Edison International · NYSE:EIX
Edison International — Investor Presentation (February 2024)
59 slides from Edison International's investor presentation, Feb 23, 2024
Slide 1: February 23, 2024 Business Update
FEBRUARY 23, 2024 BUSINESS UPDATE
Slide 2: Forward-looking statements
Edison International | February 2024 Business Update 1 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
Slide 3: Edison International leads the transformation of the electric power industry
Edison International | February 2024 Business Update 2 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Edison International leads the transformation of the electric power industry One of the nation’s largest electric-only utilities, serving over 15
Slide 4: Thesis: Wires-focused utility with rate base growth aligned with clean energy goals
Edison International | February 2024 Business Update 3 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Thesis: Wires-focused utility with rate base growth aligned with state’s aggressive clean energy goals Constructive California and Federal regulat
Slide 5: EIX well positioned for a decarbonized future
Edison International | February 2024 Business Update 4 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX well positioned for a decarbonized future; no coal or gas LDC exposure and high electric sales growth potential UTY1 EEI Index2 Electric-Only
Slide 6: Sustainability at the core of Edison's vision
Edison International | February 2024 Business Update 5 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Sustainability at the core of Edison’s vision to lead the transformation of the electric power industry 2045 goals: net-zero GHG emissions across
Slide 7: Sustainable financing activities underscore link between strategy and financings
Edison International | February 2024 Business Update 6 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Sustainable financing activities underscore strong link between strategy and financings 1. Excludes projects with GHG intensity above 100 gCO2e /
Slide 8: California's regulatory mechanisms provide revenue certainty
Edison International | February 2024 Business Update 7 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix California’s regulatory mechanisms provide revenue certainty Revenue Decoupling means earnings aren’t affected by changes in electricity sales Lon
Slide 9: Clean Energy Transition Leadership
CLEAN ENERGY TRANSITION LEADERSHIP
Slide 10: Reaching California's 2045 GHG goals requires near-complete transformation of energy use
Edison International | February 2024 Business Update 9 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Reaching California’s 2045 GHG goals requires a near-complete transformation of energy use economy wide 100% of grid sales with carbon-free electr
Slide 11: Load growth of 80% by 2045 requires acceleration in grid expansion
Edison International | February 2024 Business Update 10 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Load growth of 80% by 2045 requires a significant acceleration in grid expansion Source: SCE’s Countdown to 2045 analysis. See Countdown to 2045
Slide 12: Electricity demand projected to rise over 80% by 2045
Edison International | February 2024 Business Update 11 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 2023 2045 By 2045, electricity demand is projected to rise by over 80% from today, primarily due to electrification Households will benefit from
Slide 13: 2022 energy share of wallet in SCE's service area near median
Edison International | February 2024 Business Update 12 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 26.9 31.5 36.6 SCE SDG&E PG&E 0% 2% 4% 6% 8% 10% Mississippi West Virginia Alabama Kentucky Oklahoma Arkansas Wyoming Indiana South Dakota Louisi
Slide 14: Edison International has one of the strongest electrification profiles in the industry
Edison International | February 2024 Business Update 13 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Edison International has one of the strongest electrification profiles in the industry 1. Inflation Reduction Act of 2022 State plans for ~$600+
Slide 15: SCE leads the largest utility transportation electrification initiatives
Edison International | February 2024 Business Update 14 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix $872 $798 $527 $414 $309 $293 EIX Utility A Utility B Utility C Utility D Utility E SCE leads the largest utility transportation electrification
Slide 16: SCE's future load growth is highly levered to EV adoption
Edison International | February 2024 Business Update 15 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix - 10,000 20,000 30,000 40,000 50,000 60,000 2023 2028 2033 2038 2043 SCE’s future load growth is highly levered to EV adoption, a critical compon
Slide 17: SCE is actively strengthening grid reliability
Edison International | February 2024 Business Update 16 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE is actively strengthening grid reliability Energy Storage ~2.4 GW currently online Installed or procured ~7.3 GW of storage capacity and must
Slide 18: SCE Wildfire Mitigation: Approach, Progress, and Results
SCE WILDFIRE MITIGATION: APPROACH, PROGRESS, AND RESULTS
Slide 19: SCE is seeing numerous proof points from wildfire mitigation efforts
Edison International | February 2024 Business Update 18 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE is seeing numerous proof points and results from its substantial wildfire mitigation efforts since 2018 1. Measured by faults covered conduct
Slide 20: SCE's 2023–25 Wildfire Mitigation Plan builds on 2020–22 WMP
Edison International | February 2024 Business Update 19 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE’s 2023–25 Wildfire Mitigation Plan (WMP) builds upon the accomplishments and lessons from the 2020–22 WMP SCE is building on and extending th
Slide 21: AB 1054 provides regulatory construct for wildfire liability and cost recovery
Edison International | February 2024 Business Update 20 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix AB 10541 provides a strong regulatory construct for determining wildfire liability and cost recovery Established safety certification process and
Slide 22: California has continued to increase investments in wildfire suppression and prevention
Edison International | February 2024 Business Update 21 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix $2.0 $2.5 $2.9 $2.5 $2.6 $3.7 $4.1 $4.0 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25* California has continued to increase inv
Slide 23: SCE's tools and technology monitor real-time conditions
Edison International | February 2024 Business Update 22 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE’s tools and technology allow it to monitor real-time conditions to help inform operational decision-making 190+ cameras that provide visibili
Slide 24: Covered conductor is one of the most effective measures to reduce wildfire risk
Edison International | February 2024 Business Update 23 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix https://www.edison.com/_gallery/ get_file/?file_id=634a0ff38ed7df0 e03e0e3a4&file_ext=.pdf&page_i d= Covered conductor is one of the most effecti
Slide 25: Approaching 90% of distribution lines in high fire risk area hardened by end of 2025
Edison International | February 2024 Business Update 24 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix By end of 2025, expect to be approaching 90% of total distribution lines in high fire risk area hardened1 ~7,200 ~5,610 1,070 ~1,830 ~1,090 ~16,8
Slide 26: Mitigation and PSPS reduced probability of catastrophic wildfire losses by 85–88%
Edison International | February 2024 Business Update 25 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE estimates its wildfire mitigation and PSPS have reduced probability of losses from catastrophic wildfires by 85–88%1,2 1. Baseline risk estim
Slide 27: SCE has reduced use of PSPS through covered conductor
Edison International | February 2024 Business Update 26 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE has reduced use of PSPS for lowering wildfire risk through use of covered conductor and other physical mitigation 1. Baseline risk estimated
Slide 28: Financial Information
FINANCIAL INFORMATION INTERNATIONAL®
Slide 29: GRC underpins ~$38–43 billion 2023–2028 capex forecast
Edison International | February 2024 Business Update 28 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 5.2 5.6 6.7 7.2 7.2 7.0 0.2 0.4 0.8 0.9 1.0 0.7 $5.4 $6.0 $7.5 $8.1 $8.2 $7.7 2023 2024 2025 2026 2027 2028 Capital deployment expected to increa
Slide 30: Over 85% of capital investments are in distribution grid
Edison International | February 2024 Business Update 29 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Over 85% of SCE’s capital investments are in its distribution grid and essential to reliability, resiliency, and readiness objectives Distributio
Slide 31: Projected ~6–8% rate base growth 2023–2028
Edison International | February 2024 Business Update 30 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 33.6 35.9 41.8 45.3 48.7 51.8 7.6 7.5 7.6 7.7 8.1 8.8 $41.2 $43.4 $49.4 $53.0 $56.8 $60.6 2023 2024 2025 2026 2027 2028 Projected ~6–8% rate base
Slide 32: SCE obtained approvals of standalone applications for ~$3 billion of capex
Edison International | February 2024 Business Update 31 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE has obtained approvals of standalone applications for ~$3 billion of capex over past two rate case cycles 2018 2019 2020 2021 2022 2023 $252
Slide 33: SCE's long-term growth drivers aligned with California's policy goals
Edison International | February 2024 Business Update 32 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE’s long-term growth drivers highly aligned with California’s public policy goals Infrastructure Replacement Wildfire Mitigation Grid Moderniza
Slide 34: Memo account recovery and securitization strengthen balance sheet
Edison International | February 2024 Business Update 33 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Cash flow from memo account recovery and securitization strengthens our balance sheet and credit metrics Approved Applications Application / Acco
Slide 35: 2024 focus for 2017/18 Wildfire/Mudslide Events
Edison International | February 2024 Business Update 34 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 2024 focus for 2017/18 Wildfire/Mudslide Events: Continued progress toward resolution; target Woolsey application in Q3 1. TKM: Collectively, the
Slide 36: Resolution of 2017/2018 Wildfire/Mudslide Events advances
Edison International | February 2024 Business Update 35 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Resolution of 2017/2018 Wildfire/Mudslide Events advances 2.4 0.5 5.8 0.6 9.4 Best Estimate of Total Losses 1. TKM: Collectively, the Thomas Fire
Slide 37: Cost recovery for 2017/2018 events benefits financial strength and reduces customer costs
Edison International | February 2024 Business Update 36 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Cost recovery for 2017/2018 events benefits financial strength of the utility and reduces costs for customers Modeling sensitivities: For each $1
Slide 38: EIX and SCE are committed to investment grade credit ratings
Edison International | February 2024 Business Update 37 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX and SCE are committed to investment grade credit ratings 1. Excludes amortization of securitized bonds related to SCE’s AB 1054 Excluded Capi
Slide 39: EIX & SCE have limited variable-rate exposure
Edison International | February 2024 Business Update 38 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX & SCE have limited variable-rate exposure Approximately $12 billion of the total ~$31 billion long-term debt portfolio matures through 20291
Slide 40: EIX introduces 2024 Core EPS guidance of $4.75–5.05
Edison International | February 2024 Business Update 39 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX introduces 2024 Core EPS guidance of $4.75–5.05 1. Note: SCE Operational Variance was $0.52 in 2021 and $0.44 in 2022 2. SCE is unable to con
Slide 41: Strong underlying growth masked by wildfire claims debt interest
Edison International | February 2024 Business Update 40 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Strong underlying business growth masked by growing interest expense on wildfire claims debt 1. Compound annual growth rate (CAGR) based on the m
Slide 42: 2025 Core EPS growth primarily driven by rate base earnings
Edison International | February 2024 Business Update 41 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 4.90 0.78 0.04 (0.02) 5.70 0.00 5.70 2024 Core EPS Guidance (@ Midpoint) Rate Base Earnings (@ Midpoint) SCE Operational Variance EIX Parent & Ot
Slide 43: EIX's 2024 equity needs expected to be fully met by end of Q1
Edison International | February 2024 Business Update 42 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX’s 2024 equity needs expected to be fully met by end of Q1 1. Represents the liquidation preference value of repurchased securities. Aggregate
Slide 44: EIX has a strong track record of increasing its dividend
Edison International | February 2024 Business Update 43 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX has a strong track record of increasing its dividend 1. 2024 dividend annualized based on dividend declaration on December14, 2023 0.80 3.12
Slide 45: Track record of delivering on Core EPS guidance
Edison International | February 2024 Business Update 44 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX has a solid track record of delivering on Core EPS guidance over the last two decades 2023 2022 2021 2020 2019 In-line In-line Exceeded In-li
Slide 46: Operational excellence efforts producing O&M savings
Edison International | February 2024 Business Update 45 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE’s operational excellence efforts are producing O&M savings for its customers Insurance: Wildfire Self-Insurance Program – Expanded use of cus
Slide 47: EIX reaffirms 5–7% 2021–2025 Core EPS growth target
Edison International | February 2024 Business Update 46 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX reaffirms 5–7% 2021–2025 Core EPS growth rate target, which would result in 2025 Core EPS of $5.50–5.901 1. Based on the midpoint of initial
Slide 48: 5–7% Core EPS growth for 2025–2028 with minimal equity needs
Edison International | February 2024 Business Update 47 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX expects 5–7% Core EPS growth for 2025–2028, with financing plan showing minimal equity needs 1. For 2025, represents the midpoint of the 2025
Slide 49: Key 2028 Earnings Sensitivities
Edison International | February 2024 Business Update 48 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Key 2028 Earnings Sensitivities Variable Sensitivity 2028 EPS1 (“Per year” amounts refer to 2025–2028) Capex & Rate Base Rate Base $100 million/y
Slide 50: EIX offers double-digit total return potential
Edison International | February 2024 Business Update 49 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX offers double-digit total return potential 1. Compound annual growth rate (CAGR) based on the midpoint of the 2021 Core EPS guidance range of
Slide 51: Appendix
APPENDIX EDISON INTERNATIONAL®
Slide 52: Edison Energy partners with large organizations on energy transition
Edison International | February 2024 Business Update 51 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Partners with large commercial, industrial, and institutional organizations to navigate the energy transition by providing integrated energy mana
Slide 53: SCE Key Regulatory Proceedings
Edison International | February 2024 Business Update 52 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE Key Regulatory Proceedings Proceeding Description Next Steps Base Rates 2025 GRC (A.23-05-010) Sets CPUC base revenue requirement for 2025–20
Slide 54: TKM Cost Recovery Schedule
Edison International | February 2024 Business Update 53 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix TKM Cost Recovery Schedule Event Scoping Ruling Date ✓ Application Filed Complete ✓ Protests and responses Complete ✓ SCE’s reply to protests Com
Slide 55: 2025 GRC Schedule
Edison International | February 2024 Business Update 54 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 2025 GRC Schedule Event Scoping Ruling Date ✓ Application Filed Complete ✓ Mandated Workshop Complete ✓ Protests and Responses to Application Com
Slide 56: SCE continues to fund wildfire claims payments with debt
Edison International | February 2024 Business Update 55 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE continues to fund wildfire claims payments with debt Series Principal Due Rate 2021C 400 4/1/24 SOFR + 83bps 2021E 700 4/1/24 1.100% Term Loa
Slide 57: EIX Core EPS Non-GAAP Reconciliations
Edison International | February 2024 Business Update 56 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX Core EPS Non-GAAP Reconciliations 1. SCE non-core items are tax-effected at an estimated statutory rate of approximately 28%; customer revenu
Slide 58: Earnings Per Share Non-GAAP Reconciliations
Edison International | February 2024 Business Update 57 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 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 presented as they are recorded Earnin
Slide 59: Use of Non-GAAP Financial Measures
Edison International | February 2024 Business Update 58 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Use of Non-GAAP Financial Measures Edison International's earnings are prepared in accordance with generally accepted accounting principles used
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