Edison International · NYSE:EIX
Edison International — Q3 2014 Earnings Presentation
25 slides from Edison International's earnings presentation, Oct 28, 2014
Slide 1: Third Quarter 2014 Financial Results
Leading the Way in Electricity SM Third Quarter 2014 Financial Results October 28, 2014 1 EDISON INTERNATIONAL®
Slide 2: Forward-Looking Statements
Leading the Way in Electricity SM Forward-Looking Statements 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 statements tha
Slide 3: Third Quarter Earnings Summary
Leading the Way in Electricity SM Third Quarter Earnings Summary Q3 Q3 SCE Key Core Earnings Drivers Variance 2014 2013 Core EPS1 Higher revenue $0.20 SCE $1.54 $1.46 $0.08 SONGS impact (0.03) Higher depreciation (0.04) EIX Parent & Other (0.02) (0.04) 0.02 Income taxes and other (0.05) Core EPS1 $1
Slide 4: Year-to-Date Earnings Summary
Leading the Way in Electricity SM Year-to-Date Earnings Summary YTD YTD SCE Key Core Earnings Drivers Variance 2014 2013 Core EPS1 Higher revenue $0.51 SONGS impact (0.02) SCE $3.58 $3.09 $0.49 Lower O&M2 0.05 EIX Parent & Other (0.08) (0.11) 0.03 Higher depreciation (0.15) Core EPS1 $3.50 $2.98 $0.
Slide 5: SCE Capital Expenditures Forecast
Leading the Way in Electricity SM SCE Capital Expenditures Forecast ($ billions) $15.4 – $17.4 billion Distribution Transmission Generation forecasted capital program 2014 – 2017 $4.6 $4.5 $4.1 $4.2 • Capital expenditures cumulative forecast increased $200 million primarily from a new mobile home me
Slide 6: SCE Rate Base Forecast
Leading the Way in Electricity SM SCE Rate Base Forecast ($ billions) 7 – 9% CAGR projected rate base 2014 – 2017 $29.3 $26.7 • Rate base growth rate reaffirmed • Driven by infrastructure $24.0 replacement, reliability investments, and public policy $22.4 requirements • FERC rate base includes CWIP
Slide 7: 2014 Core and Basic Earnings Guidance
Leading the Way in Electricity SM 2014 Core and Basic Earnings Guidance (per share) 2014 Earnings 2014 Earnings Guidance as of Guidance as of 4/29/14 10/28/14 Low Mid High Low Mid High SCE $3.85 $4.43 Key Assumptions: EIX Parent & Other (0.15) (0.13) • Midpoint rate base of $22.1 billion 1 EIX Core
Slide 8: Creating Shareholder Value
Leading the Way in Electricity SM Creating Shareholder Value Create Sustainable Position for Resolve Earnings and Transformative Uncertainties Dividend Growth Sector Change • EME restructuring • 10% 5-year SCE rate base • Acquired SoCore Energy What We’ve • SONGS OII settlement CAGR (2008 – 2013) (c
Slide 9: Appendix
Leading the Way in Electricity SM Appendix October 28, 2014 9 EDISON INTERNATIONAL®
Slide 10: EIX Dividend Growth
Leading the Way in Electricity SM EIX Dividend Growth $4.43 Guidance Midpoint 2008 – 2013 CAGR 2014 $1.42 (32%) SCE Core EPS 12% $3.88 EIX Dividend 2% 2013 $1.35 (35%) $4.10 2012 $1.30 (32%) • EIX targets paying out 45 – 55% of SCE earnings $3.33 • Dividend growth rate slowed to help 2011 $1.28 (38%
Slide 11: SCE System Investments
Leading the Way in Electricity SM SCE System Investments ($ millions) Distribution Transmission • Aging system reaching equilibrium • Large transmission projects: replacement rate Tehachapi – $3.2 billion total project • 2015 GRC request includes ~120% cost; 2016-17 in service date increase in inf
Slide 12: SCE Growth Drivers Beyond 2017
Leading the Way in Electricity SM SCE Growth Drivers Beyond 2017 Infrastructure Reliability Investment • Sustained level of infrastructure investment required until equilibrium replacement rates are achieved - includes underground cable, poles, switches, and transformers1 Grid Readiness • Accelerate
Slide 13: New Technology Grid Impacts
Leading the Way in Electricity SM New Technology Grid Impacts 1 3 1 2 1 2 Future state based on evolving energy landscape 1 1 More automated and digital, with more sophisticated voltage control and protection 2 schemes 2 Facilitates increasing 1 renewables & two-way power flow 3 Cyber mitigation mus
Slide 14: Creating the Distribution Grid of the Future
Leading the Way in Electricity SM Creating the Distribution Grid of the Future Current State Future State One-Way Electricity Flow Variable and Two-Way Electricity Flow • System planned and designed to serve • System planned and designed to serve customer demand variable customer demand • Very few d
Slide 15: EIX is Responding to Industry Change
Leading the Way in Electricity SM EIX is Responding to Industry Change Long-Term Industry Trends Strategy • Public policy prioritizing environmental • SCE Strategy sustainability Invest in, build, and operate the next • Innovation facilitating conservation and self- generation electric grid genera
Slide 16: SCE 2015 CPUC General Rate Case
Leading the Way in Electricity SM SCE 2015 CPUC General Rate Case • November 2013, 2015 GRC Application A.13-11-003 filed. Request sets base revenue requirement for 2015 – 2017 Includes operating costs and CPUC jurisdictional capital Excludes fuel and purchased power (and other utility cost-reco
Slide 17: SCE 2015 GRC – Intervenor Testimony
Leading the Way in Electricity SM SCE 2015 GRC – Intervenor Testimony ($ in millions) • 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&M expense reduction large
Slide 18: CPUC and FERC Cost of Capital
Leading the Way in Electricity SM 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% equity with 10
Slide 19: SCE Key CPUC Regulatory Events Calendar
Leading the Way in Electricity SM SCE Key CPUC Regulatory Events Calendar 2H 2014 1H 2015 2H 2015 2016 SONGS Oct 9 – Proposed Decision Settlement (I.12-10-013) Nov/Dec – Final Decision July – Revised Scoping Jan – Update Hearing 2015 GRC Memo (A.13-11-003) Aug – ORA/TURN testimony Sept - Evidentiary
Slide 20: SONGS Settlement – Summary
Leading the Way in Electricity SM SONGS Settlement – Summary Term Description • Steam Generator Replacement Project (“SGRP”) removed from rates as of February 1, 2012, with Steam book value balance disallowed. Revenues related to the SGRP collected after February 1, 2012, Generators refunded to cust
Slide 21: SONGS Settlement – Third-Party Recoveries
Leading the Way in Electricity SM 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 balancing accounts and reduce SONGS regulator
Slide 22: SONGS – Units 2 and 3 Decommissioning
Leading the Way in Electricity SM 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 dollars, all owners): $4.4 billion, or $1
Slide 23: Earnings Non-GAAP Reconciliations
Leading the Way in Electricity SM Earnings Non-GAAP Reconciliations ($ millions) Reconciliation of EIX Core Earnings to EIX GAAP Earnings Earnings Attributable to Q3 Q3 YTD YTD Edison International 2014 2013 2014 2013 Core Earnings SCE $503 $477 $1,168 $1,007 EIX Parent & Other (7) (14) (26) (34) Co
Slide 24: SCE Core EPS Non-GAAP Reconciliations
Leading the Way in Electricity SM 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 2008 2009 2010 2011 2012 2013 CAGR Core EPS $2.25 $2.68 $3.01 $3.33 $4.10 $3.88 12% Non-Core Items Tax settleme
Slide 25: Use of Non-GAAP Financial Measures
Leading the Way in Electricity SM 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. Co