Edison International · NYSE:EIX
Edison International — Q3 2012 Earnings Presentation
40 slides from Edison International's earnings presentation, Nov 1, 2012
Slide 1: Third Quarter 2012 Financial Teleconference
Leading the Way in Electricity SM Third Quarter 2012 Financial Teleconference November 1, 2012 0 EDISON INTERNATIONAL®
Slide 2: Forward-Looking Statements
Leading the Way in Electricity SM Forward-Looking Statements Statements contained in this presentation about future performance, including, without limitation, operating results, asset and rate base growth, capital expenditures, San Onofre Nuclear Generating Station (SONGS), EME liquidity and restru
Slide 3: Third Quarter Earnings Summary
Leading the Way in Electricity SM Third Quarter Earnings Summary Q3 11 Q3 12 Variance Core Earnings Core EPS Core EPS1 ($ millions) SCE $1.25 $1.11 $(0.14) $411 $1.26 EMG 0.05 (0.28) (0.33) EIX parent company (0.04) (0.11) (0.07) $235 $0.72 and other2 Core EPS $1.26 $0.72 $(0.54) Non-Core Items Q3 1
Slide 4: SCE Third Quarter Highlights
Leading the Way in Electricity SM SCE Third Quarter Highlights EPS Q3 11 Q3 12 Variance Key Core Earnings Drivers Core1 $1.25 $1.11 $(0.14) 2012 GRC delay items: Depreciation $(0.05) Non-Core Items — — — Net interest expense (0.04) SONGS Inspection and repair (0.09) Basic EPS1 $1.25 $1.11 $(0.14) Se
Slide 5: SCE 2012 CPUC General Rate Case (A.10-11-015)
Leading the Way in Electricity SM SCE 2012 CPUC General Rate Case (A.10-11-015) • Proposed Decision issued on October 19 with 2012 revenue requirement of $5,693 million Decrease of $601 million from SCE’s request primarily related to O&M with some plant-related capital reductions $929 million ca
Slide 6: SCE Capital Expenditures Forecast
Leading the Way in Electricity SM SCE Capital Expenditures Forecast ($ billions) $5.0 Forecast $4.4 By Classification $3.9 $3.8 $ % Solar Photovoltaic 0.2 1 Edison SmartConnect® 0.4 3 Generation 1.7 13 Transmission 3.8 29 Distribution 7.1 54 Total 13.2 100 By Proceeding 2011 2012 2013 2014 % Forecas
Slide 7: SCE Rate Base Forecast
Leading the Way in Electricity SM SCE Rate Base Forecast ($ billions) 2012 – 2014 CAGR2 $24.7 • Rate base forecast1 based on Rate Base 7-9% GRC PD3 2012 CPUC GRC request and $22.6 $23.4 2012 FERC Formula Rate $20.8 GRC PD3 • FERC rate base includes CWIP $21.7 and increases to approximately GRC PD3 $
Slide 8: SONGS Update
Leading the Way in Electricity SM SONGS Update Operational • SCE submitted CAL response and restart plans for Unit 2 to NRC Operate at 70% power for 5 months with follow up outage and inspection No assurance about NRC review time or approval of restart request Repairs to restart Unit 2 at redu
Slide 9: EMG Third Quarter Highlights
Leading the Way in Electricity SM EMG Third Quarter Highlights EPS Q3 11 Q3 12 Variance Key Core Earnings Drivers Core1 $0.05 $(0.28) $(0.33) Midwest Generation3 $(0.21) EMMT - trading 0.02 Non-Core Items2 0.05 (0.14) (0.19) Renewable energy projects (0.01) Natural gas projects (0.05) Higher income
Slide 10: Liquidity Profile
Leading the Way in Electricity SM Liquidity Profile September 30, 2012 ($ millions) EME Other EIX & EMG parent co. Sources SCE Subs2 Subs & other Credit Facility1 $2,750 $— $— $1,250 Credit Facility (availability) $2,174 $— $— $1,222 Cash & Cash Equivalents 96 698 154 138 Available Liquidity $2,270
Slide 11: EME Financial Status
Leading the Way in Electricity SM EME Financial Status • October 2012, EME and EIX entered into non-disclosure agreements with certain EME unsecured bondholders • Based on current projections, EME is not expected to have sufficient liquidity to repay $500 million debt obligation due June 2013 • No a
Slide 12: Appendix
Leading the Way in Electricity SM Appendix November 1, 2012 11 EDISON INTERNATIONAL®
Slide 13: Updates Since Our Last Presentation
Leading the Way in Electricity SM Updates Since Our Last Presentation • Q3 2012 results and standard information • SCE 2012 CPUC General Rate Case (p. 4) • SCE Capital Expenditures Forecast (p. 5) • SCE Rate Base Forecast (p. 6) • SONGS Update (p. 7) – New Slide • EME Financial Status (p. 10) • SCE
Slide 14: Dividend Growth
Leading the Way in Electricity SM Dividend Growth $3.33 2006 – 2011 CAGR 2011 $1.28 (38%) SCE Core EPS1 12% $3.01 EIX Dividend 4% 2010 $1.26 (42%) • EIX targets paying out 45 – 55% of SCE $2.68 2009 earnings $1.24 (46%) • Dividend not growing at same rate as SCE $2.25 core earnings and is below targ
Slide 15: Year-to-Date Earnings Summary
Leading the Way in Electricity SM Year-to-Date Earnings Summary YTD 11 YTD 12 Variance Core Earnings Core EPS Core EPS1 ($ millions) $805 $2.47 SCE $2.57 $2.26 $(0.31) EMG (0.04) (0.71) (0.67) $455 $1.40 EIX parent company (0.06) (0.15) (0.09) and other2 Core EPS $2.47 $1.40 $(1.07) YTD 11 YTD 12 YT
Slide 16: SCE Year-to-Date Highlights
Leading the Way in Electricity SM SCE Year-to-Date Highlights EPS YTD 11 YTD 12 Variance Key Core Earnings Drivers Core1 $2.57 $2.26 $(0.31) 2012 GRC delay items Depreciation $(0.14) Non-Core Items — — — Net interest expense (0.11) SONGS Inspection and repair (0.17) Basic EPS1 $2.57 $2.26 $(0.31) Se
Slide 17: EMG Year-to-Date Highlights
Leading the Way in Electricity SM EMG Year-to-Date Highlights EPS YTD 11 YTD 12 Variance Key Core Earnings Drivers Core1 $(0.04) $(0.71) $(0.67) Midwest Generation3 $(0.48) Renewable energy projects (0.01) Non-Core Items2 (0.01) (0.31) (0.30) Natural gas projects (0.07) Higher net interest expense (
Slide 18: Debt Maturity Profiles
Leading the Way in Electricity SM Debt Maturity Profiles September 30, 2012 ($ millions) Calendar Year 2012 2013 2014 2015 Short- and Long-Term Debt Maturities SCE $380 $— $1,200 $300 EME1,2 27 591 294 72 EIX 28 — — — 1 Includes project finance and other non-recourse debt. 2 Assumes conversion of $3
Slide 19: Non-GAAP Reconciliations
Leading the Way in Electricity SM Non-GAAP Reconciliations ($ millions) Reconciliation of EIX Core Earnings to EIX GAAP Earnings Earnings Attributable to Edison International Q3 11 Q3 12 YTD 11 YTD 12 Core Earnings1 SCE $406 $363 $838 $736 EMG 18 (92) (14) (233) EIX parent company and other (13) (36
Slide 20: SCE Appendix
Leading the Way in Electricity SM SCE Appendix November 1, 2012 19 EDISON INTERNATIONAL®
Slide 21: SCE Historical Rate Base and Core Earnings
Leading the Way in Electricity SM SCE Historical Rate Base and Core Earnings ($ billions) 2006 – 2011 CAGR $18.8 Rate Base1 11% $16.8 Core Earnings2 12% $15.0 $13.1 $12.5 $11.4 2006 2007 2008 2009 2010 2011 Core Earnings2 $1.89 $2.07 $2.25 $2.68 $3.01 $3.33 1 Recorded rate base, year-end basis. 2 Se
Slide 22: SCE 2013 Cost of Capital Application
Leading the Way in Electricity SM SCE 2013 Cost of Capital Application • On April 20, 2012, SCE filed its application to set the capital structure and cost of capital (A.12-04-015) • Requested Return on Common Equity (ROE) of 11.1%: Capital needs are relatively high compared to other electrics F
Slide 23: SONGS – Net Investment and Rate Base
Leading the Way in Electricity SM SONGS – Net Investment and Rate Base September 30, 2012 ($ millions) Common Unit 2 Unit 3 Total Plant Net Investment Net plant in service1 $593 $418 $261 $1,272 Materials and supplies — — 99 99 Construction work in progress 77 141 76 294 Nuclear fuel 153 212 101 466
Slide 24: SONGS – Supplemental Data
Leading the Way in Electricity SM SONGS – Supplemental Data September 30, 2012 ($ millions) 2012 Outage Impacts (SCE share) Inspection & Repair Costs – Incurred $96 Net Market Costs – Incurred1 $221 Regulatory (SCE share) Steam Generator Replacement (SGR) Project – Approved2 $665 SGR Project – Incur
Slide 25: SONGS – Warranty and Insurance
Leading the Way in Electricity SM SONGS – Warranty and Insurance MHI Warranty • 20-year warranty with Mitsubishi Heavy Industries Repair or replace defective items Specified damages for certain repairs $138 million liability limit and excludes consequential damages (e.g., replacement power)
Slide 26: SCE Transmission Program
Leading the Way in Electricity SM SCE Transmission Program September 30, 2012 In Direct % of Project Lifecycle 2012-2014 Project Name Service Project Spend 1 Phase 1 Forecast San Joaquin Date Costs Complete Cross Valley Loop Rector Highwind SCE Tehachapi 1-112,3 Construction 2015 $2,500 69% $904 Ser
Slide 27: Other SCE Key Regulatory Events
Leading the Way in Electricity SM Other SCE Key Regulatory Events Case Date of Next Number Filing Status Milestone Settlement discussions on 2012 formula Next settlement conference to be ER11-3697 06/03/11 rate filing in progress held on December 5th and 6th, 2012 FERC rejected SCE’s request for reh
Slide 28: SCE Results of Operations
Leading the Way in Electricity SM SCE Results of Operations ($ millions) Three Months Ended Sept 30, 2011 Three Months Ended Sept 30, 2012 Utility Utility Utility Cost- Utility Cost- Earning Recovery Total Earning Recovery Total Activities Activities Consolidated Activities Activities Consolidated O
Slide 29: SCE Core EPS Non-GAAP Reconciliations
Leading the Way in Electricity SM SCE Core EPS Non-GAAP Reconciliations Reconciliation of SCE Core Earnings Per Share to SCE GAAP Earnings Per Share Earnings Per Share Attributable to SCE 2006 2007 2008 2009 2010 2011 CAGR Core EPS1 $1.89 $2.07 $2.25 $2.68 $3.01 $3.33 12% Non-core items Tax settleme
Slide 30: EME Appendix
Leading the Way in Electricity SM EME Appendix November 1, 2012 29 EDISON INTERNATIONAL®
Slide 31: EME Business Platform
Leading the Way in Electricity SM EME Business Platform September 30, 2012 Owned and Operated1 MW % 167 Coal2 4,354 59 Natural Gas 1,269 17 44 67 Wind3 1,660 22 133 144 240 Other 153 2 120 4,314 40 Total 7,436 100 19 305 55 964 479 Under Construction MW Wind 120 190 244 Natural Gas4 479 357 Wind Dev
Slide 32: Midwest Generation (Illinois)
Leading the Way in Electricity SM Midwest Generation (Illinois) Operational Statistics Q3 11 Q3 12 YTD 11 YTD 12 All-in Average Realized Prices1,3 • Total Generation (GWh) 7,957 6,653 20,987 17,459 • Forced Outage Rate 7.2% 5.4% 5.9% 4.8% • Capacity Factor 69.8% 62.2% 62% 52.5% $46.28 $47.46 • Equiv
Slide 33: Midwest Generation Hedging & Capacity Sales
Leading the Way in Electricity SM Midwest Generation Hedging & Capacity Sales1 September 30, 2012 Net2 Net2 Net2 Change Change Change Remainder of From From From 2012 Q2 2013 Q2 2014 Q2 Total GWh (NI, AEP/Dayton, and Indiana Hubs) 2,028 (1,610) 3,615 2,595 — — Average price ($/MWh) $37.53 $(0.71) $3
Slide 34: EME 2006 Illinois CPS Agreement
Leading the Way in Electricity SM EME 2006 Illinois CPS Agreement 2011 Completed 2012 2013 2014 2015 2016 2017 2018 2019 Emissions1 US EPA MATS Deadline Mercury 0.0074 or 86%2 Will Fleet-wide average Waukegan 7 County 3 0.008 or 90% reduction emission rate (lb/GWh) ACI Construction timeline Cost inc
Slide 35: Midwest Generation Compliance Cost
Leading the Way in Electricity SM Midwest Generation Compliance Cost Total Total Operating 2011 % of Large Unit Small Unit Capacity Generation Regional Est. Capex Est. Capex Unit (MW) (GWh) Fleet ($MM)2 ($MM)2 Waukegan 7, 8 689 3,898 13.9% $160 Joliet 6 290 1,675 5.9% $75 Joliet 7, 8 1,036 5,907 21.
Slide 36: EME Wind Strategy & Financing
Leading the Way in Electricity SM EME Wind Strategy & Financing Refocused Wind Strategy Other Recent Wind Project Developments Debt • Capistrano Wind Partners (CWP) formed February 13, • Continuing Big Sky vendor dispute regarding timing of 2012, by EME, TIAA-CREF, CIRI (an Alaskan native repayment
Slide 37: EME Capital Expenditures
Leading the Way in Electricity SM EME Capital Expenditures September 30, 2012 ($ millions) 20111 20122 2013 2013 2014 Midwest Generation Environmental expenditures3 $82 $26 $112 $311 Plant capital expenditures 27 8 50 16 Walnut Creek Project4 269 206 63 — Renewable Energy Projects Capital & construc
Slide 38: EMG – Adjusted EBITDA
Leading the Way in Electricity SM EMG1 – Adjusted EBITDA September 30, 2012 ($ millions) Reconciliation to Earnings Q3 11 Q3 09 Q4 12 Q1 11YTD 11 YTD 12 Earnings $33 $(137) $(17) $(331) Addback (Deduct): Discontinued operations (15) 76 3 129 Income from continuing operations 18 (61) (14) (202) Inter
Slide 39: EME Other Non-GAAP Reconciliations
Leading the Way in Electricity SM EME Other Non-GAAP Reconciliations ($ millions) Reconciliation of Midwest Generation Operating Revenues and Fuel Costs to All-in Average Realized Price/MWh and Average Realized Fuel Cost/MWh Midwest Generation Q3 11 Q3 12 YTD 11 YTD 12 Generation (GWh) 7,957 6,653 2
Slide 40: Use of Non-GAAP Financial Measures
Leading the Way in Electricity SM Use of Non-GAAP Financial Measures Edison International’s earnings are prepared in accordance with generally accepted accounting principles used in the United States and represent the company’s earnings as reported to the Securities and Exchange Commission. Our mana