Edison International

Good afternoon, and welcome to the Edison International Fourth Quarter 2023 Financial Teleconference. My name is Sheila, 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, Sheila, 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. 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 SEC filings. Please read these carefully. The presentation includes certain outlook assumptions as well as reconciliation of non-GAAP measures with 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 Peter.

Well, thank you, Sam, and good afternoon, everyone. Thanks for joining us. I am pleased to report that Edison International's core EPS for 2023 was $4.76, which was above the midpoint of our guidance range, despite the pending SEMA decision shifting into 2024. This strong performance demonstrates our ability to manage the business and and extends our track record of meeting annual EPS guidance over the last two decades, as shown on page three. Today, we are introducing 2024 EPS guidance of $4.75 to $5.05. This range incorporates a planned investment in O&M for reliability-focused activities and redeploys savings from prior years into operational excellence initiatives. The spending will benefit customers and therefore shareholders in the long run. I also reaffirm our strong confidence we have in our long-term EPS growth targets of 5% to 7% for 2021 to 2025, and also 2025 to 2028. Maria will discuss our financial performance and outlook later on the call. Page 4 shows our accomplishments in 2023. First, we once again delivered on our annual EPS guidance. Second, SCE exceeded its wildfire mitigation plan target to install 1,100 circuit miles of covered conductor, bringing the total to more than 5,580 in just five years. We are proud of this progress, which, combined with enhanced vegetation management, asset inspections, and other programs, has significantly reduced the need for public safety power shutoffs. Incorporating this progress into the independent wildfire risk model managed by Moody's RMS, you can see on page five that SCE has achieved 85% to 88% risk reduction as compared to pre-2018 levels. Third, SCE filed its cost recovery application for the TKM events, requesting $2.4 billion. SCE provided a compelling case that it prudently designed, managed, and operated its equipment, and that the associated costs were reasonably incurred. Lastly, we raised our annual dividend by 5.8%, reflecting the Board and management's continued confidence and commitment to delivering on our EPS growth targets. Our dividend yield is in excess of 4% and remains a key component of our total return proposition. This marked the 20th consecutive annual increase in Edison International's dividend. Page 6 provides an update on the 2017 and 2018 wildfire resolution and our approach for 2024. I would like to emphasize three takeaways. First, SCE continues to make solid progress, and overall claims are settling in line with expectations. SCE revised the best estimate of total losses upward by $65 million, with the majority of this based on a single settlement. The deadline in the Woolsey Settlement Protocol to provide complete claims packages was yesterday, and SCE is now evaluating the responses. the utility targets resolving more than 90% of WLSI claims and filing the cost recovery application in Q3. Third, CPUC President Reynolds issued the scoping memo earlier this month for the TKM proceeding, which largely adopts SCE framing of the issues. We are encouraged by this ruling because the issues will be handled in a single phase, allowing for a final decision as soon as Q1 of 2025. Also, the schedule provides an opportunity for parties to submit a settlement agreement. I would like to remind you that our financial assumptions for 2025 and beyond do not factor in the cost recovery applications, which would represent substantial value for the company and SEA's customers. Page 7 summarizes the key management focus areas for 2024. On the wildfire mitigation front, SCE plans to install an additional 1,050 miles of covered conductor in 2024, after which this program will start to ramp down. By the end of next year, SCE will be approaching a significant milestone, 90% hardening of its total distribution lines in its high-fire risk area. You can see this depicted on page 8. Also, SCE will continue its GRC advocacy for funding critical investments that will enable efficient electrification and the state's clean energy transition. I want to emphasize that distribution grid investment accounts for more than 85 percent of SCE's capital plan, and these investments are crucial for ensuring reliability, resiliency, and readiness. The CPUC has consistently approved this type of spending in previous GRCs, reinforcing our confidence in SCE's request. As for the legal and financial categories, I just discussed our legal approach, including filing the Woolsey application in the third quarter, and Maria will discuss her financial targets shortly. We at Edison are equally focused on the long term. As we have highlighted in several industry-leading white papers, the grid will be a key enabler for realizing California's pathway to net zero. To get there, it will be critical to rapidly expand the high-voltage transmission system and the localized distribution networks that serve customers. This aligns well with the underlying drivers of our investment outlook. As more and more vehicles and buildings are electrified, the electricity demand will increase by 80% over the next 20 years, which will benefit customer affordability through a 40% decrease in their total energy costs across electricity, gasoline, and natural gas. After years of flat demand, SCE is projecting an uptick in electricity usage of about 2% annually over the coming years. To accelerate the development of new markets over time, SCE has developed innovative proposals, including its nation-leading suite of transportation electrification programs. Recently, although the CPUC denied SCE's building electrification application due to their near-term affordability pressures, It acknowledged SCE's leadership in proposing programs to accelerate much-needed building decarbonization. The utility will continue to evaluate the results of other building electrification pilots it has in progress and will also look for different ways to support the state in advancing its clean energy priorities. Another area where we continue to innovate is building our digital and AI capabilities to drive greater efficiency. We are investing in technologies to improve our data analytics skills, to enhance decision making, and strengthen operational excellence. For example, we are using generative AI to improve inspections, customer experience, and grid planning. Today, our team is also using AI for research, workflow automations, and code development. In SCE's customer service operations, AI is enabling call center agents to retrieve information faster. performing speech and sentiment analytics, and supporting billing operations. We will continue this proactive approach to capture value using new technology. To conclude, our operational agenda is driven by safety first, reliability, affordability, and resiliency in our overall utility operations, including SCE's wildfire mitigation and industry-leading covered conductor program. Our financial agenda is very clear. deliver on our 2024 EPS guidance, and achieve our EPS target for 2025. Our team and I are very committed to executing strongly, and we will continue to share our progress with you. And with that, let me turn it over to Maria for her financial report.