Edison International · NYSE:EIX
Edison International — Q4 2023 Earnings Presentation
34 slides from Edison International's earnings presentation, Feb 22, 2024
Slide 1: Fourth-Quarter and Full-Year 2023 Financial Results
FOURTH-QUARTER AND FULL-YEAR 2023 FINANCIAL RESULTS FEBRUARY 22, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained in this presentation about future performance, including, without limitation, operating results, capital expenditures, rate base growth, dividend policy, financial outlook, and other statements that are not purely historical, are forward-looking statem
Slide 3: Fourth Quarter Key Messages
Fourth Quarter Key Messages 1 2023 Core EPS above midpoint of guidance extends track record of delivering on guidance $3.12 $4.76 2023 GAAP EPS 2023 Core EPS1 SCE exceeds WMP covered conductor target of 2 Introduced 1,100 miles; total deployment of 5,580+ miles 2024 Core EPS guidance incorporates in
Slide 4: EIX has a solid track record of delivering on Core EPS guidance
EIX has a solid track record of delivering on Core EPS guidance over the last two decades EIX Actual Core EPS vs. Guidance Range History1 2023 2022 2021 2020 2019 In-line In-line + Exceeded In-line In-line 2017 2016 2015 2014 2013 + Exceeded In-line + Exceeded + Exceeded + Exceeded 20
Slide 5: EIX added another year of strong execution in 2023
EIX added another year of strong execution in 2023 Extended track record of delivering on full-year • 2023 Core EPS of $4.76, above the midpoint of the initial guidance range of $4.55–4.851 Core EPS guidance • EIX has a solid track record of delivering on Core EPS guidance over the last two decade
Slide 6: SCE has reduced use of PSPS for lowering wildfire risk
SCE has reduced use of PSPS for lowering wildfire risk through use of covered conductor and other physical mitigation SCE’s wildfire risk mitigation is differentiated by its speed of hardening its infrastructure Estimated reduction in probability of catastrophic losses using the independent Moody’s
Slide 7: 2024 focus for 2017/18 Wildfire/Mudslide Events
2024 focus for 2017/18 Wildfire/Mudslide Events: Continued progress toward resolution; target Woolsey application in Q3 Resolve remaining claims File Woolsey cost recovery TKM1 cost recovery 1 2 3 in timely manner application in Q3 2024 proceeding in early stages Based on recent progress, Target
Slide 8: 2024 key focus areas emphasize safety, execution, and industry leadership
2024 key focus areas emphasize safety, execution, and industry leadership Operational Regulatory Legal Financial Employee safety: Successful CEMA Achieve 90%+ Execute capital Reduce SIF1 rate by decision resolution of program of 15% from 2023 Woolsey claims $6.0 billion Install 1,050 miles
Slide 9: Approaching 90% of distribution lines in high fire risk area hardened by 2025
By end of 2025, expect to be approaching 90% of total distribution lines in high fire risk area hardened1 Hardening Status of Total Circuit Miles of Distribution Lines in SCE’s High Fire Risk Area Today % Physically Hardened ….......…………………………………………...…………………..76% 90%+ Completed hardening2 2025–2028
Slide 10: Fourth-Quarter Earnings Summary
Fourth-Quarter Earnings Summary 2 Q4 2023 Q4 2022 Variance Key SCE EPS Drivers Higher revenue 3,4 $ 0.17 Basic Earnings Per Share (EPS) 0.19 GRC escalation Other CPUC revenue (0.02) SCE $ 1.16 $ 1.26 $ (0.10) Lower O&M 4 0.12 EIX Parent & Other (0.17) (0.17) — Higher depreciation4 (0.03) Higher net
Slide 11: 2023 Core EPS above guidance midpoint
2023 Core EPS above guidance midpoint demonstrates ability to manage business variability 2023 Core EPS vs. Guidance 2023 2023 Guidance1 Recorded Rate Base EPS 5.58 5.51 SCE Operational Variance 0.58–0.75 0.82 SCE Costs Excluded from Authorized (0.74)–(0.73) (0.76) EIX Parent and Other Operational e
Slide 12: GRC underpins ~$38–43 billion 2023–2028 capex forecast
GRC underpins ~$38–43 billion 2023–2028 capex forecast; substantial additional investment opportunities offer upside Capital deployment expected to increase in 2025–20281 Capital Expenditures, $ in Billions Forecast $8.1 $8.2 Forecast does not include $7.5 $7.7 substantial additional capital 0.9 1.0
Slide 13: Projected ~6–8% rate base growth 2023–2028
Projected ~6–8% rate base growth 2023–2028; substantial additional investment opportunities offer upside Strong rate base growth driven by wildfire mitigation and important grid work to support California’s leading role in clean energy transition Rate Base1, $ in Billions ~8% CAGR Forecast does not
Slide 14: EIX introduces 2024 Core EPS guidance of $4.75–5.05
EIX introduces 2024 Core EPS guidance of $4.75–5.05 EIX 2024 Core Earnings Per Share Guidance Range Building from SCE Rate Base EPS 2024 Modeling Considerations Rate Base EPS: CPUC ROE: 10.75% / FERC ROE: 10.30% 2023 2024 Recorded Guidance SCE Operational Variance includes: Rate Base EPS 5.51 6.11–6
Slide 15: Strong underlying growth masked by interest expense on wildfire claims debt
Strong underlying business growth masked by growing interest expense on wildfire claims debt On track to achieve 5–7% core EPS growth for 2021–20251, despite headwinds Earnings per Share (EPS) ~250 bps reduction to 2021–2025 Core EPS growth2 6.31 5.51 0.61 Wildfire 5.21 4.62 4.83 0.61 Claims 0.45 0.
Slide 16: 2025 Core EPS growth primarily driven by rate base earnings
2025 Core EPS growth primarily driven by rate base earnings 2025 Core EPS growth driven by ~11–14% 2025 rate base growth 2024 Core EPS Guidance at Midpoint of $4.75–5.05 Range vs. 2025 Core EPS Guidance at Midpoint of $5.50–5.90 Range +16.3% +16.3% 0.78 0.04 (0.02) 5.70 0.00 5.70 4.90 Immaterial exp
Slide 17: EIX's 2024 equity needs expected to be fully met by end of Q1
EIX’s 2024 equity needs expected to be fully met by end of Q1 EIX 2023 Financing Execution EIX 2024 Financing Plan2 Issued $500 million of junior subordinated $100 million of equity, with $75 million pre-funded notes (JSN) @ 8.125% (50% equity content) with excess JSN proceeds in Dec. 2023 – Expec
Slide 18: 5–7% Core EPS growth for 2025–2028 with minimal equity needs
EIX expects 5–7% Core EPS growth for 2025–2028, with financing plan showing minimal equity needs Achievable EPS growth for 2028 2025–2028 EIX consolidated financing plan2 Core Earnings per Share Guidance1 $ in Billions $6.60–7.00 5–7% Dividends3 Equity CAGR Incremental Debt4 $5.70 $6–7 ~$0.4 $8–11 C
Slide 19: EIX offers double-digit total return potential
EIX offers double-digit total return potential 5–7% Core EPS CAGR1 Underpinned by strong rate base growth of ~6–8% 2021–2025 and 2025–2028 $38–43 billion 2023–2028 capital program ~4% 20 consecutive years of dividend growth current dividend yield2 Target dividend payout of 45–55% of SCE core earning
Slide 20: Additional Information
ADDITIONAL INFORMATION
Slide 21: Resolution of 2017/2018 Wildfire/Mudslide Events advances
Resolution of 2017/2018 Wildfire/Mudslide Events advances 4Q Update: Best estimate adjusted by $65MM Substantial progress resolving claims $ in Billions, as of December 31, 20234 Majority driven by a single settlement outcome higher than expected as SCE continues to make solid progress 9.4 Remaining
Slide 22: SCE continues to fund wildfire claims payments with debt
SCE continues to fund wildfire claims payments with debt Wildfire Claims Payment-Related Debt Issuances Interest expense not currently recoverable in rates, $ in Millions except percentages, as of February 21, 2024 however, will be included in 2017/2018 Wildfire/ Series Principal Due Rate Mudslide E
Slide 23: SCE Key Regulatory Proceedings
SCE Key Regulatory Proceedings Proceeding Description Next Steps Base Rates 2025 GRC Sets CPUC base revenue requirement for 2025–2028. For more information, Intervenors’ prepared direct testimony due February (A.23-05-010) see the Investor Guide to SCE’s 2025 GRC 29; SCE rebuttal testimony due April
Slide 24: TKM Cost Recovery Schedule
TKM Cost Recovery Schedule Event Scoping Ruling Date Application Filed Complete Protests and responses Complete SCE’s reply to protests Complete Pre-hearing Conference Complete Intervenors’ prepared direct testimony May 29, 2024 Rebuttal testimony June 28, 2024 Joint Motion for Approval of S
Slide 25: 2025 GRC Schedule
2025 GRC Schedule Event Scoping Ruling Date Application Filed Complete Mandated Workshop Complete Protests and Responses to Application Complete Pre-hearing Conference Complete Intervenors’ Prepared Direct Testimony February 29, 2024 2023 Recorded Expenditures Served by SCE March 11, 2024 Pr
Slide 26: Cash flow from memo account recovery and securitization
Cash flow from memo account recovery and securitization strengthens our balance sheet and credit metrics GRC, Wildfire-related, and Wildfire Insurance Applications $ in Millions Approved Applications Balance @ Recovery Remaining Rate Recovery by Year Application / Account Dec. 31, 2023 Through 2024
Slide 27: EIX reaffirms 5–7% 2021–2025 Core EPS growth target
EIX reaffirms 5–7% 2021–2025 Core EPS growth rate target, which would result in 2025 Core EPS of $5.50–5.901 2025 Core Earnings per Share Component Ranges Component Modeling Considerations Rate Base EPS • CPUC ROE of 10.75% and FERC ROE 10.30% (based on capex levels) 6.85–7.00 SCE Op. Variance • AFU
Slide 28: Key 2028 Earnings Sensitivities
Key 2028 Earnings Sensitivities Sensitivity Variable (“Per year” amounts refer to 2025–2028) 2028 EPS1 Capex & Rate Base $100 million/year of capex ~5¢ Rate Base AFUDC Annual capex of 1¢ $200 million Requested ~$400 million increase If requested increase +15–35¢ in depreciation in 2025 GRC not autho
Slide 29: Full Year Earnings Summary
Full Year Earnings Summary 2023 2022 Variance Key SCE EPS Drivers2 Higher revenue3,4 $ 0.10 Basic Earnings Per Share (EPS) GRC escalation 0.78 Other CPUC revenue (0.81) SCE $ 3.84 $ 2.23 $ 1.61 FERC and other operating revenue 0.13 EIX Parent & Other (0.72) (0.62) (0.10) Lower O&M4 0.77 Higher depre
Slide 30: Earnings Non-GAAP Reconciliations
Earnings Non-GAAP Reconciliations Reconciliation of EIX GAAP Earnings to EIX Core Earnings Earnings (Losses) Attributable to Edison International, $ in Millions Q4 2023 Q4 2022 2023 2022 SCE $ 445 $ 478 $ 1,474 $ 847 EIX Parent & Other (67) (63) (277) (235) Basic Earnings $ 378 $ 415 $ 1,197 $ 612 N
Slide 31: EIX Core EPS Non-GAAP Reconciliations
EIX Core EPS Non-GAAP Reconciliations Reconciliation of EIX Basic Earnings Per Share to EIX Core Earnings Per Share EPS Attributable to Edison International1 Q4 2023 Q4 2022 2023 2022 Basic EPS $ 0.99 $ 1.09 $ 3.12 $ 1.61 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Events claims and expenses, net
Slide 32: EIX Core EPS Non-GAAP Reconciliations
EIX Core EPS Non-GAAP Reconciliations Reconciliation of EIX Basic Earnings Per Share to EIX Core Earnings Per Share EPS Attributable to Edison International Midpoint of Guidance Range 2025 2024 2023 2022 2021 Basic EPS $ 5.70 $ 4.90 $ 3.12 $ 1.61 $ 2.00 Non-Core Items SCE 2017/2018 Wildfire/Mudslide
Slide 33: Earnings Per Share Non-GAAP Reconciliations
Earnings Per Share Non-GAAP Reconciliations Reconciliation of EIX Basic Earnings Per Share Guidance to EIX Core Earnings Per Share Guidance 2024 EPS Attributable to Edison International Low High Basic EIX EPS $4.75 $5.05 Total Non-Core Items1 – – Core EIX EPS $4.75 $5.05 1. Non-core items are presen
Slide 34: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures Edison International's earnings are prepared in accordance with generally accepted accounting principles used in the United States. Management uses core earnings (losses) internally for financial planning and for analysis of performance. Core earnings (losses) are