Edison International (EIX) Earnings

Management highlights

### Legislative Engagement on Wildfire Reform - Management is actively engaged with California state leadership and stakeholders on durable wildfire risk reform, centered on aligning risk allocation, supporting customer affordability, and maintaining access to low-cost capital. - Third-party analysis from Moody's and S&P confirms wildfire-related financial risks impact the entire California economy, not just investor-owned utilities, including rates, insurance availability, and overall economic competitiveness. - Outcome of current legislative negotiations remains uncertain, but the clarity and structure of any final framework will directly impact SCE's cost of capital: a predictable, financeable framework will keep capital costs low for customers, while an unclear framework will raise financing costs and alter capital prioritization. ### Wildfire Mitigation and GRC Planning - SCE filed its Risk Assessment Mitigation Phase (RAMP) application for the 2029-2032 GRC cycle in May 2026, which outlines proposed capital investments for wildfire risk reduction, transmission/distribution reliability, cybersecurity, and climate adaptation. RAMP investments typically represent ~33% of total capital requested in the final GRC. - SCE has updated its wildfire risk modeling to incorporate climate data, multiple concurrent failure scenarios, and consequence-based prioritization (focusing on areas with the greatest potential community impact, not just highest ignition likelihood). - The RAMP application proposes 450 miles of new covered conductor and 190 miles of targeted undergrounding for the 2029-2032 period. To date, SCE has hardened 90% of its 16,800 distribution line miles in high wildfire risk areas, including 7,200 miles of covered conductor, with zero reported failures of deployed covered conductor for its designed risk mitigation. ### Clean Energy Transition Progress - SCE currently delivers 60% carbon-free power to customers, over 70% cleaner than the U.S. national average. It has contracted 900 megawatts of new energy storage in 2026, bringing its total owned/under-contracted storage portfolio to 9,200 megawatts, one of the largest in the U.S. ### Technology and Operational Excellence - Management identifies AI as a key enabler of long-term utility transformation, to improve risk identification, grid planning/operations, and wildfire mitigation, delivering faster execution, lower costs, and improved customer value. - Current AI deployments include automating 100,000 annual project designs (expected to cut cycle time by 20-30%) and streamlining 40,000 annual permit processing (expected to cut cycle time by ~20%), creating additional capacity for capital program execution and improving long-term cost performance. ### Wildfire Recovery and Claims - SCE's voluntary Wildfire Recovery Compensation Program (WRCP) for the Ethan Fire has issued over 2,200 offers totaling more than $775 million to over 12,300 impacted community members. SCE recently completed $2 billion Woolsey Fire cost recovery securitization, with proceeds used to retire related debt and strengthen the balance sheet.

Guidance

- Management reaffirms its 2026 core EPS guidance range of $5.90 to $6.20, supported by a strong first half performance, stable operations, and clear regulatory visibility through 2028. - Long-term core EPS growth guidance is maintained at 5% to 7% annually. - SCE's long-term rate-based capital growth target remains ~7% per year, centered on wildfire mitigation, infrastructure replacement, and electrification demand. - Management confirms no need for equity issuance to execute on the approved capital plan through 2030.

Segment performance

Edison International (parent holding company) reported Q2 2026 core EPS of $1.54, up from $0.97 in Q2 2025. Year-to-date core EPS through the first half of 2026 is $2.97. The only operating subsidiary with disclosed performance is Southern California Edison (SCE), which represents 100% of the company's core utility operations. SCE's Q2 2026 performance was driven by timing of the prior year General Rate Case (GRC) decision and strong operational execution across core business lines. The parent company and other non-utility segment had a favorable net loss 6 cents better than expected, driven by net financing benefits from 2025 preferred stock redemptions completed in Q1 2026.

Risks & headwinds

- Uncertainty around the outcome of California's 2026 wildfire reform legislative session: an incomplete or non-credit-supportive framework could lead to credit rating downgrades (SCE is currently rated BBB-, one notch above non-investment grade) that would raise borrowing costs, which would be passed through to customers and reduce planned capital investment. - Uncertainty around the total scope of SCE's potential liability for the Eaton Fire: over 30,000 claims have been filed in litigation, and WRCP participation volume remains too low to establish a reliable GAAP-estimable range of total liability, with only two subrogation claims settled to date. - No update is available on the timeline of the Los Angeles District Attorney's investigation into the Eaton Fire, creating uncertainty around potential regulatory or legal outcomes. - Wildfire risk remains a material ongoing operational and financial risk, requiring sustained large-scale capital investment that can impact customer affordability.

Analyst Q&A

• Q: What positions is Edison putting on the table for wildfire reform, and could there be an updated capital plan by Q3 2026 if a deal is reached? /

  A: SCE already has an approved GRC with full visibility on capital spending through 2028, and no equity is needed for the plan through 2030. Legislative outcomes remain uncertain with 4 weeks remaining in the session, and there has been no final draft bill released. It is possible lawmakers will only reach a partial solution this year, with remaining work pushed to 2027 after the gubernatorial transition. If an unfavorable outcome raises Edison's cost of equity dramatically, management will reevaluate future investments to avoid negative NPV projects while upholding legal obligations for safety and reliability, and will update investors once the legislative outcome is clear.

• Q: What is the timeline for tapping the state wildfire fund for Eaton Fire reimbursement, and would RAMP filings change if reform fails this session? /

  A: Total incurred costs for Eaton Fire have already crossed the $1 billion threshold, and pre-funding arrangements are already in place with the state Wildfire Fund administrator to cover claims, so SCE does not need to front these costs. If legislative reform fails and raises SCE's cost of capital, management will adjust priorities for flexible future capital projects while retaining mandatory investments in required safety and reliability, but no specific changes can be outlined before the legislative outcome is finalized.

• Q: What is the current tone of the affordability conversation around wildfire reform in California? /

  A: Affordability is a top concern for consumers across the U.S. and California, though housing is the dominant driver of California affordability pressures, not energy costs, and SCE rates are in the lowest national quartile. If no credit-supportive reform passes, the resulting credit rating downgrade (SCE is one notch from non-investment grade) would raise borrowing costs that get passed directly to customers, so addressing wildfire framework risk is itself a critical affordability measure.

• Q: How does the capital size of the current RAMP application compare to the prior GRC cycle? /

  A: RAMP investments typically represent one-third of total GRC capital requests, and the current RAMP totals ~$2.5 billion, which is slightly more than one-third of the planned 2029-2032 GRC capital request of $8-$9 billion, aligned with prior guidance.