Fourth Quarter and 2014 Financial Results February 24, 2015 - PowerPoint PPT Presentation

Fourth Quarter and 2014 Financial Results February 24, 2015

Forward-Looking Statements Statements contained in this presentation about future performance, including, without limitation, operating results, asset and rate base growth, capital expenditures, financial outlook, and other statements that are not purely historical, are forward-looking statements. These forward-looking statements reflect our current expectations; however, such statements involve risks and uncertainties. Actual results could differ materially from current expectations. These forward-looking statements represent our expectations only as of the date of this presentation, and Edison International assumes no duty to update them to reflect new information, events or circumstances. Important factors that could cause different results are discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis” in Edison International’s Form 10- K, most recent form 10-Q, and other reports filed with the Securities and Exchange Commission, which are available on our website: www.edisoninvestor.com. These filings also provide additional information on historical and other factual data contained in this presentation. February 24, 2015 1

Fourth Quarter Earnings Summary Q4 Q4 SCE Key Core Earnings Drivers Variance 2014 2013 Core EPS 1 Higher revenue $0.28 SONGS impact 0.02 SCE $1.09 $0.79 $0.30 Lower O&M 2 0.05 EIX Parent & Other (0.01) 0.02 (0.03) Higher depreciation (0.08) Core EPS 1 $1.08 $0.81 $0.27 Higher net financing costs (0.01) Non-Core Items Income taxes and other 0.04 - Higher income tax benefits 0.07 SCE $0.08 $– $0.08 - Property and other taxes (0.01) EIX Parent & Other 0.01 – 0.01 - Other (0.02) Discontinued Operations 0.12 0.11 0.01 Total $0.30 Total Non-Core $0.21 $0.11 $0.10 Basic EPS $1.29 $0.92 $0.37 Diluted EPS $1.27 $0.92 $0.35 Non-Core Earnings EIX Key Core Earnings Drivers SCE $0.08 – change in estimate of SONGS settlement Lower income tax benefits $(0.03) • Higher corporate expenses (0.02) Discontinued Operations $0.12 – income tax benefits from • resolution of 2003-2006 tax positions and other tax impacts Higher income from Edison Capital 0.02 related to EME Total $(0.03) 1. See Earnings Non-GAAP Reconciliations and Use of Non-GAAP Financial Measures in Appendix 2. Includes non-San Onofre Nuclear Generating Station (SONGS) severance of $0.00 and $0.02 for the quarters ended December 31, 2014 and 2013, respectively February 24, 2015 2

Full-Year Earnings Summary SCE Key Core Earnings Drivers 2014 2013 Variance Core EPS 1 Higher revenue $0.95 SONGS impact 0.01 SCE $4.68 $3.88 $0.80 Lower O&M 2 0.02 EIX Parent & Other (0.09) (0.08) (0.01) Higher depreciation (0.28) Core EPS 1 $4.59 $3.80 $0.79 Higher net financing costs (0.06) Non-Core Items Income taxes and other 0.16 SCE $(0.22) $(1.12) $0.90 - Higher income tax benefits 0.20 - Property taxes and other (0.03) EIX Parent & Other 0.01 0.02 (0.01) - Other (0.01) Discontinued Operations 0.57 0.11 0.46 Total $0.80 Total Non-Core $0.36 $(0.99) $1.35 Basic EPS $4.95 $2.81 $2.14 Diluted EPS $4.89 $2.78 $2.11 EIX Key Core Earnings Drivers Higher corporate expenses and costs of $(0.06) new businesses Higher income from Edison Capital 0.05 Total $(0.01) 1. See Earnings Non-GAAP Reconciliations and Use of Non-GAAP Financial Measures in Appendix 2. Includes non-SONGS severance of $0.01 and $0.07 for the years ended December 31, 2014 and 2013, respectively February 24, 2015 3

2014 Earnings Guidance Result Reconciliation $0.04 $4.59 $0.25 $1.03 ($0.13) $4.30 • Higher income from Edison Capital • Income Taxes +$0.10 • Rate base adjustment +$0.05 • Energy Efficiency +$0.04 • SONGS +$0.01 • Cost Savings / Other +$0.05 $3.40 • Cost Savings / Other +$0.69 • Income Taxes +$0.41 • No Energy Efficiency Earnings • SONGS ($0.07) SCE 2014 EPS SCE 2014 EIX Parent & October 28, Fourth Quarter Fourth Quarter 2014 Core EPS from Rate Base Variances Other 2014 Guidance SCE Variances EIX Parent & Forecast Midpoint Other Variances Note: See Earnings Non-GAAP Reconciliations and Use of Non-GAAP Financial Measures in Appendix February 24, 2015 4

SCE Capital Expenditures Forecast ($ billions) $11.8 – 13.4 billion forecasted capital program 2015-2017 Distribution Transmission Generation Request case incorporates 2015 GRC $4.8 • $4.5 January update $100 million 2015-2016 changes from $4.1 • prior forecast primarily due to timing of Transmission capital expenditures Growth driven by infrastructure • replacement, reliability investments, and public policy requirements 2015-17 2015 2016 2017 Total Requested $4.1 $4.8 $4.5 $13.4 Range $3.6 $4.2 $4.0 $11.8 Note: forecasted capital spending subject to timely receipt of permitting, licensing, and regulatory approvals. Forecast range reflects an average variability of 12%. February 24, 2015 5

SCE Rate Base Forecast ($ billions) 2015 – 2017 rate base growth consistent with prior 7-9% forecast Incorporates 2015 GRC January update • Request Net $300 million reduction by 2017 from $29.0 • Range prior forecast due to: $26.2 – Extension of bonus depreciation ($400 million reduction) $23.8 – Timing of transmission spend ($100 million reduction) – SmartConnect deferred tax adjustment ($200 million increase) 27.4 FERC rate base includes Construction 25.2 • 23.3 Work in Progress (CWIP) and is approximately 25% of SCE’s rate base forecast by 2017 Excludes SONGS regulatory asset • 2015 2016 2017 Q3 2014 $23.0 ‐ $24.0 $25.1 ‐ $26.7 $27.2 ‐ $29.3 Forecast Note: Weighted-average year basis, 2015-2017 CPUC rate base requests and consolidation of CWIP projects. Rate base forecast range reflects capital expenditure forecast range. 2014 weighted-average rate base was $22.1 billion. February 24, 2015 6

CPUC and FERC Cost of Capital CPUC Adjustment Mechanism 7 Moody’s Baa Utility Index Spot Rate Moving Average (10/1/14 – 10/10/14) = 4.69% 100 basis point +/- Deadband 6 Rate (% ) 5 Starting Value – 5.00% 4 3 10/ 1/ 12 10/ 1/ 13 10/ 1/ 14 10/ 1/ 15 • CPUC – 48% common equity and Return on Equity (ROE) adjustment mechanism has been extended through 2016 – Weighted average authorized cost of capital – 7.90% – ROE adjustment based on 12-month average of Moody’s Baa utility bond rates, measured from Oct. 1 to Sept. 30 – If index exceeds 100 bps deadband from starting index value, authorized ROE changes by half the difference – Starting index value based on trailing 12 months of Moody’s Baa index as of September 30, 2012 – 5.00% – Application extended to April 2016 for 2017 Cost of Capital – adjustment mechanism continues • FERC – November 2013 settlement 10.45% ROE comprised of: 9.30% base + 50 bps CAISO participation + 65 bps weighted average for project incentives – Moratorium on filing ROE changes through June 30, 2015 – FERC Formula recovery mechanism in effect through December 31, 2017 February 24, 2015 7

2015 Financial Assumptions ($ billions) SCE Capital Expenditures SCE Weighted Average Rate Base Distribution $16.0 Distribution $3.1 Transmission 5.6 Transmission 0.8 Generation 2.2 Generation 0.2 Request $23.8 Request $4.1 Range $23.3 Range $3.6 SCE Authorized Cost of Capital Other SCE Items CPUC Return on Equity 10.45% SONGS regulatory asset financing completed • January 2015 CPUC Capital Structure 48% equity 43% debt Energy efficiency potential up to $0.05 per • share 9% preferred Revenues recorded at 2014 levels until 2015 • FERC Return on Equity 10.45% GRC decision is received (retroactive to January (Inc. FERC Incentives) 1, 2015) EIX will provide 2015 earnings guidance after a final decision on the SCE 2015 General Rate Case February 24, 2015 8

EIX Annual Dividends Per Share $1.67 Eleven Years of Dividend Growth $1.42 $1.35 $1.30 $1.28 $1.26 $1.24 $1.22 $1.16 $1.08 $1.00 $0.80 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 EIX targets a payout ratio of 45 – 55% of SCE core earnings and plans to return to target payout ratio in steps, over time Note: See use of Non-GAAP Financial Measures in Appendix February 24, 2015 9

EIX Shareholder Value Sustainable Positioning for Transformative Financial Earnings Growth Sector Change Discipline Rate Base and Core Earnings Dividend and CapEx Balancing: SCE Growth Drivers Beyond 2017: Growth: • 11 consecutive years of EIX • Reliability • 9% 5-year SCE rate base CAGR dividend increases • Grid readiness (2009 – 2014) • 17.6% dividend increase for • EV charging • 12% Core SCE EPS growth 2015 • Transmission (2009 – 2014) • Storage • Consistent 7 – 9% rate base Sustainable Dividend Growth: • State environmental policy growth through 2017 • Target payout ratio: 45-55% of SCE core earnings SCE Productivity Improvements: Constructive Regulatory Structure: • Return to target payout ratio in • Help mitigate rate pressure from • Decoupling steps, over time capital program • Balancing accounts • Build high-performing organization • Forward-looking ratemaking Stable Share Count: • Rate reform • 325.8 million common shares Edison Energy Competitive Strategy: outstanding since 2000 • Small, targeted investments in emerging technologies Note: See use of Non-GAAP Financial Measures in Appendix February 24, 2015 10