Edison International · NYSE:EIX
Edison International — Q4 2022 Earnings Presentation
27 slides from Edison International's earnings presentation, Feb 23, 2023
Slide 1: Fourth Quarter and Full-Year 2022 Financial Results
Fourth Quarter and Full-Year 2022 Financial Results February 23, 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 Fourth Quarter Highlights
Edison International Fourth Quarter Highlights Q4 2022 EPS driven primarily by rate base GAAP EPS: $1.09 earnings Core EPS1: $1.15 Full-Year 2022 EPS driven by rate base earnings, GAAP EPS: $1.61 offset by change in reserve for 2017/2018 Core EPS1: $4.63 Wildfire/Mudslide Events $4.55–4.85 EIX initi
Slide 4: EIX added another year of strong execution in 2022
EIX added another year of strong execution in 2022 Extended track record of • 2022 Core EPS of $4.63, above the midpoint of the delivering on full-year initial guidance range of $4.40–4.701 core EPS guidance • Since 2004, EIX has exceeded its guidance range in 11 years and the midpoint in 13 years
Slide 5: Since 2004, EIX has exceeded guidance range in 11 years
Since 2004, EIX has exceeded guidance range in 11 years EIX Actual Core EPS vs. Guidance Range History 2022 2021 2020 2019 2018 No guidance In-line Exceeded In-line In-line due to GRC decision timing 2017 2016 2015 2014 2013 Exceeded In-line Exceeded Exceeded Exceeded 2012 2011 2010 2009 2008 No gui
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 ~75–80%1,2 SCE expects to further reduce risk and decrease the need for PSPS with continued grid hardening investments Pre- Year-End PSPS 20184 2022 Estimated Risk Reduction Contribution
Slide 7: Covered conductor deployment has reduced SCE's dependency on PSPS
Covered conductor deployment has reduced SCE’s dependency on PSPS for reducing wildfire risk SCE’s approach to reducing wildfire risk is differentiated by its focus on expeditiously hardening its infrastructure Estimated reduction in probability of losses from catastrophic wildfires compared to pre-
Slide 8: SCE has made significant progress in expeditiously hardening the grid
SCE has made significant progress in expeditiously hardening the grid to keep its communities safe Total Circuit Miles of Distribution Lines in SCE’s High Fire Risk Area ~17,000 ~1,300 Bare wire until hardened during routine work in least risky areas ~3,100 Future planned hardening ~1,200 Targeted f
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 December 31, 2022 First application will be for TKM1 8.8 – Now target filing in Q
Slide 10: 2023 key focus areas emphasize safety and execution
2023 key focus areas emphasize safety and execution 2023 Key Management Focus Areas Safety Employee Safety 1. Reduce Employee SIF and DART Rates by 15% from prior year1 Wildfire Covered conductor 2. Install 1,200 miles (Total by year end: ~5,600 Mitigation miles) Legal 2017/2018 Wildfire/ 3. Target
Slide 11: Fourth Quarter Earnings Summary
Fourth Quarter Earnings Summary Q4 2022 Q4 2021 Variance Key SCE EPS Drivers2 Higher revenue3,4 $ 0.47 Basic Earnings Per Share (EPS) CPUC revenue - GRC escalation 0.18 CPUC revenue - Other 0.28 SCE $ 1.26 $ 1.21 $ 0.05 FERC and other operating revenue 0.01 EIX Parent & Other (0.17) 0.17 (0.34) High
Slide 12: 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 in future GRC and Total 2021–2025 capital plan of other applications1 $27–30 billion driven by Capital Expenditures, $ in Billions investments
Slide 13: 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 14: Gap between 2023 rate base and core EPS growth
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 15: Initiating 2023 core EPS guidance of $4.55–4.85
Initiating 2023 core EPS guidance of $4.55–4.85 EIX 2023 Core Earnings Per Share Guidance Range Building from SCE Rate Base EPS Rate Base 2023 CPUC FERC Guidance Rate Base ($Bn) $34.3 $7.7 Equity Ratio 52.00% 47.50% Rate Base EPS 5.68 ROE 10.05% 10.30% EPS $4.69 $0.99 SCE Operational Variances 0.48–
Slide 16: EIX parent projects total 2023 financing needs of ~$1.4 billion
EIX parent projects total 2023 financing needs of ~$1.4 billion, including $300–400 million of equity content EIX 2023 Debt Maturities $ in Millions 2023 EIX Financing Plan1 $1,400 Expect to issue securities with $300–400 million of equity content in potential combination of: $400 – Hybrid securitie
Slide 17: 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 Index Rate (%), as of February 16, 2023 month average of Moody’s Baa utility bond rates, measured from Octo
Slide 18: 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 19: 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 20: Appendix
Appendix
Slide 21: Edison's near-term debt maturities are manageable
Edison’s near-term debt maturities are manageable with ~24% tied to SCE’s operations or AB 1054 securitization Currently Outstanding Debt Maturities (2023–2027)1 $ in Millions, as of December 31, 2022 2023 2024 2025 2026 2027 SCE term loan bridges Variable Rate (SOFR+) to 2023 securitization of SCE:
Slide 22: 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 December 31, 2022 recoverable in rates, however, will Series Principal Due Rate be included in cost recovery 2021B 400 4/3/23
Slide 23: Full Year Earnings Summary
Full Year Earnings Summary 2022 2021 Variance Key SCE EPS Drivers2 Higher revenue3,4 $ 2.11 Basic Earnings Per Share (EPS) CPUC revenue - GRC escalation 0.72 SCE $ 2.23 $ 2.18 $ 0.05 CPUC revenue - Other 1.28 FERC and other operating revenue 0.11 EIX Parent & Other (0.62) (0.18) (0.44) Higher O&M (1
Slide 24: 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 Q4 2022 Q4 2021 2022 2021 SCE $ 478 $ 458 $ 847 $ 829 EIX Parent & Other (63) 65 (235) (70) Basic Earnings $ 415 $ 523 $ 612 $ 759 Non-Core
Slide 25: 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 2022 Q4 2021 2022 2021 Basic EPS $ 1.09 $ 1.38 $ 1.61 $ 2.00 Non-Core Items SCE 2017/2018 Wildfire/Mudslide Events claims and expenses, net
Slide 26: 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 2023 EPS Attributable to Edison International Low High Basic EIX EPS $4.55 $4.85 Total Non-Core Items2 — — Core EIX EPS $4.55 $4.85 1. EPS is calculated on the
Slide 27: 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