Edison International · NYSE:EIX
Edison International — Investor Presentation (September 2013)
48 slides from Edison International's investor presentation, Sep 23, 2013
Slide 1: Revised Business Update September 2013
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 0 Revised Business Update September 2013
Slide 2: Forward-Looking Statements
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 1 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 (SON
Slide 3: SCE Highlights
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 2 • One of the nation’s largest electric utilities Nearly 14 million residents in service territory Approximately 5 million customer accounts 50,000 square-mile service area • Significant infrastructure inv
Slide 4: SCE Decoupled Regulatory Model
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 3 SCE Decoupled Regulatory Model Decoupling of Regulated Revenues from Sales Major Balancing Accounts • Fuel • Purchased power • Energy efficiency • Pension-related contributions Advanced Long-Term Procurement Pl
Slide 5: SCE Customer and Revenue Profile
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 4 SCE Customer and Revenue Profile 2012 Sales by Class of Service 2012 Revenue Requirement by Source Note: Other CPUC includes items such as energy efficiency, SONGS steam generator replacement, Solar PV, SmartCo
Slide 6: SCE Customer Demand Trends
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 5 Kilowatt-Hour Sales (millions of kWh) Residential Commercial Industrial Public authorities Agricultural and other Resale Total Kilowatt-Hour Sales Customers Residential Commercial Industrial Public authorities
Slide 7: SCE Operational Excellence Framework
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 6 SCE Operational Excellence Framework 2013 SCE GOALS STRATEGIC OBJECTIVES DART INJURY RATE GENERATION RELIABILITY INDEX J.D. POWER CUSTOMER SAT* SAFETY CUSTOMER SERVICE EXCELLENCE & RELIABILITY AFFORDABILITY VIS
Slide 8: SCE 2015 CPUC General Rate Case
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 7 SCE 2015 CPUC General Rate Case • Notice of Intent (NOI) submitted to the CPUC’s Division of Ratepayer Advocates (DRA) on July 15, 2013 • Request sets base revenue requirement for 2015 – 2017 Includes operati
Slide 9: CPUC Cost of Capital
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 8 3 4 5 6 7 Oct-12 Oct-13 Oct-14 Oct-15 Ra te (% ) CPUC Cost of Capital • 10.45% Return on Equity (ROE) and adjustment mechanism approved through 2015 ROE adjustment based on 12-month average of Moody’s Baa uti
Slide 10: 2012 FERC Formula Rate Settlement
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 9 2012 FERC Formula Rate Settlement • August 2011 – FERC accepted SCE’s formula rates subject to refund and settlement • August 2013 – SCE filed settlement for rates retroactive to January 1, 2012 and interim rat
Slide 11: SCE Historical Capital Expenditures
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 10 $2.2 $2.4 $2.9 $3.8 $3.9 $3.9 2007 2008 2009 2010 2011 2012 SCE Historical Capital Expenditures ($ billions)
Slide 12: SCE Historical Rate Base and Core Earnings
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 11 $12.5 $13.1 $15.0 $16.8 $18.8 $21.0 2007 2008 2009 2010 2011 2012 Rate Base Core Earnings 11% 15% 2007 – 2012 CAGR Note: Recorded rate base, year-end basis. See Non-GAAP Reconciliations and Use of Non-GAAP Fin
Slide 13: Capital Expenditures Forecast
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 12 Note: 2013-17 forecasted capital spending subject to timely receipt of permitting, licensing, and regulatory approvals. Forecast range reflects an average 12% variability based on the average level of historic
Slide 14: Rate Base Forecast
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 13 ($ billions) Rate Base Forecast Note: Weighted-average year basis, including: (1) forecasted 2013-2014 FERC and 2015-2017 CPUC rate base requests; (2) consolidation of CWIP projects; and (3) estimated impact o
Slide 15: SCE Large Transmission Projects
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 14 SCE Large Transmission Projects Project Name Total Project Costs1 In Service Date FERC Incentives 2013 – 2017 Forecast Status2 Tehachapi 1-11 $2,860 2016 125 bpsROE adder $917 • Total project costs and in serv
Slide 16: SCE Distribution Program
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 15 SCE Distribution Program • Average equipment age beginning to approach mean time to failure making it critical to achieve equilibrium replacement rates • 2015 GRC request represents ~120% increase in infrastru
Slide 17: EIX Dividend Growth
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 16 $1.16 $1.22 $1.24 $1.26 $1.28 $1.30 $1.35 $2.07 $2.25 $2.68 $3.01 $3.33 $4.10 $3.50 $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 2007 2008 2009 2010 2011 2012 2013 SCE Core EPS EIX Dividend Paid (39%) EIX Dividend Grow
Slide 18: 2013 Core and Basic Earnings Guidance
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 17 2013 Core and Basic Earnings Guidance Note: See Use of Non-GAAP Financial Measures in Appendix SONGS Guidance: • $(0.15) per share from removal of $1.2 billion rate base effective in June pending regulatory tr
Slide 19: Creating Shareholder Value
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 18 Creating Shareholder Value Resolve Uncertainties Create Sustainable Earnings and Dividend Growth Position for Transformative Sector Change • SCE 2012 GRC • SCE 2013 cost of capital • SCE 2012 FERC formula rate
Slide 20: EME Bankruptcy
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 19 EME Bankruptcy • December 2012, EME and certain of its wholly-owned subsidiaries filed voluntary petitions for Chapter 11 bankruptcy • EIX recorded full impairment of EME in 2012 and no longer consolidates EME
Slide 21: Updates Since Our Last Presentation
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 20 Updates Since Our Last Presentation • EME Bankruptcy – new slide (p. 19) • SONGS Regulatory – CPUC OII Testimony (p. 25) • Legislative Rate Reform – AB327 – new slide (p. 34) • SCE Energy Efficiency Programs (
Slide 22: Appendix – SONGS
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 21 Appendix – SONGS
Slide 23: SONGS – Supplemental Data
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 22 SONGS – Supplemental Data 1 Includes direct operations and maintenance costs, depreciation, and return on investment 2 In 2005 the CPUC authorized expenditures of approximately $525 million ($665 million based
Slide 24: SONGS – Asset Impairment
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 23 SONGS – Asset Impairment (As of May 31, 2013 – $ millions) Exposure to refunds for amounts collected from customers Exposure to recovery of net investment from future rates Regulatory Asset1 Net Investment $2,
Slide 25: SONGS Regulatory – CPUC OII Phases
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 24 SONGS Regulatory – CPUC OII Phases Next Steps Phase 1A1 – Establish methodology to determine market-related costs attributable to the SONGS outages Phase 1A August 28: briefs September 9: reply briefs Phase 1B
Slide 26: SONGS Regulatory – CPUC OII Testimony
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 25 SONGS Regulatory – CPUC OII Testimony • August 2013, SCE Phase 2 testimony requested return on 2013 investment1: $425 million used and useful, materials and supplies – 7.90% through December 2017 (currently
Slide 27: SONGS – Recovery Examples
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 26 SONGS – Recovery Examples Docket# Owner & Project Return of Investment Partial Return on Investment D.92-08-036 SCE – SONGS 1 generating plant D.12-10-051 SCE – GRC Legacy Meters D.11-05-018 PG&E – GRC
Slide 28: SONGS Third-Party Recovery – MHI Warranty
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 27 SONGS Third-Party Recovery – MHI Warranty Warranty Summary Notice of Dispute • 20-year warranty: Repair or replace defective items Specified damages for certain repairs $138 million liability limit, excl
Slide 29: SONGS Third-Party Recovery – NEIL Insurance
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 28 SONGS Third-Party Recovery – NEIL Insurance • Property damage and outage insurance through Nuclear Electric Insurance Limited (“NEIL”) Property Damage Policies – $2.5 million deductible; $2.75 billion liabil
Slide 30: SONGS – Decommissioning
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 29 SONGS – Decommissioning Decommissioning Trusts • Decommissioning costs recovered in rates approved by CPUC in triennial proceeding • December 2012, A.12-12-013 Joint Filing with SDG&E submitted • July 2013, up
Slide 31: SCE System Reliability
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 30 Coastal Power Plants Local Reliability Areas (generalized) California Transmission System (partial, generalized) CA Once Through Cooling Policy – Legend SCE System Reliability • Short-term SONGS closure soluti
Slide 32: Appendix – Regulatory
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 31 Appendix – Regulatory
Slide 33: SCE Rates and Bills Comparison
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 32 12.3 16.1 US Average SCE 31% Higher 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 sou
Slide 34: Distributed Generation
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 33 Distributed Generation • Distributed generation (DG) will be a key part of the future generation mix due to: Rapidly declining cost of solar photovoltaic panels Challenges to building new generation and tr
Slide 35: Legislative Rate Reform – AB 327
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 34 Legislative Rate Reform – AB 327 September 2013, Assembly Bill 327 (Perea) provides the following changes to rate structure • Rate Reform Removes tier restrictions on residential rates Allows fixed charge
Slide 36: SCE Residential Net Metering Rate Structure
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 35 SCE Residential Net Metering Rate Structure 8.2¢ 28.3¢20.1¢ 0 5 10 15 20 25 30 ¢/ kW h Solar Subsidies1,2 Generation Rate Subsidy Paid by Other Ratepayers Equivalent Solar Rate 1 Based on average home usage of
Slide 37: California Climate Change Policy
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 36 California Climate Change Policy • Assembly Bill 32 (2006) – reduces State greenhouse gas (GHG) emissions to 1990 levels by 2020 (~16% reduction) • Cap and trade program basics: State-wide cap in 2013 – decr
Slide 38: California Renewables Policy
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 37 California Renewables Policy • On April 12, 2011, Governor Brown signed SB X 1 2, which codifies a 33% Renewables Portfolio Standard (RPS) for California by 2020 Allows use of Renewable Energy Credits (RECs)
Slide 39: 2012 SCE Energy Portfolio
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 38 2012 SCE Energy Portfolio1 1 CEC Power Source Disclosure Program 2 Accounts for non-technology specific energy procured from market More than half of SCE’s energy portfolio consists of low-carbon resources inc
Slide 40: SCE Energy Efficiency Programs
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 39 SCE Energy Efficiency Programs 1.7 1.6 0.9 0.9 2011 2012 2013 2014 Energy efficiency programs updated for 2013 – 2014 • SCE is a national leader 2012 energy savings = 1.8% of retail sales1 • 2013 budget of $
Slide 41: Appendix – Financial
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 40 Appendix – Financial
Slide 42: Second Quarter Earnings Summary
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 41 Second Quarter Earnings Summary Q2 2013 Q2 2012 Variance Core EPS1 SCE $0.84 $0.59 $0.25 EIX Parent & Other (0.05) (0.03) (0.02) Core EPS1 $0.79 $0.56 $0.23 Non-Core Items SCE $(1.12) $— $(1.12) EIX Parent & O
Slide 43: Year-to-Date Earnings Summary
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 42 Year-to-Date Earnings Summary YTD 2013 YTD 2012 Variance Core EPS1 SCE $1.63 $1.14 $0.49 EIX Parent & Other (0.06) (0.04) (0.02) Core EPS1 $1.57 $1.10 $0.47 Non-Core Items SCE $(1.12) $— $(1.12) EIX Parent & O
Slide 44: SCE Results of Operations
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 43 $6,682 — 2,518 1,562 296 32 4,408 2,274 (400) 1,874 214 1,660 91 $1,569 $5,169 4,139 1,026 — (1) — 5,164 5 (5) — — — — $— $6,257 — 2,423 1,426 285 — 4,134 2,123 (378) 1,745 601 1,144 59 $1,085 $4,320 3,356 964
Slide 45: Earnings Per Share Attributable to SCE
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 44 Earnings Per Share Attributable to SCE Core EPS Non-Core Items Tax settlement Health care legislation Regulatory and tax items Total Non-Core Items Basic EPS SCE Core EPS Non-GAAP Reconciliations Note: See Use
Slide 46: Non-GAAP Reconciliations
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 45 Non-GAAP Reconciliations ($ millions) Note: See Use of Non-GAAP Financial Measures. EME’s financial results are reported as non-core for all periods Q22012 $191 (8) $183 $– – (109) (109) $74 Q22013 $274 (15) $
Slide 47: Quarterly Earnings Per Share Highlights
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 46 Quarterly Earnings Per Share Highlights Q1 Q2 Q3 Q4 2011 SCE $0.68 $0.65 $1.25 $0.76 $3.33 EIX – Parent and Other (0.03) (0.02) (0.01) 0.03 (0.02) Core EPS $0.65 $0.63 $1.24 $0.79 $3.31 Non-core items 0.02 0.0
Slide 48: Use of Non-GAAP Financial Measures
Exhibit 99.1 EDISON INTERNATIONAL® Leading the Way in Electricity SM September 23, 2013 47 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 analy
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