EDISON INTERNATIONAL

SCE

SCE's ability to operate its business, fund capital expenditures, and implement its business strategy is dependent upon its operating cash flow and access to the bank and capital markets. SCE's overall cash flows fluctuate based on, among other things, its ability to recover its costs in a timely manner from its customers through regulated rates, changes in commodity prices and volumes, collateral requirements, interest obligations, dividend payments to and equity contributions from Edison International, obligations to preference shareholders, and the outcome of tax, regulatory and legal matters.

In the next 12 months, SCE expects to fund its cash requirements through operating cash flows, capital market and bank financings, andequity contributions from Edison International Parent, as needed. In addition, SCE expects to fund authorized wildfire-related cost recoveries through securitization financings, and fund costs related to the Eaton Fire through customer-funded self-insurances and reimbursement from the Initial Account. SCE also has availability under its credit facility and agreements with lenders to issue bilateral unsecured standby letters of credit to fund cash requirements. SCE may issue additional debt for general corporate purposes.

In December 2025, SCE issued securitized bonds in the amount of $1.6 billion to finance cost recoveries authorized under the TKM Settlement Agreement. In addition, SCE expects to finance approximately $2.0 billion of cost recoveries authorized under the Woolsey Settlement Agreement by issuing securitized bonds, subject to the approval of a securitization financing application filed in January 2026. For further details on the settlements, see "Management Overview—Southern California Wildfires and Mudslides."

During the year ended December 31, 2025, SCE issued a total of $3.0 billion of first and refunding mortgage bonds. In February 2026, SCE entered into a term loan agreement to borrow up to $300 million due in March 2027. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."

In December 2025, SCE repurchased 7,250,967 shares of 5.45% Fixed-to-Floating Rate Trust Preference Securities (the "Series K Trust Securities") issued by SCE Trust V through a tender offer for an aggregate amount paid of $181 million, which includes accrued and unpaid dividends. SCE subsequently exchanged substantially all of these Series K Trust Securities for 72,509 shares of SCE's Series K preference stock, which it retired. SCE paid the consideration and the fees and expenses incurred with cash on hand. In addition, in December 2025, SCE fully redeemed 5.375% Fixed-to-Floating Rate Trust Preference Securities (the "Series J Trust Securities") issued by SCE Trust IV for an aggregate amount paid of $325 million. SCE subsequently exchanged all of these Series J Trust Securities for SCE's Series J preference stock, which it retired. In February 2026, SCE announced that it will redeem all the outstanding shares of its Series K preference stock which will cause SCE Trust V to redeem all of its outstanding 5.45% Series K Trust Securities. The redemption date will be March 15, 2026 at the redemption price of $25 per Series K Trust Security. For further details, see "Notes to Consolidated Financial Statements—Note 14. Equity."

For restrictions on SCE's ability to pay dividends, see "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—SCE Dividends."

Credit Ratings

Following the passage of SB 254 in September 2025, Moody's reaffirmed SCE's long-term issuer credit rating and outlook, and Fitch also reaffirmed SCE's credit rating and revised its outlook from ratings watch negative to stable. However, S&P downgraded SCE's long-term issuer credit rating. For further details on SB 254, see "Business—Southern California Wildfires—Recovery of Wildfire-Related Costs—California Wildfire Legislation." The following table summarizes SCE's current long-term issuer credit ratings and outlook from the major credit rating agencies as of February 11, 2026:

SCE's credit ratings may be affected by various factors. These include, but are not limited to, failure by regulators to successfully implement the California Wildfire Legislation in a consistent and credit supportive manner, or investigations into wildfire events or associated settlements result in material utility liability exposure, particularly in the absence of broader credit-supportive legislative actions to mitigate SCE's wildfire risk, including those to be recommended under SB 254 in a report due April 1, 2026. Additionally, a persistent increase in the frequency and severity of wildfires in California may lead the credit rating agencies to reassess SCE's wildfire-related operational risk exposure or believe the Wildfire Fund is at risk of material depletion. Credit rating downgrades increase the cost and may impact the availability of short-term and long-term borrowings, including commercial paper, credit facilities, bond financings or other borrowings. In addition, some of SCE's power procurement contracts, environmental remediation obligations and workers' compensation self-insurance would require SCE to pay related liabilities or post additional collateral if SCE's credit rating were to fall below investment grade. For further details, see "—Margin and Collateral Deposits."