wildfire loss estimates & recovery	Increased best-estimate by $475M; TKM $2.4B filing; Woolsey deadline Feb 2024; cost recovery could avoid up to $4.9B financing costs	Reiterated plan; targeting >90% Woolsey resolution and Q3 filing	Increased best-estimate $490M; net after-tax $333M; 97% TKM and 86% Woolsey individuals resolved; Woolsey filing on track for Q3	Elevated but advancing toward filings
Risk mitigation & grid hardening	5,200+ miles covered conductor; 85% risk reduction since 2018	85–88% risk reduction; targeting ~90% HFRA hardening by end 2025	85–88% risk reduction; 7,300+ miles underground; 5,700+ miles hardened	Improving risk profile
Regulatory: GRC/CCM/CEMA	GRC Track 4 pending; CCM trigger to +70 bps ROE	Introduced 2024 guidance, rate base drivers; CCM hedges rates	CEMA PD favorable; CCM PD supports mechanism; 2025 GRC on schedule	Constructive
Load growth & electrification	Countdown to 2045: +80% demand by 2045	2–3% annual load growth near term; >3% from 2028	2–3% growth with 2028 inflection; EV/building electrification drivers	Accelerating
Financing plan & equity needs	2023 financings; tender offer for preferreds; minimal variable-rate exposure	2024: minimal parent debt; ~$100M equity/year 2025–2028	2024 plan nearly complete; ~$100M/year equity through 2028; S&P affirmation	Stable
Technology/AI efficiency	—	AI for inspections/customer ops noted	Continued focus on tech and analytics; modeling improvements	Building

Management Commentary

Strategy and outlook: “We are pleased with our start to the year and are confident in affirming our 2024 core EPS guidance… We also remain confident in delivering on our long-term EPS growth targets.” — CEO Pedro Pizarro .
Wildfire cost recovery: “SCE intends to seek full recovery of all eligible costs… we strongly believe that cost recovery is warranted and in the public interest” — Pizarro .
Risk mitigation: “We estimate the risk is 85 to 88% lower than pre-2018… risk reduction achieved predominantly via grid hardening vs. PSPS” — Pizarro .
Regulatory update: “If adopted, [2022 CEMA PD] would authorize $191 million of revenue… The ALJ… issued a proposed decision that would deny intervenors’ petition… to suspend the cost of capital mechanism” — CFO Maria Rigatti .
Balance sheet and ratings: “S&P affirmed our credit ratings and stable outlook… lowered our FFO-to-debt downgrade threshold to 14% from 15%” — Rigatti .

Q&A Highlights

Wildfire charge trajectory: Management will continue quarterly re-assessments; true certainty comes with completing TKM and Woolsey processes; 97% of TKM and 86% of Woolsey individual claims resolved to date .
Balance sheet metrics: Latest S&P report shows just over 14% FFO/debt; plan targets 15–17% over time with limited equity needs (~$100M/year through 2028) .
Woolsey extensions: Some plaintiffs received extensions; more information expected over coming months; valuation leverages broader settlement experience .
ERP/AMI filings: NextGen ERP application expected late 2024; AMI 2.0 in 2025; financing to minimize incremental equity while maintaining credit metrics .
Seasonal wildfire risk: Near-term season assessed as average/below-average, but focus remains on structural risk reduction; PSPS now ~10% of overall risk reduction as hardening dominates .

Estimates Context

We attempted to retrieve S&P Global consensus for Q1 2024 and next quarter (EPS, revenue) but the data could not be fetched due to service limits at the time of request. As a result, we cannot provide a vs-consensus comparison for this quarter (values unavailable via S&P Global at the time of analysis) [GetEstimates error].

Where estimates may need to adjust: management affirmed 2024 Core EPS guidance despite a ~2c incremental interest headwind from additional wildfire-claims debt and cited supportive regulatory developments (CEMA PD, CCM), which may underpin stable consensus Core EPS while Basic EPS tracks non-core wildfire timing .

Key Takeaways for Investors

Core operations on track: Core EPS +4c YoY to $1.13; 2024 Core EPS $4.75–$5.05 affirmed; long-term 5–7% Core EPS CAGR reiterated .
Non-core drag dominates GAAP: Q1 non-core after-tax charge of $333M tied to wildfire claims; Basic EPS guidance reduced solely to reflect non-core through Q1 .
Regulatory set-up constructive: CPUC ROE 10.75% for 2024–2025 via CCM and favorable 2022 CEMA PD (if adopted) bolster earnings visibility and cash flows .
Wildfire de-risking continues: 85–88% reduction in catastrophic loss probability from pre-2018; >13,000 combined miles hardened/undergrounded; litigation resolution advancing with Woolsey filing targeted for Q3 .
Financing conservative: S&P affirmation/stable; limited equity needs (~$100M/year through 2028) with wildfire-claims interest to be addressed in recovery applications .
Catalysts: CPUC votes on CEMA/WM/VM items, GRC milestones (hearings/briefs/PD), TKM evidentiary schedule, and Woolsey filing; positive recovery outcomes would cut interest expense (~$35M per $1B recovered) and improve FFO/debt by ~40–50 bps .
Watch list: Further Woolsey-related estimate updates before Q3 filing; interest expense trajectory; execution on O&M savings and load-growth investments amid affordability focus .

Appendix: Additional Data Points

Cash from operations Q1 2024: $1,043M vs $(90)M in Q1 2023 (working capital and regulatory/memo recoveries) .
Balance sheet Q1 2024: Cash $992M; Long-term debt $32,576M; Total equity $17,615M .
2025–2028 plan: ~6–8% rate base CAGR; $38–$43B 2023–2028 capex; minimal equity; sensitivity of 2028 EPS ~7c/10 bps CPUC ROE; ~$0.05 per $100M annual capex .

EDISON INTERNATIONAL (EIX)·Q1 2024 Earnings Summary