Edison International · NYSE:EIX
Edison International — Q4 2021 Earnings Presentation
24 slides from Edison International's earnings presentation, Feb 24, 2022
Slide 1: Fourth Quarter and Full-Year 2021 Financial Results
Fourth Quarter and Full-Year 2021 Financial Results February 24, 2022
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 Fourth Quarter Update
Edison International Fourth Quarter Update GAAP EPS: $1.38 Q4 2021 core EPS driven by rate base growth Core EPS1: $1.16 $4.40–4.70 EIX announces 2022 EPS guidance 2022 Core EPS1 Installed ~1,500 miles of Strong execution of wildfire mitigation plan, covered conductor in 2021, exceeding many program
Slide 4: The 2021 fire season marks 3 consecutive years without a catastrophic wildfire
The 2021 fire season marks 3 consecutive years without a catastrophic wildfire associated with SCE’s infrastructure1 SCE’s grid hardening and SCE’s improved PSPS California investment in situational awareness execution and community wildfire suppression and measures support prevention ~30% of overhe
Slide 5: Covered conductor is one of the most effective measures to reduce wildfire and PSPS risks
Covered conductor is one of the most effective measures to reduce wildfire and PSPS risks in SCE’s service area Covered conductor is a very valuable tool to expeditiously and cost-effectively reduce wildfire risk specific to SCE. Undergrounding considered for certain locations based on risk profile
Slide 6: SCE estimates its wildfire mitigation and PSPS have reduced probability of losses
SCE estimates its wildfire mitigation and PSPS have reduced probability of losses from catastrophic wildfires by ~65-70%1,2 SCE expects to further reduce risk and decrease the need for PSPS with continued grid hardening investments Pre- Q4 PSPS 2018 2021 Estimated Risk Reduction Contribution Decreas
Slide 7: Edison International has one of the strongest electrification profiles in the industry
Edison International has one of the strongest electrification profiles in the industry Transportation Building Energy Electrification Electrification Storage Largest U.S. IOU EV charging SCE recently proposed $677 SCE has installed or procured programs with over $800 million plan to accelerate ~3.2
Slide 8: Fourth Quarter Earnings Summary
Fourth Quarter Earnings Summary Q4 2021 Q4 2020 Variance Key SCE EPS Drivers2 Higher revenue $ 0.11 Basic Earnings Per Share (EPS) CPUC revenue - 2021 GRC authorized 0.18 SCE $ 1.21 $ 1.25 $ (0.04) CPUC revenue - Other 3 (0.09) FERC and other operating revenue 0.02 EIX Parent & Other 0.17 0.14 0.03
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 Total 2021–2025 capital plan of GRC cycle and will be proposed in future applications $27–30 billion driven by Capital Expe
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% Forecast includes recovery of through 2025, reflecting future incremental investment utility-owned storage for Rate Base1 $ in Billi
Slide 11: 2022 cost of capital being addressed in ongoing proceeding
2022 cost of capital being addressed in ongoing proceeding; separately, IOUs will file cost of capital request for 2023–’25 CPUC’s scoping memo separates the 2022 cost of capital mechanism (CCM) into two steps Key Dates Phase 1 (Current) 2022 Cost of Capital Are there extraordinary Evidentiary heari
Slide 12: 2017/2018 Wildfire/Mudslide Events Update: Less than 22% of best estimate remains
2017/2018 Wildfire/Mudslide Events Update: Less than 22% of best estimate remains SCE continues to make substantial progress resolving claims1 SCE has not admitted wrongdoing Remaining expected potential losses, $ in Billions or liability as part of any settlements 7.5 California Attorney General's
Slide 13: EIX initiates 2022 core EPS guidance of $4.40–4.70
EIX initiates 2022 core EPS guidance of $4.40–4.70 EIX 2022 Core Earnings Per Share Guidance Range Key components of variances from Building from SCE Rate Base EPS SCE rate base EPS1 2022 Rate Base EPS Guidance1 Recording at current cost of capital pending 2022 cost of capital decision SCE 2022 Rate
Slide 14: 2022 EIX Core Earnings Guidance Assumptions
2022 EIX Core Earnings Guidance Assumptions 2022 Assumption Additional Notes CPUC Rate Base ($ in Billions) $31.3 • Assumes CSRP track 1 decision in 2022. Decision delay would defer ~$55 million earnings to 2023 Return on Equity (ROE) 10.30% • ROE sensitivity: 4 cents EPS for 10bps change in ROE Equ
Slide 15: EIX parent projects total 2022 financing needs of $1.2 billion
EIX parent projects total 2022 financing needs of $1.2 billion, including $300–400 million equity content Use of Proceeds $ in Millions 2022 EIX Financing Plan1 $1,200 Expect to issue securities with $300–400 million of equity content (consistent with prior disclosure)2 in combination of: $500 – Pot
Slide 16: EIX reaffirms 2021–2025 EPS growth rate target
EIX reaffirms 2021–2025 EPS growth rate target, which would result in 2025 EPS of $5.50–5.90 Earnings progression expected to continue to 2025 2025 Core EPS Components2 Core Earnings per Share Core Earnings per Share Approximate 5–7% Ranges2 2021–’25 CAGR1 5.50–5.90 2025 Rate Base EPS $6.45–6.90 • A
Slide 17: EIX has double-digit total return potential, supported by leadership role in clean energy transition
EIX has double-digit total return potential, supported by leadership role in clean energy transition 5–7% core EPS CAGR1 Strong rate base growth of ~7–9% 2021 to 2025 $27–30 billion 2021–2025 capital program 4%+ Target dividend payout of 45–55% of SCE core earnings current dividend yield2 Wildfire m
Slide 18: Appendix
Appendix
Slide 19: Cash flow from memo account recovery and securitization strengthens our balance sheet
Cash flow from memo account recovery and securitization strengthens our balance sheet and credit metrics GRC, Uncollectibles, Wildfire-related, and Wildfire Insurance Applications $ in Millions Approved Applications Balance @ Recovery Rate Recovery by Year Application / Account Dec. 31 Through 2022
Slide 20: Full-Year 2021 Earnings Summary
Full-Year 2021 Earnings Summary 2021 2020 Variance Key SCE EPS Drivers2 Higher revenue $ 0.82 Basic Earnings Per Share (EPS) CPUC revenue - 2021 GRC authorized 0.68 CPUC revenue - Other 3 0.04 SCE $ 2.18 $ 2.17 $ 0.01 FERC and other operating revenue 0.10 EIX Parent & Other (0.18) (0.19) 0.01 Lower
Slide 21: Earnings Non-GAAP Reconciliations
Earnings Non-GAAP Reconciliations Reconciliation of EIX GAAP Earnings to EIX Core Earnings Earnings (Losses) Attributable to Edison International, $ in Millions1 Q4 2021 Q4 2020 2021 2020 SCE $ 458 $ 474 $ 829 $ 810 EIX Parent & Other 65 52 (70) (71) Basic Earnings $ 523 $ 526 $ 759 $ 739 Non-Core I
Slide 22: 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 Q4 2021 Q4 2020 2021 2020 Basic EPS $ 1.38 $ 1.39 $ 2.00 $ 1.98 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Events claims and expenses, net
Slide 23: 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 2022 EPS Attributable to Edison International Low High Basic EIX EPS $4.40 $4.70 Total Non-Core Items2 — — Core EIX EPS $4.40 $4.70 1. EPS is calculated on the
Slide 24: 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