EDISON INTERNATIONALEIX
EDISON INTERNATIONAL Fair Value Disclosure
Fair Value Measurements
Recurring Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an "exit price"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of December 31, 2025 and 2024, nonperformance risk was not material for Edison International or SCE.
Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value.
Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds, and money market funds.
Level 2 – Edison International's and SCE's Level 2 assets and liabilities include fixed income securities, primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter commodity derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument.
The fair value of SCE's over-the-counter commodity derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing models include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity.
Level 3 – This level primarily consists of congestion revenue rights ("CRRs"), which are derivative contracts that trade infrequently with significant unobservable inputs (CAISO CRR auction prices). SCE employs a market valuation approach of utilizing historical CRR prices as a proxy for forward prices. SCE also enters into certain physically settled resource adequacy contracts with a financially settled electricity component ("Fin Toll arrangements"). For these Fin Toll arrangements, SCE uses an income model valuation approach to estimate the significant unobservable inputs (hourly power prices). Edison International Parent and Other does not have any Level 3 assets and liabilities.
Assumptions are made in order to value derivative contracts in which observable inputs are not available. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs, and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of derivative instruments.
SCE
The following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:
| December 31, 2025 | |||||||||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Netting and Collateral1 | Total | ||||||||||||||||||||||||
| Assets at fair value | |||||||||||||||||||||||||||||
| Derivative contracts | $ | — | $ | — | $ | 48 | $ | — | $ | 48 | |||||||||||||||||||
| Money market funds and other | 34 | 22 | — | — | 56 | ||||||||||||||||||||||||
| Nuclear decommissioning trusts: | |||||||||||||||||||||||||||||
Stocks2 | 1,909 | — | — | — | 1,909 | ||||||||||||||||||||||||
Fixed Income3 | 981 | 1,665 | — | — | 2,646 | ||||||||||||||||||||||||
| Short-term investments, primarily cash equivalents | 191 | 40 | — | — | 231 | ||||||||||||||||||||||||
Subtotal of nuclear decommissioning trusts4 | 3,081 | 1,705 | — | — | 4,786 | ||||||||||||||||||||||||
| Total assets | 3,115 | 1,727 | 48 | — | 4,890 | ||||||||||||||||||||||||
| Liabilities at fair value | |||||||||||||||||||||||||||||
| Derivative contracts | — | 57 | — | (57) | — | ||||||||||||||||||||||||
| Total liabilities | — | 57 | — | (57) | — | ||||||||||||||||||||||||
| Net assets | $ | 3,115 | $ | 1,670 | $ | 48 | $ | 57 | $ | 4,890 | |||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
| (in millions) | Level 1 | Level 2 | Level 3 | Netting and Collateral1 | Total | ||||||||||||||||||||||||
| Assets at fair value | |||||||||||||||||||||||||||||
| Derivative contracts | $ | — | $ | 1 | $ | 212 | $ | (1) | $ | 212 | |||||||||||||||||||
| Other | — | 22 | — | — | 22 | ||||||||||||||||||||||||
| Nuclear decommissioning trusts: | |||||||||||||||||||||||||||||
Stocks2 | 1,631 | — | — | — | 1,631 | ||||||||||||||||||||||||
Fixed Income3 | 975 | 1,618 | — | — | 2,593 | ||||||||||||||||||||||||
| Short-term investments, primarily cash equivalents | 128 | 39 | — | — | 167 | ||||||||||||||||||||||||
Subtotal of nuclear decommissioning trusts4 | 2,734 | 1,657 | — | — | 4,391 | ||||||||||||||||||||||||
| Total assets | 2,734 | 1,680 | 212 | (1) | 4,625 | ||||||||||||||||||||||||
| Liabilities at fair value | |||||||||||||||||||||||||||||
| Derivative contracts | — | 47 | — | (47) | — | ||||||||||||||||||||||||
| Total liabilities | — | 47 | — | (47) | — | ||||||||||||||||||||||||
| Net assets | $ | 2,734 | $ | 1,633 | $ | 212 | $ | 46 | $ | 4,625 | |||||||||||||||||||
1Represents the netting of assets and liabilities under master netting agreements and cash collateral.
2Approximately 71% and 75% of SCE's equity investments were in companies located in the United States at December 31, 2025 and 2024, respectively.
3Includes corporate bonds, which were diversified by the inclusion of collateralized mortgage obligations and other asset backed securities of $60 million and $94 million at December 31, 2025 and 2024, respectively.
4Excludes net payables of $251 million and $105 million at December 31, 2025 and 2024, respectively, which consist of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases.
SCE Fair Value of Level 3
The following table sets forth a summary of changes in SCE's fair value of Level 3 net derivative assets and liabilities:
| Years ended December 31, | |||||||||||
| (in millions) | 2025 | 2024 | |||||||||
| Fair value of net assets at beginning of period | $ | 212 | $ | 91 | |||||||
| Sales | — | (1) | |||||||||
| Settlements | (42) | 14 | |||||||||
Total realized/unrealized (losses) gains1 | (122) | 108 | |||||||||
| Fair value of net assets at end of period | $ | 48 | $ | 212 | |||||||
1Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities.
There were no material transfers into or out of Level 3 during 2025 and 2024.
The following table sets forth the significant unobservable inputs used to determine fair value for Level 3 assets and liabilities:
| Fair Value (in millions) | Significant Unobservable Input | Range ($ per MWh) | Weighted Average ($ per MWh) | ||||||||||||||||||||||||||
| Assets | Liabilities | ||||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
| CRRs | $ | 43 | $ | — | CAISO CRR auction prices | $(5.28) - $14,484.70 | $ | 8.39 | |||||||||||||||||||||
| Fin Toll arrangements | 5 | — | Hourly forecast power prices | $0.00 - $97.04 | 42.16 | ||||||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
| CRRs | $ | 212 | $ | — | CAISO CRR auction prices | $(4.64) - $50,048.16 | $ | 27.20 | |||||||||||||||||||||
Level 3 Fair Value Uncertainty
For CRRs, increases or decreases in CAISO auction prices would result in higher or lower fair value, respectively.
For Fin Toll arrangements, the fair value measurements are sensitive to the spread between daily high and daily low hourly power prices. Increases or decreases in this spread would result in higher or lower fair value, respectively.
Nuclear Decommissioning Trusts
SCE's nuclear decommissioning trust investments include equity securities, U.S. treasury securities and other fixed income securities. Equity and treasury securities are classified as Level 1 as fair value is determined by observable market prices in active or highly liquid and transparent markets. The remaining fixed income securities are classified as Level 2. The fair value of these financial instruments is based on evaluated prices that reflect significant observable market information such as reported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes, issuer spreads, bids, offers and relevant credit information. There are no securities classified as Level 3 in the nuclear decommissioning trusts.
SCE's investment policies and CPUC requirements place limitations on the types and investment grade ratings of the securities that may be held by the nuclear decommissioning trust funds. These policies restrict the trust from holding alternative investments and limit the trust funds' exposures to investments in highly illiquid markets. With respect to equity and fixed income securities, the trustee obtains prices from third-party pricing services which SCE is able to independently corroborate as described below. The trustee monitors prices supplied by pricing services, including reviewing prices against defined parameters' tolerances and performs research and resolves variances beyond the set parameters. SCE corroborates the fair values of securities by comparison to other market-based price sources obtained by SCE's investment managers. Differences outside established thresholds are followed-up with the trustee and resolved. For each reporting period, SCE reviews the trustee determined fair value hierarchy and overrides the trustee level classification when appropriate. See Note 10 for more information on nuclear decommissioning trusts.
Edison International Parent and Other
Edison International Parent and Other assets measured at fair value and classified as Level 1 consisted of money market funds of $51 million and $101 million at December 31, 2025 and 2024, respectively. Assets measured at fair value and classified as Level 2 were immaterial at December 31, 2025 and 2024. There were no securities classified as Level 3 for Edison International Parent and Other at December 31, 2025 and 2024.
Fair Value of Debt Recorded at Carrying Value
The carrying value and fair value of Edison International's and SCE's long-term debt (including current portion of long-term debt) are as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||
| (in millions) | Carrying Value1 | Fair Value2 | Carrying Value1 | Fair Value2 | |||||||||||||||||||
| Edison International | $ | 37,998 | $ | 35,721 | $ | 35,583 | $ | 33,160 | |||||||||||||||
| SCE | 33,183 | 30,744 | 30,515 | 27,994 | |||||||||||||||||||
1Carrying value is net of debt issuance costs.
2The fair value of long-term debt is classified as Level 2.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 27, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 22, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 23, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.