Edison International · NYSE:EIX
Edison International — Corporate Update (May 2023)
54 slides from Edison International's corporate update, May 3, 2023
Slide 1: Business Update
Business Update May 3, 2023 EDISON INTERNATIONAL®
Slide 2: Forward-looking statements
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, are forward-looking statements. These forward-looki
Slide 3: Edison International leads the transformation of the electric power industry
2 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Edison International leads the transformation of the electric power industry May 3, 2023 One of the nation’s largest electric-only utilities, serving over 15 million residents EIX’s principal subsidi
Slide 4: Thesis: Wires-focused utility with rate base growth aligned with state's clean energy goals
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 May 3, 2023 Constructive California and Federal regulatory structures Aggressive climate goals m
Slide 5: EIX well positioned for a decarbonized future; no coal or gas LDC exposure
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 May 3, 2023 UTY1 EEI Index2 Electric-Only & No Gas LDC Exposure (# of Companies) 6
Slide 6: Sustainability at the core of Edison's vision
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 May 3, 2023 Environmental Social Governance 2045 goals: net-zero GHG emissions across Scopes 1,
Slide 7: Sustainable financing activities underscore link between strategy and financings
6 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Sustainable financing activities underscore strong link between strategy and financings May 3, 2023 Primary Category1 U.N. Sustainable Development Goals Alignment Green Renewable Energy Clean Transpo
Slide 8: California's regulatory mechanisms provide revenue certainty
7 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix California’s regulatory mechanisms provide revenue certainty May 3, 2023 Revenue Decoupling means earnings aren’t affected by changes in electricity sales Long-standing regulatory mechanism that brea
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 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 May 3, 2023 100% of grid sales with carbon-free electricity 80 GW of utility-scale clean genera
Slide 11: Electricity sales required to be 100% carbon-free by 2045
10 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 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 re
Slide 12: Significant incremental grid investments required by 2045
11 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Significant incremental grid investments required by 2045 to serve load growth and integrate renewables and storage May 3, 2023 1. In 2019 dollars under Balanced Scenario 2. Source: CAISO Draft 2022
Slide 13: Decarbonized, electrified world produces energy cost savings for households
12 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 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 sa
Slide 14: 2022 energy share of wallet in SCE's service area near median
13 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 0% 2% 4% 6% 8% 10% Mississippi West Virginia Alabama Kentucky Oklahoma Arkansas Wyoming Indiana South Dakota Louisiana Kansas Montana South Carolina Michigan Maine Tennessee North Dakota Georgia Mis
Slide 15: Edison International has one of the strongest electrification profiles in the industry
14 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Transportation Electrification Energy Storage Edison International has one of the strongest electrification profiles in the industry May 3, 2023 Building Electrification 1. As of December 2022. Sour
Slide 16: SCE leads largest utility transportation electrification programs in the U.S.
15 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix $872 $414 $402 $368 $309 $293 $235 $207 EIX PCG NGG ED ES PEG SRE NEE SCE leads the largest utility transportation electrification initiatives and programs in the U.S. May 3, 2023 1. Low Carbon Fuel
Slide 17: SCE's future load growth highly levered to EV adoption
16 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE’s future load growth is highly levered to EV adoption, a critical component of reaching state GHG goals May 3, 2023 1. Includes both light duty and non-light duty EV load 2. As of December 2022.
Slide 18: SCE strengthening grid reliability for summer 2023 and beyond
17 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE is actively strengthening grid reliability to prepare for summer 2023 and beyond May 3, 2023 Energy Storage ~2 GW currently online Installed or procured ~6 GW of storage capacity and must procur
Slide 19: SCE Wildfire Mitigation: Approach, Progress, and Results
SCE WILDFIRE MITIGATION: APPROACH, PROGRESS, AND RESULTS
Slide 20: Numerous proof points from wildfire mitigation efforts since 2018
19 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 conductor is expected to mitigate per 100 circuit miles on f
Slide 21: 2023–25 Wildfire Mitigation Plan builds on 2020–22 WMP
20 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 May 3, 2023 In 2023, SCE is building on and extending the work already accomplished: – C
Slide 22: AB 1054 provides strong construct for wildfire liability and cost recovery
21 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix AB 10541 provides a strong regulatory construct for determining wildfire liability and cost recovery May 3, 2023 Established safety certification process and additional wildfire safety oversight Und
Slide 23: California has continued to increase investments in wildfire suppression and prevention
22 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix California has continued to increase investments in wildfire suppression and prevention May 3, 2023 60+ aircraft make CAL FIRE’s fleet the largest civil aerial firefighting fleet in the world3 1. As
Slide 24: Tools and technology monitor real-time conditions for operational decisions
23 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 May 3, 2023 180+ cameras that provide visibility to about 90% high fire risk areas to m
Slide 25: Covered conductor is one of the most effective measures to reduce wildfire risk
24 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 effective measures to reduce wildfire and PSPS risks May 3,
Slide 26: Significant progress in hardening the grid
25 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE has made significant progress in expeditiously hardening the grid to keep its communities safe May 3, 2023 ~7,200 ~4,400 1,200 ~3,100 ~900 ~16,800 Distribution Miles in HFRA ✓ ✓ By end of 2023,
Slide 27: Substantial progress in grid hardening; ~58% of bare wire covered by end of 2023
26 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Substantial progress in grid hardening — ~58% of bare wire in SCE’s HFRA to be covered by end of 2023 May 3, 2023 Prioritizing riskier segments first, SCE expects to harden up to ~8,700 circuit mile
Slide 28: Wildfire mitigation and PSPS reduced probability of catastrophic wildfire losses ~75–80%
27 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 ~75–80%1,2 May 3, 2023 1. Baseline risk estimated by RMS using its wildfire model, th
Slide 29: Covered conductor deployment reduced dependency on PSPS
28 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Covered conductor deployment has reduced SCE’s dependency on PSPS for reducing wildfire risk May 3, 2023 1. Baseline risk estimated by Risk Management Solutions, Inc. (Moody’s RMS) using its wildfir
Slide 30: Financial Information
re N] EDISON atoll Bei a SANNA NY, WAT) MONO | ‘e } J FINANCIAL INFORMATION
Slide 31: SCE has significant capital expenditure opportunities
30 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 5.4 5.7 6.0 5.8–5.9 6.7 Range 2021 2022 2023 2024 2025 2026 2027 2028 Case2 n/a n/a 5.7 5.2 5.3 SCE has significant capital expenditure opportunities driven by investments in the safety and reliabil
Slide 32: Over 85% of SCE's capital investments are in its distribution grid
31 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Over 85% of SCE’s capital investments are in its distribution grid, consistent with wires-focused strategy May 3, 2023 SCE forecasts investing $27–30 billion from 2021 to 2025 to support SCE’s wildf
Slide 33: Rate base growth forecast of 7–9% through 2025
32 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix From a 2021 base, rate base growth forecast of 7–9% through 2025, reflecting future incremental investment May 3, 2023 1. Weighted-average year basis. Excludes rate base associated with ~$1.6 billio
Slide 34: SCE's long-term growth drivers aligned with California's public policy goals
33 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE’s long-term growth drivers highly aligned with California’s public policy goals May 3, 2023 Overarching Goals SCE Growth Drivers Safe, Reliable, and Affordable Electricity Service Infrastructure
Slide 35: Cash flow from memo account recovery and securitization strengthens balance sheet
34 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 May 3, 2023 Approved Applications Application / Account Balance @ Mar. 31 Recovery Through Re
Slide 36: SCE will request CPUC cost recovery for 2017/2018 events
35 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE will request CPUC cost recovery for 2017/2018 events, with first application targeted for Q3 2023 May 3, 2023 2.4 0.5 5.1 0.9 8.8 Best Estimate of Total Losses 1. TKM: Collectively, the Thomas F
Slide 37: CPUC Cost of Capital Adjustment Mechanism
36 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 Oct. 1, 2022 Jan. 1, 2023 Apr. 1, 2023 Jul. 1, 2023 Oct. 1, 2023 CPUC cost of capital mechanism adjusts ROE; also resets costs of debt and preferred if triggered
Slide 38: EIX and SCE committed to investment grade credit ratings
37 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX and SCE committed to investment grade credit ratings May 3, 2023 SCE EIX Moody’s Baa1 Stable Baa2 Stable S&P BBB Stable BBB Stable Fitch BBB Stable BBB Stable Long-term Issuer Rating and Outlook
Slide 39: EIX & SCE have limited variable-rate exposure beyond 2023
38 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX & SCE have limited variable-rate exposure beyond 2023 May 3, 2023 Approximately $10 billion of the total ~$31 billion debt portfolio matures through 20271 SCE Wildfire Interest expense will be i
Slide 40: EIX affirms 2023 core EPS guidance of $4.55–4.85
39 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX affirms 2023 core EPS guidance of $4.55–4.85 May 3, 2023 1. SCE is unable to conclude, at this time, that these amounts are probable of recovery; however, recovery will be sought as part of futu
Slide 41: Gap between 2023 rate base and core EPS growth driven by debt interest
40 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 4.63 0.35 0.15 (0.19) 4.94 (0.24) 4.70 2022 Core EPS Rate Base Earnings SCE Operational Variances EIX Parent & Other Results Before Incr. WF Claims Debt Interest Incr. WF Claims Debt Interest 2023 C
Slide 42: Significant portion of EIX 2023 financing plan accomplished early
41 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Significant portion of EIX 2023 financing plan accomplished early in the year, with strong investor support for offering May 3, 2023 1. Financing plans are subject to change 2. Equity content based
Slide 43: Track record of meeting or exceeding EPS guidance and growing dividend
42 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX has a strong track record of meeting or exceeding EPS guidance and growing dividend May 3, 2023 0.80 2.95 2004 2023 7.1% CAGR …and has 19 consecutive years of dividend growth2 Dividends per Shar
Slide 44: SCE's operational excellence program includes >600 employee-driven ideas
43 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE’s operational excellence program includes >600 employee-driven ideas with capital and O&M benefits1 May 3, 2023 Major Themes Example High Impact Ideas Work Planning • Improve O&M cost efficiency
Slide 45: EIX reaffirms 5–7% 2021–2025 EPS growth rate target
44 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX reaffirms 5–7% 2021–2025 EPS growth rate target, which would result in 2025 EPS of $5.50–5.901 May 3, 2023 1. Based on the midpoint of initial 2021 Core EPS guidance range of $4.42–4.62 establis
Slide 46: EIX offers double-digit total return potential
45 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX offers double-digit total return potential May 3, 2023 9–11% total return opportunity4 before potential P/E multiple expansion driven by estimated 75–80% wildfire risk reduction5 , and ongoing u
Slide 47: Edison International
INTERNATIONAL.
Slide 48: Edison Energy partners with market leaders on sustainability goals
47 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 49: SCE Key Regulatory Proceedings
48 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE Key Regulatory Proceedings May 3, 2023 1. Capital reflects direct costs. Revenue requirement does not include revenue associated with AB 1054 Excluded Capital Expenditures Proceeding Description
Slide 50: Near-term debt maturities are manageable
49 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Edison’s near-term debt maturities are manageable with ~26% tied to SCE’s operations or AB 1054 securitization May 3, 2023 Currently Outstanding Debt Maturities (2023–2027)1 2023 2024 2025 2026 2027
Slide 51: SCE continues to fund wildfire claims payments with debt
50 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE continues to fund wildfire claims payments with debt May 3, 2023 Series Principal Due Rate 2021B 400 4/3/23 SOFR + 64bps 2021D 350 4/3/23 0.700% 2021J 400 8/1/23 0.700% 2021C 400 4/1/24 SOFR + 8
Slide 52: EIX Core EPS Non-GAAP Reconciliations
51 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 2023 2022 Basic EPS $ 4.42 $ 1.61 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Events claims and expenses, net of recoveries (0.24) (3.27) Wildfire Insurance Fund expense (0.14) (0.56) 2021 NDCTP
Slide 53: Earnings Per Share Non-GAAP Reconciliations
52 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Low High Basic EIX EPS $4.27 $4.57 Total Non-Core Items1 (0.28) (0.28) Core EIX EPS $4.55 $4.85 1. Non-core items are presented as they are recorded Earnings Per Share Non-GAAP Reconciliations May 3
Slide 54: Use of Non-GAAP Financial Measures
53 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