Edison International · NYSE:EIX
Edison International — Corporate Update (November 2022)
58 slides from Edison International's corporate update, Nov 2, 2022
Slide 1: November 2, 2022 Business Update
November 2, 2022 Business Update
Slide 2: Forward-looking statements
1 Statements contained in this presentation about future performance, including, without limitation, operating results, capital ex penditures, rate base growth, dividend policy, financial outlook, and other statements that are not purely historical, are forward - looking statements. These forward -
Slide 3: Edison International is leading the transformation of the electric power industry
2 Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Introduction Edison International is leading the transformation of the electric power industry November 2, 2022 One of the nation’s largest electric - only utilities, serving over 15 million residents EIX’s princ
Slide 4: Thesis: Wires-focused electric utility with regulated rate base growth
3 Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Introduction Thesis: Wires - focused electric utility with regulated rate base growth aligned with state’s aggressive clean energy goals November 2, 2022 Constructive California and Federal regulatory structures
Slide 5: EIX is well positioned for a decarbonized future
4 Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Introduction EIX is well positioned for a decarbonized future, with no coal or gas LDC exposure and high electric sales growth potential November 2, 2022 UTY 1 EEI Index 2 Electric - Only & No Gas LDC Exposure (#
Slide 6: Sustainability is central to Edison's vision
5 Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Introduction Sustainability is central to Edison’s vision to lead the transformation of the electric power industry November 2, 2022 Social Environmental Governance 2045 goals: net - zero GHG emissions across Sco
Slide 7: Sustainable financing activities link strategy and financings
6 Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Introduction Our sustainable financing activities underscore the strong link between our strategy and financings November 2, 2022 Primary Category 1 U.N. Sustainable Development Goals Alignment Green Renewable En
Slide 8: California's regulatory mechanisms provide revenue certainty
7 Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Introduction California’s regulatory mechanisms provide revenue certainty, even as load and payment patterns change November 2, 2022 Revenue Decoupling means earnings aren’t affected by changes in electricity sal
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
9 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership Reaching California’s 2045 GHG goals requires a near - complete transformation of energy use economy wide November 2, 2022 100% of grid sales with carbon - free electricity 80 GW of utility - scale c
Slide 11: Electricity sales required to be 100% carbon-free by 2045
10 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership Electricity sales required to be 100% carbon - free by 2045 Decarbonizing transportation sector, ~40% of GHG emissions, requires widespread vehicle electrification State’s commitment highlighted by
Slide 12: Significant incremental grid investments required by 2045
11 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership Significant incremental grid investments required by 2045 to serve load growth and integrate renewables and storage November 2, 2022 1. In 2019 dollars under Balanced Scenario 2. Source: CAISO Draft
Slide 13: Decarbonized, electrified world produces household energy cost savings
12 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership Annual residential household energy costs (2019$) 1 2019 2045 By 2045, a greater reliance on electricity, combined with population and economic growth, will result in a 60% increase in electricity s
Slide 14: 2021 energy burden in SCE's service area below median
13 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership 0% 2% 4% 6% 8% West Virginia Mississippi Tennessee Alabama Oklahoma Kentucky Arkansas South Carolina Indiana Vermont Michigan Maine Kansas Louisiana Missouri Georgia Arizona South Dakota North Carol
Slide 15: SCE's average rate has grown less than inflation over 20 years
14 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership 5 10 15 20 25 30 2001 '08 '15 2022 SCE’s average rate has grown less than inflation over the last 20 years, even with recent increases to mitigate wildfire risks November 2, 2022 1. Inflation data b
Slide 16: Edison has one of the strongest electrification profiles in the industry
15 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership Transportation Electrification Energy Storage Edison International has one of the strongest electrification profiles in the industry November 2, 2022 Building Electrification 1. As of August 2022. S
Slide 17: SCE leads largest utility transportation electrification initiatives
16 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership $872 $414 $367 $235 $205 $205 EIX PCG ED SRE PEG NEE SCE leads the largest utility transportation electrification initiatives and programs in the U.S. November 2, 2022 1. Low Carbon Fuel Standard. T
Slide 18: SCE's future load growth is highly levered to EV adoption
17 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership SCE’s future load growth is highly levered to EV adoption, which is a critical component of reaching state GHG goals November 2, 2022 1. Includes both light duty and non - light duty EV load 2. As o
Slide 19: Increased energy storage is essential to carbon-free future
18 Introduction Wildfire Mitigation Financial Information Appendix Clean Energy Transition Leadership Increased energy storage is essential to support the transition to a carbon - free future November 2, 2022 – 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2020 2021 2022 2023 2024 2025 2026 Future Procu
Slide 20: SCE Wildfire Mitigation: Approach, Progress, and Results
SCE WILDFIRE MITIGATION: APPROACH, PROGRESS, AND RESULTS
Slide 21: AB 1054 provides strong regulatory construct for wildfire liability
20 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation AB 1054 1 provides a strong regulatory construct for determining wildfire liability and cost recovery November 2, 2022 Established safety certification process and additional wildfire safety oversig
Slide 22: $21 billion California Wildfire Fund provides liquidity and liability ceiling
21 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation The $21 billion California Wildfire Fund provides IOUs with liquidity and ceiling on liability for wildfire claims November 2, 2022 1. Source: California Earthquake Authority Financial Report presen
Slide 23: Wildfire Fund illustrated
22 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation Wildfire Fund Illustrated: Eligible claims paid by Fund and IOUs reimburse up to cap only to degree found imprudent 1,2 November 2, 2022 SCE does not reimburse Fund for eligible claims 1 above annua
Slide 24: California increased investments in wildfire suppression and prevention
23 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation California has continued to increase investments in wildfire suppression and prevention 1 November 2, 2022 CAL FIRE budget support along with actions to increase staffing and improve effectiveness ~
Slide 25: Wildfire mitigation practices have evolved since 2018
24 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation Many of SCE’s wildfire mitigation practices have been in place for years and have greatly evolved since 2018 November 2, 2022 Longstanding wildfire mitigation efforts at SCE Pre - 2018 practices and
Slide 26: Tools and technology monitor real-time conditions
25 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation SCE’s tools and technology allow it to monitor real - time conditions to help inform operational decision - making November 2, 2022 170+ cameras that provide visibility to about 90% high fire risk a
Slide 27: Covered conductor is among most effective wildfire measures
26 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation https://library.sce.com/conten t/dam/eix/documents/investo rs/wildfires - document - library/Wildfire_CaliforniaBiom es.pdf Covered conductor is one of the most effective measures to reduce wildfire
Slide 28: Ongoing deployment of covered conductor and grid hardening
27 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation SCE’s ongoing deployment of covered conductor and other grid hardening measures helps keep its communities safe November 2, 2022 Total Miles of Primary Distribution Lines ~17,000 Underground ~7,000
Slide 29: Substantial progress hardening the grid
28 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation SCE has made substantial progress hardening the grid, with ~43% of bare wire in HFRA to be covered by year - end November 2, 2022 - 2,000 4,000 6,000 8,000 10,000 2018 '19 '20 '21 '22 '23 '24 '25 '2
Slide 30: Execution of wildfire mitigation strategy reduces risk
29 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation SCE’s execution of its wildfire mitigation strategy is reducing risk of wildfires associated with utility infrastructure November 2, 2022 Community Resource Centers Community Crew Vehicles 67 sites
Slide 31: Meaningful progress in mitigating wildfire risk
30 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation SCE is making meaningful progress in mitigating wildfire risk for its customers November 2, 2022 Covered conductor has reduced faults, which could lead to ignitions High fire risk inspection program
Slide 32: Wildfire mitigation and PSPS reduced probability of catastrophic losses
31 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation ~21% of total risk reduction SCE estimates its wildfire mitigation and PSPS have reduced probability of losses from catastrophic wildfires by ~65 – 70% 1,2 November 2, 2022 1. Baseline risk estimate
Slide 33: Grid hardening reduces risk of losses from less severe events
32 Introduction Clean Energy Transition Leadership Financial Information Appendix Wildfire Mitigation Additionally, ongoing grid hardening expected to result in faster pace of reduced risk of losses from less severe events 1,2 November 2, 2022 1. Baseline risk estimated by Risk Management Solutions,
Slide 34: Financial Information
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Slide 35: Significant capital expenditure opportunities in safety and reliability
34 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information Range Case 2 n/a 5.5 5.5 5.2 5.3 5.4 5.7 6.0 5.8 – 5.9 6.7 2021 2022 2023 2024 2025 SCE has significant capital expenditure opportunities driven by investments in the safety and reliability of the g
Slide 36: Over 85% of capital investments in distribution grid
35 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information Over 85% of SCE’s capital investments are in its distribution grid, consistent with wires - focused strategy November 2, 2022 30% 19% 15% 13% 9% 8% 3% 3% SCE forecasts investing $27 – 30 billion fro
Slide 37: Rate base visibility through 2023
36 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information Range Case 2 n/a 38.4 41.2 43.6 46.7 2021 GRC track 1 decision provides rate base visibility through 2023; future applications expected to extend growth November 2, 2022 1. Weighted - average year b
Slide 38: Long-term growth drivers aligned with California public policy goals
37 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information SCE’s long - term growth drivers are highly aligned with California’s public policy goals November 2, 2022 Overarching Goals SCE Growth Drivers Safe, Reliable, and Affordable Electricity Service Inf
Slide 39: Memo account recovery and securitization strengthen balance sheet
38 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information Cash flow from memo account recovery and securitization strengthens our balance sheet and credit metrics November 2, 2022 Approved Applications Application / Account Balance @ Sept. 30 Recovery Thro
Slide 40: SCE revises best estimate of expected losses for 2017/2018 events
39 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information SCE revises best estimate of expected losses for 2017/2018 Wildfire/Mudslide Events by $880 million, to $8.8 billion November 2, 2022 Change driven by new information • Statute of limitations for in
Slide 41: 2017/2018 Wildfire/Mudslide Events update
40 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information 2017/2018 Wildfire/Mudslide Events Update: ~85% of best estimate resolved. Anticipate cost recovery filing by late 2023 November 2, 2022 7.5 1.2 8.8 Best Estimate of Total Losses ~85% of best estima
Slide 42: Cost of Capital status
41 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information Cost of Capital Status: Constructive proposed decisions issued for 2022. PD for 2023 – 2025 expected in November November 2, 2022 Year Proposed ROE Status 2022 10.30% (i.e., currently authorized) •
Slide 43: Committed to maintaining investment grade credit ratings
42 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information EIX and SCE are committed to maintaining their investment grade credit ratings November 2, 2022 SCE EIX Moody’s Baa2 Positive Baa3 Positive S&P BBB Stable BBB Stable Fitch BBB - Positive BBB - Posit
Slide 44: Interest expense and debt maturities
43 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information SCE Wildfire Interest expense will be included in cost recovery applications. Current forecast embeds ~5.3% refinancing rate SCE Operational Minimal exposure based on authorized cost of capital and
Slide 45: EIX narrows 2022 core EPS guidance
44 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information EIX narrows 2022 core EPS guidance to $4.48 – 4.68 from $4.40 – 4.70 November 2, 2022 1. YTD results as of September 30, 2022, based on 2022 YTD weighted average shares of 381.2 million; 2022 guidan
Slide 46: EIX 2022 financing plan
45 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information EIX is executing on its 2022 financing plan and has flexibility to defer equity content issuances to 2023 November 2, 2022 EIX 2022 Financing Plan 1 Q2 Update Q3 Update Maturity Refinancing Expect t
Slide 47: Track record of meeting EPS guidance and growing dividend
46 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information EIX has a strong track record of meeting or exceeding EPS guidance and growing its dividend November 2, 2022 0.80 2.80 2004 2022 7.2% CAGR …and has 18 consecutive years of dividend growth 2 Dividend
Slide 48: Catalyst operational excellence program
47 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information SCE’s operational excellence program , Catalyst, includes >600 employee - driven ideas with capital and O&M benefits 1 November 1, 2022 Major Themes Example High Impact Ideas Work Planning • Improve
Slide 49: EIX reaffirms 2021-2025 EPS growth rate target
48 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information EIX reaffirms 5 – 7% 2021 – 2025 EPS growth rate target, which would result in 2025 EPS of $5.50 – 5.90 1 November 2, 2022 1. Based on the midpoint of initial 2021 Core EPS guidance range of $4.42 –
Slide 50: Double-digit total return potential
49 Introduction Clean Energy Transition Leadership Wildfire Mitigation Appendix Financial Information EIX has double - digit total return potential, supported by leadership role in clean energy transition November 2, 2022 9 – 11% total return o pportunity 4 before potential P/E multiple expansion dr
Slide 51: Edison Energy
INTERNATIONAL.
Slide 52: Partners with market leaders on energy and sustainability goals
51 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Partners with market leaders to deliver on their strategic, financial, and sustainability goals by addressing carbon, cost, complex choices, and creating energy justice across communities Provide in
Slide 53: SCE Key Regulatory Proceedings
52 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE Key Regulatory Proceedings November 2, 2022 Proceeding Description and Next Steps Base Rates 2021 GRC Track 4 (A.19 - 08 - 013) Set CPUC base revenue requirement for third attrition year (2024)
Slide 54: 2022 EIX Core Earnings Guidance Assumptions
53 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 2022 EIX Core Earnings Guidance Assumptions November 2, 2022 1. Beginning in 2023, Intervenors have an annual opportunity to terminate the TO2019A Formula Rate. The earliest any new rate co uld beco
Slide 55: Near-term debt maturities are manageable
54 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Edison’s near - term debt maturities are manageable with ~33% tied to SCE’s operations or AB 1054 securitization November 2, 2022 Q4 2022 2023 2024 2025 2026 2027 Variable Rate (SOFR+) SCE: Operatio
Slide 56: Wildfire claims payment-related debt issuances
55 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE continues to fund wildfire claims payments above insurance and FERC rate recoveries with debt November 2, 2022 Series Principal Due Rate 2021B 400 4/3/23 SOFR + 64bps 2021D 350 4/3/23 0.700% 202
Slide 57: Earnings Per Share Non-GAAP Reconciliations
56 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Low High Basic EIX EPS $1.51 $1.71 Total Non - Core Items 2 (2.97 ) (2.97) Core EIX EPS $4.48 $4.68 1. EPS is calculated on the assumed weighted - average share count for 2022 of 381.5 million 2. No
Slide 58: Use of Non-GAAP Financial Measures
57 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 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 pl
Edison International — Corporate Update (November 2022) on 6ix