Good afternoon, and welcome to the Edison International Fourth Quarter 2025 Financial Teleconference. My name is Michelle, and I will be your operator today. [Operator Instructions] Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Thank you, Michelle, and welcome, everyone. Our speakers today are President and Chief Executive Officer, Pedro Pizarro; and Executive Vice President and Chief Financial Officer, Maria Rigatti. Also on the call are other members of the management team. Materials supporting today's call are available at www.edisoninvestor.com. These include our Form 10-K, prepared remarks from Pedro and Maria and the teleconference presentation. Tomorrow, we will distribute our regular business update presentation. During this call, we'll make forward-looking statements about the outlook for Edison International and its subsidiaries. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our SEC filings, please read these carefully. The presentation includes certain outlook assumptions as well as reconciliation of non-GAAP measures to the nearest GAAP measure. During the question-and-answer session, please limit yourself to one question and one follow-up. I will now turn the call over to Pedro.

Well, thanks a lot, Sam, and good afternoon, everyone. Edison International's 2025 core earnings per share of $6.55 was above our guidance range, that extends our 2-decade track record of meeting or exceeding annual EPS guidance. Importantly, this also marks the successful delivery of the long-term core EPS growth target that 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'll focus on three themes: Our commitments to customers, communities and investors, our strength in 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 Escalent, SCE had the highest absolute brand trust score among the large California investor-owned Utilities. Customers and public trust remain 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…

Thanks, Pedro. In my comments today, I will discuss fourth quarter and full year financial results. Our focused 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 6 and 7 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 redemption 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 15 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 that we will continue to deliver on these commitments and build on your trust. You can see on Page 8 that delivering strong financial results was just one accomplishment and another year of strong execution in 2025. Page 9 summarizes the key management focus areas for 2026. SCE continues to execute its wildfire mitigation plan and its focus on operational excellence to reduce…

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 Instructions] Our first caller is Nick Campanella with Barclays.

So I guess just -- on the Eaton losses, I think you disclosed that you recorded about $1.1 billion of losses so far, just from the settlements under the wildfire recovery compensation program. And I guess just as you're continuing to get more visibility on the total liability, like when do you think you would potentially 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?

Yes. Thanks, Nick, for the question. I'll start on this one. Let me share some -- reinforce some numbers for perspective. I think I mentioned that we've had -- SCE has 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. For example, if you have a multiple tenant kind of property. So we could certainly see a few tens of thousands of claims ultimately, if everybody wants to participate through the program. And so in that context, 2,300 claim applications, and we're -- now I think I checked this morning, SCE has now crossed the 590 offer mark. That's a really good strong start. Those are good numbers for just three months into the program, but it's just a minuscule number compared to the potential pool here. And so in terms of when we would be able to estimate, we really don't have an estimate for that yet because it really depends on the pace of this.

And Nick, maybe just a clarification. You referenced $1 billion or so that we've recorded. That's a combination of what we paid under the WRCP 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's both of those things.

Yes. Thanks, really clarification, Maria. We've announced a couple of subrogation settlement so far. So that's what -- on the insurance side, the subrogation side, similarly, there's been two settlements at around an average of $0.55 in the dollar, but there's many more insurance companies in that. So we really can't estimate when we might have enough critical volume to be able to have even a low end of the [ estimated ] range with the confidence required by GAAP.

Okay. And then just maybe expanding on the comments about the 5% to 7% and being at the high end '27. I know your rate base growth is 7%, and you're not issuing any equity, which is great, but I assume you do have some financing drag. Just what are kind of the consideration the nonlinearity to think about for '28 and '29? 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?

Thanks, Nick. So you can see sort of like through the '28 period, again, 2026, some muted growth due to variances that are now in the year and will not create variances on a go-forward basis, which then does mean that we're at the high end of the range for the next couple of years. We don't really see any large discrete activities that are driving things in one direction and the other over the course of the years, it's really rate base growth. . Obviously, we still continue to see things like AFUDC come through. We're going to continue to manage the business across all the different elements and areas, similar to what we've done in the past. Then as you get out to '29 and '30, 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 '29 and '30 as we file for a new General Rate Case decision. That will be filed actually in May of 2027. So we're closing in on that now.

And the next question comes from Carly Davenport with Goldman Sachs.

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?

Sure. So we'll be filing later next few months likely. And we'll ask for a typical schedule, which would get us a decision hopefully in about 18 months or so. The capital that's embedded in the forecast right now, the total request will be in the neighborhood of $3 billion. About $1.5 billion is in the period that we have portrayed here through 2030 with another $1.5 billion that would get spent post that by and large through 2033. So that's sort of the pace of what we're anticipating.

Great. Okay. That's super helpful. And then maybe just on the SB 254 processes getting closer to the April 1 CEA report deadline. Any updates that you'd call out in terms of thematics that are coming out of the updates we've gotten so far? And just how you feel we're progressing into that deadline and what that could mean for timing of getting some clarity on legislation?

Yes. Thanks, Carly. I'd say the process is certainly underway. It's good to see robust participation from so many stakeholders across the economy. The legislature set this up, they set it up to be truly across economy sort of exercise. And so that engagement is important. It's been important to see the approach that the CEA is taking in marshaling the process, making sure that there's good participation, good engagement, good transparency into the various positions that different parties are bringing in. It is certainly 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 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 a consequence focusing as well on shoring up the insurance market, focusing on having ultimately solutions that if heaven forbid, there's another catastrophic fire in the state that there's a way to equitably socialize that impact across the economy. Those are all constructive, our themes that keep coming up. I would also point to the report that the CPUC issued a couple of weeks ago. We thought that, that was very constructive, and 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 this risk that even if you have a catastrophe that starts with the 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 issues that led to faster spread. And so recognizing those kind of things is really important, and it was good to see that show up in the CPUC's conclusions. Maria, anything you'd add?

Maybe just one other thing, Carly, and it's really not an add. It's just -- it's underscoring. Pedro talked about 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's very important and part of the conversation that we're having is that you need a predictable framework that supports access to well-priced capital. Because at the end of the day, it's 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.

And the next question comes from Paul Zimbardo with Jefferies.

The first one I had was just a follow-up on Nick's question a little bit. If I have the maths right, and it's late in the day, so I might not. But if I have the maths right, it looks like about an 8% rate base growth from that '28 to 2030. So I don't know if there's any other factors we should be considering, because kind of your rate base growth is translating into the net income and earnings growth. Should we think about a potential faster trajectory in the back end of that plan from 2028 to 2030?

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're not seeing anything other than rate base growth as we move out in time. We're always going to be doing things to help benefit the growth, but -- and also benefit affordability. So we'll be focusing on efficient financing. We'll be focusing on over time, further operational excellence efforts. But I think that's how I really view the entire five-year period. It's based on a lot of scenarios, a lot of scenario planning, a lot of scenario analysis and some conservative valuations.

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 shouldn't think about the depreciation and kind of those tax other items that $0.14 is recurring, that would be helpful.

Sure. So while they are variances in this year like relative to '25, but now that they're built in, they're just going to -- they continue on a go-forward basis, but they won't actually be affecting or diminishing the growth year-over-year. So maybe that's a clarification that might be helpful. What are they with more specificity as you get into any rate case cycle, and I know we've chatted about this in the past, 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. You get those depreciation and then also property tax-related variances. Again, built in now. So on a go-forward basis, they don't expect the year-over-year trajectory. Tax and financing. There were some tax law changes last year around charitable contributions. There's a couple of 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 -- 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.

Okay. They're very comprehensive and thank you for giving the 2027 as well.

And the next question comes from Ryan Levine with Citi.

As the compensation program continues to execute, would 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?

I had a little hard time picking up.

Yes. So Ryan, we did -- Pedro did mention earlier some small changes or some changes we're 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...

I'm sorry, Ryan, it was just a little bit of static when you're asking the question, so I had a hard time picking it up. Yes. So we 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 actual 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 or the engine that we have to calculate or 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 provided support for attorney fees, voluntary program, you can participate without an attorney, but if 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 for -- 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 there was appropriate to increase the -- what we're providing for legal fees to 20% from the 10% of net damages. Both of these changes will be applied retroactively as well. So we have claimants who have already received their compensation or -- we've already received an offer, we'll be making the adjustment for them automatically and won't require effort on their part.

And Ryan, I think you asked about what we continue to tweak to meet our objectives. The objective here is to have fair timely compensation, which also helps preserve the funds in the wildfire fund, reducing interest costs, reducing escalation, et cetera. The objective -- that is the objective. And then in terms of additional changes, we really are trying to respond to the community, but we think we've gotten a lot of feedback at this point.

I think our advisors on this. Also I've highlighted the importance of having a stable, understandable program. So I don't think it would be helpful to have a constant stream of changes either.

The next question comes from Aidan Kelly with JPMorgan.

Just wanted -- 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'd appreciate any color on how you think about the scope of this investigation. Any thoughts on the potential magnitude?

Yes. 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 don't have a lot of visibility into timing, et cetera. Certainly, our team will be collaborating with the attorney's office as they ask for any steps. But importantly, as we continue our investigation, and I think as I said earlier, as we look at the events here, we continue to be confident that SCE will be able to make a good faith showing that its actions were those of a reasonable utility operator. And so that gives us a lot of comfort as we look at whether it's that investigation you mentioned or just the broader investigations into the event and looking ahead to ultimately looking for the CPUC to affirm -- CPUs -- SCE's prudency in the future.

Understood. And just one last one for me. Can you confirm whether the out-of-service transmission tower in Eaton is grounded or not?

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've been transparent about all 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've 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's 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 probably it's like a month or two after the event, we also disclosed publicly that we were going -- in fact, we 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 depending on the particular topography of any line. It's probably more than you wanted on idle lines there, but I want to make sure you have the complete picture.

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

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