AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 18/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · The extensive operating transmission and distribution footprint, together with realized regulatory revenue recovery, supports a strong infrastructure advantage. Exclusive rights and comparative returns are not supplied.
durability · 2/4 · Installed infrastructure supports persistence, but regulatory dependence, competitive transmission awards and realized wildfire exposure make durability mixed.
customer dependency · 2/4 · Continued delivery through SCE's physical network and recurring operating revenue indirectly establish customer dependence. The passages do not quantify customer alternatives, switching friction or exclusive service obligations.
erosion resilience · 2/4 · Realized expense pass-through provides protection, but independent transmission awards and exhausted Eaton Fire self-insurance demonstrate limits to that protection. Mitigation work is reported without proof that residual risk is contained.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · SCE implemented the residential Basic Service Charge and recognized additional revenue from the rate-case decision and escalation mechanism. These are actual regulated outcomes; recognition timing and offsetting expense pass-through prevent treating revenue growth as unrestricted pricing power.
retention · 2/4 · Recurring revenue and continued operation of the delivery network provide indirect evidence of repeat essential-service demand. No customer retention rate, account trend or response to rate changes is disclosed.
margin resilience · 2/4 · Actual customer expense pass-through supports resilience to ordinary cost changes. First-half earnings nevertheless varied substantially with wildfire recoveries and interest expense, and recovery timing can pressure cash flow. Margins alone do not establish the moat.
contractual freedom · 1/4 · Pricing flexibility is weak: disclosed revenue increases depend on regulatory decisions and their escalation mechanisms, with customer assistance discounts and expense pass-through also shaping bills. The evidence supports constrained rate setting rather than unilateral control.
Predictability54
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 7.55
- Positive FCF years (%)
- 0.00
- FCF margin volatility (pp)
- 12.10
Financial strength8
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 32.81
- currentRatioGrade
- 0.00
- Net debt / operating income (x)
- 5.67
- Interest coverage (x)
- 4.61
- Current ratio (x)
- 0.73
Capital allocation56
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 7.76
- 3-year average dilution (%)
- 0.35
- 3-year average SBC / revenue (%)
- 0.30
- cashConversionGrade
- 0.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · First-half 2026 consolidated operating cash flow of $2.697 billion did not cover $3.385 billion of capital expenditures; dividends and repurchases added funding demands while substantial debt was issued. Covenant compliance and a 0.57 debt-to-capitalization ratio provide counterbalancing evidence. Investment returns are not demonstrated.
incentive alignment · 3/4 · Existing three-year equity vesting, executive ownership requirements with disclosed compliance, and actual reductions to 2025 incentive awards demonstrate meaningful alignment and accountability. Detailed individual ownership and the full incentive mix remain unavailable; exceptional alignment is not established.
execution · 2/4 · Reported grid hardening and charging installations demonstrate completed work, while the performance matrix reports a reliability result worse than its threshold. Exhausted Eaton Fire self-insurance adds realized financial stress. Management's possible ignition assessment is not a final causation finding.
governance · 3/4 · Disclosed independent board leadership, mostly independent committees, annual elections and shareholder rights support strong governance structures. Actual incentive reductions demonstrate an accountability action. Extended director retirement limits and incomplete evidence of oversight outcomes temper the assessment.
Evidence
130 Table of Contents Properties SCE supplies electricity to its customers through extensive transmission and distribution networks.
Properties: operating transmission and distribution networks · Filed 18/02/2026
Its transmission facilities, which are located primarily in California but also in Nevada and Arizona, deliver power from generating sources to the distribution network and consist of approximately 13,000 circuit-miles of lines ranging from 55 kV to 500 kV and approximately 80 transmission substations.
Properties: transmission lines and substations · Filed 18/02/2026
SCE's distribution system, which takes power from distribution substations to customers, consists of approximately 38,000 circuit-miles of overhead lines, approximately 32,000 circuit-miles of underground lines and approximately 730 distribution substations.
Properties: distribution lines and substations · Filed 18/02/2026
10 Table of Contents Six months ended June 30, 2026 versus June 30, 2025 Six months ended June 30, Favorable (Unfavorable) (in millions) 2026 2025 2026 to 2025 Operating revenue $ 8,444 $ 8,334 $ 110 Purchased power and fuel 2,107 2,204 97 Operation and maintenance 2,039 2,515 476 Wildfire-related claims, net of (recoveries) 14 (1,355) (1,369) Wildfire Fund expense 71 72 1 Depreciation and amortization 1,666 1,566 (100) Property and other taxes 347 332 (15) Other (2) 8 10 Total operating expenses 6,242 5,342 (900) Operating income 2,202 2,992 (790) Interest expense (845) (641) (204) Other income, net 238 228 10 Income before income taxes 1,595 2,579 (984) Income tax expense 278 502 224 Net income 1,317 2,077 (760) Less: Preference stock dividend requirements 55 67 12 Net income available to common stock $ 1,262 $ 2,010 $ (748) Operating Revenue An increase in operating revenue of $110 million was primarily due to: •An increase in revenue of $553 million driven by the 2025 GRC final decision, including the 2026 escalation mechanism set forth in the 2025 GRC decision.
SCE six-month operating results: authorized revenue increase and earnings · Filed 30/07/2026
partially offset by: •A decrease in revenue of $390 million related to net lower expenses that are passed through to customers, which mainly included decreases in: •Operation and maintenance expense of $408 million; •Purchased power and fuel expense of $97 million; •Depreciation and amortization expense of $6 million; and increases in: •Other income of $9 million; partially offset by increases in: •Income tax expense of $65 million; •Interest expense of $38 million; •Wildfire-related claims, net of recoveries, of $25 million; •Property and other taxes of $2 million.
Operating revenue: realized customer expense pass-through · Filed 30/07/2026
The CAISO has held competitive solicitations pursuant to these rules and independent service providers were selected.
Competition: independent providers selected in transmission solicitations · Filed 18/02/2026
SCE exhausted self-insurance recoveries available for losses related to the Eaton Fire as a result of costs incurred and settlements entered into as of February 11, 2026.
Wildfire insurance: Eaton Fire self-insurance recovery exhaustion · Filed 30/07/2026
13 Table of Contents LIQUIDITY AND CAPITAL RESOURCES SCE SCE's ability to operate its business, fund capital expenditures, and implement its business strategy is dependent upon its operating cash flow and access to the bank and capital markets.
Liquidity: dependence on operating cash flow and capital markets · Filed 30/07/2026
Price increases faced by customers would not affect SCE's earnings because SCE expects recovery of these costs through the ERRA balancing account or other CPUC approved procurement plans.
Natural gas supply: expected regulatory cost recovery · Filed 18/02/2026
However, these higher prices may impact cash flow due to the timing of those recoveries.
Natural gas supply: recovery timing and cash flow · Filed 18/02/2026
Customers enrolled in the California Alternative Rates for Energy (CARE) and Family Electric Rate Assistance (FERA) programs receive Basic Service Charges that are respectively 25% and 50% of the $24.15 fixed charge applicable to all other residential customers.
Residential rates: Basic Service Charge amounts and assistance discounts · Filed 18/02/2026
SCE began including the new Basic Service Charge on residential customer bills in the fourth quarter of 2025.
Residential rates: Basic Service Charge implementation · Filed 18/02/2026
SCE received the final 2025 GRC decision in the third quarter of 2025 and the authorized revenue attributable to the first and second quarters of 2025 but recorded subsequently in 2025 was approximately $394 million.
Operating revenue: timing of the 2025 rate-case decision and revenue recognition · Filed 30/07/2026
25 Table of Contents Condensed Consolidated Statements of Cash Flows Edison International Six months ended June 30, (in millions, unaudited) 2026 2025 Cash flows from operating activities: Net income $ 1,131 $ 1,890 Adjustments to reconcile to net cash provided by operating activities: Depreciation and amortization 1,668 1,568 Equity allowance for funds used during construction (113) (93) Deferred income taxes 146 420 Wildfire Fund amortization expense 71 72 Other 103 77 Nuclear decommissioning trusts 11 (102) Changes in operating assets and liabilities: Receivables (392) 248 Inventory (39) 12 Accounts payable 56 50 Other current assets and liabilities (9) (247) Derivative assets and liabilities, net 12 44 Regulatory assets and liabilities, net 460 (1,600) Wildfire-related claims, net of insurance recoveries (357) (211) Other noncurrent assets and liabilities (51) (22) Net cash provided by operating activities 2,697 2,106 Cash flows from financing activities: Long-term debt issued, net of premium, discount and issuance costs of $(5) and $(49) for the respective periods 4,545 3,501 Long-term debt repaid (1,677) (726) Short-term debt issued 3 18 Short-term debt repaid (437) — Common stock repurchased (30) (29) Preferred stock repurchased (538) — Commercial paper repayments, net of borrowing (426) (1,012) Dividends and distribution to noncontrolling interests (52) (67) Common stock dividends paid (675) (637) Preferred stock dividends paid (13) (44) Other 2 (13) Net cash provided by financing activities 702 991 Cash flows from investing activities: Capital expenditures (3,385) (3,120) Proceeds from sale of nuclear decommissioning trust investments 3,666 2,680 Purchases of nuclear decommissioning trust investments (3,684) (2,580) Proceeds from sale of a subsidiary, net of cash transferred 15 — Other (7) 18 Net cash used in investing activities (3,395) (3,002) Net increase in cash and cash equivalents and restricted cash and cash equivalents 4 95 Cash and cash equivalents and restricted cash and cash equivalents at beginning of period 720 684 Cash and cash equivalents and restricted cash and cash equivalents at end of period $ 724 $ 779 The accompanying notes are an integral part of these condensed consolidated financial statements.
Consolidated cash flows: capital spending, financing, distributions and repurchases · Filed 30/07/2026
At June 30, 2026, SCE's debt to total capitalization ratio was 0.57 to 1.
Debt covenant: actual debt-to-capitalization ratio · Filed 30/07/2026
At June 30, 2026, SCE was in compliance with all financial covenants that affect access to capital.
Debt covenant: compliance at June 30, 2026 · Filed 30/07/2026
In light of the impact of wildfires on communities within SCE’s service territory, the EIX and SCE Compensation and Executive Personnel Committees decided to reduce the annual incentive awards otherwise payable for 2025 to Pedro Pizarro, Steven Powell and Jill Anderson by approximately 40%, and to reduce the annual incentive awards for certain other SCE executives by approximately 20%.
Shareholder letter: reductions to 2025 executive incentive awards · Filed 13/03/2026
Restricted Stock Units Each restricted stock unit awarded is a right to receive one share of EIX Common Stock after the vesting requirement of three years of continued service is satisfied.
Executive compensation: three-year restricted stock unit vesting · Filed 13/03/2026
The President and CEO must own Company stock equal to six times his annual salary; the Chief Financial Officer, the General Counsel and the SCE President and CEO must each own three times their annual salary; and other NEOs must own two times their annual salary.
Stock ownership guidelines: executive salary multiples · Filed 13/03/2026
All NEOs are in compliance with the Company’s guidelines.
Stock ownership guidelines: disclosed NEO compliance · Filed 13/03/2026
As discussed in this Proxy Statement, the key corporate governance policies and practices reflected in our corporate governance documents include the following: Key Governance Policies and Practices Board Independence, Oversight and Refreshment Director Participation and Accountability Shareholder Rights ● Independent Board Chair ● Independent Board Committees, other than Pricing Committee ● Director Retirement at Age 75 or after 15 years of service (20 years for directors serving on the Board prior to January 1, 2026) ● Annual Board and Committee Evaluations ● Annual Succession and Talent Planning ● Oversight of Strategy, Risk and Sustainability ● Regular Independent Director Executive Sessions ● Director Orientation and Continuing Education Programs ● Director Stock Ownership Guidelines ● Majority Voting for Directors in Uncontested Elections ● Annual Engagement with Major Shareholders ● Annual Election of Directors ● Annual Advisory Vote on Executive Compensation ● 10% of Shareholders May Call Special Meetings ● Shareholders May Act By Written Consent ● Proxy Access Bylaws with Market Terms Corporate Governance Documents ● Articles of Incorporation ● Bylaws ● Corporate Governance Guidelines ● Board Committee Composition ● Board Committee Charters ● Procedures for Communicating with the Board ● Ethics and Compliance Code for Directors ● Employee Code of Conduct ● Supplier Code of Conduct ● Incentive Compensation Recoupment Policy ● Human Rights Policy ● Sustainability Report ● Political Engagement Policy and Reports Shareholders and other interested parties may find these documents on our website at www.edison.com/corpgov.
Corporate governance: board independence and shareholder rights · Filed 13/03/2026
Goal measured in minutes 105 95 85 108 4 0 Workforce Development Improve employee experience through execution of Business Resource Group business plans Qualitative Goal Goal met 2 2 Clean Energy Transition Transportation Electrification charging port installations 2,800 4,600 7,800 6,250 2 3 Customer Experience Achieve billing and payment and outage net score index -5 7 19 15 6 10 Operational Excellence Implement planned improvement projects Qualitative Goal Goal met 6 6 Total: 100 143(5) (1) For defined terms, see footnote (1) to the 2025 EIX Corporate Performance Scoring Matrix - Goal Details above.
Corporate performance matrix: reliability, customer experience and charging installations · Filed 13/03/2026
SCE made meaningful progress through continued execution of its multiyear Wildfire Mitigation Plan, including replacing hundreds of miles of bare electrical wire with insulated wire and undergrounding electrical lines in high fire risk areas.
Shareholder letter: reported wire replacement and undergrounding · Filed 13/03/2026
While we may never know with certainty what caused the Eaton Fire, based on currently available information, it is likely that SCE equipment could have been associated with the ignition, and induction remains a viable explanation.
Shareholder letter: management assessment of possible Eaton Fire equipment involvement · Filed 13/03/2026
The change was primarily due to the increase in 2026 escalation mechanism for rates set forth in the 2025 GRC final decision and the change in timing of climate credit disbursement as reflected in the change in regulatory assets and liabilities, partially offset by a decrease from changes in working capital.
Operating cash flows: rate escalation and climate-credit timing · Filed 30/07/2026
In December 2025, acting upon the Nominating and Governance Committee’s recommendation, the Board updated its director retirement policy by amending the Corporate Governance Guidelines to increase the retirement age to 75 and adopt a 15-year term limit for new directors and a 20-year term limit for directors serving on the Board prior to January 1, 2026.
Corporate governance: adopted director retirement policy changes · Filed 13/03/2026
