Edison International · NYSE:EIX
Edison International — Q2 2013 Earnings Presentation
28 slides from Edison International's earnings presentation, Aug 1, 2013
Slide 1: Second Quarter 2013 Financial Teleconference
Leading the Way in Electricity SM Second Quarter 2013 Financial Teleconference August 1, 2013 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 bankruptcy, and othe
Slide 3: Second Quarter Earnings Summary
Leading the Way in Electricity SM Second Quarter Earnings Summary Q2 2013 Q2 2012 Variance SCE Key Core Earnings Drivers Core EPS1 Impact of delay in 2012 GRC $0.16 SCE $0.84 $0.59 $0.25 Higher revenue 0.08 EIX Parent & Other (0.05) (0.03) (0.02) Increase in 2013 revenues Rate base growth Core EPS1
Slide 4: Year-to-Date Earnings Summary
Leading the Way in Electricity SM Year-to-Date Earnings Summary YTD YTD SCE Key Core Earnings Drivers 2013 2012 Variance Core EPS1 Impact of delay in 2012 GRC $0.30 SONGS refueling revenue (0.07) SCE $1.63 $1.14 $0.49 Higher revenue 0.13 EIX Parent & Other (0.06) (0.04) (0.02) Increase in 2013 reven
Slide 5: SCE 2015 CPUC General Rate Case
Leading the Way in Electricity SM SCE 2015 CPUC General Rate Case • Notice of Intent (NOI) submitted to the CPUC’s Division of Ratepayer Advocates (DRA) on July 15, 2013 • Request sets base revenue requirement for 2015 – 2017 Includes operating costs and CPUC jurisdictional capital Excludes fuel
Slide 6: Capital Expenditures Forecast
Leading the Way in Electricity SM Capital Expenditures Forecast ($ billions) $17.8 – $20.3 billion forecasted capital program 2013 – 2017 Distribution Transmission Generation • Capital expenditures plateau at $4.2 $4.2 $4.0 $4.0 $3.9 approximately $4 billion per year • CPUC GRC requests additional i
Slide 7: Rate Base Forecast
Leading the Way in Electricity SM Rate Base Forecast ($ billions) $29.1 CAGR 7 – 9% projected $27.1 rate base 2013 – 2017 $24.7 • Driven by infrastructure replacement, reliability $22.4 investments, Smart and public policy requirements Grid $20.5 • FERC rate base includes CWIP and is approximately 2
Slide 8: FERC Formula Rates
Leading the Way in Electricity SM FERC Formula Rates • August 2011 – FERC accepted SCE’s formula rates subject to refund and settlement • July 29, 2013 – Settlement Judge informed the Commission that: SCE and other parties have reached an agreement-in-principle on the formula rate Settlement Jud
Slide 9: SONGS – Supplemental Data
Leading the Way in Electricity SM SONGS – Supplemental Data ($ millions) Since (SCE Share as of June 30, 2013) 1/1/2012 Revenue Requirement Collected1 $860 Steam Generator Replacement (SGRP) – Approved2 $665 SGRP Total – Incurred $602 Incremental Inspection & Repair Costs $115 Severance – Shut Down3
Slide 10: SONGS – Asset Impairment
Leading the Way in Electricity SM SONGS – Asset Impairment (As of May 31, 2013 – $ millions) Revenue Subject to Refund Net Investment in SONGS Since Since 1/1/12 11/1/12 Net investment as of May 31, 2013 $2,096 Authorized revenues $804 $262 Replacement power $670 $329 Exposure to refunds for amounts
Slide 11: SONGS Regulatory – CPUC OII
Leading the Way in Electricity SM SONGS Regulatory – CPUC OII • October 2012, CPUC issued Order Instituting Investigation for SONGS outages (I.12-10-013) Consolidates all SONGS proceedings to determine appropriate cost recovery – steam generator project, market power, capital expenditures, operati
Slide 12: SONGS – Recovery Examples
Leading the Way in Electricity SM SONGS – Recovery Examples Partial Return of Return on Docket# Owner & Project Investment Investment D.92-08-036 SCE – SONGS 1 generating plant D.12-10-051 SCE – GRC Legacy Meters D.11-05-018 PG&E – GRC Legacy Meters D.11-09-017 Golden State Water – Hill
Slide 13: SONGS Third-Party Recovery – MHI Warranty
Leading the Way in Electricity SM SONGS Third-Party Recovery – MHI Warranty Warranty Summary Notice of Dispute • 20-year warranty: • July 2013, Notice of Dispute submitted Repair or replace defective items to MHI Specified damages for certain repairs • Exceptions to damage limitations are argued
Slide 14: SONGS Third-Party Recovery – NEIL Insurance
Leading the Way in Electricity SM SONGS Third-Party Recovery – NEIL Insurance • Property damage and outage insurance through Nuclear Electric Insurance Limited (“NEIL”) Property Damage Policies – $2.5 million deductible; $2.75 billion liability limit Outage Policy – weekly indemnity up to $3.5 m
Slide 15: SONGS – Decommissioning
Leading the Way in Electricity SM SONGS – Decommissioning Decommissioning Trusts • Decommissioning costs recovered in rates approved by CPUC in triennial proceeding • December 2012, A.12-12-013 Joint Filing with SDG&E submitted • July 2013, updated early retirement scenario total decommissioning cos
Slide 16: 2013 Core and Basic Earnings Guidance
Leading the Way in Electricity SM 2013 Core and Basic Earnings Guidance SONGS Guidance: • $(0.15) per share from removal of $1.2 billion rate base effective in June pending regulatory treatment of return on investment 2013 Earnings 2013 Earnings Guidance as of Guidance as of • $(0.03) per share from
Slide 17: EIX Dividend Growth
Leading the Way in Electricity SM EIX Dividend Growth $3.50 Guidance Midpoint 2007 – 2012 CAGR 2013 $1.35 (39%) SCE Core EPS 15% $4.10 2012 EIX Dividend 2% $1.30 (32%) $3.33 2011 $1.28 (38%) • EIX targets paying out 45 – 55% of SCE earnings $3.01 2010 $1.26 (42%) • Dividend growth rate slowed to hel
Slide 18: Creating Shareholder Value: What Remains
Leading the Way in Electricity SM Creating Shareholder Value Create Sustainable Position for Resolve Earnings and Transformative Uncertainties Dividend Growth Sector Change What We’ve Done • Maintained EME structural • 5-year rate base CAGR of 11% • Leadership and development separateness (2007 – 20
Slide 19: Appendix
Leading the Way in Electricity SM Appendix August 1, 2013 18 EDISON INTERNATIONAL®
Slide 20: What's New Since Our Last Presentation
Leading the Way in Electricity SM What’s New Since Our Last Presentation • SCE 2015 CPUC General Rate Case (p. 4) • Capital Expenditures Forecast (p. 5) • Rate Base Forecast (p. 6) • FERC Formula Rates (p. 7) • SONGS – Supplemental Data (p. 8) • SONGS – Asset Impairment (p. 9) • SONGS Regulatory – C
Slide 21: SCE System Reliability
Leading the Way in Electricity SM SCE System Reliability • Short-term SONGS closure solutions Transmission – 220 kV Barre-Ellis reconfiguration Voltage support – Huntington Beach 3 and 4 synchronous condensers Substations – Santiago, Viejo, Johanna capacitor bank upgrades Generation – El Seg
Slide 22: Residential Rate Design in California
Leading the Way in Electricity SM Residential Rate Design in California 2013 SCE Residential Rate Structure1,2,3 • 2001 – AB 1X established current rate structure and process during energy crisis 35 Tiered rates – encourage conservation 31.1¢ 30 Frozen Tier 1 and 2 rates – preserve Tier 4 27.1¢
Slide 23: SCE Large Transmission Projects
Leading the Way in Electricity SM SCE Large Transmission Projects ($ millions) Project Total Project In Service FERC 2013 – 2017 Name Costs1 Date Incentives Forecast Status2 • Total project costs and in service date include Chino Hills undergrounding and exclude FAA Petition For 125 bps Tehachapi 1-
Slide 24: SCE Distribution Program
Leading the Way in Electricity SM SCE Distribution Program • Distribution expenditures required to meet customer and load growth, infrastructure maintenance and compliance needs, information technology and related general plant • Request represents a ~120% increase in 2015 – 2017 Requested GRC infra
Slide 25: SCE Results of Operations
Leading the Way in Electricity SM SCE Results of Operations ($ millions) • Utility earning activities – revenue authorized by CPUC and FERC to provide reasonable cost recovery and return on investment • Utility cost-recovery activities – CPUC- and FERC-authorized balancing accounts to recover specif
Slide 26: 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 Basic Earnings Per Share Earnings Per Share Attributable to SCE 2007 2008 2009 2010 2011 2012 CAGR Core EPS $2.07 $2.25 $2.68 $3.01 $3.33 $4.10 15% Non-Core Items Tax settleme
Slide 27: Non-GAAP Reconciliations
Leading the Way in Electricity SM Non-GAAP Reconciliations ($ millions) Reconciliation of EIX Core Earnings to EIX GAAP Earnings Earnings Attributable to Q2 Q2 YTD YTD Edison International 2013 2012 2013 2012 Core Earnings SCE $274 $191 $530 $373 EIX Parent & Other (15) (8) (20) (13) Core Earnings $
Slide 28: 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. Management uses core earnings internally for financial planning and for analysis of performance. Co