EDISON INTERNATIONAL (EIX)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024: Core EPS $1.05 and GAAP EPS $0.88 declined year over year on higher O&M and interest expense; full‑year 2024 Core EPS was $4.93, above guidance midpoint .
• Guidance raised: 2025 Core EPS increased to $5.94–$6.34, reflecting the CPUC‑approved TKM settlement (+$0.44; $0.30 one‑time interest true‑up and $0.14 ongoing interest reduction), while the 5–7% Core EPS CAGR through 2028 was reaffirmed off a higher $5.84 base .
• Regulatory catalysts: pending 2025 GRC decision (retroactive to Jan 1), TKM securitization filing in March, and continued progress on Woolsey cost recovery—CPU C president’s comments underscored prudent‑operator recovery under AB 1054 .
• Wildfire framework and risk profile: management emphasized AB 1054 liquidity/liability‑cap protections and highlighted nearly 90% HFRA hardening with 6,400+ miles of covered conductor; Eaton Fire cause is under investigation with multi‑party protocols now moving into equipment testing .
• Dividend: Board declared $0.8275 per share for Q1 2025; no change to dividend policy (45–55% payout of SCE core earnings) .

What Went Well and What Went Wrong

What Went Well

• Core execution and capital plan: “2024 Core EPS of $4.93 was above the midpoint of our guidance,” extending a two‑decade track record; 2025 guidance raised, and 5–7% CAGR to 2028 reaffirmed off a higher base .
• Regulatory momentum: CPUC unanimously approved the TKM settlement (~$1.6B recovery), with the CPUC President reiterating customer coverage of prudent costs and future Wildfire Fund applicability; GRC proposed decision expected 1H25 .
• Grid hardening: SCE installed 800+ miles in 2024, totaling 6,400+ covered‑conductor miles, with nearly 90% of HFRA distribution hardened; management emphasized risk‑prioritized wildfire mitigation and AB 1054 protections .

What Went Wrong

• Q4 YoY earnings pressure: Q4 Core EPS down to $1.05 (from $1.28) on higher O&M and interest expense, partially offset by higher authorized revenue and ROE .
• Continuing non‑core wildfire charges: 2024 included $652mm wildfire‑related claims, $146mm Wildfire Fund amortization, and other non‑core items impacting GAAP results .
• Wildfire uncertainty and credit focus: Eaton Fire causation remains undetermined; S&P kept EIX/SCE on negative outlook amid broader climate‑risk concerns, though management expects cost‑of‑capital processes to capture debt costs .

Financial Results

Quarterly results and trend (oldest → newest)

Full‑year income statement summary

Note: Operating margin computed from Operating Income/Operating Revenue using values cited above .

Segment EPS contribution (per share)

KPI snapshot (strategic and operating)

Non‑GAAP reconciliation drivers (Q4 and FY)

• Q4: Non‑core items at SCE were ($0.17) per share, mainly wildfire‑related claims and Wildfire Fund amortization; EIX Parent & Other non‑core was de minimis in Q4 .
• FY: SCE non‑core totaled ($1.59) per share; Parent & Other (‑$0.01), driven by wildfire claims, Wildfire Fund amortization, and prior severance .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic focus: “We remain confident in our ability to meet our 2025 EPS guidance and deliver a 5 to 7% core EPS CAGR through 2028.”
• AB 1054 resilience: “The Fund has $21 billion of claim‑paying capacity… provides liquidity for claims payments… a clear prudence standard, and a liability cap.”
• Regulatory momentum: “CPUC’s unanimous approval of the TKM settlement… allowing SCE to recover about $1.6 billion… We expect to file its TKM securitization application in March.”
• Wildfire mitigation: “SCE has now installed more than 6,400 miles of covered conductor and has hardened nearly 90% of its distribution lines in high fire risk area.”
• Dividend posture: “No change to our current dividend policy… balances a competitive dividend with reinvesting SCE’s earnings back into infrastructure.”

Q&A Highlights

• Eaton Fire exposure and timing: Too early to estimate damages; investigations can take 12–18 months; legal actions drive liability timing .
• AB 1054 draw and financing: Customer‑funded self‑insurance up to $1B first; then Wildfire Fund—utility would not need to use its balance sheet, unlike pre‑AB 1054 events .
• GRC and Woolsey not derailed: Intervenor settlements (20% O&M, 8% capex) in GRC; Woolsey schedule set with intervenor alignment; management does not expect wildfire headlines to impair outcomes .
• Ratings/credit: S&P negative outlook reflects climate risk, not metrics; SCE’s cost of debt flows through cost‑of‑capital; scenario work suggests financing within provided ranges .
• Capex prioritization: Restoration/undergrounding where rebuilding; continuous re‑optimization of risk models; potential incremental focus on wildfire mitigations depending on updated risk .

Estimates Context

• Wall Street consensus via S&P Global for Q4 2024 revenue/EPS and near‑term quarters was unavailable at time of retrieval due to system limits; as a result, we cannot provide a definitive beat/miss vs estimates for Q4 2024. We will update when access is available.

Key Takeaways for Investors

• 2025 EPS catalyst: Raised 2025 Core EPS to $5.94–$6.34 on TKM approval; expect additional clarity with GRC decision and TKM securitization (application in March; potential proceeds by YE 2025 per plan) .
• Earnings quality: Q4 YoY decline driven by higher O&M and interest; structural tailwinds include authorized revenue (Track 4) and higher allowed ROE, plus TKM interest relief (30¢ true‑up, 14¢ run‑rate) .
• Regulatory path: CPUC posture remains constructive (unanimous TKM approval; PD expected 1H25; Woolsey schedule set), supporting rate base growth of ~6–8% to 2028 .
• Risk framework: AB 1054 liquidity and liability cap materially reduce balance‑sheet risk vs pre‑2019; management engaged on potential legislative enhancements to bolster durability .
• Execution on mitigation: Nearly 90% HFRA hardening and 6,400+ covered‑conductor miles help reduce ignition/damage risk; investigation of Eaton proceeds with multi‑party testing protocols .
• Income support: Dividend declared $0.8275 with policy unchanged; track GRC true‑up timing, cost‑of‑capital filing, and rating‑agency posture as near‑term sentiment drivers .
• Watch list: 2025 GRC PD/FD timeline, AB 1054 legislative chatter, TKM securitization approval and execution, Woolsey proceeding milestones, and Eaton Fire investigation updates .

Appendix: Additional Quantitative Details

EPS drivers (company‑reported bridge)

• Q4 2024 SCE core drivers YoY: +$0.33 higher revenue; (‑$0.27) higher O&M; (‑$0.07) higher depreciation; (‑$0.03) higher interest; others modest; net (‑$0.17) EPS at SCE; Parent (‑$0.06) → EIX Core EPS (‑$0.23) .
• FY 2024 SCE core drivers YoY: +$1.26 revenue; (‑$0.33) O&M; (‑$0.23) depreciation; (‑$0.28) interest; taxes/other modest; net +$0.22 at SCE; Parent (‑$0.05) → EIX Core EPS +$0.17 .

Select balance sheet and cash flow (FY 2024)

• Total assets $85,579mm; long‑term debt $33,534mm; total equity $17,740mm .
• CFO $5,014mm; capex $(5,707)mm; financing cash flow $674mm .

All figures above are sourced directly from EIX filings, press releases, prepared remarks, presentations, and the earnings call transcript as cited.