Edison International · NYSE:EIX
Edison International — Investor Presentation (March 2005)
27 slides from Edison International's investor presentation, March 2005
Slide 1: Business Overview and Strategy Handout
Business Overview and Strategy Handout March, 2005
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking information. The words “expect,” “forecast,” “potential,” “projected,” “anticipated,” “predict,” “targeted,” and similar expressions identify forward-looking information that involves risks and uncertainties. Actual results or out
Slide 3: Edison International — Balanced Business Mix
Edison International — Balanced Business Mix • Strong utility • Stable and predictable operating in a large earnings and cash flow and rapidly growing • Significant long-term service territory earnings and cash flow Produces Produces growth from regulated investments • Unregulated • Further upside e
Slide 4: Edison International — Strategy
Edison International — Strategy Our strategy seeks to create a balance among • Balance sheet strength • Growth • Dividends We expect to produce total returns above peer averages 3
Slide 5: Edison International 2004 and 2005 EPS outlook
Edison International 2004 EPS 2005 EPS per October 2004 per October 2004 Outlook EPS 2004 Outlook • SCE $1.75 $1.80 $1.75 • MEHC 0.03 – 0.13(a) 0.14(a) 0.34 • EC 0.14 0.18 0.08 • EIX Holding Co. (0.23) (0.21) (0.03) Core EPS $1.69 - $1.79 $1.91 $2.14 Non-Core Items • SCE $0.48(b) $1.01(b) $0.11(d) •
Slide 6: Edison International — Balance Sheet Strength
Edison International — Balance Sheet Strength • SCE creditworthiness restored / dividends to EIX resumed – Capital structure rebalanced to 48%¹ equity – $1.7 billion of dividends 2003 – 2004 and regular quarterly dividends – Investment grade ratings by Moody's (Baa1) and S&P (BBB+) • Edison Capital
Slide 7: Balance Sheet Strength (cont'd)
Edison International — Balance Sheet Strength (cont’d) • $4.3 billion of non-utility debt paid down over the past three years¹ $Billion 2002 2003 2004 YTD 2005 Total EIX Holding Co. $0 $0.1 $1.5 $0 $1.6 MEHC $0.3 $0.6 $1.0 $0.4 $2.3 Edison Capital $0.3 $0 $0.1 $0 $0.4 Total $0.6 $0.7 $2.6 $0.4 $4.3
Slide 8: Edison International — Growth
Edison International — Growth • Given the hybrid system of electricity regulation in the U.S., EIX benefits from having both a utility and a competitive generator • Substantial growth in rate base anticipated at Southern California Edison through the remainder of the decade • Earnings improvements f
Slide 9: Edison International — Sources of Growth
Edison International — Sources of Growth MORE CERTAIN •• Reduction Reduction in in G&A G&A and and debt-service debt-service costs costs •• Utility Utility rate rate base base investments investments •• Investments Investments in in renewable renewable energy energy •• Recovery Recovery of of capaci
Slide 10: Southern California Edison — Regulatory Update
Southern California Edison — Regulatory Update • 2005 Cost of Capital decision – December 2004 – 11.4% return on equity – Recognized purchased power debt equivalence in capital structure • Long-Term procurement decision – December 2004 – Approved 2005 procurement and resource plan – Extension of 5%
Slide 11: Southern California Edison — Capital Investment
Southern California Edison — Capital Investment • $11.3 billion planned investments (2004-2009) – $7.6 billion distribution (67%) – $1.6 billion transmission (14%) – $2.1 billion generation (19%) • $1.9¹ billion invested in 2004 (on target to plan) – $1.6 billion forecasted expenditures in 2005 – 20
Slide 12: Southern California Edison Capital Expenditures and Rate Base
Southern California Edison Capital Expenditures Rate Base (Nominal $ in Billions) (Nominal $ in Billions) Actual¹ Forecast Actual Forecast $2.5 $16 2.2 14.2 $14 Generation 13.1 $2.0 Generation 1.9 1.9 1.9 Transm ission 12.3 1.8 $12 11.4 Transm ission Distribution2 Distribution 2 1.6 10.2 9.7 $10 9.1
Slide 13: Mission Energy Holding Company — Overview
Mission Energy Holding Company — Overview Before After Asset Profile Restructuring Restructuring ¹ • MWs 18,833 8,834 • Fuel Mix – Coal 9,035 MW / 48% 7,545 MW / 85% – Gas/Oil 6,530 MW / 34% 1,289 MW / 15% – Hydro 2,950 MW / 16% – Other 318 MW / 2% • Percent Merchant 72% 2 88% • Assets $12.1 billion
Slide 14: Mission Energy Holding Company — Restructuring
Mission Energy Holding Company — Restructuring • Successful execution of the Restructuring Plan, without contributions from EIX, substantially addresses MEHC’s survivability • Significant milestones include: – Refinanced Midwest Generation debt of $1.7 billion – Collins lease termination – approxima
Slide 15: Mission Energy Holding Company — Strategy
Mission Energy Holding Company — Strategy Reduce business and financial risk by improving financial strength, operating efficiency, and predictability of cash flow and earnings • Continually reduce leverage using cash flow from operations • Manage fuel supply, emissions, and environmental controls t
Slide 16: Mission Energy Holding Company – Value Drivers
Mission Energy Holding Company – Value Drivers Even without the international projects, MEHC core earnings are expected to increase in 2005 over 2004, and show significant double-digit compound annual growth in the longer term Earnings Drivers Estimates of Contribution (pre-tax earnings) COST REDUCT
Slide 17: Edison Capital
Edison Capital • Edison Capital – Focus on growing the existing Renewables portfolio – Resumed investment in 2004 closing $50 million of new projects • $27 million of affordable housing • $23¹ million of wind projects – New investment in 2005 is targeted at $180 million building to $250 million annu
Slide 18: Edison International — Dividend Policy
Edison International — Dividend Policy • Strong cash flow generation underpins ability to pay dividends • Dividend philosophy is centered around: – Maintaining a strong balance sheet – Balancing dividends with the cash needed to fund growth – Maintaining a competitive dividend • Annual dividend rece
Slide 19: Appendix
Appendix Slide 5: The calculation for the equity ratio presented excludes non-recourse debt of $792 million. The comparable equity ratio, including non-recourse debt is 44%. Slide 6: Represents the pay-off of non-utility debt, not a change in total debt. Table does not include changes in SCE debt. T
Slide 20: Appendix
Appendix Slide 10 and 11: The $1.9 billion for 2004 includes capital expenditures of $1.7 billion and $0.3 billion of acquisition costs related to nonutility generation plant. Excludes $0.1 of nuclear fuel expenditures. Slide 11: 2000 2001 2002 2003 Transmission, Distribution & Generation, per prese
Slide 21: Supplementary Materials to EIX 2004 Earnings
Supplementary Materials to EIX 2004 Earnings The following presentation contains estimates, projections, and other forward-looking statements that involve risks and uncertainties. Actual results or outcomes could differ materially as a result of such important factors as the outcome of state and fed
Slide 22: Earnings Per Share – Year Ended 2004
Edison International Earnings Per Share – Year Ended 2004 Reconciliation of “Core” GAAP Presentation to Recorded EPS of Earnings EPS EPS _____ _____ Core Earnings, Excluding Non-Core Items: Continuing Operations: 0.69 – SCE 1.80 – All Domestic Operations – MEHC 0.14 – International Operations from D
Slide 23: Earnings Per Share – 4th Quarter 2004
Edison International Earnings Per Share – 4th Quarter 2004 Reconciliation of “Core” GAAP Presentation to Recorded EPS of Earnings EPS EPS _____ _____ Core Earning s, Excluding Non-Core Items: Continuing Operations Includes: 0.79 – SCE 0.49 – All Domestic Operations – MEHC –0.09 – International Opera
Slide 24: MEHC Consolidated Earnings Per Share – Year Ended 2004
MEHC Consolidated Earnings Per Share – Year Ended 2004 Reconciliation of “Core” GAAP Presentation to Recorded EPS of Earnings EPS EPS _____ _____ Core Earnings, Excluding Non-Core Items: 0.14 Continuing Operations Includes: –2.05 – Domestic Operations – All Domestic Operations – International Operat
Slide 25: MEHC Consolidated Earnings Per Share – 4th Quarter 2004
MEHC Consolidated Earnings Per Share – 4th Quarter 2004 Reconciliation of “Core” GAAP Presentation to Recorded EPS of Earnings EPS EPS _____ _____ Core Earnings, Excluding Non-Core Items: –0.09 Continuing Operations Includes: –0.16 – Domestic Operations – All Domestic Operations – International Oper
Slide 26: Mission Energy Holding Co — 2005 Hedges and Earnings Variability
Mission Energy Holding Co — 2005 Hedges and Earnings Variability Midwest Gen. Homer City Energy Price Energy Price TWh ($/MW h) TWh ($/MW h) 9/30 12/31 9/30 12/31 9/30 12/31 9/30 12/31 Hedged 4.7 12.2 $34.29 ¹ $35.06 ¹ 6.3 9.3 $44.26 ¹ $45.17 ¹ Unhedged 29.3 21.8 $32.82 ² $33.05 ² 7.7 4.7 $46.19 ² $
Slide 27: MEHC — Long-Term Forecast Assumptions
MEHC — Long-Term Forecast Assumptions As of October 13, 2004 2004 2005 2006 2007 2008 2009 Henry Hub Gas ($/MMBtu) $ 5.90 $ 6.89 $ 6.20 $ 4.73 $ 4.67 $ 4.64 Midwest Generation – Coal Plants Flat Energy Price - NIHub ($/MWh) $ 28.17 $ 32.82 $ 32.85 $ 31.32 $ 31.36 $ 32.49 Merchant Capacity ($/KW-yr)
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