Edison International · NYSE:EIX
Edison International — Investor Presentation (March 2012)
53 slides from Edison International's investor presentation, Mar 1, 2012
Slide 1: Business Update March 2012
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 0 Business Update March 2012
Slide 2: Forward-Looking Statements
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 1 Statements contained in this presentation about future performance, including, without limitation, earnings, asset and rate base growth, load growth, capital expenditures, and other statements that are not purely historical, are
Slide 3: Delivering Superior and Sustained Value
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 2 Delivering Superior and Sustained Value Edison International • Diversified platform (regulated and competitive) best positions EIX in an industry undergoing unprecedented change • Positioned for long-term earnings and dividend g
Slide 4: Financing Strategies and Dividend Policy
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 3 Financing Strategies • No financial support from, or distributions to, Edison International • Preserve and enhance liquidity: Reduce O&M spending on smaller Midwest Generation facilities Lower and delay Midwest Generation en
Slide 5: SCE Highlights
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 4 • One of the nation’s largest electric utilities Nearly 14 million residents in service territory 4.9 million customer accounts 50,000 square-mile service area Over 110,000 miles of distribution and transmission lines •
Slide 6: SCE Constructive Environment
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 5 SCE Constructive Environment Regulatory framework supports growth and reliability needs Element • Multi-year cost-of-capital mechanism • Forward-looking rate-making • FERC transmission incentives • Advance approval of annual pro
Slide 7: SCE Capital Expenditures Forecast
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 6 1 Currently forecasted 2012-2014 FERC and CPUC capital spending, subject to timely receipt of permitting, licensing, and regulatory approvals. Forecast range reflects an 11% variability to annual expenditure levels related to ex
Slide 8: SCE Year-End Rate Base and Core Earnings
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 7 $11.4 $12.5 $13.1 $15.0 $16.8 $18.8 2006 2007 2008 2009 2010 2011 Rate Base1 Core Earnings2 11% 12% 2006 – 2011 CAGR 1 Recorded rate base, year-end basis. 2 See SCE Core EPS Non-GAAP Reconciliations and Use of Non-GAAP Financial
Slide 9: SCE Rate Base Forecast
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 8 Rate Base 7-9% 2012 – 2014 CAGR2 • Rate base forecast1 based on 2012 CPUC GRC and 2012 FERC Formula Rate requests including consolidated FERC CWIP in rate base • Forecast subject to change based on timely receipt of permitting,
Slide 10: SCE 2012 CPUC General Rate Case
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 9 SCE 2012 CPUC General Rate Case • Application filed November 23, 2010 to set base revenue requirement for 2012-2014 Rate increase driven by system reliability, load growth, capital-related expense, and technology needs Exclu
Slide 11: SCE Cost of Capital Mechanism
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 10 4 5 6 7 8 9 10 Feb-08 Feb-09 Feb-10 Feb-11 Feb-12 Ra te (% ) Moody’s Baa Utility Index - 12-month moving average and spot rate through 2/15/12 SCE Cost of Capital Mechanism • Since 2008, SCE’s CPUC authorized ROE has been 11.5%
Slide 12: Balancing Key Objectives
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 11 Balancing Key Objectives • Realize sustainable growth opportunities utilizing prudent risk / return investment policy Manage impact on customer rates Focus on grid reliability and public policy investments Manage within c
Slide 13: EMG Business Platform
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 12 Operating Platform1 Coal2 Natural Gas Wind Other Total MW 7,096 1,269 1,861 153 10,379 % 68 12 18 2 100 Under Construction Wind Natural Gas3 Wind Development Pipeline4 MW 120 479 MW ~1,300 67 141 19 244 190 461 5,172 167 133 30
Slide 14: EMG Hedge Program Status
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 13 December 31, 2011 EMG Hedge Program Status Midwest Generation Total GWh (NI, AEP/Dayton, and Indiana Hubs)2 Average price ($/MWh)1 Coal under contract (millions of tons) Homer City Total GWh (West Hub)3 Average price ($/MWh)1,4
Slide 15: EMG Coal Fleet Capacity Sales
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 14 December 31, 2011 EMG Coal Fleet Capacity Sales 5,477 1,884 5,477 1,884 5,477 1,884 5,477 1,884 (555) (163) (773) (232) (827) (104) (852) (190) 4,922 1,721 4,704 1,652 4,650 1,780 4,625 1,694 4,582 1,771 4,704 1,736 4,650 1,780
Slide 16: EMG 2006 Illinois CPS Agreement
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 15 EMG 2006 Illinois CPS Agreement NOx SO2 Construction timeline Fleet-wide average emission rate (lb/mmbtu) Construction timeline Fleet-wide average emission rate (lb/mmbtu) Mercury Construction timeline Fleet-wide average emissi
Slide 17: EMG Wind Strategy & Financing
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 16 • Capistrano Wind Partners (CWP) formed February 13, 2012 by EMG, TIAA-CREF, and CIRI (an Alaskan native corporation). $460 million commitment for wind development: Operating projects transferred – Cedro Hill, Texas (150 MW)
Slide 18: EMG Capital Expenditures
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 17 EMG Capital Expenditures Midwest Generation Environmental expenditures2 Plant capital expenditures Walnut Creek Project3 Renewable Energy Projects Capital & construction Turbine commitments Other capital expenditures Subtotal H
Slide 19: Liquidity Profile
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 18 Credit Facility Credit Facility (availability) Cash & short-term investments2 Available Liquidity Liquidity Profile 1 Edison Capital & other includes Mission Energy Holding Company and other EMG subsidiaries. 2 EMG had corporat
Slide 20: 2012 Operating Assumptions
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 19 Southern California Edison • Average rate base range of $19.9 - $20.8 billion • Approved capital structure: 48% equity, 11.5% ROE (CPUC), 11.1% ROE (FERC) • No energy efficiency earnings • AFUDC offsets other costs outside CPUC
Slide 21: Our Shareholder Value Proposition
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 20 Our Shareholder Value Proposition • Dual platform operating across the full spectrum of the electric industry • Southern California Edison Among the best domestic electric utility growth platforms Supportive regulatory fram
Slide 22: Updates Since Our Last Presentation
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 21 Updates Since Our Last Presentation • Financing Strategies (p. 3) • SCE Capital Expenditures Forecast (p. 6) • SCE Rate Base Forecast (p. 8) • SCE 2012 CPUC General Rate Case (p. 9) • EMG 2006 Illinois CPS Agreement (p. 15) • E
Slide 23: SCE Appendix
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 22 SCE Appendix
Slide 24: SCE Transmission Program
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 23 SCE Transmission Program Transmission expenditures are needed to improve system reliability and increase access to renewable energy Eldorado Ivanpah San Joaquin Cross Valley Loop Los Angeles Vincent San Diego Pardee Antelope Pa
Slide 25: California Renewables Policy
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 24 California Renewables Policy • On April 12, 2011, Governor Brown signed SB X 1 2, which codifies a 33% Renewables Portfolio Standard for California Allows use of Renewable Energy Credits (RECs) for up to 25% of target with de
Slide 26: SCE Renewable Portfolio
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 25 SCE Renewable Portfolio Solar 6% Small Hydro 6% Geothermal 47% Biomass 6% Wind 35% Renewable Resources (billion kWh) 15.5 28.3 2011 Actual Deliveries 2020 33% RPS Goal 83% Increase Actual 2011 Renewable Resources: 21.1% of SCE’
Slide 27: SCE Solar Photovoltaic Program
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 26 SCE Solar Photovoltaic Program (SPVP) • On February 16, 2012 CPUC approved the decision on SCE’s requested program modification1: Between 115-125 MW for both utility-owned built and independent power producer projects Incre
Slide 28: SCE Distribution Program
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 27 SCE Distribution Program • Distribution expenditures required to meet customer and load growth, infrastructure needs, information technology and related general plant • Demonstrated operational capability to execute infrastruct
Slide 29: SCE SmartConnect Program
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 28 SCE SmartConnectTM Program • 5 million “smart” meters to be installed by end of 2012 3.8 million meters installed through 2011 • Total approved project: $1.6 billion ($1.25 billion capital) • Cost recovery transitioning to CP
Slide 30: California Once-Through Cooling Impacted Facilities
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 29 Coastal Power Plants Local Reliability Areas (generalized) California Transmission System (partial, generalized) Legend Name & Permit Holder MW Nuclear Plants Diablo Canyon – PG&E 2,240 San Onofre – SCE 2,250 Independent Genera
Slide 31: SCE Rates and Bills Comparison
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 30 SCE Rates and Bills Comparison • SCE’s residential rates are above national average due, in part, to a cleaner fuel mix – cost for renewables are higher than high carbon sources • Average monthly residential bills are lower tha
Slide 32: SCE Rate Design and Sales Mix
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 31 Tier 1 - Base Line (BL) 12.5 8.5 Tier 2 - 101%-130% of BL 14.8 10.7 Tier 3 - 131%-200% of BL 22.9 17.5 Tier 4 - 201%-300% of BL 26.4 17.5 Tier 5 - Over 300% of BL 29.9 17.5 SCE Rate Design 2011 kWh Sales by Class of Service 201
Slide 33: Other SCE Key Regulatory Events
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 32 Other SCE Key Regulatory Events Devers-Colorado River Transmission Tehachapi Transmission Eldorado-Ivanpah Transmission Alberhill Case Number Date of Filing Status Next Milestone FERC Formula Rate Filing ER11-3697 06/03/11 Sett
Slide 34: SCE Results of Operations
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 33 SCE Results of Operations ($ millions) 1 See Use of Non-GAAP Financial Measures. Utility Earning Activities Utility Cost- Recovery Activities Total Consolidated Twelve Months Ended Dec 31, 2010 Operating Revenue Fuel and purcha
Slide 35: EMG Appendix
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 34 EMG Appendix
Slide 36: Midwest Generation Operating Results
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 35 1 Includes the price of energy, capacity, ancillary services, etc. 2 Average realized gross margin is equal to all-in average realized price less average fuel and emission costs. 3 See Other Non-GAAP Reconciliations and Use of
Slide 37: Homer City Operating Results
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 36 Homer City (Pennsylvania) 1 Includes the price of energy, capacity, ancillary services, etc. 2 Average realized gross margin is equal to all-in average realized price less average fuel and emission costs. 3 See Other Non-GAAP R
Slide 38: EMG Adjusted EBITDA Reconciliation
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 37 Reconciliation to Earnings1 EMG – Adjusted EBITDA Q4 09 Q4 10 $(1,071) — (1,071) 82 — (761) 81 (1,669) 19 1,753 $103 Earnings Addback (Deduct): Discontinued operations Income from continuing operations Interest expense Interest
Slide 39: EMG Debt Covenant Status
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 38 EMG Debt Covenant Status Midwest Generation Credit Facility Debt to Capitalization Ratio Covenant threshold (less than or equal to) Homer City Lease Agreement Senior Rent Service Coverage Ratio2,3 Covenant Threshold (greater th
Slide 40: EMG Comparative Operating Statistics
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 39 EMG Comparative Operating Statistics Midwest Generation Generation (in GWh) Performance Equivalent availability Forced outage rate Pricing Information Average realized energy price ($/MWh) Energy only contracts Average cost of
Slide 41: EMG Other Non-GAAP Reconciliations
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 40 EMG Other Non-GAAP Reconciliations Reconciliation of Midwest Generation and Homer City Operating Revenues and Fuel Costs to All-in Average Realized Price/MWh and Average Realized Fuel Cost/MWh Generation (GWh) Operating revenue
Slide 42: Appendix
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 41 Appendix
Slide 43: Short- and Long-Term Debt Maturities
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 42 Short- and Long-Term Debt Maturities SCE EMG1 EIX Expiration of Credit Facilities SCE EME2 MWG3 EIX Debt Maturity Profiles 2013 2012 2014 2015 $419 57 10 $— 600 500 — December 31, 2011 ($ millions) $— 755 — $2,894 — — 1,426 $1,
Slide 44: Fourth Quarter Earnings Summary
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 43 Fourth Quarter Earnings Summary 1 See Earnings Non-GAAP Reconciliations and Use of Non-GAAP Financial Measures in Appendix. The per share impact of participating securities is included in EIX parent company and other and was ze
Slide 45: SCE Fourth Quarter Highlights
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 44 SCE Fourth Quarter Highlights Higher operating revenue Rate base growth Operating revenue and other Lower expenses Higher depreciation Higher net financing costs Income tax and other Deferred income taxes2 Other Total $0.05 0.1
Slide 46: EMG Fourth Quarter Highlights
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 45 EMG Fourth Quarter Highlights Recent Developments • EPA MATS rule finalized in December; consistent with coal fleet compliance scenarios • CSAPR rule stayed in December; CAIR allowance-based compliance approach continues in 201
Slide 47: Fourth Quarter 2011 Non-Core Charges
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 46 Fourth Quarter 2011 Non-Core Charges EPS Description EMG Impairment of Homer City (1.91) EMG expects to lose substantially all beneficial economic interest and material control of the plant; remaining net assets were $167 milli
Slide 48: Full-Year Earnings Summary
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 47 2010 2011 Variance Core EPS1 SCE $3.01 $3.33 $0.32 EMG 0.59 (0.07) (0.66) EIX parent company and other (0.12) (0.04) 0.08 Core EPS $3.48 $3.22 $(0.26) Non-Core Items SCE $0.18 $— $(0.18) EMG 0.10 (3.27) (3.37) EIX parent compan
Slide 49: SCE Full-Year Highlights
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 48 SCE Full-Year Highlights Higher operating revenue Rate base growth Operating revenue and other Lower expenses Higher depreciation Higher net financing costs Income tax and other Change of tax accounting Deferred income taxes3 O
Slide 50: EMG Full-Year Highlights
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 49 EMG Full-Year Highlights Merchant coal3 Midwest Generation Homer City EMMT - trading Renewable energy projects Higher net interest expense Lower income taxes and other Total 1 See Use of Non-GAAP Financial Measures in Appendix
Slide 51: Earnings Non-GAAP Reconciliations
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 50 Earnings Attributable to Edison International Core Earnings1 SCE EMG EIX parent company and other Core Earnings Non-core items SCE – tax impact of health care legislation SCE – tax settlement EMG – tax settlement2 EMG – impairm
Slide 52: SCE Core EPS Non-GAAP Reconciliations
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 51 Earnings Per Share Attributable to SCE Core EPS1 Non-core items Tax settlement Health care legislation Regulatory and tax items Generator settlement/refund incentive Total non-core items Basic EPS SCE Core EPS Non-GAAP Reconcil
Slide 53: Use of Non-GAAP Financial Measures
EDISON INTERNATIONAL® Leading the Way in Electricity SM March 1, 2012 52 Edison International’s earnings are prepared in accordance with generally accepted accounting principles used in the United States and represent the company’s earnings as reported to the Securities and Exchange Commission. Our
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