Edison International · NYSE:EIX
Edison International — Q1 2014 Earnings Presentation
28 slides from Edison International's earnings presentation, Apr 29, 2014
Slide 1: First Quarter 2014 Financial Results
Leading the Way in Electricity SM First Quarter 2014 Financial Results April 29, 2014 0 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: First Quarter Earnings Summary
Leading the Way in Electricity SM First Quarter Earnings Summary Q1 2014 Q1 2013 Variance SCE Key Core Earnings Drivers Core EPS1 Higher revenue $0.15 SCE $0.93 $0.78 $0.15 SONGS impact (0.02) EIX Parent & Other (0.03) (0.01) (0.02) Lower O&M2 0.06 Higher depreciation (0.05) Core EPS1 $0.90 $0.77 $0
Slide 4: SONGS Settlement – Accounting
Leading the Way in Electricity SM SONGS Settlement – Accounting • Q2 2013, SCE recorded $575 million pre-tax and $365 million after-tax impairment based on management’s judgment of the recoverability of SONGS investment Developed based on a range of possible outcomes Each quarter, management mus
Slide 5: ERRA Recovery Forecast–March 27 SONGS Call
Leading the Way in Electricity SM ERRA Recovery Forecast–March 27 SONGS Call ($ millions) Dec 2013 June 2014 Jan 2015 SAR1 15.7 16.6 16.5 Key Items 195 1,464 (186) 2014 ERRA: Assumes Commission approves March 25 proposed decision (267) Decommissioning Trust: recorded O&M 264 recovered from Trust beg
Slide 6: Updated ERRA Recovery Forecast
Leading the Way in Electricity SM Updated ERRA Recovery Forecast ($ millions) Dec 2013 June 2014 Jan 2015 SAR1 15.7 16.6 16.5 – 17.3 Key Items 2014 ERRA: Assumes Commission approves March 25 proposed decision Decommissioning Trust: recorded O&M recovered from Trust beginning June 2013 644 1,649 (247
Slide 7: SCE Capital Expenditures Forecast
Leading the Way in Electricity SM SCE Capital Expenditures Forecast ($ billions) $15.1 – $17.2 billion forecasted capital program 2014 – 2017 Distribution Transmission Generation $4.5 $4.4 • Capital expenditures forecast $4.1 $4.2 reaffirmed • CPUC GRC focused on infrastructure replacement • Include
Slide 8: SCE Rate Base Forecast
Leading the Way in Electricity SM SCE Rate Base Forecast ($ billions) 7 – 9% CAGR projected rate base 2014 – 2017 $29.2 $27.0 • Growth rate reaffirmed • Driven by infrastructure $24.4 replacement, reliability investments, and public policy $22.4 requirements • FERC rate base includes CWIP and is app
Slide 9: SCE System Investments
Leading the Way in Electricity SM SCE System Investments ($ millions) Distribution Transmission • Aging system reaching equilibrium • Large transmission projects: replacement rate Techachapi – $3,174 million total • 2015 GRC request includes ~120% project cost; 2016-17 in service date increase in
Slide 10: 2014 Core and Basic Earnings Guidance
Leading the Way in Electricity SM 2014 Core and Basic Earnings Guidance 2014 Earnings 2014 Earnings Guidance as of Guidance as of Key Assumptions: 2/25/14 4/29/14 • Midpoint rate base of $22.1 billion Low Mid High Low Mid High • Approved capital structure – SCE $3.85 $3.85 48% equity, 10.45% CPUC &
Slide 11: 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 • SCE 2013 cost of capital • 10% 5-year SCE rate base • Acquired SoCore Energy What We’ve • SCE 2012 FERC formula rate CAGR (20
Slide 12: Appendix
Leading the Way in Electricity SM Appendix April 29, 2014 11 EDISON INTERNATIONAL®
Slide 13: Changes Since Our Last Presentation
Leading the Way in Electricity SM Changes Since Our Last Presentation • Quarterly updates • SONGS Settlement – Accounting (p. 3) • ERRA Recovery Forecast – March 27 SONGS Call (p. 4) • Updated Forecasted ERRA Recovery (p. 5) – new slide • SONGS Settlement – Third-Party Recoveries (p. 14) – new slide
Slide 14: 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, Steam with book value balance disallowed. Revenues related to the SGRP collected after February 1, Generators 2012, refunded to cust
Slide 15: SONGS Settlement – Third-Party Recoveries
Leading the Way in Electricity SM SONGS Settlement – Third-Party Recoveries • SCE’s share of recoveries from NEIL and MHI will be allocated between SCE and customers • Litigation fees recovered prior to SCE / customer sharing SCE Share NEIL All 17.5% MHI • First $100 million 85% Non-Core Earnings •
Slide 16: SONGS Settlement – Regulatory Asset
Leading the Way in Electricity SM SONGS Settlement – Regulatory Asset ($ millions) December 31, March 31, Authorized Category 20131 2014 Return Base Plant $488 2.62% SGRP - n/a CWIP2 $2,166 406 2.62% Materials and Supplies 78 2.62% Nuclear Fuel 404 Commercial Paper Rate Asset Impairment (575) (5) n/
Slide 17: SONGS Settlement Impact
Leading the Way in Electricity SM SONGS Settlement Impact Regulatory Regulatory Profit In Millions Asset Liability (Loss) As of June 7, 2013 $2,096 $— $— Impairment (575) — (575) Additions 70 — — Authorized Revenues in excess of revenue recorded — 266 — As of December 31, 2013 1,591 266 (575) Reduct
Slide 18: SONGS Third-Party Recovery – MHI
Leading the Way in Electricity SM SONGS Third-Party Recovery – MHI Warranty Summary Request for Arbitration • 20-year warranty: • October 2013, Request for Arbitration filed Repair or replace defective items with the International Chamber of Commerce per MHI contract Specified damages for certai
Slide 19: SONGS Third-Party Recovery – NEIL Insurance
Leading the Way in Electricity SM SONGS Third-Party Recovery – NEIL Insurance • Accidental property damage and accidental outage insurance through Nuclear Electric Insurance Limited (“NEIL”) Accidental Property Damage Policies – $2.5 million deductible; $2.75 billion liability limit Accidental O
Slide 20: SONGS – Decommissioning
Leading the Way in Electricity SM SONGS – Decommissioning Decommissioning Trusts • Decommissioning Trust contributions recovered in rates approved by CPUC in triennial proceeding • December 2012, A.12-12-013 Joint Filing with SDG&E submitted • July 2013, updated early retirement scenario total decom
Slide 21: 2014 Bulk Electricity Outlook
Leading the Way in Electricity SM 2014 Bulk Electricity Outlook (MW) 9,800 2,322 63,190 50,177 891 47,413 • California planning reserve margin is approximately 33% versus 15 – 17% target • Local transmission constraints can still yield potential customer interruptions Existing Additions Imports Dema
Slide 22: Residential Rate Design OIR
Leading the Way in Electricity SM Residential Rate Design OIR • June 2012, CPUC opened Order Instituting OIR Phase 2 Settlement Summary Rulemaking (OIR) R.12-06-013: Comprehensive review of residential rate structure 35 Transition to Time of Use (TOU) rates 31.94 AB327 rate design 30 27.94 Tie
Slide 23: Energy Storage
Leading the Way in Electricity SM Energy Storage • AB2514 directs CPUC to establish SCE 2014 Existing Storage procurement targets and policies for energy storage 50 • CPUC final decision in Energy Storage OIR 30 MW (R.10-12-007) 16.40 1,325 MW target for IOUs by 2024 13.68 10 (580 MW SCE share)
Slide 24: EME Bankruptcy Settlement Implementation
Leading the Way in Electricity SM EME Bankruptcy Settlement Implementation • April 2014, amended Plan of Reorganization completed • EME emerged from bankruptcy and remains subsidiary of EIX Consolidated for tax purposes • Reorganization Trust established to receive tax benefit payments from EIX Cash
Slide 25: Non-GAAP Reconciliations
Leading the Way in Electricity SM Non-GAAP Reconciliations ($ millions) Reconciliation of EIX Core Earnings to EIX GAAP Earnings Earnings Attributable to Q1 Q1 Edison International 2014 2013 Core Earnings SCE $304 $256 EIX Parent & Other (10) (4) Core Earnings $294 $252 Non-Core Items SCE $(96) $– E
Slide 26: SCE Results of Operations
Leading the Way in Electricity SM SCE Results of Operations ($ 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 specif
Slide 27: 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 28: 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