Edison EIX Q4 2025 Earnings Call Transcript

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DATE

Wednesday, Feb. 18, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Pedro J. Pizarro
• Executive Vice President and Chief Financial Officer — Maria Rigatti
• Vice President, Investor Relations — Sam Ramraj
• Senior Vice President, Regulatory Affairs — Gregg Gillander Orrill

TAKEAWAYS

• Core EPS -- $1.86 for the quarter and $6.55 for the full year; full-year result exceeded the high end of prior guidance.
• Q4 Core EPS Items -- $0.06 charge related to preferred stock tender offers and redemptions; $0.46 true-up recorded after the Woolsey cost recovery decision.
• 2026 and 2027 Core EPS Guidance -- $5.90 to $6.20 for 2026; $6.25 to $6.65 for 2027, indicating higher anticipated growth in 2027.
• Long-Term EPS Growth Target -- 5%-7% annual core EPS growth extended through 2030, measured from a $5.84 baseline.
• Dividend Yield -- Approximately 5% as stated by management.
• Capital Plan -- $38 billion to $41 billion in projected capital expenditures from 2026 through 2030; includes anticipated $1.5 billion for the AMI 2.0 program within this timeframe.
• Rate Base Growth -- Projected at approximately 7% annually through 2030.
• SCE Wildfire Mitigation -- Over 7,000 miles of covered conductor installed in high-fire-risk areas, surpassing 90% of planned grid hardening; 93% of distribution circuits in those zones now use fast curve settings.
• Customer Rate Changes -- Residential rates decreased by 2.3%; small and medium-sized business rates decreased by 5.3% earlier in the year.
• Customer Rate Position -- Southern California Edison (SCE) maintains the lowest system average rate among California IOUs by a margin of 20%.
• Customer Bills -- The typical non-CARE residential customer now pays about $188 per month, up from $180 two years ago.
• Wildfire Recovery -- Over 2,300 claims submitted under the Wildfire Recovery Compensation Program with $1.1 billion in total losses recorded, the majority associated with subrogation settlements.
• Eaton Fire Update -- SCE has not concluded equipment caused the Eaton fire but "believes that it is likely that its equipment could have been associated"; unable to estimate a range of potential losses.
• Regulatory Developments -- Regulatory proceedings including General Rate Case, cost of capital, and wildfire settlements concluded, providing increased medium-term visibility for capital plans and revenue requirements.
• Securitization -- Application filed to securitize approximately $2 billion in Woolsey fire-related costs; transaction targeted to close mid-2026, with proceeds offsetting normal debt issuance.
• Equity Issuance Outlook -- Management projects no equity needs through 2030, maintaining the current capital structure.
• AMI 2.0 Capital Deployment -- Full application expected to exceed $3 billion, with about $1.5 billion intended for 2026-2030 and the remainder allocated through 2033.
• Enhancements to Wildfire Recovery Program -- Program modified to increase rental support to the higher of actual or fair market rents, and legal fee coverage increased to 20% of net damages, both retroactive for previous claimants.
• Pasadena Community Foundation Donation -- $2 million pledged for Eaton fire recovery in the Altadena area.
• No Common Industry Practice for Idle Line Grounding -- Company disclosed changes to SCE policy now requiring grounding at least every two miles for idle transmission lines, with adjustments based on topography.

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RISKS

• Eaton fire investigation ongoing, with SCE stating "it is likely that its equipment could have been associated with the ignition," and management unable to provide a credible estimate of potential liabilities.
• Ongoing LA District Attorney's investigation into possible criminal violations connected to the Eaton fire, with no visibility into timing or scope noted by management.
• The company acknowledges unresolved wildfire claims and subrogation settlements, noting the volume of eligible claims far exceeds those processed, which creates uncertainty in total exposure.

SUMMARY

Edison International (NYSE:EIX) exceeded annual core EPS guidance, extending its track record of achieving long-term growth commitments despite recent headwinds. Management introduced 2026 and 2027 core EPS guidance, extended its 5%-7% annual EPS growth target through 2030, and stated no new equity issuances are expected through that horizon. Regulatory clarity has improved as all major 2025 proceedings, including cost of capital and key wildfire settlements, are concluded, enabling execution of a $38 billion to $41 billion capital plan. Notable changes were made to the Wildfire Recovery Compensation Program with expanded tenant support and increased legal fee reimbursement, retroactively applied. Additional uncertainty persists due to the ongoing Eaton fire, with unresolved potential liability, active regulatory and legal investigations, and the magnitude of eligible claims far exceeding those processed to date.

• The advance of the AMI 2.0 program and targeted $9 billion annual capital deployment opportunity in the next General Rate Case cycle may set the stage for accelerated rate base growth after 2028.
• Management highlighted SCE's customer rate advantage, with current system average rates 20% below other major investor-owned utilities in California.
• SCE's wildfire mitigation progress includes over 7,000 miles of covered conductor and coverage of 93% of high-risk distribution circuits with advanced protection technology.
• Equity market dilution risk is limited, as leadership projects no new equity needs for at least five years.

INDUSTRY GLOSSARY

• General Rate Case (GRC): Multi-year regulatory proceeding in which a utility seeks approval of revenue requirements and rate structures, setting the authorized cost-of-service and investment levels.
• Subrogation: The right of insurance companies to pursue recovery from third parties responsible after the insurer has paid a policyholder's claim, often arising after wildfire loss settlements.
• AMI 2.0: Advanced Metering Infrastructure phase-two program to deploy updated smart meters and grid technology, allowing enhanced customer and grid management functionality.
• Wildfire Recovery Compensation Program (WRCP): Edison/SCE program to provide compensation for eligible wildfire-related claims from affected property owners and tenants.

Full Conference Call Transcript

Pedro Pizarro: exceeding annual EPS guidance. Importantly, this also marks the successful delivery of the long-term core EPS growth target we established in 2021. Our performance reflects disciplined execution across the enterprise and continued focus on cost management, operational performance, and capital efficiency. Maria will provide more details in her remarks. Today, I will focus on three themes: our commitments to customers, communities, and investors; our strengthened regulatory visibility; and our confidence in our multiyear plan. Starting with the first theme, we are committed to the customers and communities who count on safe, reliable, and increasingly clean energy. Safety remains our top value, and SCE continues to carry out extensive work to strengthen the electric system and reduce wildfire risk.

We are proud that in the Q4 2025 Residential Customer Engagement Survey by Escalante, SCE had the highest absolute brand trust score among the large California investor-owned utilities. Customer and public trust remain at the core of SCE’s mission. The utility has now installed more than 7,000 miles of covered conductor in high fire risk areas, representing over 90% of its planned grid hardening effort. This work continues to play a critical role in reducing ignition risk and strengthening reliability for the communities we serve.

SCE now has fast curve settings on 93% of its distribution circuits in high fire risk areas, a prime example of how it is using technology to reduce risk by detecting and addressing faults even more quickly. All of this work demonstrates SCE’s ongoing wildfire risk reduction leadership. This progress benefits not just the utility’s own customers and communities who fund this critical work, but also many peers across the nation. Safety and affordability remain at the core of our commitment to customers. Earlier this year, SCE announced a 2.3% rate decrease for residential customers and a 5.3% decrease for small and medium-sized business customers.

This is starting from a place of having the lowest system average rate by a margin of 20% among California’s major investor-owned utilities. SCE has invested more than $12,000,000,000 for customer safety and reliability over the last two years. Currently, a typical non-CARE residential customer pays about $188 per month, which is modestly higher than the $180 paid two years ago. This reflects the utility’s disciplined cost management to support customer affordability. We will continue to work to keep rates affordable for customers. We are also committed to the investors whose capital makes it possible to build the infrastructure that is essential to deliver safe, reliable, affordable electricity.

Our commitment begins with a regulatory framework that enables SCE to consistently earn its authorized returns, which supports a strong investment-grade balance sheet and lower financing costs for customers. Our capital contributors, including pension funds, mutual funds, and insurers, depend on stable, transparent long-term performance. Credit rating agencies continue to evaluate California-specific risk factors, underscoring the importance of maintaining a durable and predictable regulatory environment, an environment that provides confidence for long-term investment and protects customers from higher costs. To that end, we are actively engaging with policymakers and state leaders to reinforce the value of a stable framework

Sam Ramraj: and the SB 254 process will be a

Pedro Pizarro: central venue in 2026 for strengthening the regulatory durability that supports both capital contributors and customers. SCE remains committed to resolving wildfire-related claims fairly, prudently, and responsibly. To date, more than 2,300 claims have been submitted under the Wildfire Recovery Compensation Program, with associated payments underway. As always, we are guided by our commitment to transparency, accountability, and customer trust.

Sam Ramraj: Building upon this,

Pedro Pizarro: today, SCE announced enhancements to the program providing stronger support for displaced renters and increasing coverage for legal expenses. Regarding the Eaton fire, as you see on page four, the investigations remain ongoing. To recap our prior statements, while SCE has not conclusively determined that its equipment caused the ignition of the Eaton fire, a viable explanation is that a de-energized idle SCE transmission facility in the preliminary area of origin was associated with the ignition of the fire, and SCE is not aware of evidence pointing to another possible source of ignition. Absent additional evidence, SCE believes that it is likely that its equipment could have been associated with the ignition of the Eaton fire.

Given the complexities associated with estimating damages, we currently are unable to reasonably estimate a range of potential losses. Nonetheless, based on the information we have reviewed thus far, we remain confident that SCE will be able to make a good faith showing that its conduct with respect to its transmission facilities in the Eaton Canyon area was consistent with actions of a reasonable utility. The company continues to prioritize the recovery of impacted community members. Edison International is donating $2,000,000 to the Pasadena Community Foundation to help meet the needs of community members in the Altadena area recovering from the Eaton fire. My second theme

Sam Ramraj: today

Pedro Pizarro: is our strengthened regulatory visibility given 2025 was a significant regulatory year for SCE, which you see on page five. With the GRC, cost of capital proceeding, TKM and Woolsey settlement agreements, and other wildfire proceedings concluded, SCE enters 2026 with substantially greater clarity into capital plans, revenue requirement, and operational priorities, not only for the GRC period but into the next decade.

Sam Ramraj: Our team members across Edison International and SCE continue to demonstrate their ability

Pedro Pizarro: to execute through complexity, respond to evolving conditions, and stay focused on long-term goals. Turning to the legislative front, the upcoming session will be pivotal for shaping the next phase of California’s energy and resiliency policy. A central focus this year is the SB 254 natural catastrophe resiliency study being authored by the California Earthquake Authority and subsequent legislation. Our focus remains on a whole-of-society solution to mitigate and respond to catastrophic wildfires that enhances public safety, improves affordability, and supports predictable long-term investment in a clean, reliable energy system for California. In December, SCE and the other IOUs jointly submitted white papers along with dozens of other stakeholders, providing input into the CEA’s process.

We continue to be actively engaged with relevant stakeholders, the Governor’s Office, and legislative leaders about the potential for enhancements to the policy framework. Moving on to my third theme today, our confidence in our multiyear financial outlook. We are introducing core EPS guidance for 2026 and 2027, reaffirming our 2028 outlook, and extending our expected core EPS growth rate target through 2030. Maintaining the 2028 target while extending the horizon underscores the growing clarity and stability in our multiyear plan, supported by a constructive regulatory foundation and a robust pipeline of necessary investments at the utility.

With an attractive dividend yield of approximately 5%, and a long-term core EPS growth target of 5% to 7%, EIX shares offer a compelling case for total shareholder returns of 10% to 12%. This combination of income and growth reflects the strength of our regulated business model and our commitment to delivering sustainable value for customers and capital providers. Let me close where I began: with commitment. Our commitment to communities and customers and to the capital contributors whose support makes our work possible. Our commitment to strengthening the grid, enhancing safety, improving reliability, and supporting affordability.

Our commitment to clarity and transparency as we move into a period of greater regulatory stability, and our commitment to deliver on the objectives we have shared with you today. We have the right strategy, the right plan, and the right team in place, and we are confident in our ability to execute that plan through 2030. With that, Maria, let me turn it over to you.

Maria Rigatti: Thanks, Pedro. In my comments today, I will discuss fourth quarter and full-year financial results, our focus areas for 2026, provide an update on our refreshed capital, rate base, and EPS growth guidance, and discuss other financial topics. For the fourth quarter, EIX reported core EPS of $1.86. Full-year 2025 core EPS of $6.55 exceeded the high end of our EPS guidance range. Pages six and seven provide the year-over-year variance analysis. I would like to note two items embedded in our results. First, fourth quarter core EPS includes $0.06 of costs attributed to the preferred stock tender offers and redemptions at EIX and SCE completed in December.

Second, we recorded a $0.46 true-up following the final decision in the Woolsey cost recovery proceeding. Excluding the Woolsey true-up, EIX’s full-year 2025 core EPS still exceeded the midpoint of our guidance. I will echo Pedro’s comments that this marks the successful delivery of the long-term core EPS target we established for 2021 through 2025. Over that period, we successfully managed a number of unforeseen headwinds: record inflation, the first rising interest rate environment in over fifteen years, growing wildfire claims-related debt, several changes to SCE’s authorized cost of capital, and additional cost pressures, yet we delivered on our commitment. Today, we are reaffirming our 2028 guidance and extending our 5% to 7% EPS growth target to 2030.

You should share this leadership team’s confidence we will continue to deliver on these commitments and build on your trust. You can see on page eight, delivering strong financial results was just one accomplishment in another year of strong execution in 2025. Page nine summarizes the key management focus areas for 2026. SCE continues to execute its wildfire mitigation plan and its focus on operational excellence to reduce costs for customers. The utility also plans to execute on its $7,000,000,000 capital plan for the year to meet customers’ needs.

Sam Ramraj: As Pedro mentioned,

Maria Rigatti: the legislative process will be a major focus for the year. In the regulatory area, the utility will be driving toward a final decision on its NextGen ERP program and filing an application for its advanced metering infrastructure, or AMI 2.0, program. Both of these are large programs that provide significant long-term customer benefits. Lastly, we look forward to another year of delivering on our annual core EPS guidance and executing efficient financings across the enterprise. Let’s turn to SCE’s updated capital and rate base forecast, shown on pages ten and eleven. The extended capital plan of $38,000,000,000 to $41,000,000,000 from 2026 through 2030 continues the company’s essential work in load growth-driven programs, infrastructure replacement, and wildfire mitigation.

Additionally, our updated forecast now includes nearly $1,500,000,000 of capital expenditures through 2030 from SCE’s upcoming AMI 2.0 application. The total request will exceed $3,000,000,000, with spending expected to continue through 2033. We forecast a step-up in our capital deployment opportunities to as high as $9,000,000,000 per year in the next GRC cycle. This is driven by the essential investments in the grid to meet customer needs and support California’s clean energy objectives. The resulting projected rate base growth is approximately 7% from 2025 to 2030. Page 12 shows our 2026 and 2027 core EPS guidance.

Sam Ramraj: Our core EPS guidance for 2026 is $5.90 to $6.20, and for 2027, it is $6.25 to $6.65.

Maria Rigatti: As you are aware, Edison’s core EPS over the years has not been linear. Let me provide some additional insight into our outlook and trajectory towards achieving our longer-term targets. You will see that 2026 core EPS represents growth of about 3.5% at the midpoint compared to the $5.84 baseline. We have provided a bridge on page 13 to help you understand the puts and takes. This muted growth is driven by three items, which amount to $0.25. First, SCE has fewer regulatory decisions in 2026 than last year. Therefore, the associated earnings contribution from recognizing prior-year earnings is about $0.11 lower. Second, asset mix differences versus the original GRC forecast create depreciation and property tax-related variances of about $0.07.

Third, financing-related variances, tax law changes, and other items reduced core EPS by approximately $0.07. The drivers behind the $0.25 impact are baked into 2026 and thus are not expected to result in negative variances in later periods. Consequently, we expect EPS growth in 2027 to be at the high end of our 5% to 7% range. This is supported by SCE’s 7% rate base growth, and we do not expect any large discrete variances from the rest of SCE’s operations. Turning to page 16. We are extending our 5% to 7% EPS growth target to 2030. We are also reaffirming our 2028 guidance, and both of these are measured from the $5.84 baseline for 2025.

On the financing front, I want to emphasize that we project no equity needs for the next five years through 2030. Our balance sheet remains strong, and we continue to finance the business efficiently within our 15% to 17% FFO-to-debt framework. Last month, the utility filed its Woolsey securitization application with the CPUC.

Pedro Pizarro: Once approved,

Maria Rigatti: the utility will securitize about $2,000,000,000 in costs associated with the approved Woolsey settlement agreement. SCE’s proposed schedule would allow for this transaction to close in mid-2026. As we have shared before, proceeds from this transaction would be used to offset normal-course debt issuances rather than paying down specific issuances. I will conclude by echoing Pedro’s earlier comments about commitment and trust. Deploying capital for the resilience, reliability, and readiness of the grid helps deliver on our commitments to customers and maintain their trust. We are committed to collaborating with stakeholders to advance a clear, durable, and predictable framework. And to our capital contributors, you have seen us deliver consistently on our annual and long-term commitments to earn your trust.

This leadership team remains committed and confident in continuing to do just that going forward. That concludes my remarks. Back to you, Sam.

Sam Ramraj: Michelle? Please open the call for questions. As a reminder, we request you to limit yourself to one question and one follow-up so everyone in line has the opportunity to ask questions.

Operator: Thank you. If you would like to ask a question, please press star 1 on your phone. One moment for the first question. Our first caller is Nicholas Joseph Campanella with Barclays. Your line is open, sir.

Pedro Pizarro: Hi, Nick. Good afternoon. Thanks for taking my questions.

Nicholas Joseph Campanella: So I guess just on the Eaton losses, I think you disclosed that you recorded about $1,100,000,000 of losses so far just from the settlements under the Wildfire Recovery Compensation Program. And I guess just as you are continuing to get more visibility on the total liability, when do you think you would

Sam Ramraj: potentially

Nicholas Joseph Campanella: have the low end of losses for the total event? And what is kind of the complicating factor at this point, if you could kind of maybe expand on that at all? Thank you.

Pedro Pizarro: Hey, thanks, Nick, for the question. I will start on this one. Let me share some, reinforce some numbers for perspective. I think I mentioned that we have had SCE had over 2,300 claims submitted so far. There are 18,000 properties that are eligible for the program. You might have multiple claimants per property. There is, for example, if you have a, you know, multiple-tenant kind of property, so we could certainly see, you know, a few tens of thousands of claims ultimately, you know, if everybody were to participate in the program. So in that context, 2,300 claim applications that we are now, I think I checked this morning, SCE has now crossed the 590-offer mark.

Those are a really good strong start. Those are good numbers for just, you know, three months into the program. But it is just a, you know, minuscule number compared to the potential pool here. And so in terms of when we would be able to estimate, we really do not have an estimate for that yet because it really depends on the pace of this.

Maria Rigatti: And, Nick, maybe just a clarification. You referenced a billion or so that we have recorded. That is a combination of what we paid under the WRC program, which Pedro just described. That is a very minor part of the total. The rest of it is associated with subrogation claim settlements that the company has entered into. So it is both of those things.

Pedro Pizarro: Yeah. Thanks for the clarification, Maria. We have announced a couple of subrogation settlements so far, so that is why we need to clarify. Say on the insurance side, subrogation side, similarly, there have been two settlements, around an average of 55¢ on the dollar. But, you know, there are many more insurance companies than that, so we really cannot estimate when we might have enough critical volume to be able to have, you know, even a low end of the estimable range with the confidence required by that.

Nicholas Joseph Campanella: Okay. Thank you. Thanks for the clarification. And then just maybe expanding on the comments about the 5% to 7% and being at the high end in 2027. I know your rate base growth is 7%, and you are not issuing any equity, which is great. But I assume you do have some financing drag. Just what are kind of the considerations and nonlinearity to think about for 2028 and 2029? And do you kind of plan to be at the high end in those years, in the 5% to 7% range, or are there just further considerations there? Thank you.

Maria Rigatti: Thanks, Nick. So you can see sort of the through the 2028 period, again, 2026 some muted growth due to variances that are now in the year and will not create variance on a go-forward basis, which then does mean that we are at the high end of the range for the next couple of years. We do not really see any large discrete activities that are driving things in one direction or the other over the course of those years. It is really rate base growth. Obviously, you know, we still continue to see things like AFUDC come through.

We are going to continue to manage the business across all the different elements and areas, similar to what we have done in the past. And if you get out to 2029–2030, again, right back down to rate base growth. I mean, that is really the driver here, and you can see the potential step up in 2029–2030 as we file for a new general rate case decision. That will be filed actually in May 2027. So we are closing in on that now.

Sam Ramraj: Okay. Thanks.

Operator: Thank you. And the next question comes from Carly S. Davenport with Goldman Sachs. Your line is open. Good afternoon.

Carly S. Davenport: Hey, thanks so much for taking the questions. Maybe just on some of the updates on the capital plan through 2030. On the AMI 2.0 application, just once you file that, what do you anticipate to be the timing on clarity of approvals? And then just how does that interplay with the timing of the capital dollars that are embedded in the plan through 2030?

Maria Rigatti: Sure. So we will be filing, you know, later next few months likely, and we will ask for a typical schedule, which would get us a decision, hopefully, in about eighteen months or so. The capital that is embedded in the forecast right now, the total request will be in the neighborhood of $3,000,000,000. About $1,500,000,000 is in the period that we have portrayed here through 2030, with another $1,500,000,000 that would get spent post that, by and large through 2033. So that is sort of the pace of what we are anticipating.

Carly S. Davenport: Great. Okay. That is super helpful. And then maybe just on the SB 254 process, as we are getting closer to the April 1 CEA report deadline, you know, any updates that you would call out in terms of, you know, thematics that are coming out of the updates we have gotten so far and just how you feel we are progressing into that deadline, and what that could mean for, you know, timing of getting some clarity on legislation.

Pedro Pizarro: Yeah. Hey. Thanks, Carly. I would say, you know, the process is certainly underway. It is good to see robust participation from so many stakeholders across the economy. The Legislature set this up to be truly a cross-economy sort of exercise, and so that engagement is important. It has been important also to see the approach that the CEA is taking in marshaling the process, making sure that there is good participation, you know, good engagement, good transparency into the various positions that different parties are bringing in. You know, it is early in the process, so really not able to comment on specific solutions or potential solutions yet.

But seeing the recognition that this is an economy-wide issue that, you know, really needs to touch all sectors, everything from upstream securing of buildings, hardening of buildings, decreasing the risk of ignition, decreasing the risk of spread and of consequence, focusing as well on shoring up the insurance market, focusing on having ultimately solutions that if, heaven forbid, there is another catastrophic fire in the state, that there is a way to equitably socialize that impact across the economy. Those are all constructive themes that keep coming up. I would also point to the report that the CPUC issued a couple of weeks ago.

We thought that was very constructive and, you know, acknowledged that central theme that ultimately utilities and therefore their customers and shareholders simply cannot continue to be the insurers of last resort, the bearers of all of this risk; that even if you have a catastrophe that starts with a utility ignition, the catastrophe has so many other components. Right? The tragedy can include weather conditions, can include challenges in mitigating the fire, can include, you know, issues that led to, you know, faster spread. And so recognizing those kind of themes is really important, and it was good to see that, you know, show up in the CPUC’s conclusions. Are there anything you would

Maria Rigatti: Maybe just one other thing, Carly. It is really not an add. It is just an underscoring. You know, Pedro talked about, you know, sort of the focus on safety and risk reduction, on timely and fair recovery for the people who are impacted by an event. But, also, it is very important and part of the conversation that we are having is that you need a predictable framework that supports access to well-priced capital, because at the end of the day, it is about affordability for customers. And so having that conversation and making sure that we are emphasizing that is a really important part of what the IOUs are doing.

Carly S. Davenport: Got it. Really helpful. Thank you for all those comments.

Pedro Pizarro: Yeah. Thanks, Carly.

Operator: Thank you. And the next question comes from Paul Andrew Zimbardo with Jefferies. Your line is open, sir.

Paul Andrew Zimbardo: Hi.

Nicholas Joseph Campanella: Good afternoon, team. Thanks for taking the question. The first one I had was just to follow up on Nick’s question a little bit. If I have the math right, and it is late in the day, so I might not. But if I have the math right, it looks like about an uptick in rate base growth from that 2028 to 2030. So I do not know if there are any other factors we should be considering because kind of your rate base growth is translating into the net income and earnings growth. Do we think about a potential faster trajectory in the back end of that plan from 2028 to 2030?

Maria Rigatti: Paul, I think you know how we approach this. We definitely run a lot of different scenarios. We plan conservatively. Looking at all various outcomes and how they play together allows us to have confidence in the 5% to 7%. I would focus on that now. I think we are not seeing anything other than rate base growth as we move out in time. We are always going to be doing things to help, you know, benefit the growth, but and also benefit affordability. So we will be focusing on efficient financings. We will be focusing on, over time, you know, further operational excellence efforts. But I think that is how I really view the entire five-year period.

It is based on

Gregg Gillander Orrill: a lot of scenarios, a lot of scenario planning, a lot of scenario analysis, and some conservative evaluations.

Paul Andrew Zimbardo: Okay. That is clear. And then I do want to follow up a little bit on the 2026 drivers and the variances you mentioned. I understand on the regulatory true-up. But could you elaborate a little bit on why we should not think about depreciation and kind of those tax other items at $0.14 recurring? That would be helpful.

Maria Rigatti: Thanks. Sure. So what they are variances in this year, like, relative to

Gregg Gillander Orrill: 2025. But now that they are built in, they are just going to, you know, they continue on a go-forward basis, but they will not actually be affecting or diminishing the growth year over year. So maybe that is a clarification that might be helpful. You know, what are they with more specificity? As you get into any rate case cycle, and I know we have chatted about this in the past, you know, you can start to deploy assets or invest in assets at a slightly different pace or in slightly different buckets than are in the GRC authorized revenue requirement. So you get those depreciation and then also property tax-related variances. Again, built in now.

So on a go-forward basis, do not expect the year-over-year trajectory. Tax and financing: there were some tax law changes last year around charitable contributions. There is a couple pennies around that. And then because year over year we have more wildfire debt outstanding, you see just a variance in the financing cost, again because the average amount outstanding changes as we continue to pay claims back in 2025. Again, now built in. We also have a lot of visibility into that with the settlements behind us. So not a variance going forward, which brings you back to rate base growth as the driver for our earnings growth.

Paul Andrew Zimbardo: Okay. That is very comprehensive, and thank you for giving the 2027 as well. Thanks a lot, team.

Maria Rigatti: Thanks, Paul.

Operator: Thank you. And the next question comes from Ryan Michael Levine with Citi. Your line is open.

Pedro Pizarro: Hello, Ryan.

Ryan Michael Levine: Hi. How are you? As the compensation program continues to execute,

Steven Powell: you look to continue to tweak the program to achieve your objectives? And any color you could share around the rationale for the recently announced changes?

Pedro Pizarro: I had a little hard time

Gregg Gillander Orrill: picking up. Did you hear the question?

Maria Rigatti: Yes. So, Ryan, we did, Pedro did mention earlier some small changes or some changes we are making in the program. I think all of that ties to the information gathering and the community feedback we continue to get. But I think, Pedro, if you want to elaborate.

Pedro Pizarro: Yeah. I will be doing—sorry, Ryan. It was just a little bit of static when you were asking the question, so I had a hard time picking it up. Yeah. So we have made a couple of modifications to the WRCP program. One is to provide some added support for tenants. The original protocol provided three months of compensation at the rent level that the tenants were paying prior to the event. But as we dug into this more and got more feedback, it became clear that there was at least some number of tenants in Altadena who perhaps have been longer-term tenants and were continuing to pay rents that were under market levels.

So now we are making an adjustment to use the calculator, the engine that we have to, you know, estimate fair market value for rent, and allowing tenants to recover three months of either the higher of their actual rent payments or that fair market value rent. The second adjustment we made was you might recall that the program

Nicholas Joseph Campanella: provided

Pedro Pizarro: support for attorney fees. Again, it is a voluntary program. You can participate without an attorney. But if, you know, claimants choose to use an attorney, then the program provided 10% of net damages as an increment to help cover attorney fees. We were also hoping that the attorney community would recognize that this program represents a fairly straightforward approach and hopefully less work, you know, less effort, for them and perhaps they could provide lower fees for clients. But as we got feedback from the clients themselves, from the claimants themselves, we decided that it was appropriate to increase what we are providing for the legal fees to 20% from the 10% of net damages.

Both of these changes will be applied retroactively as well. So for claimants who have already received their compensation or already received an offer, we will be making the adjustment for them automatically. It will not require effort on their part.

Maria Rigatti: And, Ryan, I think, you know, you asked about would we continue to tweak to meet our objectives. The objective here is to have

Anthony Christopher Crowdell: fair

Maria Rigatti: timely compensation, which also helps preserve the funds in the wildfire fund, you know, reducing interest cost, reducing escalation, etc. That is the objective. And then in terms of additional changes, we really are trying to listen to the community, but we think we have gotten a lot of feedback at this point.

Pedro Pizarro: Thank you. I think our advisers on this also, you know, have highlighted the importance of having a stable, understandable program. So, you know, I do not think it would be helpful to have a constant stream of changes either.

Anthony Christopher Crowdell: Thank you.

Aidan Kelly: Yeah.

Pedro Pizarro: Thanks, Ryan. Thank you.

Operator: Thank you. The next question comes from Aidan Kelly with JPMorgan. Your line is open.

Aidan Kelly: Hey. Good afternoon.

Pedro Pizarro: Good afternoon.

Aidan Kelly: Yeah. Just wondering if you could elaborate a bit more on the L.A. District Attorney’s investigation to determine whether criminal violations occurred. I noticed the new 10-K disclosure here, so I would appreciate any color on how you think about scope of this investigation. Any thoughts on the potential magnitude?

Pedro Pizarro: Yeah. Thanks for the question. And as you might imagine, investigations, I think, are often to be expected when you have events of the scale of the Eaton fire. We do not have a lot of visibility into timing, etc. Certainly, our team will be collaborating with the attorney’s office as, you know, as they ask for any steps. But importantly, as we continue our investigation, you know, and I think as I said earlier, as we look at the events here, you know, we continue to be confident that SCE will be able to make a good faith showing that, you know, its actions were those of a reasonable utility operator.

And so that gives us a lot of comfort as we, you know, look at, you know, whether it is that investigation you mentioned or just the broader investigations into the event and

Aidan Kelly: you know, looking ahead to, you know, ultimately

Pedro Pizarro: looking for the CPUC to affirm SCE’s prudency in the future.

Aidan Kelly: Understood. Thanks for the color there. And then just one last one for me. Can you confirm whether the out-of-service transmission tower in Eaton was grounded or not?

Pedro Pizarro: We have shared before that transmission line, the idle line, was grounded at both ends. We have also shared that we had photographic evidence at the far end of the line that showed some anomalies and potential issues with that grounding. And we have been transparent about all of this from early on. We have also shared that as you take a look at practices across the utility industry, there really is no common practice or standard for grounding of idle lines. In fact, we have identified at least a couple of utilities that choose not to ground idle lines at all.

In an abundance of caution and in the spirit of continuous improvement—and it is one of our values as a company—as we continue to learn and, or hypothesize too, about what may or may not have happened here, you might also recall that

Sam Ramraj: probably it is a

Pedro Pizarro: month or two after the event, we also disclosed publicly that we were, in fact already did this, change SCE’s protocols and policies to now require the grounding of idle lines at not only the endpoints, but for longer lines at least every two miles. And that could be shorter, you know, depending on the particular topography, you know, of any line. It is probably more than you wanted on idle lines there, but I want to show you the complete picture.

Aidan Kelly: Oh, I appreciate it. Appreciate it. Thank you. I will leave it there. Thanks.

Pedro Pizarro: Thanks, Aidan.

Operator: Thank you. And that was our last question. I will now turn the call back over to Sam Ramraj. Thank you for joining us. This concludes the conference call.

Sam Ramraj: Have a good rest of the day. You may now disconnect.

Operator: Thank you. This concludes today’s conference call. You may now disconnect at this time, and have a good rest of your day.

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