Edison International

Good afternoon and welcome to the Edison International Second Quarter 2020 Financial Teleconference. My name is Ted and I will be your operator today. When we get to the question and answer session, if you have a question, press star 1 on your phone. Today's call is being recorded. I would now like to turn the call over to Mr. Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Thank you, Ted, and welcome, everyone. Our speakers today are President and Chief Executive Officer Pedro Pizarro, and Executive Vice President and Chief Financial Officer Maria Rigotti. Also on the call are other members of the management team. I would like to mention that we are doing this call with our executives in different locations, so please bear with us if you experience any technical difficulties. Materials supporting today's call are available at www.edisoninvestor.com. These include a Form 10-K, prepared remarks from Pedro and Maria, and the teleconference presentation. Tomorrow, we will distribute a regular business update presentation. During this call, we'll make forward-looking statements about the outlook for Edison International and its subsidiaries. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our FCC filings. Please read these carefully. The presentation includes certain outlook assumptions as well as reconciliation of non-GAAP measures to the nearest GAAP measure. During the question and answer session, please limit yourself to one question and one follow-up. I will now turn the call over to Pedro.

Well, thank you, Sam. And let me start by hoping that all of you listening today and your loved ones are staying safe and healthy as our world continues to work its way through COVID-19. Today, Edison International reported core earnings per share of $1 for the second quarter 2020, down 58 cents compared to the same period last year. The decline in year-over-year EPS was primarily due to higher O&M expenses, equity share dilution, and the true-up for the final 2018 GRC decision that we recorded in the second quarter of last year. Consistent with recent quarters, results with this period were impacted by the timing of O&M spend and deferrals of certain wildfire-related expenses. However, the year-over-year EPS impact of wildfire-related expenses should improve in the second half, and we remain confident in our outlook for the full year. Therefore, we are narrowing our 2020 EPS guidance range to $4.37 to $4.62 by raising our low end by 5 cents. Maria will discuss our financial performance in more detail in her report. On the legislative front, we are pleased that the governor and legislature prioritized wildfire funding in the recently adopted budget, despite its projected $54 billion deficit due to the pandemic. The budget provides over $200 million in one-time and ongoing funding for community resiliency preparedness, additional firefighting personnel and equipment, and enhancement of the state's emergency preparedness, response, and coordination with state agencies, local governments, and utilities. We are also encouraged by the state's enhanced wildfire mitigation capabilities as we prepare for this year's wildfire season. For instance, Cal Fire reported that it completed all of the planned 35 emergency fields management projects in May, making 90,000 acres safer ahead of wildfire season and protecting 200 vulnerable communities. Some of these projects were located in or adjacent to FCE service territory. CAL FIRE has also made substantial investments to support its firefighting capabilities, including the addition of C-130 airplanes and new helicopters with better night firefighting capabilities. Turning to operations during this COVID-19 pandemic, FCE remains steadfast in focusing on practices aimed at the safety and health of employees and customers. Two-thirds of our 13,000 employees continue to telework, and we recently moved our earliest reentry date for them from after Labor Day to the beginning of next year. Importantly, FCE also has a sharp focus on maintaining critical operations for customers' benefit, including those laid out in FCE's 2020 through 2022 wildfire mitigation plan. This plan calls for our FCE to continue to harden infrastructure, bolster situational awareness capabilities, and improve operational practices while implementing enhanced data analytics and technology. Since the beginning of the year, FCE has completed more than 330 miles of covered conductor, installed nearly 400 additional weather stations, and completed over 135,000 ground-based inspections of our infrastructure and high-fire risk areas. SCE is also making good progress in acquiring more high definition imagery through a combination of helicopters and drones to facilitate additional assessments that are not possible from the ground. The CPUC approved the 2020 through 2022 wildfire mitigation plan on June 11th, paving the way for the renewal of SCE's annual safety certification as the prerequisite for access to the wildfire fund. Looking ahead, we anticipate another active fire season mainly driven by lower than expected precipitation and very dry conditions across California. However, SCE is entering the more active fire period better prepared than ever. In addition to advancing wildfire mitigation measures, the company has made improvements to public safety power shutoff or PSPS protocols since last year. While the use of PSPS is largely dependent on temperature, wind, and fuel conditions, With the improvements that FCE has made since last year, we would expect to see a 30% reduction in the number of customers affected by PSPS events under the same conditions as last year. Our preparedness includes pre-established switching playbooks for each of our approximately 1,100 circuits that traverse high fire risk areas, enabling a more surgical approach to isolate the smallest portion of the circuit possible for a given weather condition. It also includes many facets of our customer care program, such as providing generator rebates for customers in a high-fire risk area and battery backup systems for qualified critical care customers. We continue to focus on minimizing customer impacts, but PSDS will remain a tool to mitigate the risk of a catastrophic wildfire. Among key wildfire-related proceedings of the CPUC, FCE submitted its 2020 safety certification request on June 19th, outlining how the company meets safety culture and conduct requirements, including implementing our approved wildfire mitigation plan and linking executive compensation to safety. The CPUC has 90 days to act on FCE's request. Until then, the initial safety certification we received last July will remain in effect. On the legal front, I would like to give you an update on the 2017 and 2018 wildfire and mudslide events. SCE announced an agreement last November to settle claims with 23 public entities. Since that time, the utility has continued to explore settlement opportunities with numerous individual plaintiffs. During the quarter, SCE reached confidential settlement agreements with some of these plaintiffs, and they represent the first individual claims that the company has settled in the 2017 and 2018 wildfire and mudslide cases. There are thousands of similar individual claims against SCE, and the utility is committed to exploring settlements with all reasonable parties who wish to do so. The court has set January 12th, 2021 as the start of the Thomas Fire Bellwether trial, but this may be further impacted by COVID-19. The court vacated the July 2020 bellwether trial date for the Woolsey fire and has yet to set a new date. I would now like to briefly discuss how sustainability is central to our vision for leading the transformation of the electric power industry. Our vision aligns with California's COVID-19 recovery efforts as the state is working to help Californians recover as fast as safely possible from the COVID-19-induced recession and to shape an equitable, green, and prosperous future. Our recently published 2019 sustainability report highlights Edison International's progress towards meeting our long-term goals. They include delivering 100% carbon-free power to SCE customers by 2045, expanding infrastructure and SCE service area to support increased vehicle electrification, and electrifying SCE's own fleet, including 100% of light duty vehicles by 2030. I would note that at the end of 2019, 51% of the electricity that SCE delivered came from carbon-free resources. We also remain focused on advancing our clean energy and electrification strategy. In May, SCE announced 770 megawatts of energy storage procurement, one of the largest in the nation, which will help enhance electric system local reliability needs. Also, last month, SCE, in partnership with other utilities, published the West Coast Clean Transit Corridor Initiative Study. This looks at infrastructure needs to serve medium and heavy-duty electric trucks. Additionally, we were pleased that the California Air Resources Board furthered the state's commitment to electrification by adopting the nation's first zero-emission electric truck rule. Maria will comment on the initial proposed decision issued just yesterday in SCE's Charge Ready II proceeding. Let me conclude by saying that California's commitment to the 2030 and 2045 climate change goals can play a critical role in a just and equitable economic recovery. Investments in clean energy and electrification can address climate change and also lower greenhouse gases affordably for all California communities. At Edison International, we are committed to enabling the state's efforts to achieve its objective of a clean energy economy. With that, let me turn it over to Maria to provide her financial report.