Edison International · NYSE:EIX
Edison International — Q1 2023 Earnings Presentation
23 slides from Edison International's earnings presentation, May 2, 2023
Slide 1: First Quarter 2023 Financial Results
First Quarter 2023 Financial Results May 2, 2023
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 First Quarter Highlights
Edison International First Quarter Highlights Q1 2023 EPS driven primarily by rate base GAAP EPS: $0.81 earnings Core EPS1: $1.09 EIX issued $500 million junior subordinated notes Substantial portion of EIX 2023 achieving $250 million of equity content financing plan completed $4.55–4.85 EIX affirms
Slide 4: SCE's 2023–25 Wildfire Mitigation Plan builds upon the 2020–22 WMP
SCE’s 2023–25 Wildfire Mitigation Plan (WMP) builds upon the accomplishments and lessons from the 2020–22 WMP In 2023, SCE is building on and extending the work already accomplished: – Continue hardening the grid, including transmission lines – Ramp up targeted undergrounding work in severe risk are
Slide 5: SCE's operational excellence program includes >600 employee-driven ideas
SCE’s operational excellence program includes >600 employee-driven ideas with capital and O&M benefits1 Major Themes Example High Impact Ideas Work Planning • Improve O&M cost efficiency by bundling work activities across inspections and repairs to reduce number of visits to the same asset • Optimiz
Slide 6: First Quarter Earnings Summary
First Quarter Earnings Summary Q1 2023 Q1 2022 Variance Key SCE EPS Drivers2 Lower revenue3,4 $ (0.03) Basic Earnings Per Share (EPS) GRC escalation 0.20 Other revenue (0.23) SCE $ 0.97 $ 0.38 $ 0.59 Lower O&M4 0.28 EIX Parent & Other (0.16) (0.16) — Wildfire-related claims 0.01 Higher depreciation4
Slide 7: SCE has significant capital expenditure opportunities driven by grid safety and reliability
SCE has significant capital expenditure opportunities driven by investments in the safety and reliability of the grid Capital deployment expected to increase in future GRC and other applications1 Capital Expenditures, $ in Billions Future Requests In mid-May, SCE will file 2025 6.7 GRC application a
Slide 8: Rate base growth forecast of 7–9% through 2025
From a 2021 base, rate base growth forecast of 7–9% through 2025, reflecting future incremental investment Strong rate base growth driven by wildfire mitigation and important grid work to support California’s leading role in pivoting to a carbon-free economy Rate Base1, $ in Billions Future Requests
Slide 9: SCE will request CPUC cost recovery for 2017/2018 events
SCE will request CPUC cost recovery for 2017/2018 events, with first application targeted for Q3 2023 SCE continues to make substantial progress resolving claims Applications for CPUC cost recovery $ in Billions, as of March 31, 2023 First application will be for TKM1 8.8 – Now target filing in Q3 2
Slide 10: EIX affirms 2023 core EPS guidance of $4.55–4.85
EIX affirms 2023 core EPS guidance of $4.55–4.85 EIX 2023 Core Earnings Per Share Guidance Range Building from SCE Rate Base EPS Rate Base 2023 2023 CPUC FERC YTD Guidance Rate Base ($Bn) $34.3 $7.7 Equity Ratio 52.00% 47.50% Rate Base EPS 1.33 5.68 ROE 10.05% 10.30% EPS $4.69 $0.99 SCE Operational
Slide 11: Significant portion of EIX 2023 financing plan accomplished early in the year
Significant portion of EIX 2023 financing plan accomplished early in the year, with strong investor support for offering EIX 2023 Debt Maturities EIX 2023 Financing Plan Status1 $ in Millions As of March 31, 2023 $1,400 Expect to issue securities with $300–400 million of equity content: $400 – In Ma
Slide 12: Strengthening credit profiles have improved rating agencies' outlooks
Strengthening business and credit profiles have improved rating agencies’ outlooks Most recent rating agency updates: – Fitch upgraded EIX and SCE in April 2023 Expect ~$2.1 billion of cash flow Q2 2023–2025 from – Moody’s upgraded EIX and SCE in Feb. 2023 approved and pending cost recovery applicat
Slide 13: CPUC cost of capital mechanism adjusts ROE
CPUC cost of capital mechanism adjusts ROE; also resets costs of debt and preferred if triggered CPUC Cost of Capital Adjustment Mechanism (CCM) ROE adjustment based on 12- Moody’s Baa Utility Bond Index Rate (%), as of April 25, 2023 month average of Moody’s Baa utility bond rates, measured from Oc
Slide 14: EIX offers double-digit total return potential
EIX offers double-digit total return potential 5–7% core EPS CAGR1 Underpinned by strong rate base growth of ~7–9% 2021 to 2025 $27–30 billion 2021–2025 capital program ~4% 19 consecutive years of dividend growth current dividend yield2 Target dividend payout of 45–55% of SCE core earnings Wildfire
Slide 15: Appendix
Appendix
Slide 16: Gap between 2023 rate base and core EPS growth driven by wildfire claims debt interest
Gap between 2023 rate base and core EPS growth largely driven by interest on debt for wildfire claims payments1 Earnings from strong 8.5% 2023 rate base growth offset by higher interest expense 2022 Core EPS vs. 2023 Core EPS Guidance at Midpoint of $4.55–4.85 Range1 +6.7% +1.5% 0.15 (0.19) 0.35 4.9
Slide 17: EIX reaffirms 5–7% 2021–2025 EPS growth rate target
EIX reaffirms 5–7% 2021–2025 EPS growth rate target, which would result in 2025 EPS of $5.50–5.901 Pursuing opportunities to deliver 5–7% growth rate1 2025 Core Earnings per Share Component Ranges2 Component Modeling Considerations Rate Base EPS3 • CPUC ROE of 10.05% and FERC ROE 10.3% (based on cap
Slide 18: Near-term debt maturities are manageable
Edison’s near-term debt maturities are manageable with ~26% tied to SCE’s operations or AB 1054 securitization Currently Outstanding Debt Maturities (2023–2027)1 $ in Millions, as of March 31, 2023 2023 2024 2025 2026 2027 SCE term loan bridges Variable Rate (SOFR+) to 2023 securitization of SCE: Op
Slide 19: SCE continues to fund wildfire claims payments with debt
SCE continues to fund wildfire claims payments with debt Wildfire Claims Payment-Related Debt Issuances Interest expense not currently $ in Millions except percentages, as of March 31, 2023 recoverable in rates, however, will Series Principal Due Rate be included in cost recovery 2021B 400 4/3/23 SO
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 Q1 2023 Q1 2022 SCE $ 370 $ 147 EIX Parent & Other (60) (63) Basic Earnings $ 310 $ 84 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Event
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 International1 Q1 2023 Q1 2022 Basic EPS $ 0.81 $ 0.22 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Events claims and expenses, net of recoveries (0.24) (1
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 Guidance 2023 EPS Attributable to Edison International Low High Basic EIX EPS $4.27 $4.57 Total Non-Core Items1 (0.28) (0.28) Core EIX EPS $4.55 $4.85 1. Non-core items
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