Slide 1: Fourth Quarter and 2014 Financial Results
Fourth Quarter and 2014 Financial Results February 24, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained in this presentation about future performance, including, without limitation, operating results, asset and rate base growth, capital expenditures, financial outlook, and other statements that are not purely historical, are forward-looking statements. T
Slide 3: Fourth Quarter Earnings Summary
Fourth Quarter Earnings Summary Q4 Q4 Variance SCE Key Core Earnings Drivers 2014 2013 Core EPS1 Higher revenue $0.28 SCE $1.09 $0.79 $0.30 SONGS impact 0.02 Lower O&M2 0.05 EIX Parent & Other (0.01) 0.02 (0.03) Higher depreciation (0.08) Core EPS1 $1.08 $0.81 $0.27 Higher net financing costs (0.01)
Slide 4: Full-Year Earnings Summary
Full-Year Earnings Summary 2014 2013 Variance SCE Key Core Earnings Drivers Core EPS1 Higher revenue $0.95 SCE $4.68 $3.88 $0.80 SONGS impact 0.01 EIX Parent & Other (0.09) (0.08) (0.01) Lower O&M2 0.02 Higher depreciation (0.28) Core EPS1 $4.59 $3.80 $0.79 Higher net financing costs (0.06) Non-Core
Slide 5: 2014 Earnings Guidance Result Reconciliation
2014 Earnings Guidance Result Reconciliation $0.25 $0.04 $4.59 $1.03 ($0.13) $4.30 • Higher income from Edison Capital • Income Taxes +$0.10 • Rate base adjustment +$0.05 • Energy Efficiency +$0.04 • SONGS +$0.01 • Cost Savings / Other +$0.05 $3.40 • Cost Savings / Other +$0.69 • Income Taxes +$0.41
Slide 6: SCE Capital Expenditures Forecast
SCE Capital Expenditures Forecast ($ billions) $11.8 – 13.4 billion forecasted capital program 2015-2017 Distribution Transmission Generation $4.8 • Request case incorporates 2015 GRC $4.5 January update $4.1 • $100 million 2015-2016 changes from prior forecast primarily due to timing of Transmissio
Slide 7: SCE Rate Base Forecast
SCE Rate Base Forecast ($ billions) 2015 – 2017 rate base growth consistent with prior 7-9% forecast • Incorporates 2015 GRC January update Request $29.0 • Net $300 million reduction by 2017 from Range $26.2 prior forecast due to: – Extension of bonus depreciation $23.8 ($400 million reduction) – Ti
Slide 8: CPUC and FERC Cost of Capital
CPUC and FERC Cost of Capital CPUC Adjustment Mechanism 7 Moody’s Baa Utility Index Spot Rate Moving Average (10/1/14 – 10/10/14) = 4.69% 100 basis point +/- Deadband 6 Rate (%) 5 Starting Value – 5.00% 4 3 10/1/12 10/1/13 10/1/14 10/1/15 • CPUC – 48% common equity and Return on Equity (ROE) adjustm
Slide 9: 2015 Financial Assumptions
2015 Financial Assumptions ($ billions) SCE Capital Expenditures SCE Weighted Average Rate Base Distribution $3.1 Distribution $16.0 Transmission 0.8 Transmission 5.6 Generation 0.2 Generation 2.2 Request $4.1 Request $23.8 Range $3.6 Range $23.3 SCE Authorized Cost of Capital Other SCE Items CPUC R
Slide 10: EIX Annual Dividends Per Share
EIX Annual Dividends Per Share $1.67 Eleven Years of Dividend Growth $1.42 $1.35 $1.28 $1.30 $1.24 $1.26 $1.22 $1.16 $1.08 $1.00 $0.80 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EIX targets a payout ratio of 45 – 55% of SCE core earnings and plans to return to target payout ratio in
Slide 11: EIX Shareholder Value
EIX Shareholder Value Sustainable Positioning for Transformative Financial Earnings Growth Sector Change Discipline Rate Base and Core Earnings SCE Growth Drivers Beyond 2017: Dividend and CapEx Balancing: Growth: • Reliability • 11 consecutive years of EIX • 9% 5-year SCE rate base CAGR • Grid read
Slide 12: Appendix
Appendix February 24, 2015 11
Slide 13: SCE Historical Capital Expenditures
SCE Historical Capital Expenditures ($ billions) $3.9 $3.9 $4.0 $3.8 $3.5 $2.9 2009 2010 2011 2012 2013 2014 February 24, 2015 12
Slide 14: SCE Historical Rate Base and Core Earnings
SCE Historical Rate Base and Core Earnings ($ billions) 2009 – 2014 CAGR Rate Base 9% $23.3 Core Earnings 12% $21.0 $21.1 $18.8 $16.8 $15.0 2009 2010 2011 2012 2013 2014 Core $2.68 $3.01 $3.33 $4.10 $3.88 $4.68 EPS Note: Recorded rate base, year-end basis. See Earnings Non-GAAP Reconciliations and U
Slide 15: SCE 2015 CPUC General Rate Case
SCE 2015 CPUC General Rate Case • November 2013, 2015 GRC Application A.13-11-003 sets 2015 – 2017 base revenue requirement – Includes operating costs and CPUC jurisdictional capital – Excludes fuel and purchased power (and other utility cost-recovery activities), cost of capital, and FERC jurisdict
Slide 16: SCE Key Regulatory Proceedings
SCE Key Regulatory Proceedings Proceeding Description Next Steps Capital 2015 GRC Application Rate setting for CPUC 3‐year cycle 2015 – 17 Proposed and final decision Q3 2015 (A.13‐11‐003) Cost of Capital Application Capital structure and return on equity Extension to file in April 2016 approved Dis
Slide 17: SCE Operational Excellence
SCE Operational Excellence Defining Excellence Measuring Excellence Top Quartile • Safety • Employee and public safety • Cost efficiency metrics • Reliability • System reliability (SAIDI, • Customer service SAIFI, MAIFI) • J.D. Power customer Optimize satisfaction • Capital productivity • O&M cost p
Slide 18: SCE System Investments
SCE System Investments ($ millions) Distribution Transmission • Aging system reaching equilibrium • Large transmission projects: replacement rate – Tehachapi 4-11 – $2.4 billion total project • 2015 GRC request includes ~120% cost; 2016-17 in service date increase in infrastructure replacement – Coo
Slide 19: Residential Rate Design OIR
Residential Rate Design OIR • June 2012, CPUC opened Order Instituting OIR Phase 2 Ratemaking (OIR) R.12-06-013: Settlement Summary – Comprehensive review of residential rate structure 35 – Transition to Time of Use (TOU) rates 32.10 Tier 4 – AB327 rate design 30 28.10 • Phase 2 (Summer 2014): simpl
Slide 20: Earnings Non-GAAP Reconciliations
Earnings Non-GAAP Reconciliations ($ millions) Reconciliation of EIX Core Earnings to EIX GAAP Earnings Q4 Q4 Earnings Attributable to Edison International 2014 2013 2014 2013 Core Earnings SCE $356 $258 $1,525 $1,265 EIX Parent & Other (1) 6 (28) (28) Core Earnings $355 $264 $1,497 $1,237 Non-Core
Slide 21: SCE Core EPS Non-GAAP Reconciliations
SCE Core EPS Non-GAAP Reconciliations Reconciliation of SCE Core Earnings Per Share to SCE Basic Earnings Per Share Earnings Per Share Attributable to SCE 2009 2010 2011 2012 2013 2014 CAGR Core EPS $2.68 $3.01 $3.33 $4.10 $3.88 $4.68 12% Non-Core Items Tax settlement 0.94 0.30 — — — — Health care l
Slide 22: SCE Results of Operations – Fourth Quarter 2014
SCE Results of Operations – Fourth Quarter 2014 ($ millions) • Utility earning activities – revenue authorized by CPUC and FERC to provide reasonable cost recovery and return on investment • Utility cost-recovery activities – CPUC- and FERC-authorized balancing accounts to recover specific project o
Slide 23: SCE Results of Operations – Full-Year 2014
SCE Results of Operations – Full-Year 2014 ($ millions) • Utility earning activities – revenue authorized by CPUC and FERC to provide reasonable cost recovery and return on investment • Utility cost-recovery activities – CPUC- and FERC-authorized balancing accounts to recover specific project or pro
Slide 24: 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 internally for financial planning and for analysis of performance. Core earnings are also used when com