Edison International · NYSE:EIX
Edison International — Investor Presentation (November 2014)
40 slides from Edison International's investor presentation, Nov 6, 2014
Slide 1: Business Update November 2014
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 1 Business Update November 2014
Slide 2: Forward-Looking Statements
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 2 Statements contained in this presentation about future performance, including, without limitation, operating results, asset and rate base growth, capital expenditures, San Onofre Nuclear Generating Station (SONGS), and other
Slide 3: Table of Contents
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 3 Table of Contents Page New (N) or Updated (U) Highlights & Regulatory Model 4-5 Historical Capital Expenditures, Rate Base, Core Earnings 6-7 Forecast Capital Expenditures, Rate Base 8-9 U System Investments, Growth Drivers B
Slide 4: SCE Highlights
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 4 • One of the nation’s largest electric utilities Nearly 14 million residents in service territory Approximately 5 million customer accounts 50,000 square-mile service area • Significant infrastructure investments: 1.4
Slide 5: SCE Decoupled Regulatory Model
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 5 SCE Decoupled Regulatory Model Decoupling of Regulated Revenues from Sales Major Balancing Accounts • Fuel • Purchased power • Energy efficiency • Pension-related contributions Advanced Long-Term Procurement Planning Forward-
Slide 6: SCE Historical Capital Expenditures
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 6 $2.4 $2.9 $3.8 $3.9 $3.9 $3.5 2008 2009 2010 2011 2012 2013 SCE Historical Capital Expenditures ($ billions) Note: 2013 distribution reliability spend up $300 million, offset by completion of SmartConnect in 2012 ($300 millio
Slide 7: SCE Historical Rate Base and Core Earnings
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 7 $13.1 $15.0 $16.8 $18.8 $21.0 $21.12 2008 2009 2010 2011 2012 2013 Rate Base2 Core Earnings 10% 12% 2008 – 2013 CAGR Core Earnings $2.25 $2.68 $3.01 $3.33 $4.10 SCE Historical Rate Base and Core Earnings ($ billions) $3.88 1
Slide 8: SCE Capital Expenditures Forecast
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 8 SCE Capital Expenditures Forecast ($ billions) 2014-17 Total Requested $4.1 $4.2 $4.6 $4.5 $17.4 Range $3.6 $3.7 $4.1 $4.0 $15.4 • Capital expenditures cumulative forecast increased $200 million primarily from new CPUC mobile
Slide 9: SCE Rate Base Forecast
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 9 ($ billions) SCE Rate Base Forecast • Reflects 2015 GRC rebuttal testimony update for 2013 lower recorded Capex, offset by higher FERC transmission spend and CPUC mobile home park meter conversion pilot program • Growth drive
Slide 10: SCE System Investments
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 10 Distribution ($ millions) SCE System Investments Transmission • Large transmission projects: Tehachapi – $3.2 billion total project cost; 2016-17 in service date Coolwater-Lugo – $0.7 billion total project cost; 2018 in
Slide 11: SCE Growth Drivers Beyond 2017
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 11 SCE Growth Drivers Beyond 2017 Infrastructure Reliability Investment • Sustained level of infrastructure investment required until equilibrium replacement rates are achieved - includes underground cable, poles, switches, and
Slide 12: California Climate Change Policy
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 12 California Climate Change Policy • Assembly Bill 32 (2006) – reduces State greenhouse gas (GHG) emissions to 1990 levels by 2020 (~16% reduction) • Cap and trade program basics: State-wide cap in 2013 – decreases over time
Slide 13: New Technology Grid Impacts
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 13 2 1 3 1 1 1 2 2 New Technology Grid Impacts Future state based on evolving energy landscape More automated and digital, with more sophisticated voltage control and protection schemes Facilitates increasing renewables & two-w
Slide 14: Distribution Grid of the Future
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 14 Distribution Grid of the Future One-Way Electricity Flow • System planned and designed to serve customer demand • Very few distributed energy resources • Voltage simple to maintain • Limited situational awareness and visuali
Slide 15: Energy Storage
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 15 Energy Storage • AB2514 directed CPUC to establish procurement targets and policies for storage • CPUC final decision in Energy Storage OIR (R.10-12-007) 1,325 MW target for IOUs by 2024 (580 MW SCE share) Three types: t
Slide 16: Electric Vehicles (EV)
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 16 Electric Vehicles (EV) • October 2014, electric vehicle Charge Ready Program application submitted to CPUC (A.14- 10-014) • Pro-active, two-phased program over five years to support installation of up to 30,000 EV charging s
Slide 17: SCE 2015 CPUC General Rate Case
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 17 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
Slide 18: SCE 2015 GRC – Intervenor Testimony
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 18 SCE 2015 GRC – Intervenor Testimony • In August, Office of Ratepayer Advocate (ORA) and The Utility Reform Network (TURN) submitted 2015 GRC testimony Proposed $680 million 2015 test year decrease Proposed $356 million O
Slide 19: CPUC and FERC Cost of Capital
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 19 CPUC and FERC Cost of Capital • CPUC – 48% common equity and Return on Equity (ROE) adjustment mechanism approved through 2015 Interest rates did not trigger change to ROE for 2015 – continues at 10.45% Weighted average
Slide 20: SCE Key CPUC Regulatory Events Calendar
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 20 SCE Key CPUC Regulatory Events Calendar Rate Design OIR (R.12-06-013) 2015 GRC (A.13-11-003) 2H 2014 1H 2015 2H 2015 2016 SONGS Settlement (I.12-10-013) Other proceedings next steps: • CAISO 2013-2014 Transmission Plan – Boa
Slide 21: 2014 Core and Basic Earnings Guidance
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 21 2014 Core and Basic Earnings Guidance 2014 Earnings Guidance as of 10/28/14 2014 Earnings Guidance as of 4/29/14 Key Assumptions: • Midpoint rate base of $22.1 billion • Approved capital structure – 48% equity, 10.45% CPUC &
Slide 22: EIX Dividend Growth
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 22 $1.22 $1.24 $1.26 $1.28 $1.30 $1.35 $1.42 $2.25 $2.68 $3.01 $3.33 $4.10 $3.88 $4.43 2008 2009 2010 2011 2012 2013 2014 SCE Core EPS EIX Dividend Paid EIX Dividend Growth • EIX targets paying out 45 – 55% of SCE earnings • Di
Slide 23: EIX is Responding to Industry Change
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 23 EIX is Responding to Industry Change • Public policy prioritizing environmental sustainability • Innovation facilitating conservation and self- generation • Regulation supporting new forms of competition • Flattening domesti
Slide 24: Creating Shareholder Value
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 24 Creating Shareholder Value Resolve Uncertainties Create Sustainable Earnings and Dividend Growth Position for Transformative Sector Change • EME restructuring • SONGS OII settlement amended • 10% 5-year SCE rate base CAGR (2
Slide 25: Appendix
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 25 Appendix
Slide 26: SCE Customer Demand Trends
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 26 Kilowatt-Hour Sales (millions of kWh) Residential Commercial Industrial Public authorities Agricultural and other Subtotal Resale Total Kilowatt-Hour Sales Customers Residential Commercial Industrial Public authorities Agric
Slide 27: SCE 2014 Bundled Revenue Requirement
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 27 SCE 2014 Bundled Revenue Requirement 2014 Bundled Revenue Requirement $millions ¢/kWh Fuel & Purchased Power – includes CDWR Bond Charge 5,071 6.9 Distribution – poles, wires, substations, service centers; Edison SmartConnec
Slide 28: SCE Rates and Bills Comparison
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 28 12.6 16.6 US Average SCE 33% Higher SCE Rates and Bills Comparison • SCE’s residential rates are above national average due, in part, to a cleaner fuel mix – cost for renewables are higher than high carbon sources • Average
Slide 29: Residential Rate Design OIR
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 29 Residential Rate Design OIR 14.85 19.28 28.10 32.10 0 5 10 15 20 25 30 35 0 200 400 600 800 1,000 1,200 1,400 ¢ / k W h kWh/month SCE Proposed 2018 Tiers: • Two tiers: Tier 1 – 16.4¢/kWh Tier 2 – 19.7¢/kWh • June 2012, C
Slide 30: SCE Residential Net Metering Rate Structure
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 30 SCE Residential Net Metering Rate Structure 8.7¢ 30.6¢ 21.9¢ 0 5 10 15 20 25 30 35 ¢ / k W h Solar Subsidies (Illustrative) Generation Rate Subsidy Paid by Other Ratepayers Equivalent Solar Rate Current rate design results i
Slide 31: SCE Energy Efficiency Programs
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 31 SCE Energy Efficiency Programs Energy efficiency programs updated for 2013 – 2014 • SCE is a national leader – 2012 energy savings = 1.8% of retail sales • 2014 budget of $352 million • Target 0.9 billion kWh average annual
Slide 32: Third Quarter Earnings Summary
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 32 Third Quarter Earnings Summary Q3 2014 Q3 2013 Variance Core EPS1 SCE $1.54 $1.46 $0.08 EIX Parent & Other (0.02) (0.04) 0.02 Core EPS1 $1.52 $1.42 $0.10 Non-Core Items SCE $– $– $– EIX Parent & Other – – – Discontinued Oper
Slide 33: Year-to-Date Earnings Summary
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 33 Year-to-Date Earnings Summary YTD 2014 YTD 2013 Variance Core EPS1 SCE $3.58 $3.09 $0.49 EIX Parent & Other (0.08) (0.11) 0.03 Core EPS1 $3.50 $2.98 $0.52 Non-Core Items SCE $(0.29) $(1.12) $0.83 EIX Parent & Other – 0.02 (0
Slide 34: Earnings Non-GAAP Reconciliations
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 34 Earnings Non-GAAP Reconciliations ($ millions) Reconciliation of EIX Core Earnings to EIX GAAP Earnings Earnings Attributable to Edison International Core Earnings SCE EIX Parent & Other Core Earnings Non-Core Items SCE EIX
Slide 35: SCE Non-GAAP Reconciliations
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 35 Earnings Per Share Attributable to SCE Core EPS Non-Core Items Tax settlement Health care legislation Regulatory and tax items Asset impairment Total Non-Core Items Basic EPS SCE Core EPS Non-GAAP Reconciliations Reconciliat
Slide 36: SCE Results of Operations
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 36 $6,682 — 2,518 1,562 296 32 4,408 2,274 94 (494) 1,874 214 1,660 91 $1,569 $5,169 4,139 1,026 — (1) — 5,164 5 — (5) — — — — $— $6,602 — 2,348 1,622 307 575 4,852 1,750 48 (519) 1,279 279 1,000 100 $900 $5,960 4,891 1,068 — —
Slide 37: SONGS Settlement – Summary
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 37 SONGS Settlement – Summary Term Description Steam Generators • Steam Generator Replacement Project (“SGRP”) removed from rates as of February 1, 2012, with book value balance disallowed. Revenues related to the SGRP collecte
Slide 38: SONGS Settlement – Third-Party Recoveries
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 38 SONGS Settlement – Third-Party Recoveries CPUC SONGS OII Settlement • SCE’s share of recoveries from NEIL and MHI will be reported in non-core earnings • Customer share of recoveries from NEIL and MHI will be credited to bal
Slide 39: SONGS – Units and Decommissioning
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 39 SONGS – Units 2 and 3 Decommissioning Decommissioning Trusts • Decommissioning Trust contributions recovered in rates approved by CPUC in triennial proceeding • Updated site-specific decommissioning cost study estimate (2014
Slide 40: Use of Non-GAAP Financial Measures
EDISON INTERNATIONAL® Leading the Way in Electricity SM November 6, 2014 40 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 performa
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