Edison International · NYSE:EIX
Edison International — Q3 2021 Earnings Presentation
23 slides from Edison International's earnings presentation, Nov 2, 2021
Slide 1: Third Quarter 2021 Financial Results
Third Quarter 2021 Financial Results November 2, 2021
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: Edison International Third Quarter Update
Edison International Third Quarter Update Q3 2021 core EPS driven by higher revenue from GAAP EPS: ($0.90) GRC track 1 decision Core EPS1: $1.69 $4.42–4.52 EIX narrows 2021 EPS guidance 2021 Core EPS1 SCE updates best estimate of total potential Best estimate revised losses associated with the 2017/
Slide 4: 2017/2018 Wildfire/Mudslide Events Update
2017/2018 Wildfire/Mudslide Events Update: Less than 30% of best estimate remains; SCE resolves enforcement action SCE continues to make substantial progress resolving claims Claims settled in most recent Remaining expected potential losses, $ in Billions quarter (3Q21): ~$485 million 7.5 Bellwether
Slide 5: SCE's execution of its wildfire mitigation strategy is reducing risk
SCE’s execution of its wildfire mitigation strategy is reducing risk of wildfires associated with utility infrastructure 2021 Completed 2021 Completed Completed/Target Since 2018 Completed/Target 113% Since 2018 375/375 100% 1,430+ Distribution 185,000/163,000 completed 769,300+ weather stations ins
Slide 6: SCE is making meaningful progress in mitigating wildfire risk
SCE is making meaningful progress in mitigating wildfire risk for its customers Covered Expanded High fire risk Today’s PSPS use conductor has vegetation inspection would have reduced faults, management program has prevented majority which could lead and tree removal reduced of damage from to igniti
Slide 7: Wildfire mitigation and PSPS have reduced probability of catastrophic losses
SCE estimates its wildfire mitigation and PSPS have reduced probability of losses from catastrophic wildfires by ~55-65%1,2 Methodology Substantial risk reduction due to SCE’s mitigation measures RMS, a leading provider of Pre- Estimated climate and natural disaster 2018 Now Risk Reduction risk mode
Slide 8: Third Quarter Earnings Summary
Third Quarter Earnings Summary Q3 2021 Q3 2020 Variance Key SCE EPS Drivers2 Higher revenue3 $ 0.55 Basic Earnings Per Share (EPS) CPUC revenue - 2021 GRC authorized 0.50 4 SCE $ (0.75) $ (0.70) $ (0.05) CPUC revenue - Other 0.04 FERC and other operating revenue 0.01 EIX Parent & Other (0.15) (0.06)
Slide 9: SCE has significant capital expenditure opportunities
SCE has significant capital expenditure opportunities driven by investments in the safety and reliability of the grid Capital deployment expected to increase beyond the current 2021 GRC track 1 supports $5.3 GRC cycle and will be proposed in future applications billion of annual capital spending Cap
Slide 10: 2021 GRC track 1 decision provides rate base visibility through 2023
2021 GRC track 1 decision provides rate base visibility through 2023; future applications expected to extend growth From a 2021 base, rate base growth forecast of 7–9% 2021 GRC track 1 final decision through 2025, reflecting future incremental investment supports solid rate base growth Rate Base1 $
Slide 11: Cash flow from memo account recovery and securitization strengthens balance sheet
Cash flow from memo account recovery and securitization strengthens our balance sheet and credit metrics GRC, Wildfire-related, and Wildfire Insurance Applications $ in Millions Approved Applications Balance @ Recovery Rate Recovery by Year Application Sept. 30 Through Q4 ’21 2022 2023 2024 GRC Tr
Slide 12: SCE's requested 2022 cost of capital would result in ROE of 10.53%
SCE’s requested 2022 cost of capital would result in an ROE of 10.53%, while keeping customer rates unchanged On August 23, SCE filed request to set CPUC Authorized Cost of Capital and 2022 Request CPUC cost of capital for 2022–2024 and Capital 2021 2022 2022 Alt. to reset cost of capital mechanism
Slide 13: EIX narrows 2021 core EPS guidance to $4.42-4.52
EIX narrows 2021 core EPS guidance to $4.42–4.52 EIX 2021 Core Earnings Per Share Guidance Range Key components of variances Building from SCE Rate Base EPS from SCE rate base EPS1 YTD 2021 SCE Operational Variances Recorded1 Guidance1 Financial, operating, and 0.34–0.42 other variances from auth. S
Slide 14: 2021 Guidance Assumptions and Preliminary 2022 Considerations
2021 EIX Core Earnings Guidance Assumptions and Preliminary 2022 Considerations 2021 2022 Assumption Preliminary Considerations CPUC Rate Base ($ in Billions) $28.1 Rate base growth as projected Return on Equity (ROE) 10.30% 2022 ROE subject to CPUC decision on SCE’s Equity in Capital Structure 52.0
Slide 15: EIX expects to achieve a 5-7% EPS CAGR from 2021 to 2025
EIX expects to achieve a 5–7% EPS CAGR1 from 2021 to 2025 5–7% Driven by rate base Rate base and dividend growth 2021–2025 expected to be financed with: growth of ~7–9% Core EPS CAGR 1 • SCE cash from operations & financings • Parent debt issuances ~4%+ Target dividend • On average, up to $250 milli
Slide 16: Appendix
Appendix
Slide 17: SCE plans to securitize ~$1.6 billion of AB 1054 capex
SCE plans to securitize ~$1.6 billion of AB 1054 capex upon CPUC approval Steps Required to Issue Securitized Recovery Bonds $ in Millions Cost Recovery Financing Order Applica- Issue tion Proceeding/ AB 1054 Serve CPUC Serve CPUC Recovery # Category Capex1,2 Testimony Approval Testimony Approval Bo
Slide 18: SCE's 2021 General Rate Case will be approved in four tracks
SCE’s 2021 General Rate Case will be approved in four tracks over 2021–2023 Estimated timeline for 2021 General Rate Case tracks and milestones Opening CPUC SCE Intervenor SCE & Reply Proposed Testimony Testimony Rebuttal Briefs Decision Track 1: 2021–2023 GRC Revenue Requirement (Approved
Slide 19: Year-to-Date Earnings Summary
Year-to-Date Earnings Summary YTD YTD 2021 2020 Variance Key SCE EPS Drivers2 Higher revenue3 $ 0.72 Basic Earnings Per Share (EPS) CPUC revenue 0.63 FERC and other operating revenue 0.09 SCE $ 0.98 $ 0.90 $ 0.08 Lower O&M 0.59 EIX Parent & Other (0.36) (0.33) (0.03) Wildfire-related claims (0.01) H
Slide 20: 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 Q3 Q3 YTD YTD 2021 2020 2021 2020 SCE $ (284) $ (264) $ 371 $ 336 EIX Parent & Other (57) (24) (135) (123) Basic Earnings $ (341) $ (288) $
Slide 21: 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 International Q3 Q3 YTD YTD 2021 2020 2021 2020 Basic Earnings $ (0.90) $ (0.76) $ 0.62 $ 0.57 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Events claims a
Slide 22: 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 Guidance1 2021 EPS Attributable to Edison International Low High Basic EIX EPS2 $1.62 $1.72 Total Non-Core Items2 (2.80) (2.80) Core EIX EPS $4.42 $4.52 1. EPS is calcul
Slide 23: 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