SCE-PG 10-K & 10-Q changes, risk factors and insider trading

Edison International is the ultimate parent holding company of SCESCE, and Edison Energy, LLC, doing business as Trio. SCEwhich 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, CentralCentral, 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.

Edison International's earnings are prepared in accordance with GAAP. Management uses core earnings (loss) internally for financial planning and for analysis of performance. Core earnings (loss) are also used when communicating with investors and analysts regarding Edison International's earnings results to facilitate comparisons of the company's performance from period to period. Core earnings (loss) are a non-GAAP financial measure and may not be comparable to those of other companies. Core earnings (loss) are defined as earnings available to Edison International shareholders less non-core items. Non-core items include income or loss from discontinued operations and income or loss from significant discrete items that management does not consider representative of ongoing earnings, such as write downs,write-downs, asset impairmentsimpairments, and other income and expense related to changes in law, outcomes in tax, regulatory or legal proceedings, and exit activities, including sale of certain assets and other activities that are no longer continuing. SCE implemented a customer-funded wildfire self-insurance program in 2023. With the commencement of this program, Edison International and SCE no longer consider wildfire-related claim losses to be representative of ongoing earnings and treat such costs as non-core items.

1SCE and Edison International Parent and Other non-core items are tax-effected at an estimated statutory rate of approximately 28%; wildfire claims and expenses insured by EIS are tax-effected at the federal statutory rate of 21%. No net tax benefit was recognized for the Trio disposition loss as the related tax benefits are not expected to be realized.

Edison International's firstsecond quarter 2026 earnings decreasedincreased $905$191 million from the firstsecond quarter of 2025, resulting from aan decreaseincrease in SCE's earnings of $948$200 million, partially offset by aan decreaseincrease in Edison International Parent and Other's loss of $43$9 million. SCE's lowerhigher net income consistedreflected of a $16 million non-core loss in 2026 compared to $947 million non-core earnings in 2025, partially offset by $15$198 million of higher core earnings.earnings and a $2 million lower non-core loss. Edison International Parent and Other's loss decreasedincreased by $43$9 million due to $40a $29 million of higher non-core earningsloss andin $32026, partially offset by $20 million of lower core loss.loss compared to 2025.

The increase in SCE's core earnings for the three and six months ended MarchJune 31,30, 20262026, fromcompared to the same periodperiods in 20252025, was primarily due to the adoption of the 2025 GRC final decision in the third quarter of 2025,2025. The increase for the six-month period was partially offset by the absence of a benefit to interest expense related to cost recoveries authorized under the TKM Settlement Agreement in 2025. The decrease in Edison International Parent and Other's core loss for the three months ended March 31, 2026, was primarily due to lower preferred stock dividends, partially offset by higher interest expense.

Consolidated non-core items for the threesix months ended MarchJune 31,30, 2026 and 2025 for Edison International included:

•Net earnings of $1 million ($1 million after-tax) recorded in 2026 primarily due to updated estimates of claims accruals, net of legal expenses, and charges of $50 million ($39 million after-tax) recorded in 2025, both related to wildfire claims insured by EIS. See "Notes to Condensed Consolidated Financial Statements— Note 12. Commitments and Contingencies" for further information.

Total capital expenditures (including accruals) were $1.5$3.1 billion for theboth threesix months ended MarchJune 31,30, 2026 and 2025. As discussed in the 2025 Form 10-K, SCE forecasts total capital expenditures ranging from $37.5 billion to $40.6 billion for 2026 – 2030, and weighted average annual rate base from $50.8 billion to $67.9 billion for 2026 – 2030. These capital program and rate base projections incorporate the planned CPUC-jurisdictional spending as informed by the 2025 GRC final decision and expected FERC capital expenditures, see "Liquidity and Capital Resources—SCE—Capital Investment Plan" below and "Management Overview — Capital Program" in the 2025 MD&A.

SCE continues to implement its WMP to reduce the risk of SCE equipment contributing to the ignition of wildfires. Further to the investments SCE is making as part of its WMP, SCE also uses its PSPS program to proactively de-energize power lines as a last resort to mitigate the risk of significant wildfires during extreme weather events. In addition, California has increased its investment in wildfire prevention and fire suppression capabilities. Yet, the potential for catastrophic wildfire activity in SCE's service area still exists. In February 2026, the OEIS issued a final decision approving SCE’s 2026 – 2028 WMP. In March 2026, the OEIS issued SCE's safety certification which is valid until the later of March 2, 2027, and when OEIS acts on SCE's timely submittal of a request for its next safety certification.

In April 2026, the CEA submitted to the California Legislature and the Governor a report required by SB 254 that evaluates California’s approach to natural catastrophe risk, including wildfires. The report identifies increasing natural catastrophe risk driven by climate‑related factors, development in wildfire‑prone areas, fuel conditions, and other systematic factors, and highlights challenges in wildfire mitigation, insurance availability, liability allocation, and post‑event recovery. The report observes that failure to address escalating wildfire risk would prolong recovery for affected communities, significantly increase electric utility costs, driving higher customer rates, and also could elevate insurance premiums statewide. ContinuedThe report further observes that inaction would expose SCE to risk of credit downgrades and heightened financial stress, limiting access to capital needed to maintain safe and reliable infrastructure. Taken together, these dynamics would exacerbate affordability pressures, undermine market stability, and impede SCE's ability to support long‑term reliability and California's climate‑related objectives.

SCE’s internal review into the facts and circumstances of the Eaton Fire is complex and ongoing. SCE's review includes ongoing inspections of its facilities and records and of third-party information and testing. 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 firefire, 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 beenwas associated with the ignition of the Eaton Fire and is pursuing settlement of claims through its Wildfire Recovery Compensation Program, a program designed to enable eligible individuals and businesses impacted by the Eaton Fire to seek expedited resolution of their claims.

SCE has entered into settlements with insurance claimants and claimants under its Wildfire Recovery Compensation Program related to the Eaton Fire. As of MarchJune 31,30, 2026, SCE had recorded $1.3$1.6 billion in losses related to these settlements. SCE also recorded expected recoveries from customer-funded self-insurance of $917 million, from the Wildfire Fund of $295$645 million, and through FERC electric rates of $70 million. In total, through MarchJune 31,30, 2026, the net after-tax charge to earnings recorded related to the settlements was $9 million, the after-tax impact of the required $12.5 million shareholder contribution related to SCE's customer-funded self-insurance coverage. For more information about settlements under SCE’s Wildfire Recovery Compensation Program, see "Notes to Condensed Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides—Settlement of Claims."

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. SCE has advised the administrator of the Wildfire Fund that it anticipates that it will seek reimbursement of eligible claims arising from the Eaton Fire from the Initial Account and the administrator has confirmed that the Eaton Fire is a "covered wildfire" for purposes of accessing the Initial Account. SCE will be reimbursed for losses incurred in excess of $1.0 billion for eligible claims for third-party damages related to the Eaton Fire from the Initial Account, subject to approval of the fund administrator and the Initial Account's claims-paying capacity. The fund administrator has reported that approximately $21 billion in the fund's claims-paying capacity will be available for the Eaton Fire, as of September 30, 2025, exceeds $21 billion.Fire.

SCE will file an application with the CPUC for review of its costs and expenses related to the Eaton Fire after it has resolved all or, if authorized by the CPUC, substantially all third-party damage claims related to the fire, or upon earlier request of the fund administrator. Because SCE held a valid safety certification at the time of the Eaton Fire, SCE will be presumed to have acted prudently unless a party in the proceeding creates "serious doubt" as to the reasonableness of its conduct, in which case SCE will have the burden of dispelling that doubt and proving its conduct was prudent. The prudency standard does not necessitate perfect conduct and California Wildfire Legislation requires that the CPUC allow recovery if it determines that SCE's conduct related to the ignition of the Eaton Fire was consistent with actions of a reasonable utility. SCE believes that the CPUC's determination regarding the reasonableness of its ignition-related conduct should be based on an evaluation of the reasonableness of its overall policies, systems, and practices. The CPUC has not yet issued a final decision applying the California Wildfire Legislation prudency framework to a wildfire cost-recovery proceeding.

The following discusses SCE's condensed consolidated statements of income for the three and six months ended MarchJune 31,30, 2026 and 2025. In general, expenses SCE is authorized to pass through directly to customers (such as purchased power and fuel expenses, flow-through taxes, as well as costs incurred for various programs and activities, such as public purpose programs and vegetation management activities) and the corresponding amount of revenues collected to recover those pass-through costs do not impact net income.

Three months ended MarchJune 31,30, 2026 versus MarchJune 31,30, 2025

AnA increasedecrease in operating revenue of $294$184 million was primarily due to:

•AnA increasedecrease in revenue of $15$400 million related to net higherlower expenses that are passed through to customers, which mainly included increasesdecreases in:

•Purchased powerDepreciation and fuelamortization expense of $77$30 million;

•OtherPurchased incomepower and fuel expense of $4$20 million.million;

A decrease in purchased power and fuel costs of $77$20 million was primarily due to lower energy prices,prices and higher congestion revenue rights credits, partially offset by higher capacity costs (offset in "Operating Revenue" above).

AnA increasedecrease in operation and maintenance expense of $36$512 million was primarily due to:

•A net increasedecrease of $16$425 million pass-through costs (offset in "Operating Revenue" above), which is mainly related to higherthe publicrecognition programs expenses and higherof previously deferred wildfire mitigation and vegetation management costs authorized for recovery in 2026, partially offset by lower uncollectible expense.2025.

AAn decreaseincrease in recoveriesoperating revenue of wildfire-related claims of $1,352$110 million was primarily due to: