Edison International · NYSE:EIX
Edison International — Investor Presentation (February 2023)
52 slides from Edison International's investor presentation, Feb 24, 2023
Slide 1: Business Update
February 24, 2023 Business Update
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 February 24, 2023 One of the nation’s largest electric-only utilities, serving over 15 million residents EIX’s principal s
Slide 4: Thesis: Wires-focused utility with rate base growth aligned with 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 February 24, 2023 Constructive California and Federal regulatory structures Aggressive climate g
Slide 5: EIX well positioned for a decarbonized future
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 February 24, 2023 UTY1 EEI Index2 Electric-Only & No Gas LDC Exposure (# of Compani
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 February 24, 2023 Environmental Social Governance 2045 goals: net-zero GHG emissions across Sco
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 February 24, 2023 Primary Category1 U.N. Sustainable Development Goals Alignment Green Renewable Energy Clean T
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 February 24, 2023 Revenue Decoupling means earnings aren’t affected by changes in electricity sales Long-standing regulatory mechanism tha
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 February 24, 2023 100% of grid sales with carbon-free electricity 80 GW of utility-scale clean
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 February 24, 2023 1. In 2019 dollars under Balanced Scenario 2. Source: CAISO Draf
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: Total 2021 energy burden in SCE's service area below median
13 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 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: 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 February 24, 2023 Building Electrification 1. As of December 2022
Slide 16: SCE leads the largest utility transportation electrification programs in the U.S.
15 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix $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. February 24, 2023 1. Low Carbon Fuel Standard.
Slide 17: SCE's future load growth is 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 February 24, 2023 1. Includes both light duty and non-light duty EV load 2. As of December
Slide 18: SCE is 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 February 24, 2023 Energy Storage ~2 GW currently online Installed or procured ~5.5 GW of storage capacity and mus
Slide 19: SCE Wildfire Mitigation: Approach, Progress, and Results
SCE WILDFIRE MITIGATION: APPROACH, PROGRESS, AND RESULTS
Slide 20: AB 1054 provides strong construct for wildfire liability and cost recovery
19 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix AB 10541 provides a strong regulatory construct for determining wildfire liability and cost recovery February 24, 2023 Established safety certification process and additional wildfire safety oversig
Slide 21: California has continued to increase investments in wildfire suppression and prevention
20 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix California has continued to increase investments in wildfire suppression and prevention February 24, 2023 60+ aircraft make CAL FIRE’s fleet the largest civil aerial firefighting fleet in the world3
Slide 22: SCE's tools and technology monitor real-time conditions
21 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 February 24, 2023 180+ cameras that provide visibility to about 90% high fire risk area
Slide 23: Covered conductor is one of the most effective measures to reduce wildfire risk
22 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 Februar
Slide 24: SCE has made significant progress hardening the grid
23 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 February 24, 2023 ~7,000 ~4,400 ~1,200 ~3,100 ~1,300 ~17,000 Distribution Miles in HFRA ✓ ✓ By end
Slide 25: Substantial progress in grid hardening
24 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Substantial progress in grid hardening — ~56% of bare wire in SCE’s HFRA to be covered by end of 2023 February 24, 2023 Prioritizing riskier segments first, SCE expects to harden ~8,700 circuit mile
Slide 26: Wildfire mitigation and PSPS reduced probability of catastrophic wildfire losses
25 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 February 24, 2023 1. Baseline risk estimated by RMS using its wildfire mod
Slide 27: Covered conductor deployment has reduced dependency on PSPS
26 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Covered conductor deployment has reduced SCE’s dependency on PSPS for reducing wildfire risk February 24, 2023 1. Baseline risk estimated by Risk Management Solutions, Inc. (Moody’s RMS) using its w
Slide 28: Financial Information
[WJEPISON Bee | a SANNA NY, WAT) MONO | ‘e } J FINANCIAL INFORMATION
Slide 29: SCE has significant capital expenditure opportunities
28 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Range Case2 n/a n/a 5.7 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 grid
Slide 30: Over 85% of SCE's capital investments are in distribution grid
29 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 February 24, 2023 SCE forecasts investing $27–30 billion from 2021 to 2025 to support SCE’s
Slide 31: Rate base growth forecast of 7–9% through 2025
30 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 February 24, 2023 1. Weighted-average year basis. Excludes rate base associated with ~$1.6
Slide 32: SCE's long-term growth drivers aligned with California's public policy goals
31 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE’s long-term growth drivers highly aligned with California’s public policy goals February 24, 2023 Overarching Goals SCE Growth Drivers Safe, Reliable, and Affordable Electricity Service Infrastr
Slide 33: Cash flow from memo account recovery and securitization strengthens balance sheet
32 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 February 24, 2023 Approved Applications Application / Account Balance @ Dec. 31 Recovery Thro
Slide 34: SCE will request CPUC cost recovery for 2017/2018 events
33 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 February 24, 2023 2.4 0.5 5.0 0.9 8.8 Best Estimate of Total Losses 1. TKM: Collectively, the Th
Slide 35: CPUC cost of capital adjustment mechanism
34 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 36: EIX and SCE committed to investment grade credit ratings
35 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX and SCE committed to investment grade credit ratings February 24, 2023 SCE EIX Moody’s Baa1 Stable Baa2 Stable S&P BBB Stable BBB Stable Fitch BBB-Positive BBB-Positive Long-term Issuer Rating a
Slide 37: EIX & SCE have limited variable-rate exposure beyond 2023
36 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX & SCE have limited variable-rate exposure beyond 2023 February 24, 2023 Approximately $11 billion of the total ~$30 billion debt portfolio matures through 20271 SCE Wildfire Interest expense wil
Slide 38: Initiating 2023 core EPS guidance of $4.55–4.85
37 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Initiating 2023 core EPS guidance of $4.55–4.85 February 24, 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
Slide 39: Gap between rate base and core EPS growth driven by interest on wildfire debt
38 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Gap between 2023 rate base and core EPS growth largely driven by interest on debt for wildfire claims payments1 February 24, 2023 1. See Earnings Per Share Non-GAAP Reconciliations and Use of Non-GA
Slide 40: EIX parent 2023 financing needs of ~$1.4 billion
39 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX parent projects total 2023 financing needs of ~$1.4 billion, including $300–400 million of equity content February 24, 2023 1. Financing plans are subject to change 2. Equity content based on S&
Slide 41: Track record of meeting EPS guidance and growing dividend
40 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 February 24, 2023 0.80 2.95 2004 2023 7.1% CAGR …and has 19 consecutive years of dividend growth2 Dividends pe
Slide 42: SCE's operational excellence program, Catalyst
41 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE’s operational excellence program, Catalyst, includes >600 employee-driven ideas with capital and O&M benefits1 February 24, 2023 Major Themes Example High Impact Ideas Work Planning • Improve O&
Slide 43: EIX reaffirms 5–7% 2021–2025 EPS growth rate target
42 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 February 24, 2023 1. Based on the midpoint of initial 2021 Core EPS guidance range of $4.42–4.62 es
Slide 44: EIX offers double-digit total return potential
43 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix EIX offers double-digit total return potential February 24, 2023 9–11% total return opportunity4 before potential P/E multiple expansion driven by estimated 75–80% wildfire risk reduction5 , and ong
Slide 45: Appendix
INTERNATIONALS.
Slide 46: Edison Energy: partners with market leaders on sustainability and energy goals
45 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 47: SCE Key Regulatory Proceedings
46 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE Key Regulatory Proceedings February 24, 2023 1. Capital reflects direct costs. Revenue requirement does not include revenue associated with AB 1054 Excluded Capital Expenditures Proceeding Descr
Slide 48: Near-term debt maturities are manageable
47 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Edison’s near-term debt maturities are manageable with ~24% tied to SCE’s operations or AB 1054 securitization February 24, 2023 2023 2024 2025 2026 2027 Variable Rate (SOFR+) SCE: Operational2 – –
Slide 49: SCE continues to fund wildfire claims payments with debt
48 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix SCE continues to fund wildfire claims payments with debt February 24, 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 SO
Slide 50: EIX Core EPS Non-GAAP Reconciliations
49 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix 2022 Basic EPS $ 1.61 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Events claims and expenses, net of recoveries (3.27) Wildfire Insurance Fund expense (0.56) Upstream Lighting Program decision (0
Slide 51: Earnings Per Share Non-GAAP Reconciliations
50 Introduction Clean Energy Transition Leadership Wildfire Mitigation Financial Information Appendix Low High Basic EIX EPS $4.55 $4.85 Total Non-Core Items2 — — Core EIX EPS $4.55 $4.85 1. EPS is calculated on the assumed weighted-average share count for 2023 of 382.2 million 2. Non-core items are
Slide 52: Use of Non-GAAP Financial Measures
51 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 — Investor Presentation (February 2023) on 6ix