Edison International · NYSE:EIX
Edison International — Q4 2016 Earnings Presentation
20 slides from Edison International's earnings presentation, Feb 21, 2017
Slide 1: Fourth Quarter and Full Year 2016 Financial Results
Fourth Quarter and Full Year 2016 Financial Results February 21, 2017
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: Fourth Quarter Earnings Summary
Fourth Quarter Earnings Summary Q4 Q4 Variance Key SCE EPS Drivers 2016 2015 Basic Earnings Per Share (EPS)1,2 Revenue6,7 $0.16 - CPUC – Escalation 0.09 SCE $1.04 $(0.25) $1.29 - CPUC – GRC return on pole loading rate base (0.03) EIX Parent & Other (0.02) 0.03 (0.05) - CPUC – Other 0.09 Discontinued
Slide 4: Full Year 2016 Earnings Summary
Full Year 2016 Earnings Summary 2016 2015 Variance Key SCE EPS Drivers Revenue5,6 $0.41 Basic Earnings Per Share (EPS)1 - CPUC – Escalation 0.35 SCE $4.22 $3.06 $1.16 - CPUC – GRC return on pole loading rate base 0.05 EIX Parent & Other (0.23) (0.04) (0.19) - CPUC – Other (0.06) Discontinued Operati
Slide 5: 2016 Core Earnings vs. Guidance Reconciliation
2016 Core Earnings vs. Guidance Reconciliation SCE $4.18 SCE $4.22 EIX Parent & EIX Parent & $0.06 $0.02 Other $(0.25) Other $(0.27) $0.01 • O&M and ($0.03) Total Total Financing $3.97 $3.91 Benefits $0.07 • Energy Efficiency Award ($0.01) November 2, Additional FERC Productivity & Income Taxes & EI
Slide 6: 2017 EIX Earnings Per Share Guidance
2017 EIX Earnings Per Share Guidance 2017 Earnings Per Share Guidance as of February 21, 2017 Key Assumptions Low Mid High • SCE authorized rate base $26.2 billion SCE $4.39 • Energy efficiency earnings $0.03 per EIX Parent & Other (0.25) share EIX Basic EPS $4.04 $4.14 $4.24 • Authorized CPUC capit
Slide 7: SCE Capital Expenditure Forecast – Request Level
SCE Capital Expenditure Forecast – Request Level ($ billions) $19.3 Billion Capital Program Traditional Capital Spending: for 2017-2020 Distribution Transmission Generation Grid Modernization Capital Spending: • Capital expenditure forecast incorporates GRC, FERC and Grid Modernization non-GRC CPUC
Slide 8: SCE Rate Base Forecast – Request Level
SCE Rate Base Forecast – Request Level ($ billions) Traditional Grid Modernization 4-year CAGR of 8.6% $34.6 $32.0 CPUC $29.3 • Rate base based on request levels from 2018 GRC and 2018 positive true-up from $26.2 $24.9 authorized to forecast 2017 rate base FERC • FERC rate base is approximately 19%
Slide 9: SCE Long-Term Growth Drivers
SCE Long-Term Growth Drivers Description Timeframe/Regulatory Process Sustained level of infrastructure • Ongoing - current and future GRCs Infrastructure investment required until equilibrium Reliability replacement rates achieved and then maintained Accelerate automation, communication, • 2017 - G
Slide 10: Other Finance Topics
Other Finance Topics CPUC Cost of Capital Settlement • MOU reached February 6 among electric and gas utilities, TURN and ORA • CPUC approval requested on February 7 via a Petition for Modification of the prior decision 2017 FERC Formula Rate Filing • SCE plans to file its 2018 formula rate filing in
Slide 11: CPUC Cost of Capital
CPUC Cost of Capital 7 CPUC Adjustment Mechanism Moody’s Baa Utility Index Spot Rate Moving Average (10/1/16 – 02/01/2017) = 4.60% 100 basis point +/- Deadband 6 Rate (%) 5 4 Starting Value – 5.00% ROE fixed at ROE fixed at 10.45%, for 2017 10.30%, for 2018 independent of independent of trigger mech
Slide 12: EIX and SCE Tax Reform
EIX and SCE Tax Reform Key Reform Impact on Comments Considerations Customer / Shareholder • Permanent increase in customer rates (top concern) No interest deductibility Negative Negative • Costs passed through but lowers tax shield Negative at EIX • Lower customer rates Lower tax rate (15%-20%) Pos
Slide 13: EIX Annual Dividends Per Share
EIX Annual Dividends Per Share Thirteen Years of Dividend Growth $2.17 $1.92 $1.67 $1.42 $1.30 $1.35 $1.24 $1.26 $1.28 $1.22 $1.16 $1.08 $1.00 $0.80 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Target dividend growth at a higher than industry average growth rate within its t
Slide 14: Appendix
Appendix February 21, 2017 13
Slide 15: SCE Large Transmission Projects
SCE Large Transmission Projects Summary of Large Transmission Projects Project Name Total Cost4 Remaining Investment In-Service Date West of Devers1,3 $1.1 billion $1.02 billion 2021 Mesa Substation1 $608 million $585 million 2020-2021 Alberhill System2 $397 million $361 million 2021 Riverside Trans
Slide 16: SCE Results of Operations
SCE Results of Operations ($ millions) • Earning activities – revenue authorized by CPUC and FERC to provide reasonable cost recovery and return on investment • Cost-recovery activities – CPUC- and FERC-authorized balancing accounts to recover specific project or program costs, subject to reasonable
Slide 17: 2016 Retroactively Adjusted EPS by Quarter
2016 Retroactively Adjusted EPS by Quarter 20161 Q4 Q3 Q2 Q1 Earnings (loss) per share attributable to Edison International Continuing Operations SCE $4.22 $1.01 $1.34 $0.98 $0.90 Edison International Parent & Other (0.23) (0.04) (0.05) (0.11) (0.04) Discontinued Operations 0.03 0.04 (0.01) Edis
Slide 18: Earnings Non-GAAP Reconciliations
Earnings Non-GAAP Reconciliations ($ millions) Reconciliation of EIX GAAP Earnings to EIX Core Earnings Earnings Attributable to Edison International Q4 Q4 2016 2015 2016 2015 SCE $339 $(80) $1,376 $998 EIX Parent & Other (7) 9 (77) (13) Discontinued Operations 13 (8) 12 35 Basic Earnings $345 $(79)
Slide 19: SCE Core EPS Non-GAAP Reconciliations
SCE Core EPS Non-GAAP Reconciliations Reconciliation of SCE Basic Earnings Per Share to SCE Core Earnings Per Share Earnings Per Share Attributable to SCE 2011 2012 2013 2014 2015 2016 CAGR Basic EPS $3.33 $4.81 $2.76 $4.46 $3.06 $4.22 5% Non-Core Items Tax settlement — — — — — — Health care legisla
Slide 20: 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 internally for financial planning and for analysis of performance. Core earnings are also used when com