Good afternoon and welcome to the Edison International Fourth Quarter 2016 Financial Teleconference. My name is Riya, and I will be your operator today. Today's call is being recorded. I would now like to turn the call over to Mr. Scott Cunningham, Vice President of Investor Relations. Mr. Cunningham, you may begin your conference.

Thanks, Riya, and good afternoon, everyone. Our speakers today are our President and Chief Executive Officer, Pedro Pizarro; and Executive Vice President and Chief Financial Officer, Maria Rigatti. Also here are other members of the management team. Materials supporting today's call are available at www.edisoninvestor.com. These include our Form 10-K, Pedro's and Maria's prepared remarks, and the teleconference presentation. Tomorrow afternoon, we will distribute our regular business update presentation. During this call, we will 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 to the nearest GAAP measure. During Q&A, please limit yourself to one question and one follow-up. I'll now turn the call over to Pedro.

Thanks, Scott. Good afternoon, everyone. Edison International delivered excellent fourth quarter and full year results, led by SCE's strong operating performance. Core earnings were $3.97 per share, at the high end of our core earnings guidance range. We have introduced 2017 earnings guidance with the midpoint of $4.14 per share, which is above consensus analyst estimates of $4.11 per share. We've been able to improve on our targeted 2017 EIX holding company costs compared to what I foreshadowed on our third quarter earnings call. Maria will provide further details in her comments. Since this is our first year-end earnings call in our new roles, I want to take a few minutes on a couple of topics from my first few months as President and CEO and from reviewing our full year results against our company goals. First is the helpful and candid feedback we received from many of you from the Investor Perception Study we launched in October and I want to say thank you. Your comments resonated well with much of what we've heard in person. In particular, it reinforced some of the strategic thinking we've had underway on maintaining a strong focus on SCE as our core growth engine and on the best areas of focus for Edison Energy Group. I'd like to touch on a few of the key non-financial metrics the board uses in measuring our performance annually. Though they may not be as critical to investors, they are critical to how we measure our performance in delivering safe, reliable, clean and affordable electricity to our customers. A major priority across our company is being safe and though we've improved our performance in our journey to injury free, we have much more to do to meet the performance of our best-in-class peers. To that end, we…

Thanks, Pedro and good afternoon, everyone. My remarks cover our fourth quarter and full year results compared to last year and to our 2016 earnings guidance. I'll then cover the 2017 guidance that Pedro has already highlighted, update our capital spending and rate base forecasts and touch on a few other topics. Please turn to page 2 of the presentation. Fourth quarter core earnings grew 16% on SCE's strong performance. As was the case in previous quarters, SCE earnings comparisons still have some timing issues related to the adoption of the General Rate Case decision in the fourth quarter of last year. The principal earnings growth driver is lower operations and maintenance costs, which contributed $0.09 of the $0.15 per share in SCE core earnings growth. Revenues primarily reflect the normal GRC attrition year increases and modest additions to FERC revenues to reflect additional construction and operating costs. We also had a positive $0.09 per share revenue variance, primarily due to recognition of the impact of the GRC decision in the fourth quarter last year. Roughly half of this is offset in taxes. Higher depreciation reflects SCE's ongoing capital spending program. Net financing costs, which include allowance for funds used during construction, AFUDC, together with interest and preference stock dividend expense, are $0.05 per share higher in the quarter. This largely reflects $0.03 per share of lower AFUDC contribution due to less construction work in progress. AFUDC rates of return, however, are still above average, given SCE's low short-term debt balances and the contributor to our earnings relative to rate base math, as I'll discuss in a few minutes. Overall, there was not a variance within the income tax line for SCE, although there is $0.04 of tax benefits on stock options, largely offset by the GRC revenue item I…

One moment for the first question. The first question is from Julien Dumoulin-Smith with UBS.

Hi, good afternoon.

Hi, how are you?

Hi, Julien.

Good. First quick question if you could. You talked about the $0.08 with Edison Energy, Pedro more for you, can you discuss perhaps the line of sight on turning that around and how should we read anything into $0.08 relative to the north of minus $0.10 previously?

Yeah. Let me just comment on it briefly and Maria or Ron Litzinger can add, as needed. In the last earnings call, we first focused on 2017 in total holding company guidance. And we told you then that, while we were not ready to provide you all the details in Edison Energy, we wanted to make sure that folks understood that we were working at holding the total holding company expenses including Edison Energy, the $0.27 for 2017, and now, you see that we've updated that to be $0.25 for the year, of which $0.08 is the piece in Edison Energy. Hopefully, it gives folks comfort that we are very focused on driving the work at Edison Energy in a disciplined way. We see a big opportunity there, Julien, but we also recognize that investors do want line of sight in terms of what the ongoing investment looks like. I'm glad that we've been able to affirm that $0.08 for 2017. As I had shared in the third quarter call, we expect to provide you more detail on – the details behind the business plan for Edison Energy no later than the fall of this year. So until we get to there, I'm going to hold off and I don't have any new news to report other than that we continue that work. In the meantime, we're out in the market. We continue to be encouraged by the activities across the piece parts of Edison Energy and are looking forward to sharing more with all our investors.

Got it. Excellent. Perhaps to expand on that a little bit as a follow-up, which businesses are looking more attractive within the Edison Energy, within the $0.08, within your business plan, I know I'm pushing a little bit further, but can you give us a sense on what you see your primary focus has been or will be given kind of the different activities you're pursuing?

Yeah. I think the easiest, and frankly, the shortest way to answer that is, we're focused on the advisory services across the large C&I customer space. I don't think we're ready to provide a lot of detail on, this piece looks better than that piece, because quite frankly, part of the larger gear is that providing that broader set of advisory services across the full portfolio of needs is the core idea. And so, we'll have more to share with you as we get into the details of the business planning exercise by the fall. But nothing to report right now on this piece looks better than that piece or actually we're seeing value and having expertise across the gamut of on-site and off-site renewables, energy efficiency and building management and bringing that suite together is the value nugget here in terms of more customer needs.

Great. Thank you.

Thanks, Julien.

Thank you. The next question is from Ali Agha with SunTrust.

Thank you. Good afternoon. First question, Pedro, a big picture, as you laid out your updated rate base CAGR 2016 through 2020 is 8.6%, but over the last – this rate case cycle, you've been benefiting significantly in your core earnings from the tax benefits and also the O&M savings, at a minimum the tax benefits go away, O&M probably get strewed up as well in the next GRC. But then, the Edison Energy losses would move around as well. So when I look at that mathematically of your 2016 actual earnings that you've booked here, how should I think about the EPS CAGR versus the rate base CAGR given that you're actually over-earning on the EPS front right now?

Hey, Ali, it's Maria. So obviously, there are some things in the mix that I think you mentioned that aren't flowing through to the bottom lining, more primarily around the tax benefits in the early part of two years or three years or four years ago that we're seeing. But we continue to find or look for opportunities where we can actually reduce our costs and put ourselves on a good trajectory. We have opportunities there. We talked a little bit about the opportunities that we're looking at relative to other capital investments, Pedro mentioned the transportation electrification proposal that we recently submitted. So we think that there are opportunities across the board that we can be looking at and incorporating on a go forward basis around our earnings.

So what you would say, Maria, is given all the puts and takes EPS CAGR should be in line with the rate base CAGR?

We certainly think that our earnings and our rate base are aligned.

Okay. And my second question, and I think you alluded to that up a little bit in your remarks as well, but on the dividend front, is the goal to eventually end up at the higher end of the range? As you mentioned, you're pretty much at the midpoint right now. So we're not done yet in terms of ratcheting up the payout ratio, is that correct?

Ali, yeah, that's been our payout ratio range for a long time, 45% to 55%. We'll continue to work it, as we move forward in time, but I think that that incepts over time, we want to be there.

The higher end, did I hear that right?

We want to be in that range over the long-term, yeah.

Thank you.

Thank you. The next question is from Angie Storozynski with Macquarie. Angie Storozynski - Macquarie Capital (USA), Inc.: Thank you. Just...

Hi, Angie.

Hey, Angie. Angie Storozynski - Macquarie Capital (USA), Inc.: Thank you. Two questions. One is, so given the pending GRC and the fourth quarter filing on the true-up on the cost of debt, should I basically assume that you'll have no efficiencies in your earnings in 2018?

Well, certainly, when we file a GRC, the tendency would be to give things back to the customer, that's the construct around which we try and find efficiencies whether it's around O&M or debt. So I think you'll see that as we move forward. On the other hand, as we continue to work and we continue to probe the opportunities that we have, we will still work on finding and achieving additional efficiencies, which – then when we get back to the next rate case, we'll get back to customers once again. So I think you'll see that as sort of our mantra and certainly the cycle that we go through here. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. And the second question on the potential MHI arbitration award, you said the amount equivalent to the costs incurred would be reflected in core earnings. Can you remind us what are those costs?

Sure. So that would be really just costs associated with legal expenses that we have previously incurred through core earnings and that would be if we were – we don't know what the award would be or if there would be an award at this point, but if we were to recover anything and we had sufficient amounts to cover prior legal expenses, that would be about $0.09 per share. Angie Storozynski - Macquarie Capital (USA), Inc.: Very good. Thank you.

Thanks, Angie.

Thank you. The next question is from Jonathan Arnold with Deutsche Bank.

Yeah, good morning, guys – good afternoon, guys, excuse me. I just have quick question Pedro on the non-GRC capital spending that you referenced in the slide, but it's now between grid modernization and the mobile home program. It's $289 million and last quarter that was $100 million or so higher, I think, between the two. What's driving the change there and what you're assuming you'll spend outside the GRC, is there some indication from staff, the things in grid mod that causes you to be more cautious there?

Hi, Jonathan. It's Maria. No, it's nothing about grid mod is causing us to be more cautious, but I think the grid mod numbers for 2017 haven't changed at all since Q3. We are finding some efficiencies in some of the unit cost, if you will, on some of the programs outside of grid mod, so that's really all you're seeing roll through that.

And then, Jonathan, it's something that we'll continue to be very keen on. I know we mentioned in the comments, but obviously, while we present an important growth opportunity here for investors, we want to make sure that it's good capital and in our view, good capital is efficient capital. So just like we're doing the O&M, we'll continue to look for capital productivity opportunities for customers.

Okay, great. Thank you. And then, just you talked about the reasons for the rate base decline in 2020 having to do with the way that – I think if I understood this right, the way that grade making rolls the projects into rate base. So I'm just curious what change did something in the rate making change or is it more just the timing to let to the rate, because I'm presuming that would have been the case in November too.

So certainly, it all starts with the timing slipping to the rate. In the various projects that we have that are part of our FERC rate base, some of the projects are actually eligible for certain incentives, specifically where the capital enters rate base while it's still in construction. So CWIP incentives, others do not. And when you have projects move around that aren't subject to that incentives, staggering it by a year can actually, in that first year or two, have an outsized impact, and then, you catch up when you get to the first full year.

Okay. So it's not that the methodology changed, it's more the timing changed.

Correct.

Okay. Great. And then, just finally on Edison Energy, you say you're narrowing the focus. So does that embed it within that statement? Are there businesses that you acquired that you're not going to continue with? Or just how can you help us understand what's actually changing in that narrowing of focus?

Sure, Jonathan. And I think I covered it in my comments that the two specific examples we wanted to highlight were with Edison Transmission where we have been pursuing opportunities in the various organized markets. The reality is that we are just not seeing the same level of opportunity under FERC Order 1000, as I think the whole market thought there might be at one point. And now, in particular, as we think about what the impacts maybe of the new administration of Washington, potentially moving away from the clean power plant implementation that is probably continued negative for the likely availability of FERC Order 1000 project. So Edison Transmission was one of two businesses we wanted to highlight where we're decreasing the level of effort there, although still keeping our position in Grid Assurance. The second one that I highlighted was Edison Water Resources. I think I had mentioned that in the past as an exploratory activity. We had a team that did a lot of great work there and there's clearly customer interest, but frankly, it's a market that it's still not mature in terms of the transparency of pricing and just the complexity of regulation across it. And so, while we saw some real technical feasibility there, and frankly, I think water is something that's important to society over the long run, our judgment after doing some pilot work was that, the mass there wasn't a good fit for us at this time. And I think as we look at potential opportunities broadly across the space, some of this is exploration on the radar screen and try some of these and we determine that they are not ripe or prime, then we move on. And so, we moved on Edison Water Resources. So those were the two. We remain very focused on the central idea of the energy advisory services for large commercial and industrial customers, and so, I was not trying to telegraph anything about businesses inside that portfolio.

Okay. That's great. I hadn't realized that was sort of an expansion of that comment. So thank you, Pedro.

You bet.

And then, just finally on that, you talked about 2017 guidance factor, lower EEG losses, the $0.08, had you previously disclosed the bigger EEG number, I thought it was all kind of wrapped within the holding company?

Yes.

That's right.

It was previously all in that $0.27.

Okay. So you're just commenting that there was a bigger number in that before, but it was kind of within the $0.27?

Correct.

That's right.

Great. All right. Thank you very much.

Thanks, Jonathan.

Thank you. The next question is from Praful Mehta with Citigroup.

Hi, guys.

Hey, there.

Hey.

Hi. So quickly on Edison Energy, I know you don't like to touch or dig deep into it, but just wanted to understand from a tax reform perspective, any implications on what that could mean from a growth strategy, I know it's more capital light, but wanted to just understand if it has any implications for you guys?

So I think it's the same thing probably that lots of other companies have been telling you. We'll be obviously looking at any sorts of border taxes and how that affects costs for our company and others, and how it would impact our customers. And also, in terms of tax rate, tax rate affects every company, and so as that changes, we'll be keeping an eye on that as well.

Yeah, I mean, and just to tag on to that, so I do think Maria has it right that it might be some impacts on what the overall cost position is, but that wouldn't be just for our offerings, it would be for the offerings of other folks in the space, other competitors as well. And I think, importantly, as we look at the large C&I customers that the business is aiming to serve, they're being driven by a lot of things, they're being driven by economics, they're being driven by sustainability objectives, the tax changes could have some impact on some of the underlying costs, but at this point, we don't see a material change in the overall interest that large C&I customers have in the broad portfolio advisory services theme.

Got you. And that's very helpful color. And then, secondly, on community choice aggregation, the CCA, there is an expectation of meaningful amount of load being served through CCAs over time. Any implications for you guys, how do you see that going forward in your service territory?

Well, let me give a top-level answer, and then, perhaps Ron Nichols or Kevin Payne want to answer further. I think the short answer is that while I think we've mentioned we could see low departures of as much as 40% to 50% by 2025 or so, under the rules set by the legislature, under the framework set by the legislature, there should be no impact to our investors, because it's just all really about who is serving the commodity energy needs, but those customers would still be relying on our grid investments for provision of electricity. So done right, should be no impact, that we do spend time on making sure that the program is implemented appropriately so that there isn't that cross subsidization between folks – having the folks who are leaving being cross subsidized by some of the remaining customers, and so, we have a lot of focus on making sure that the rules are being implemented right. Ron or Kevin, anything you'd like to add there?

Praful, this is the issue that we're dealing with right now. And the Commission is tracking this. They've been having workshops on this matter as well to get more clarity about how they plan to implement the legislative rules on this. So we're just going to continue to track that carefully.

Okay. And I'm assuming then cross subsidization is the core issue just to ensure that that is done fairly?

Yes.

Got you. Thank you, guys.

Thanks.

Thank you. The next question is from Michael Lapides with Goldman Sachs. Michael Lapides - Goldman Sachs & Co.: Hey, guys. Congrats to a good end to 2016. Two questions, one on the dividend payout ratio. And can you talk a little bit, Pedro or Maria, about why the 45% to 55%, why you and why the board still thinks that's the right metric? I mean if I think about what happened, you still have $4 billion-ish plus of CapEx, maybe even closer to $4.5 billion to $5 billion, but the overall size of the company is significantly bigger since you first set that as a payout ratio target, depreciation that's what covered in rates and cash flow is significantly bigger. Just talk about how the board today versus five years ago comes to that level as the target, what are some of the metrics you look at in setting that target?

Let me kick it off and Maria may have more here. I think at the end of the day, we're looking to provide a total shareholder return to our investors and we deliver that through both the dividend growth as well as the earnings growth. And like you said, we have a very strong and, frankly, I'd say, a premium growth story relative to our peers across the industry, driven largely by the organic growth opportunity at SCE, and that rate base growth is driving earnings growth and we view that as being above industry average earnings growth, which I think coupled with above industry average dividend growth rates to deliver a very compelling package to our investors. So we don't look at a dividend growth rate in isolation. We looked at married with the earnings growth rate. And so, as we look at what that earnings growth rate is, the board and we and management still feel that that 45% to 55% payout range present a compelling attractive opportunity when coupled with the earnings growth rate. Maria, anything else you'd add there?

No. Michael, I think it's all part of the package. The total value that we're delivering to shareholders is not just one piece or the other. Michael Lapides - Goldman Sachs & Co.: Got it. The other thing is and this is a rate base question. So 2016 CapEx came in a couple of hundred million dollars lower than I'd think your last business update or your last forecast had. 2017 is a couple of hundred million dollars lower than your last forecast. If I add those up, I don't get to the same number that 2018 is down, and maybe my math is off, but 2018 rate base is actually down less than what the sum of the 2016 and 2017, if I just added up what the differences in old versus new CapEx was going to be any. Can you help A, make sure help me understand what's going on there and it may just be a timing deal? And B, what drives such a big step-up in rate base in 2018 over 2017? I mean you talk about having $4 billion plus of CapEx, but $2 billion of rate base growth, and yet, rate base growth in that year is over $3 billion?

Okay. So maybe let's take the piece parts of your question. So the first part of your question was, you see capital spending down in the first couple of years, but not a commensurate decline in rate base and some of that really is the timing issues that we've talked about before. It's timing that then rolls through, as you move out towards the end of the 2020 period, you can see that rate base more catches up with the reduction in capital spending, and then, you'll see that offset again through 2022. Part of that's related also to just how do projects enter rate base, do they have this incentive feature or not. And then also, every time you change particular assets that are in rate base, you will get in different impact on accumulated deferred taxes. So there's a lot of things like that that roll through. But at the end of the day, CapEx and rate base, they catch up with each other. In terms of your second question as to why there's a step-up in 2018, when we bought – so right now, we're deploying capital, et cetera, we filed our 2018 GRC. We actually have a true-up in the 2018 GRC to reflect the capital that we've been spending over the course of the last few years. If you recall, in the 2015 GRC, the way that our revenue requirement is set in 2016 and 2017 is by looking at capital additions and capital additions and escalation on those capital additions. Capital expenditures, ultimately, match the escalation in capital additions, but because of that, that methodology that the CPUC has adopted, which is frankly a simplified methodology, you'll see a catch-up in 2018 when we go into our next rate case. Michael Lapides - Goldman Sachs & Co.: Got it. Okay. Thank you, guys. Much appreciate it.

Thanks, Michael.

Thanks.

Thank you. The next question is from Anthony Crowdell with Jefferies.

Hey. Good afternoon. Just the company, and I guess the other utility down in the state were very – I guess, got a very balanced decision in cost of capital. Can I use that the same parties involved to think about the discussions around SONGS or are there other parties involved?

I'll turn it over to Adam Umanoff, but I think the broad message here is, we had a constructive outcome in terms of a cost of capital proceeding, where those parties involved, the SONGS matter, separate matter (52:56) we have, obviously, we want to make sure we have a constructive set of discussions with the parties involved there. You saw the assigned commissioner ruling that from December that setup this whole meet and confer process and so we had our first meeting, we'll have our second meeting coming up at the end of February, and I know we'll certainly do our part to have constructive discussions with all the parties, but we cannot handicap at this point where that might lead. Adam or Ron Nichols, anything to add to that?

I wouldn't add anything, Pedro.

Okay. Thanks.

Just what other – are there like a very important party involved with the SONGS discussion that are not involved with cost of capital?

This is Adam Umanoff. There are a number of parties involved in the SONGS proceeding who are also involved in the cost of capital negotiations. But the playlist of parties in the SONGS proceeding is wider. Anyone who intervened in that proceeding has a seat at the table.

Great. Thanks for taking my question.

Thank you.

Thank you. The next question is from Travis Miller with Morningstar.

Hi, Travis.

Good afternoon. Thank you. Just one on the transmission side, if you think out the 5 years, 10 years, whatever, how close is the transmission system, especially where you guys are to getting to that 50% RPS to be able to transmit all that power that might be needed for the 50%, and then, I'll add on to that about the 100%?

I think, a couple of comments on that, and again, Kevin Payne, Ron Nichols may have more to say here. Ultimately, we look to the California independent system operator to do the planning for that and they are still working on the planning to meet 50% renewables. So that really return it to them, you mentioned 100% renewables, we did see a draft bill that was submitted by the pro Tem of the Senate, Kevin De León, last week, that would accelerate the State to 100%. It calls for reaching the 50% mark by 2025, and then, reaching a 100% renewables by 2045, that is, as you can imagine, early days of the legislative session. Last week was the deadline for submitting bills, often place holders gets submitted, so we'll be obviously ready to engage in discussions as that (55:35) and other proposed bills make their way through the process, but I don't think that the ISIL has included a 100% renewables that I know of in any of the scenarios so far. Ron, Kevin anything to add?

Yeah. Just to maybe clarify that the projects necessary, I mean 33% are already identified and underway planning in the upcoming cycle at the California, and so, we'll determine what projects are needed for 50%, and beyond that point, I don't believe that are going away (56:06).

Okay. So the incremental you get 50% or even a 100% is not included in your forecast, right? Because (56:14).

Yeah. Certainly, no.

2020, 2021. Okay.

That's right.

Okay. And then, real quick, very generally speaking, what are you seeing in terms of corporate renewable energy purchases? I guess it gets somewhat into the Edison Energy, but even just more broadly, what you're seeing from corporations who want to buy renewable energy?

Let me ask Ron Litzinger to comment on that.

Yeah. As we – Edison Energy corporate PPA is a significant portion of our business and it continues to grow strong and we see interest and growing year-over-year. So it continues to be an important part of the business.

Is there any way to quantify that in terms of percent of system or percent of renewables delivered anything like that, any numbers in that?

No, not at this time, let's think that would be included in the business plan in the fall.

Okay. Great. Thanks a lot.

Thank you.

That was the last question. I will now turn the call back to Mr. Scott Cunningham.

Thanks very much, everyone, for participating today. If you have any follow-up questions, please do give us a call. Thanks and good evening.

And that concludes today's call. Thank you all for your participation. You may now disconnect.