v3.25.2
Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2025
Accounting Policies [Abstract]  
Organization and Basis of Presentation
Organization and Basis of Presentation
Edison International is the ultimate parent holding company of SCE and Edison Energy, LLC, doing business as Trio. SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area across Southern, Central, and Coastal California. Trio is a global energy advisory firm providing integrated sustainability and energy solutions to commercial, industrial, and institutional customers. Trio's business activities are currently not material to report as a separate business segment, and SCE is the single reportable segment. See "Segment Information" below for further discussion.
These combined notes to the condensed consolidated financial statements apply to both Edison International and SCE unless otherwise described. Edison International's condensed consolidated financial statements include the accounts of Edison International, SCE, and other controlled subsidiaries. References to Edison International refer to the consolidated group of Edison International and its subsidiaries. References to "Edison International Parent and Other" refer to Edison International Parent and its competitive subsidiaries and "Edison International Parent" refer to Edison International on a stand-alone basis, not consolidated with its subsidiaries. SCE's condensed consolidated financial statements include the accounts of SCE, its controlled subsidiaries and a variable interest entity, SCE Recovery Funding LLC, of which SCE is the primary beneficiary. All intercompany transactions have been eliminated from the condensed consolidated financial statements.
Edison International's and SCE's significant accounting policies were described in the "Notes to Consolidated Financial Statements" included in Edison International's and SCE's combined Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"). This quarterly report should be read in conjunction with the financial statements and notes included in the 2024 Form 10-K.
In the opinion of management, all adjustments, consisting only of adjustments of a normal recurring nature, have been made that are necessary to fairly state the condensed consolidated financial position, results of operations, and cash flows in accordance with accounting principles generally accepted in the United States ("GAAP") for the periods covered by this quarterly report on Form 10-Q. The results of operations for the interim periods presented are not necessarily indicative of the operating results for the full year.
The December 31, 2024 financial statement data was derived from the audited financial statements, but does not include all disclosures required by GAAP for complete annual financial statements.
Consolidation
Organization and Basis of Presentation
Edison International is the ultimate parent holding company of SCE and Edison Energy, LLC, doing business as Trio. SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area across Southern, Central, and Coastal California. Trio is a global energy advisory firm providing integrated sustainability and energy solutions to commercial, industrial, and institutional customers. Trio's business activities are currently not material to report as a separate business segment, and SCE is the single reportable segment. See "Segment Information" below for further discussion.
These combined notes to the condensed consolidated financial statements apply to both Edison International and SCE unless otherwise described. Edison International's condensed consolidated financial statements include the accounts of Edison International, SCE, and other controlled subsidiaries. References to Edison International refer to the consolidated group of Edison International and its subsidiaries. References to "Edison International Parent and Other" refer to Edison International Parent and its competitive subsidiaries and "Edison International Parent" refer to Edison International on a stand-alone basis, not consolidated with its subsidiaries. SCE's condensed consolidated financial statements include the accounts of SCE, its controlled subsidiaries and a variable interest entity, SCE Recovery Funding LLC, of which SCE is the primary beneficiary. All intercompany transactions have been eliminated from the condensed consolidated financial statements.
Edison International's and SCE's significant accounting policies were described in the "Notes to Consolidated Financial Statements" included in Edison International's and SCE's combined Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"). This quarterly report should be read in conjunction with the financial statements and notes included in the 2024 Form 10-K.
In the opinion of management, all adjustments, consisting only of adjustments of a normal recurring nature, have been made that are necessary to fairly state the condensed consolidated financial position, results of operations, and cash flows in accordance with accounting principles generally accepted in the United States ("GAAP") for the periods covered by this quarterly report on Form 10-Q. The results of operations for the interim periods presented are not necessarily indicative of the operating results for the full year.
The December 31, 2024 financial statement data was derived from the audited financial statements, but does not include all disclosures required by GAAP for complete annual financial statements.
Segment Information
Segment Information
For information on Edison International's and SCE's segment information, see Note 1 in the 2024 Form 10-K. In addition, for the three and six months ended June 30, 2025 and 2024, Edison International's and SCE's significant segment expenses agree to those disclosed in the condensed consolidated statements of income. As of June 30, 2025 and 2024, the measures of Edison International's and SCE's segment assets are reported on Edison International's and SCE's condensed consolidated balance sheets, respectively, as total assets.
Allowance for Uncollectible Accounts
Allowance for Uncollectible Accounts
The allowance for uncollectible accounts is recorded based on SCE's estimate of expected credit losses and adjusted over the life of the receivables as needed. Since the customer base of SCE is concentrated in Southern California which exposes SCE to a homogeneous set of economic conditions, the allowance is measured on a collective basis on the historical amounts written-off, assessment of customer collectibility and current economic trends, including unemployment rates and any likelihood of recession for the region. The increase in the provision of uncollectible accounts and write-offs for the three and six months ended June 30, 2025, is driven primarily by consumer protection programs that limit disconnections for nonpayment.
Wildfire Insurance Fund
Wildfire Insurance Fund
The Wildfire Insurance Fund does not have a defined life and instead will terminate when the administrator determines that the fund has been exhausted. SCE estimates the period of coverage of the fund and amortizes contributions made to the Wildfire Insurance Fund ratably over the period of coverage similar to prepaid insurance. Estimating the period of coverage
of the fund requires significant judgment. Frequency of wildfire events and estimated costs associated with wildfire events caused by participating utilities are significant factors used to estimate the fund's period of coverage.
SCE reassesses the period of coverage of the fund at least annually in the first quarter each year and when new or additional information becomes available. As of the date of this filing, SCE does not have new or additional information that would enable it to change its prior assessment that the Wildfire Insurance Fund would provide coverage for an estimated 20 years from the date SCE committed to participate in the Wildfire Insurance Fund. When updating its estimate, SCE included all its fires for which losses can be reasonably estimated and relied on publicly disclosed wildfire-related losses related to other participating utilities. As discussed in Note 12, while SCE believes that it will incur material losses in connection with the Eaton Fire, it is currently unable to reasonably estimate a range of losses that may be incurred. The Wildfire Insurance Fund amortization period will be evaluated, and reduced as necessary, as new or additional information on wildfire events, including reasonably estimated losses related to the Eaton Fire, becomes available.
Edison International and SCE adjust the period of coverage on a prospective basis and amortize the Wildfire Insurance Fund contribution asset ratably over the remaining estimated life of the fund. An impairment will be recorded to the Wildfire Insurance Fund contribution asset, if the asset exceeds SCE's ability to benefit from the remaining coverage provided by the Wildfire Insurance Fund.
Earnings Per Share
Earnings Per Share
Edison International computes earnings per common share ("EPS") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards, payable in common shares, which earn dividend equivalents on an equal basis with common shares once the awards are vested.
EPS available to Edison International common shareholders was computed as follows:
Three months ended June 30,Six months ended June 30,
(in millions, except per-share amounts)2025202420252024
Basic earnings per share:
Net income available to Edison International common shareholders$343 $439 $1,779 $428 
Earnings allocated to participating securities— — (1)— 
Income available to common shareholders$343 $439 $1,778 $428 
Weighted average common shares outstanding385 385 385 385 
Basic earnings per share$0.89 $1.14 $4.62 $1.11 
Diluted earnings per share:
Income available to common shareholders$343 $439 $1,778 $428 
Add back: Earnings allocated to participating securities— 1 1 1 
Net income available to Edison International common shareholders$343 $440 $1,779 $429 
Weighted average common shares outstanding385 385 385 385 
Effect of dilutive securities1 3 1 2 
Adjusted weighted average shares – diluted386 388 386 387 
Diluted earnings per share$0.89 $1.13 $4.61 $1.11 
In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase 9,879,885 and 1,899,476 shares of common stock for the three months ended June 30, 2025 and 2024, respectively, 9,041,783 and 3,051,134 shares of common stock for the six months ended June 30, 2025 and 2024, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been antidilutive.
Revenue Recognition
Revenue Recognition
Revenue is recognized by Edison International and SCE when a performance obligation to transfer control of the promised goods is satisfied or when services are rendered to customers. This typically occurs when electricity is delivered to customers, which includes amounts for services rendered but unbilled at the end of a reporting period.
Regulatory Proceedings
2025 General Rate Case
In July 2025, the CPUC issued a proposed decision on the 2025 GRC that, if adopted, would result in a base rate revenue requirement of $9.8 billion in 2025, an increase of $1,174 million over revenue requirement authorized for 2024.
Since January 1, 2025, SCE is recognizing revenue based on the 2024 authorized revenue requirement, adjusted to reflect the 2025 CPUC-authorized ROE, until a final GRC decision is issued. The CPUC has also approved the establishment of a memorandum account to track changes in the authorized revenue requirement effective January 1, 2025. SCE cannot predict the revenue requirement the CPUC will ultimately authorize or forecast the timing of a final decision.
FERC 2025 Formula Rate Update
In November 2024, SCE filed its 2025 annual transmission revenue requirement update with the FERC, with rates effective January 1, 2025. The update reflects a 2025 transmission revenue requirement of $1.3 billion, which is a $220 million, or 20%, increase from the 2024 annual revenue requirement. The lower revenue in 2024 was due to a return of prior year overcollections. Pending resolution of the FERC formula rate proceedings, SCE recognized revenue in the first six months of 2025 based on the FERC 2025 annual update rate, subject to refund.
New Accounting Guidance
New Accounting Guidance
Accounting Guidance Adopted
No material accounting standards were adopted in the six months ended June 30, 2025.
Accounting Guidance Not Yet Adopted
In December 2023, the FASB issued an accounting standards update requiring public entities to provide more disclosures primarily related to the income tax rate reconciliation and income taxes paid. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The guidance is effective for annual periods after January 1, 2025 with early adoption permitted. The guidance is applied prospectively. Edison International and SCE will apply this standard for their annual filings for the year ended December 31, 2025 and do not expect the adoption of this standard to materially affect the annual disclosures.
In November 2024, the FASB issued an accounting standards update requiring public entities to provide disaggregated disclosure of income statement expenses. The guidance does not change the expense captions an entity presents on the face of the income statement, rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The guidance is effective for annual disclosure for the year ended December 31, 2027 and subsequent interim periods with early adoption permitted. The guidance is applied prospectively. Edison International and SCE are currently evaluating the impact of the new guidance.