Edison International · NYSE:EIX
Edison International — Merrill Lynch Global Power and Gas Leaders Conference 2005
21 slides from Edison International's conference presentation, Sep 28, 2005
Slide 1: Business Overview and Strategy
Business Overview and Strategy John E. Bryson Chairman, President and CEO Merrill Lynch Global Power and Gas Leaders Conference September 28, 2005
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Edison International’s current expectations and projections about future events based on Edison Internatio
Slide 3: Edison International – Organizational Structure
Edison International – Organizational Structure (1) Edison International Credit Rating (2) BBB / Baa3 Total Assets $33.5 B Generation 13,956 MW Edison Mission Group Southern California Edison Mission Energy Edison Capital Holding Company Credit Rating (2) BBB+ / A3 Credit Rating (2) CCC+ / B2 Credit
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 – Balance Sheet Strength
Edison International – Balance Sheet Strength Consolidated Recourse Leverage Ratio (1), (2) Strengthening Balance Sheet $4.9 billion reduction in EIX and MEHC total debt over the past 18 months(3) Investment Grade ratings at EIX and SCE EIX Long-term goal Cash balances as of 6/30/05: MEHC consolidat
Slide 6: Southern California Edison
Southern California Edison (1) One of the largest U.S. electric utilities 50,000 square-mile service territory More than 13 million people served 4.7 million customers 70 thousand customers added in 2004 PG&E 85 TWh Retail Sales 2.8% growth New summer peak established; up 6% (2) 11 TWh Direct Access
Slide 7: SCE Capital Expenditures
SCE Capital Expenditures Average annual expenditures of $2 billion, double previous 5-year average Investments across all business lines Expect regulatory decisions on approximately 2/3 of capital investments by early 2006 Potential Additions: Mohave Generating Station Advanced Meter Initiative $ Bi
Slide 8: SCE Rate Base
SCE Rate Base Rate base (1) increasing 42% from end of 2005 to end of 2009 to meet system growth and reliability requirements Primary drivers of SCE’s pre-tax earnings (2): ± $100 million in authorized rate base = ± $9 million ± 10 bp change in authorized ROCE (3) = ± $8 million ± 1% change in autho
Slide 9: Southern California Edison
Southern California Edison Areas of Focus Capital investment implementation Market structure development / reliability Fair and timely recovery of procurement costs Customer rates Key regulatory decisions pending / timing (1) 2006 General Rate Case - Early 2006 SONGS Steam Generator Replacement - La
Slide 10: Mission Energy Holding Company
Mission Energy Holding Company 8,834 MWs of Generation (1) 7,545 MW (85%) coal 1,289 MW (15%) gas/oil Midwest Generation 88% merchant 70 MWs 5,876 MWs $3.4 billion total debt reduction over the past 18 months (2) Homer City MEHC consolidated cash balance $1.6 billion (1) 1,884 MWs Value Drivers Low
Slide 11: Midwest Generation Operating Performance
Midwest Generation Operating Performance Coal Generation (in TWh) 30.6 30.8 26.6 27.6 27.5 Hedge Volume and Prices (as of 6/30/05) Volume Avg. Price Forward Price (TWH) ($/MWh) ($/MWh) (6/30 YTD) 2005 YTD 14.2 $40.12 – Hedged 9.4 $38.15 – Unhedged 7.2 – $40.46 (1) Coal Revenues and Costs ($/MWh) 30.
Slide 12: Homer City Operating Performance
Homer City Operating Performance Coal Generation (in TWh) Hedge Volume and Prices (as of 6/30/05) 13.6 Volume Avg. Price Forward Price (1) (TWH) ($/MWh) ($/MWh) 2005 YTD 6.6 $43.38 – (6/30 YTD) Hedged 4.6 $44.94 – Unhedged 2.4 – $50.25 (2) 13.6 Coal Revenues and Costs ($/MWh) 2006 Hedged 5.3 $51.50
Slide 13: MEHC – Coal Requirements Under Contract
MEHC – Coal Requirements Under Contract Coal Supply 110 105 Annual coal usage: 98 Illinois plants use approximately 18 96 million to 20.5 million tons obtained from the Southern Powder River Basin Homer City uses approximately 5 million tons obtained from mines located near Homer City, 53 Pennsylvan
Slide 14: Mission Energy Holding Company – Areas of Focus
Mission Energy Holding Company Areas of Focus Reduce overhead expenses in the aftermath of asset sales Use of cash Debt reduction Collateral for hedging New generation investments Manage fuel supply, emissions, and environmental controls to protect operating margins Key regulatory developments Illin
Slide 15: Edison Mission Group – Wind Business Objectives
Edison Mission Group – Wind Business Objectives Now actively pursuing new renewable (primarily wind) investments Production tax credits extended for 2 years New investment in 2005 is targeted at $180 million building to $250 million annually Announced 120 MW wind project in eastern New Mexico Closed
Slide 16: Edison International – Dividend Policy
Edison International – Dividend Policy $1.00 $0.80 $0.00 (1) (2) Longer-term, targeting a payout ratio of 45–55% excluding MEHC earnings 1) 2) Dividends paid. Dividend rate. 15
Slide 17: Edison International EPS – 2004 Recorded and 2005 Outlook
Edison International EPS (1) – 2004 Recorded and 2005 Outlook The outlook as of August 9, 2005 is no longer current 2005 earnings guidance to be updated when third quarter earnings are released Core earnings are expected to be higher $2.87-2.97 $2.81 0.34 $2.20 1.31 0.06 2.53-2.63 2.14 1.50 (2) 1) S
Slide 18: R" FDISON
R" FDISON INTERNATIONAL® M1TEDISON
Slide 19: Appendix
Appendix Slide 4: The calculation for the second quarter 2005 recourse leverage ratio of 53% includes common equity and preferred securities as reflected on the EIX balance sheets. Debt includes short- and long-term debt and excludes non-recourse debt from continuing operations totaling $2.3 billion
Slide 20: Appendix
Appendix Slide 10: Reconciliation for MVVG Fuel Costs YTD 2001 2002 2003 2004 6/30/2005 Reported Fuel Cost (in thousands) 364,425 396,345 390,601 381,391 171,241 Less Collins Fuel Cost (in thousands) (106,212) (85,560) __—(89,917) _(50,006) i Net Fuel Cost 248,213 310,785 300,684 331,385 171,241 Coa
Slide 21: Appendix
Appendix The outlook as of August 9, 2005 is no longer current 2005 earnings guidance to be updated when third quarter earnings are released Core earnings are expected to be higher Reconciliation of Earnings to GAAP Recorded 2004 Original August EPS 2005 Outlook (4) 2005 Outlook SCE $1.80 $1.75 $1.8
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