Edison International · NYSE:EIX
Edison International — Q2 2024 Earnings Presentation
35 slides from Edison International's earnings presentation, Jul 25, 2024
Slide 1: Second-Quarter 2024 Financial Results
SECOND-QUARTER 2024 FINANCIAL RESULTS JULY 25, 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: Second Quarter Key Messages
Second Quarter Key Messages 1 Strong start to first half of the year; reaffirming 2024 Core EPS guidance $1.14 $1.23 Q2 2024 GAAP EPS Q2 2024 Core EPS1 Electrification demand trends are materializing 2 sooner than expected — 10-year load growth forecast up 35% over last two years Reaffirmed $4.75–5.
Slide 4: Customer demand is accelerating — 10-year load growth forecast up
Customer demand is accelerating — 10-year load growth forecast has increased significantly over last two years Demand trends materializing …Now expect 35% higher 10-year load growth sooner than expected… SCE Projected Load Growth, Total New Gigawatts Customers requesting new load +5.6 GW +35% growth
Slide 5: SCE rate increases through 2028 expected near inflation
SCE rate increases through 2028 now expected to be near inflation, providing headroom for additional investment SCE has the lowest system average rate among California IOUs System Average Rate1,2,3, Cents per kWh Current Forecast ~2.6% CAGR 33.7 33.1 +26% 29.6 +24% vs. SCE vs. SCE 26.7 SCE’s rate gr
Slide 6: Wildfire mitigation and PSPS reduced probability of catastrophic losses
SCE estimates its wildfire mitigation and PSPS have significantly reduced probability of losses from catastrophic wildfires1,2 Loss levels Uses Moody’s RMS’ model Stochastic modeling of 50,000 tied to AB 1054 widely used by insurance simulations to estimate future fund and liability cap industry to
Slide 7: 84% of planned hardening complete in high fire risk area
SCE reaches another milestone in hardening distribution lines in high fire risk area (HFRA): 84% of planned hardening complete Status of Currently Planned Grid Hardening in HFRA1 Distribution circuit miles By end of 2025, expect Remaining Planned2,3 to be approaching 90% (~2,600 miles) Underground o
Slide 8: SCE's hardened miles exceed all other California IOUs combined
SCE’s total hardened miles in high fire risk area exceed all other California IOUs’ combined1 Hardening Status of California IOU Distribution Lines in High Fire Risk Area (HFRA) Thousands of circuit miles, Sorted by percentage of total distribution circuit miles in HFRA hardened, Estimated as of Dec
Slide 9: California has the strongest wildfire risk reduction profile
California has the strongest wildfire risk reduction profile in the nation Legislation Regulation Suppression AB 1054 passed in Wildfire Mitigation Plan CAL FIRE Budget: Doubled July 2019 since 2017-18 Codified prudent Safety Certification CAL FIRE Staffing: 80% manager standard increase since 20
Slide 10: Edison's 2023 sustainability achievements
Edison’s 2023 sustainability achievements advanced our clean energy strategy and enhanced value to our stakeholders Climate Change Operational Excellence Delivered 52% carbon-free power in terms of retail sales to SCE SCE’s operational excellence efforts are producing operational customers, 55% clea
Slide 11: Industry-leading ESG profile recognition and awards in 2023
Edison International’s industry-leading ESG profile received wide-ranging recognition and awards in 2023 Climate Change Governance Environmental Impact Award (Verdantix) — SCE Commitment to diverse leadership, Edison International Board members Pedro J. Pizarro and Michael Camuñez (Latino Leaders LA
Slide 12: Second-Quarter Earnings Summary
Second-Quarter Earnings Summary Q2 2024 Q2 2023 Variance Key SCE EPS Drivers2 Higher revenue 3,4 $ 0.83 Basic Earnings Per Share (EPS) GRC escalation 0.33 Other CPUC revenue 0.52 SCE $ 1.36 $ 1.09 $ 0.27 FERC and other operating revenue (0.02) EIX Parent & Other (0.22) (0.17) (0.05) Higher O&M4 (0.3
Slide 13: Cash flow from memo account recovery and securitization
Cash flow from memo account recovery and securitization strengthens our balance sheet and credit metrics Remaining GRC and Wildfire-related Application Recoveries ~$4.3 $ in Millions Approved Applications billion Balance @ Recovery Remaining Rate Recovery by Year memo account recovery Application /
Slide 14: 2025 GRC proceeding on track; partial settlements
2025 GRC proceeding on track. SCE has reached partial settlements1 with intervenors During Q2, update testimony filed to reflect Partial settlements1 with intervenors cost of capital and escalation rate changes covering 12 areas – Represents ~19% of O&M and ~8% of capital request Updated Annual
Slide 15: 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 progressing Individual plaintiff claims In Q2 20
Slide 16: 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 Forecast does not include $8.1 $8.2 $7.7 substantial additional capital $7.5 0.9 1.0
Slide 17: 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 18: EIX reaffirms 2024 Core EPS guidance of $4.75–5.05
EIX reaffirms 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 2024 2024 Rate Base EPS: CPUC ROE: 10.75% / FERC ROE: 10.30% 2023 YTD Guidance SCE Operational Variance includes: Rate Base EPS 5.51 2.94 6.
Slide 19: EIX expects 5–7% Core EPS growth for 2025–2028
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 $5.70 Incremental Debt4 ~$0.4 $6–7 $8–11 C
Slide 20: 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 21: Additional Information
ADDITIONAL INFORMATION
Slide 22: Year-to-Date Earnings Summary
Year-to-Date Earnings Summary YTD 2024 YTD 2023 Variance Key SCE EPS Drivers2 Higher revenue3,4 $ 1.18 Basic Earnings Per Share (EPS) GRC escalation 0.65 SCE $ 1.52 $ 2.06 $ (0.54) Other CPUC revenue 0.56 FERC and other operating revenue (0.03) EIX Parent & Other (0.41) (0.33) (0.08) Higher O&M4 (0.
Slide 23: EIX's 2024 financing plan completed
EIX’s 2024 financing plan completed EIX 2024 Financing Plan1 Equity needs fully addressed: $100 million of equity need, $75 million pre-funded with excess JSN proceeds in Dec. 2023; remaining need fully addressed via internal programs in Q1 2024 Minimal debt financing: Issued $500 million parent
Slide 24: Resolution of 2017/2018 Wildfire/Mudslide Events advances
Resolution of 2017/2018 Wildfire/Mudslide Events advances Substantial progress resolving claims Application for TKM events in progress1 $ in Billions, as of June 30, 20244 Status: Schedule update issued in July: Extended date for 9.9 motion for approval of a settlement or a case management Remaining
Slide 25: 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 June 30, 20241 however, will be included in 2017/2018 Wildfire/ Series Principal Due Rate Mudslide Even
Slide 26: SCE system average rate growth aligns with local inflation
SCE’s system average rate growth aligns closely with local inflation of 2.3% as historical costs roll out of rates SCE System Average Rate Forecast1,2 Cents per kWh Forecast ~2.6% CAGR 29.6 27.5 27.5 28.3 26.7 Current 2025 2026 2027 2028 1. All rates include California Climate Credit 2. Forecast inc
Slide 27: 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 Reply briefs due August 5; Proposed decision (A.23-05-010) information, see the Investor Guide to SCE’s 2025 GRC scheduled to be issued within 90 days of re
Slide 28: 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 Complete Rebuttal testimony Complete Joint Motion for Approval of Settle
Slide 29: EIX reaffirms 5–7% 2021–2025 Core EPS growth rate 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 30: 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 31: Earnings Non-GAAP Reconciliations
Earnings Non-GAAP Reconciliations Reconciliation of EIX GAAP Earnings to EIX Core Earnings Net Income (Loss) Available to Edison International, $ in Millions Q2 2024 Q2 2023 2024 2023 SCE $ 523 $ 420 $ 588 $ 790 EIX Parent & Other (84) (66) (160) (126) Basic Earnings $ 439 $ 354 $ 428 $ 664 Non-Core
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 Available to Edison International1 Q2 2024 Q2 2023 2024 2023 Basic EPS $ 1.14 $ 0.92 $ 1.11 $ 1.73 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Events claims and expenses, net of
Slide 33: 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 Available to Edison International Midpoint of Guidance Range 2025 2024 2023 2022 2021 Basic EPS $ 5.70 $ 3.64 $ 3.12 $ 1.61 $ 2.00 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Ev
Slide 34: 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 Available to Edison International Low High Basic EIX EPS $3.49 $3.79 Total Non-Core Items1 (1.26) (1.26) Core EIX EPS $4.75 $5.05 1. Non-core items are
Slide 35: 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 (loss) internally for financial planning and for analysis of performance. Core earnings (loss) are also