Edison International · NYSE:EIX
Edison International — Corporate Update (June 2013)
42 slides from Edison International's corporate update, Jun 7, 2013
Slide 1: Business Update
Leading the Way in Electricity SM Business Update June 2013 June 7, 2013 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), EME bankruptcy, and othe
Slide 3: SCE Highlights
Leading the Way in Electricity SM SCE Highlights • 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 Over 103,000 miles of distribution and transmission lines • 7 – 8% proj
Slide 4: Decoupled Regulatory Model
Leading the Way in Electricity SM SCE Decoupled Regulatory Model Regulatory Model Elements Key Benefits Decoupling of Regulated • SCE earnings are not affected by changes in retail Revenues from Sales electricity sales • Differences between amounts collected and authorized levels are either billed o
Slide 5: Historical Capital Expenditures
Leading the Way in Electricity SM SCE Historical Capital Expenditures ($ billions) $3.8 $3.9 $3.9 $2.9 $2.4 $2.2 2007 2008 2009 2010 2011 2012 June 7, 2013 4 EDISON INTERNATIONAL®
Slide 6: Historical Rate Base and Core Earnings
Leading the Way in Electricity SM SCE Historical Rate Base and Core Earnings ($ billions) 2007 – 2012 CAGR Rate Base 11% $21.0 Core Earnings 15% $18.8 $16.8 $15.0 $12.5 $13.1 2007 2008 2009 2010 2011 2012 Core Earnings $2.07 $2.25 $2.68 $3.01 $3.33 $4.10 Note: Recorded rate base, year-end basis. See
Slide 7: Capital Expenditures Forecast
Leading the Way in Electricity SM Capital Expenditures Forecast ($ billions) $4.2 2013 – 14 Forecast $3.9 $4.0 by Classification $ % Generation 1.0 12 Transmission 2.2 27 Distribution 5.0 61 Forecast pending GRC Notice of Intent filing Q3 2013 Total 8.2 100 By Jurisdiction 2012 2013 2014 2015 2016 2
Slide 8: Rate Base Forecast
Leading the Way in Electricity SM Rate Base Forecast ($ billions) 7 – 8% Projected Rate Base $23.6 Growth from 2013 – 14 $21.8 • Driven by infrastructure replacement, reliability Smart investments, and public Grid policy requirements $22.8 Forecast pending GRC $21.4 Notice of Intent filing Q3 2013 •
Slide 9: FERC Return on Equity
Leading the Way in Electricity SM FERC Return on Equity • August 2011 – FERC accepted SCE’s formula rates effective January 1, 2012 FERC • Rates remain subject to refund and settlement Formula • Next settlement conference May 2013 Rates • September 2012 – Formula Rate update filed for 2013; $178 mil
Slide 10: Cost of Capital Mechanism
Leading the Way in Electricity SM Cost of Capital Mechanism Proposed 9 Moody’s Baa Utility Index Spot Rate Moving Average (10/1/2012 – 3/31/2013 = 4.60%) 8 7.63% 100 basis point +/- Deadband 7 Rate (%) Prior Starting Index = 6.26% 6.05% 6 5.75% 5.00% Current Starting Index = 5.00% 5 4 3 Sep-08 Sep-1
Slide 11: Key Regulatory Events Calendar
Leading the Way in Electricity SM SCE Key Regulatory Events Calendar Q1 2013 Q2 2013 Q3 2013 Q4 2013 2014 SONGS OII Phase 1 (I.12-10-013) Opening Evidentiary Proposed Briefs Hearings Decision (2/25/13) (5/13-17/13) (July) 2012 FERC Formula Rate Filing (ER11-3697) Settlement Settlement Conference Con
Slide 12: 2013 Core and Basic Earnings Guidance
Leading the Way in Electricity SM 2013 Core and Basic Earnings Guidance SONGS Guidance Changes: • $(0.15) per share from removal of $1.2 billion rate base effective in June pending regulatory treatment of return on investment 2013 Earnings 2013 Earnings Guidance as of Guidance as of • $(0.03) per sh
Slide 13: EIX Dividend Growth
Leading the Way in Electricity SM EIX Dividend Growth 2013 2007 – 2012 CAGR $1.35 SCE Core EPS 15% $4.10 2012 EIX Dividend 2% $1.30 (32%) $3.33 2011 $1.28 (38%) • EIX targets paying out 45 – 55% of SCE earnings 2010 $3.01 • Dividend not growing at same rate as $1.26 (42%) SCE core earnings and is be
Slide 14: Creating Shareholder Value: What We've Done and What Remains
Leading the Way in Electricity SM Creating Shareholder Value Create Sustainable Position for Resolve Earnings and Transformative Uncertainties Dividend Growth Sector Change What We’ve Done • EME bankruptcy filing • 5-year rate base CAGR of 11% • Leadership and development • SCE 2012 GRC (2007 – 2012
Slide 15: Appendix
Leading the Way in Electricity SM Appendix June 7, 2013 14 EDISON INTERNATIONAL®
Slide 16: What's New Since Our Last Presentation
Leading the Way in Electricity SM What’s New Since Our Last Presentation • 2013 Core and Basic Earnings Guidance (p. 11) • SONGS Estimated Impairment Range (p. 17) • SONGS Decommissioning Trust (p. 18) June 7, 2013 15 EDISON INTERNATIONAL®
Slide 17: SONGS – Supplemental Data
Leading the Way in Electricity SM SONGS – Supplemental Data ($ millions, as of March 31, 2013) Outage Impacts (SCE share) Total Inspection & Repair Costs – Incurred $109 Net Market Costs – CPUC Basis1 $444 Regulatory (SCE share) Steam Generator Replacement (SGRP) – Approved2 $665 SGRP – Incurred $60
Slide 18: SONGS Estimated Impairment Range
Leading the Way in Electricity SM SONGS Estimated Impairment Range ($ millions) SONGS Impairment Exposures Total SONGS Net Investment $2,101 Since Since January 1, 2012 November 1, 2012 Authorized Revenues Through 3/31/13 $728 $185 Estimated for April-May 85 85 Total Authorized Revenues $813 $270 Ne
Slide 19: SONGS Decommissioning Trust
Leading the Way in Electricity SM SONGS Decommissioning Trust ($ millions as of March 31, 2013) Unit 2 Unit 3 Combined Fund Assets $1,405 $1,600 $3,005 Fund Assets (after-tax) 1,286 1,452 2,738 2022 Decommissioning Costs – 2013$1 1,458 1,597 3,055 Funded Ratio 88% 91% 90% Target Funding Completion D
Slide 20: SONGS – Warranty and Insurance
Leading the Way in Electricity SM SONGS – Warranty and Insurance MHI Warranty • 20-year warranty with Mitsubishi Heavy Industries Repair or replace defective items Specified damages for certain repairs $138 million liability limit and excludes consequential damages (e.g., replacement power)
Slide 21: Electric Power System Assets
Leading the Way in Electricity SM SCE Electric Power System Assets Sub - Transmission Transmission Distribution Distribution Generation transmission Customers 500kV 230kV Substation Substation 16kV 12kV 4kV 115kV 66kV Transmission Distribution 60 Substations 810 Substations 4,587 Circuits1 1,193 Cir
Slide 22: Large Transmission Projects
Leading the Way in Electricity SM SCE Large Transmission Projects ($ millions) Project Total Project In Service FERC 2013 – 2014 Name Costs Date Incentives Forecast Status • Cost estimates for potential Chino 125 bps Hills undergrounding filed Q1 2013 Tehachapi 1-11 $2,500 2015 $455 ROE adder • Prop
Slide 23: Distribution Program
Leading the Way in Electricity SM 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 infrastructure replacement programs 2013 – 2014 Ap
Slide 24: California Renewables Policy
Leading the Way in Electricity SM 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) for up to 25% of target with decreasing percentages over
Slide 25: Renewable Portfolio – Retail Sales
Leading the Way in Electricity SM SCE Renewable Portfolio – Retail Sales Renewable Resources Actual 2012 Renewable Resources: (billion kWh) 19.9% of SCE’s portfolio 25 Small Hydro 4% Solar 7% 67% Increase Biomass 4% 15 Geothermal 44% Wind 41% 2012 2020 Actual 33% RPS Deliveries Goal In order to meet
Slide 26: 2012 SCE Energy Portfolio – Generation
Leading the Way in Electricity SM 2012 SCE Energy Portfolio – Generation 1 (Billion kWh – Generation Level) 82.0 34.0 Market Source2 Coal Natural Gas Nuclear Large Hydro Low Carbon Wind 52% 6.0 Solar 41% Small Hydro 17.5 7% Geothermal Biomass & Waste Carbon Neutral 30% 5.8 22% Renewables3 3.5 7% 6.2
Slide 27: California Climate Change Policy
Leading the Way in Electricity SM California Climate Change Policy • Assembly Bill 32 (2006) – reduces State GHG emissions to 1990 levels by 2020 (~16% reduction) • Cap and trade program basics: AB32 Emissions State-wide cap in 2013 – decreases over time Reduction Programs Compliance met through
Slide 28: California Once-Through Cooling Policy
Leading the Way in Electricity SM California Once-Through Cooling Policy Area MW Name & Permit Holder MW CAISO 18,505 SCE TERRITORY LADWP 2,654 San Onofre – SCE 2,150 Total 21,159 Alamitos – AES 2,010 Redondo Beach – AES 1,343 Huntington Beach – AES 904 Morro Bay – DYN 673 El Segundo – NRG 670 Manda
Slide 29: Energy Efficiency Programs
Leading the Way in Electricity SM SCE Energy Efficiency Programs Energy efficiency programs updated for 2013 – 2014 Annual kWh Savings (billions) • SCE is a national leader 2012 energy savings = 1.8% of retail sales1 1.9 1.7 1.7 • 2013 budget of $347 million2 – all balancing account 1.6 based • Ta
Slide 30: Rates and Bills Comparison
Leading the Way in Electricity SM SCE Rates and Bills Comparison 2012 Average Residential Rates Key Factors (¢/kWh) 15.9¢ • SCE’s residential rates are above national average due, in part, to a cleaner fuel mix – 12.3 ¢ cost for renewables are higher than high 29% Higher carbon sources • Average mon
Slide 31: Rate Design
Leading the Way in Electricity SM SCE Rate Design 2012 Sales by Class of Service 2012 Revenue Requirement by Source Total Sales (millions kWh): 88,215 Agricultural, FERC Resale & Other Other 7% 4% Public CPUC Residential Authorities 12% 35% 6% Fuel & Industrial Purchased 9% Power 33% CPUC GRC Base R
Slide 32: Residential Net Metering Rate Structure
Leading the Way in Electricity SM SCE Residential Net Metering Rate Structure 2013 SCE Residential Rate Structure1,2,3 Solar Subsidies4,5 35 30 31.1¢ 18.5¢ 26.7¢ 30 25 Tier 4 27.1¢ 25 20 Tier 3 20 ¢/kWh ¢/kWh 16.0¢ 15 15 12.8¢ Tier 2 10 10 8.2¢ Tier 1 5 5 0 0 0 200 400 600 800 1,000 1,200 1,400 Gene
Slide 33: Customer Demand Trends
Leading the Way in Electricity SM SCE Customer Demand Trends Kilowatt-Hour Sales (millions of kWh) 2012 2011 2010 2009 2008 Residential 30,563 29,631 29,034 30,063 30,745 Commercial 40,541 39,622 39,318 40,076 41,978 Industrial 8,504 8,490 8,507 8,524 9,658 Public authorities 5,196 5,206 5,336 5,687
Slide 34: Operational Excellence Framework
Leading the Way in Electricity SM SCE Operational Excellence Framework VISION MISSION VALUES To be an industry pacesetter Safely delivering reliable, affordable Integrity, Excellence, Respect, providing safe, reliable, and electricity to our customers. Continuous Improvement, affordable electric ser
Slide 35: Results of Operations
Leading the Way in Electricity SM SCE Results of Operations ($ millions) Three Months Ended Mar 31, 2013 Three Months Ended Mar 31, 2012 Utility Utility Utility Cost- Utility Cost- Earning Recovery Total Earning Recovery Total Activities Activities Consolidated Activities Activities Consolidated Ope
Slide 36: 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 2007 2008 2009 2010 2011 2012 CAGR Core EPS $2.07 $2.25 $2.68 $3.01 $3.33 $4.10 15% Non-Core Items Tax settleme
Slide 37: Non-GAAP Reconciliations
Leading the Way in Electricity SM Non-GAAP Reconciliations ($ millions) Reconciliation of EIX Core Earnings to EIX GAAP Earnings Earnings Attributable to Edison International Q1 2013 Q1 2012 Core Earnings SCE $256 $182 EIX Parent & Other (4) (5) Core Earnings $252 $177 Non-Core Items EIX Parent & Ot
Slide 38: First Quarter Earnings Summary
Leading the Way in Electricity SM First Quarter Earnings Summary Q1 2013 Q1 2012 Variance SCE Key Core Earnings Drivers Core EPS Revenue $0.13 SCE $0.78 $0.56 $0.22 Impact of delay in 2012 GRC 0.15 EIX Parent & Other (0.01) (0.02) 0.01 SONGS refueling revenue (0.07) Higher revenue 0.05 Core EPS $0.7
Slide 39: Full-Year Earnings Summary
Leading the Way in Electricity SM Full-Year Earnings Summary 2012 2011 Variance SCE Key Core Earnings Drivers Core EPS Higher operating revenue $0.63 SCE $4.10 $3.33 $0.77 Rate base growth EIX Parent & Other (0.18) (0.02) (0.16) Operating revenue O&M reductions 0.21 Core EPS $3.92 $3.31 $0.61 Severa
Slide 40: Quarterly Earnings Per Share Highlights
Leading the Way in Electricity SM Quarterly Earnings Per Share Highlights 2011 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 0.01 (0.03) (0.11) (0.11) EIX Parent and Other – Discon
Slide 41: EIX Transaction Support Agreement Summary
Leading the Way in Electricity SM EIX Transaction Support Agreement Summary The agreement between EIX, EME, and a majority of EME bondholders defines the terms under which EIX is to transition its ownership position in EME at the end of the bankruptcy process Term Description Equity • Creditors get
Slide 42: 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