Edison International · NYSE:EIX
Edison International — Q2 2023 Earnings Presentation
32 slides from Edison International's earnings presentation, Jul 27, 2023
Slide 1: Second Quarter 2023 Financial Results
SECOND QUARTER 2023 FINANCIAL RESULTS JULY 27, 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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 statem
Slide 3: Second Quarter Highlights
Second Quarter Highlights 1 Q2 performance remains on track; reaffirming 2023 core EPS guidance1 $0.92 $1.01 Q2 GAAP EPS Q2 Core EPS1 In May, SCE filed 2025 GRC and updated capital 2 Reaffirmed plan to $38–43 billion for 2023–2028 $4.55–4.85 SCE approaches wildfire mitigation milestone: 2023 Core EP
Slide 4: Reliable Resilient Ready
SCE’s 2025 GRC focuses on safely providing electric service for customers’ needs today and the clean energy transition Reliable Resilient Ready Improve the reliability of Deploy programs that Ensure the grid is ready to the grid so SCE can meet protect the safety of support widespread customers’ nee
Slide 5: SCE will request CPUC cost recovery for 2017/2018 events
SCE will request CPUC cost recovery for 2017/2018 events, with first application targeted for August 2023 Substantial progress resolving claims First application will be for TKM events1 $ in Billions, as of June 30, 2023 Target filing in August 8.8 Remaining2 0.6 Expected request: – ~$2 billion (set
Slide 6: SCE is seeing numerous proof points from wildfire mitigation efforts
SCE is seeing numerous proof points and results from its substantial wildfire mitigation efforts since 2018 4,950+ MILES 2 MILLION+ 1 MILLION+ 1,660+ 180+ OF COVERED CONDUCTOR TRIMS AND REMOVALS IN HFRA HFRA INSPECTIONS WEATHER STATIONS HD CAMERAS 71% fewer 53% fewer 61% lower 90% visual faults on f
Slide 7: Covered conductor deployment has reduced SCE's use of PSPS
Covered conductor deployment has reduced SCE’s use of PSPS for lowering wildfire risk SCE’s wildfire risk mitigation is differentiated by its speed of hardening its infrastructure Estimated reduction in probability of losses from catastrophic wildfires compared to pre-2018 levels1,2,3 Current 85% 75
Slide 8: SCE has made significant progress hardening the grid
SCE has made significant progress hardening the grid to keep its communities safe Total Circuit Miles of Distribution Lines in SCE’s High Fire Risk Area ~16,800 Bare wire until hardened during ~900 routine work in least risky areas ~3,100 Future planned hardening 1,200 Targeted for 20231 ~4,400 Co
Slide 9: Edison's 2022 sustainability achievements advanced our clean energy strategy
Edison’s 2022 sustainability achievements advanced our clean energy strategy and enhanced value to our stakeholders Climate Change Operational Excellence Leadership in physical risk assessments, with SCE publishing 1,000+ MW of demand response program peak load one of the first climate adaptation vu
Slide 10: Edison International's industry-leading ESG profile received wide-ranging recognition
Edison International’s industry-leading ESG profile received wide-ranging recognition and awards in 2022 Climate Change Technology Transfer Awards Utility Project of the Year Corporate Strategy to Advance ESG Leader of the Year Solar, Energy Storage and Load Electric Access System Enhancement — Comm
Slide 11: Second Quarter Earnings Summary
Second Quarter Earnings Summary Q2 2023 Q2 2022 Variance Key SCE EPS Drivers2 Revenue3,4 $ — Basic Earnings Per Share (EPS) GRC escalation 0.19 CPUC revenue - Other (0.23) SCE $ 1.09 $ 0.79 $ 0.30 FERC and other operating revenue 0.04 EIX Parent & Other (0.17) (0.16) (0.01) Lower O&M4 0.30 Higher de
Slide 12: EIX reaffirms 2023 core EPS guidance of $4.55-4.85
EIX reaffirms 2023 core EPS guidance of $4.55–4.85 EIX 2023 Core Earnings Per Share Guidance Range Rate Base Building from SCE Rate Base EPS CPUC FERC 2023 2023 Rate Base ($Bn) $34.3 $7.7 YTD Guidance Equity Ratio 52.00% 47.50% Rate Base EPS 2.66 5.68 ROE 10.05% 10.30% EPS $4.69 $0.99 SCE Operationa
Slide 13: GRC underpins ~$38-43 billion 2023-2028 capex forecast
GRC underpins ~$38–43 billion 2023–2028 capex forecast; substantial additional investment opportunities offer upside Capital deployment expected to increase in 2025–20281 Capital Expenditures, $ in Billions $8.1 Forecast does not include $8.0 $7.5 $7.7 substantial additional capital deployment oppor
Slide 14: SCE has obtained approvals of standalone applications for ~$3 billion of capex
SCE has obtained approvals of standalone applications for ~$3 billion of capex over past two rate case cycles Standalone application approvals of incremental capital spending during 2018 and 2021 GRC cycles Only capital expenditure components of CPUC decisions shown below Electrification Wildfire Mi
Slide 15: GRC request supports ~6-8% rate base growth 2023-2028
GRC request supports ~6–8% rate base growth 2023–2028; substantial additional investment opportunities offer upside Strong rate base growth driven by wildfire mitigation and important grid work to support California’s leading role in clean energy transition Rate Base1, $ in Billions ~8% CAGR Forecas
Slide 16: Significant portion of EIX 2023 financing plan accomplished early
Significant portion of EIX 2023 financing plan accomplished early in the year, with strong investor support for offerings EIX 2023 Debt Maturities EIX 2023 Financing Plan Status1 $ in Millions As of June 30, 2023 $1,400 Expect to issue securities with $300–400 million of equity content: $400 – In
Slide 17: CPUC cost of capital mechanism adjusts ROE
CPUC cost of capital mechanism adjusts ROE; also resets costs of debt and preferred if triggered CPUC Cost of Capital Adjustment Mechanism (CCM) ROE adjustment based on 12-month Moody’s Baa Utility Bond Index Rate (%), as of July 19, 2023 average of Moody’s Baa utility bond rates, measured from Oct.
Slide 18: SCE's operational excellence efforts are producing O&M savings
SCE’s operational excellence efforts are producing O&M savings for its customers ~$160 ~$55 ~$50 million million million Over GRC Over GRC annually cycle1 cycle1 Insurance: Work Planning: Procurement: Wildfire Self-Insurance Program Transformed Inspection Process Finding Ways to Buy Better – Expande
Slide 19: EIX expects to continue 5-7% core EPS growth for 2025-2028
EIX expects to continue 5–7% core EPS growth for 2025–20281 Core driver for earnings trajectory is SCE’s strong rate Achievable EPS growth for 2028 Core Earnings per Share Guidance1 1 base growth, driven by investing in the reliability, resilience, and readiness of the grid $6.60–7.00 5–7% 2025–2028
Slide 20: EIX offers double-digit total return potential
EIX offers double-digit total return potential 5–7% core EPS CAGR1 Underpinned by strong rate base growth of ~6–8% 2021–2025 and 2025–2028 $38–43 billion 2023–2028 capital program ~4% 19 consecutive years of dividend growth current dividend yield2 Target dividend payout of 45–55% of SCE core earning
Slide 21: Additional Information
ADDITIONAL INFORMATION
Slide 22: Year-to-Date Earnings Summary
Year-to-Date Earnings Summary YTD 2023 YTD 2022 Variance Key SCE EPS Drivers2 Lower revenue3,4 $ (0.03) Basic Earnings Per Share (EPS) GRC escalation 0.39 CPUC revenue - Other (0.52) SCE $ 2.06 $ 1.18 $ 0.88 FERC and other operating revenue 0.10 EIX Parent & Other (0.33) (0.33) — Lower O&M4 0.58 Wil
Slide 23: Over 85% of SCE's capital investments are in its distribution grid
Over 85% of SCE’s capital investments are in its distribution grid and essential to reliability, resiliency, and readiness objectives SCE forecasts investing $38–43 billion from 2023 to 2028 to support SCE’s wildfire mitigation strategy and clean energy transformation in California Percentage of 202
Slide 24: Gap between 2023 rate base and core EPS growth driven by interest on debt
Gap between 2023 rate base and core EPS growth largely driven by interest on debt for wildfire claims payments1 Earnings from strong 8.5% 2023 rate base growth offset by higher interest expense 2022 Core EPS vs. 2023 Core EPS Guidance at Midpoint of $4.55–4.85 Range1 +6.7% +1.5% 0.35 0.15 (0.19) 4.9
Slide 25: EIX reaffirms 5-7% 2021-2025 EPS growth rate target
EIX reaffirms 5–7% 2021–2025 EPS growth rate target, which would result in 2025 EPS of $5.50–5.901 Pursuing opportunities to deliver 5–7% growth rate1 2025 Core Earnings per Share Component Ranges2 Component Modeling Considerations Rate Base EPS3 • CPUC ROE of 10.05% and FERC ROE 10.3% (based on cap
Slide 26: Key 2028 Earnings Sensitivities
Key 2028 Earnings Sensitivities Sensitivity Variable (“Per year” amounts refer to 2025–2028) 2028 EPS1 Capex & Rate Base $100 million/year of capex 5¢ Rate Base AFUDC Annual capex of 1¢ (~45¢/share) $200 million Requested ~$400 million increase If requested increase +15–35¢ in depreciation in 2025 G
Slide 27: Edison's near-term debt maturities are manageable
Edison’s near-term debt maturities are manageable Currently Outstanding Debt Maturities (2023–2028)1 $ in Millions, as of June 30, 2023 2023 2024 2025 2026 2027 2028 Variable Rate (SOFR+) SCE: Wildfire Claims – 1,000 – – – – Total Variable Rate – 1,000 – – – – Fixed Rate SCE: Operational 735 – 900 –
Slide 28: SCE continues to fund wildfire claims payments with debt
SCE continues to fund wildfire claims payments with debt Wildfire Claims Payment-Related Debt Issuances Interest expense not currently recoverable in rates, $ in Millions except percentages, as of June 30, 2023 however, will be included in 2017/2018 Wildfire/ Series Principal Due Rate Mudslide Event
Slide 29: Earnings Non-GAAP Reconciliations
Earnings Non-GAAP Reconciliations Reconciliation of EIX GAAP Earnings to EIX Core Earnings Earnings (Losses) Attributable to Edison International, $ in Millions Q2 2023 Q2 2022 YTD 2023 YTD 2022 SCE $ 420 $ 302 $ 790 $ 449 EIX Parent & Other (66) (61) (126) (124) Basic Earnings $ 354 $ 241 $ 664 $ 3
Slide 30: EIX Core EPS Non-GAAP Reconciliations
EIX Core EPS Non-GAAP Reconciliations Reconciliation of EIX Basic Earnings Per Share to EIX Core Earnings Per Share EPS Attributable to Edison International1 Q2 2023 Q2 2022 YTD 2023 YTD 2022 Basic EPS $ 0.92 $ 0.63 $ 1.73 $ 0.85 Non-Core Items SCE Wildfire Insurance Fund expense (0.14) (0.14) (0.28
Slide 31: Earnings Per Share Non-GAAP Reconciliations
Earnings Per Share Non-GAAP Reconciliations Reconciliation of EIX Basic Earnings Per Share Guidance to EIX Core Earnings Per Share Guidance 2023 EPS Attributable to Edison International Low High Basic EIX EPS $4.18 $4.48 Total Non-Core Items1 (0.37) (0.37) Core EIX EPS $4.55 $4.85 1. Non-core items
Slide 32: Use of Non-GAAP Financial Measures
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 (losses) internally for financial planning and for analysis of performance. Core earnings (losses) are