Good afternoon, and welcome to the Edison International First Quarter 2017 Financial Teleconference. My name is, Princess, and I'll 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 very much and good afternoon, everyone. Our speakers today are 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-Q, Pedro's and Maria's prepared remarks, and the teleconference presentation. Next week, we'll distribute our 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 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, and good afternoon, everyone. Edison International is off to a solid start in 2017. Today, we reported strong first quarter earnings of $1.11 per share compared to $0.85 per share a year ago. It is early in the year, so for now, we have left our full-year guidance unchanged, since our normal practice is to wait until more of the year has gone by before formally updating guidance. At the same time, we recognize there is a bias toward the upper-half of the range. Maria will cover this in detail in her remarks. My comments today focus on Southern California Edison's long-term growth opportunity. I'll start with the SCE 2018 General Rate Case. SCE's filing outline a continued focus on infrastructure reliability investment. It also proposed the first elements of a multi-year grid modernization initiative, one that will be a key enabler of California's ambitious climate change policies, as well as supporting improved system reliability and public safety. As I have said before, California has only 13 years to reduce greenhouse gas emissions 40% below 1990 levels. Policymakers have identified a robust, modernized electric grid as a critical element in the effort to achieve significant GHG reductions. The CPUC will set SCE's initial pace for grid modernization in its GRC decision. Agreeing on the right pace for grid modernization will be a key topic in the GRC process, as we saw two weeks ago. In testimony submitted by the Office of Ratepayer Advocates, or ORA, they recommended zero capital spending for this key enabler of climate and clean air policy. This is contrary to the CPUC's stated goal of completing grid modernization by 2025, and we don't believe is consistent with California's climate policy objectives. Testimony from other intervenors is due tomorrow. We will respond to all intervenor…

Thanks, Pedro. And I just want to echo those comments; we deeply appreciate Scott's contributions to the company. He's a wonderful colleague and thought partner, and has been an integral part of our team for the past 10 years. We will miss his expertise and counsel tremendously. We know, however, that the friendship will continue. Thank you, Scott. This afternoon, I'll now cover our first quarter results, our reaffirmed guidance and a few other financial topics. Please turn to page 2 of the presentation. First quarter results reflect strong SCE operating performance, so let's begin by looking at the key SCE earnings drivers shown on the right of the slide. Higher revenues reflect the normal attrition mechanism in SCE's current General Rate Case. As a reminder, increases in revenues are authorized by the CPUC in the second and third year of each rate case cycle. These increases essentially anticipate standard cost growth for operations and maintenance expenses, depreciation, taxes, and other items. The mechanism also provides our rate base earnings for capital additions in that second and third year. Higher revenues contributed a positive $0.12 per share variance compared to last year's first quarter. SCE continues to implement various operational and service excellence initiatives and O&M was lower in the quarter, contributing $0.06 per share to the higher earnings. I would note that some of this can be related to timing of various activities, and is not necessarily indicative of a trend line for the full year. Higher depreciation is to be expected since it's the partial offset to the higher authorized revenues related to SCE's major capital spending program. Depreciation is a $0.04 per share negative variance in the quarter. Net financing costs were also higher by $0.03 per share mainly due to increased borrowings to finance our capital…

Thank you. Our first question comes from Ali Agha from SunTrust. Ali, your line is now open.

Good afternoon.

Hi, Ali.

Scott, congratulations for a job extremely well done, and wishing you all the best as well.

Thanks very much, Ali.

First question, Maria, for modeling purposes, what effective tax rate should we assume for EIX for the year? And how should we think about that to book tax rate going forward as well?

We usually think about effective tax rate at SCE at 20%, and then a percentage or two lower at EIX, so that really should be how you're thinking for the next several years.

Okay. And that would factor in this year as well given the tax benefits that you booked?

Yeah. I would use those assumptions starting with this year, yeah.

Okay. And then on the SONGS process, given the new date you've talked about extending it to August 15, assuming things fall into place et cetera, what's the earliest you believe you could reach a final conclusion on that issue?

Hey Ali, it's Pedro. I don't think we're in a position to speculate on timing, what we've done is, we've provided visibility to the three sessions that are coming up in June. But just don't want to speculate or presume that we get resolution to these three sessions or one or two of them, the parties decide to go into more sessions, so the parties decided to have mediation, it's not going to work out, so just want to stick to the timeline as we've given it, and not speculate further. Hope you appreciate that.

Okay. Last question, Pedro, given the ORA's position on the GRC, and I know, others will be filing tomorrow as well. Do you still believe there is a possibility to reach a settlement on this rate case or do you think it's going to be fully litigated most likely?

Again, I'm not going to be able to give you any sort of quantification of probabilities left or right on that. I think, what we said before, and would reaffirm now is, certainly open to that. The PUC staff set a schedule for the first set of settlement discussions. So we'll take them seriously, and see how it goes. So now, certainly intellectually open to that, but not in a place where we can give you a probability in either direction.

Okay. Thank you.

Thanks, Ali.

Thank you. Our next question comes from Julien Dumoulin-Smith from UBS. Julien, your line is now open.

Hey.

Hi, Julien.

Good afternoon. Hey, well, first-off congratulations, Scott. I really appreciate everything you've always done for us and the team, it really means a lot. So with that said, I'll just kick-off a couple, basic questions. First, in terms of SONGS, just to set the expectation, could you see a further extension or is there actually a drop-dead timeline? And then, a second unrelated question. But going back to what Sempra was talking about, on the safety-related CapEx they're talking about, the ramp. Is there any potential to see any of that flow into your CapEx, perhaps not necessarily in the current instance, but perhaps future rate cases? I'd just be curious how you think about embedding more of that safety culture?

All right, Julien. Let me start with the SONGS piece, and turn it over to Maria or Ron Nichols for the ramp question. On the SONGS piece, kind of similar to the answer I gave Ali, don't really want to speculate on where this may go. I think, answering your question head-on, I think anything is possible. Parties could decide that they want to continue discussions. I'm not aware of (31:09) a predetermined drop-dead date or what have you. So I think we'll leave it fairly open at this point, and see where it goes. Let me turn it over to Maria on the ramp question.

Sure, so Julien, we actually will file – for our 2021 GRC, we will file a similar filing next year. It's part of the process as it is unfolding. I think, from a safety culture perspective, we actually already look at all of our capital through a safety lens and are determining all the time, with or without the ramp, whether or not we are appropriately addressing all of the safety concerns and the safety needs of the company. So I would say, you'll continue to see us have that focus on infrastructure replacement, which has both the safety aspect to it as well as the reliability aspect to it.

Great. And then lastly, I hate to bug you on this again, breakeven on Edison Energy, can you even talk about that for 2018 yet, or anything, I know that was a third quarter subject?

So, still same comments that we made last time around, we've given folks visibility into the costs for 2017, $0.25 guidance at the total holding company level, $0.08 of that is Edison Energy, and then we will be coming back sometime in the fall with comments on the broader business plan. And that we do expect to be able to provide some insights on, at what point we would get the business to or expect to get the business to breakeven. So nothing new to report there yet. Look forward to chatting about it in the fall, Julien.

All right. I'll leave it at that. Thank you all.

Okay. Thanks, Julien.

Thank you. Our next question comes from Jonathan Arland (sic) [Jonathan Arnold] from Deutsche Bank. Jonathan, your line is now open.

Hi, good afternoon, guys.

Hey.

Hey.

And congratulations, Scott, and thank you for all your help over the years, as well.

Happy to, Jonathan.

Thank you. So I just wanted to ask about the cost of capital situation, and to make sure we understand the process. And there was some comments made at the Commission Meeting on Thursday about, I think, the ex parte being no longer in effect because the item was withdrawn from the agenda. Does that mean that your people can start to engage with the Commission, and figure out where they're headed with this, but you just don't have anything to share with us yet, or you may choose not to anyway, I would guess. But am I understanding that right?

Yeah. Jon, this is Ron Nichols, they have opened back up, so we can request those meetings.

Are they the sort of meetings you'd have to disclose or would they not be ex parte meetings effectively, if ex parte is not in effect?

No, they'll still be ex parte. There was a total ex parte ban for that period, they've lifted the ban, but they would still be reported meetings.

Okay. So we might see some indication of you guys going in there and whatever, before we hear what's actually happening?

Possible.

Okay. That was one. And then, I was also curious on what you said about the tax in February and March, you said you'd seen continued benefit. Are those similar in size to what you saw in the first quarter or are you just letting us know there's a little tail that carries on?

No. Actually, all of the benefits from the exercise of stock options are now in the results for the first quarter. So that reference to the $0.10 variance and the $0.13 for the entire company on a consolidated basis, that takes into account all of those exercises through March.

What you're really telling us is, you have roughly $0.10 of exercises over and above guidance for the front end of this year?

That's correct, we had $0.02 embedded in our guidance.

Okay. And that $0.02 would typically mostly show up in Q1, right?

Well, actually when we included it in guidance – in the original guidance, it was on the basis of option exercises that had already occurred, so they were in Q1, we knew about them.

Okay. So it's not impossible you'd have more going through the year, but what you've had so far is roughly $0.10?

Right. It's always – you can't really predict when people will exercise, so that's what we have through the end of March.

Okay. And could I just go back to – I think I just heard you say that, we should be using 20% as an effective tax rate, is that just a 2017 comment or does that go beyond?

No, that's for next couple of years.

Yeah. What was your – is that what you have in the rate case filing as well or?

The rate case filing is just a little bit more complicated just because there's a lots of puts and takes when you get into the RO (36:16) model, but from a forecasting perspective that's an appropriate number.

Okay. And this is the primary reason for the difference with statutory rate?

I'm sorry, could you say that again, Jon?

What is the – well, there's a big pictured reason for the difference with more of a normal rate?

Well, the biggest reason is really the property-related deductions, so the tax repay reductions, bonus et cetera.

Right. All right. Thanks for the help.

Thank you. Next in queue, we have Mr. Michael Lapides from Goldman Sachs. Michael, your line is now open. Michael Lapides - Goldman Sachs & Co.: Hey guys, congrats on a good quarter.

Hi, Michael. Michael Lapides - Goldman Sachs & Co.: Quick question, if I go back to the last rate case or two, when the final outcome came from the CPUC, were the ending revenue requirement in rate base assumptions, were they generally kind of closer to what your request was or were they kind of closer to what the ORA testimony implied?

Over the last few rate case, I think you know, the percentage of the CapEx that was authorized was, I'll say between the – approaching 92% in the last rate case, high 80s in the one prior to that. I think, you often do see some give and take over the course of the litigation of the proceeding, so that – where people first start in terms of their testimony when they're intervening may not be where we end up. But it's hard to say, this is a new proceeding from the perspective of – we've added the grid modernization expenditures. And so, we'll have to see how that turns out, and it's one of the reasons why we didn't provide more boundaries around the outcomes as we have in the past, simply because it's a new type of investment or a different approach that we think people will review the testimony on. Michael Lapides - Goldman Sachs & Co.: Got it. But if I look at their testimony, their testimony actually had a little bit lower rate of return in it, just 7.2% versus the 7.9%, I'm sorry, it maybe the other way around, I'm just curious why those things would be different, I would think both the ORA and SoCalEd would be using the same assumed rate of return in the testimony?

We definitely would be using the same assumed rate of return in testimony, based on our authorized rate of return, they may have some differences just from modeling issues or they may have adjusted some things due to, for example, things like customer deposits. So when you do the math through, it looks like a different calculated number. But I think the going in assumption on ROEs and cost of debt, et cetera, would be the same. Michael Lapides - Goldman Sachs & Co.: Got it. And finally, just real quick. I think, the difference in rate base was about $700 million for 2018. How much of that was grid mod versus other items?

It was really all generally related to grid mod, it's related to both the portions related to the 2018 spend, but the results of 2017 spend that we had sort of the pre-test year spend on grid mod that also affects that number. Michael Lapides - Goldman Sachs & Co.: Got it. Thank you, Maria, much appreciated.

Michael.

Thank you. Our next question comes from Steve Fleishman. Steve, your line is now open.

Yeah. Hi, good afternoon. Just at the end of your comments on cost of capital, you did say that you expect it – it will eventually be – the settlement will eventually be approved?

Yeah. I just said...

And I just wanted...

...in my comments, and we view the settlement as a very fair one. TURN, ORA, the utilities all agreed to it, and importantly, there were simply no comments from anybody else in the proceeding. So there was no stated opposition to it.

Okay. So even though you don't know exactly why the delay, there's nothing that would indicate any issues with the settlement?

We're not aware of anything.

Yeah.

Of course as I also said in my comments, I don't think, the PUC has made any public statements about the reason for the withdrawal of the PD or what the timing will be for next steps. We are staying tuned in that regard.

Okay, great. That was it. Thank you.

Thanks, Steve.

Thank you. For our next question, we have Mr. Greg Gordon from Evercore ISI. Greg your line is now open.

Hey, Greg.

Thanks. Congratulations, Scott.

Thanks, Greg.

It's been a long good run, unfortunately most of us have to keep working for a while. I just want to be clear when you give the guidance on the effective tax rate, when we think about rate base math, because a lot of the benefits that you're experiencing that lower the effective tax rate are ultimately putting the balancing account, and refunded the customers. We should still think about the right after-tax ROE assumption for the fiscal year for SCE still being at or around your cost of capital plus or minus incentive revenues, right? This isn't going to somehow allow you to – from a tax rate perspective earn in excess of the, the authorized return?

Absolutely correct. Yeah.

Okay. And your guidance on earnings per share at the parent as articulated, also contemplated that tax rate?

Yeah.

Okay. That's all I had. Everyone else asked my questions. Thank you.

Thanks, Greg.

Thank you. Next in queue we have Mr. Praful Mehta from Citigroup. Praful, your line is now open.

Thanks, so much. Hi, guys, and congrats, Scott.

Thanks, Praful.

So quickly, on O&M savings. Just want to understand the $0.06 O&M savings this quarter, how do you track that for the full year, and then going forward, given the GRC cycle, how should we think about O&M over the next GRC cycle?

So I think, Praful, you know that, we're always working on reducing O&M costs, affordability, operational and service excellence there, it's really key components of our strategy, because we need to manage customer rates over the long-term. So we're always going to be looking for those improvements, when we get to the beginning of a next rate case cycle, things that we've accumulated over time, we're going to return to the customer, but because we have to always be working in order to get them, you'll kind of see that happening periodically up until the point, and get to the rate case and then again after that we'll continue that work. When I mentioned the $0.06 quarter-over-quarter change in O&M, this quarter that's obviously – reflects a lot of our operational and service excellence, initiatives. I was just noting that, not to extrapolate that to a trend line for the year necessarily, because you can have timing of initiatives that vary year-over-year, sometimes work happens in the latter half of the year as opposed to beginning of the year, but we have embedded in the guidance that we've given that $0.31 of combined efficiencies and financing benefit. And so, that's kind of where, I think, I would land at this point.

And just to put an accent on that, when you think about it, Kevin Payne, and the team at SCE, at any point in time, I have a dozen or more different individual projects going on in areas of opportunity. So that adds to the rationale behind Maria's point about, this is not a simple linear process, there's real work underlying it with implementation steps that have to be taken.

Got you. Thanks, guys. That's helpful color. And then, just secondly, wanted to just understand a little bit on the strategic side. There still seems to be potential M&A opportunities that can come up at the utility level, for example, in Texas. Wanted to understand how you're thinking broadly about M&A, and if there would be any interest if any opportunities come up?

Yeah. Thanks, Praful. I'll take this one, and I think, you'll hear a repeat of similar comments I've made in prior earnings calls, general comment with Mr. Cunningham sitting here next to me, where he usually reminds me that, that we don't comment on M&A. And then, I might go further and just say that, as we look at the environment, it is an environment where we are fortunate that we have these strong organic growth opportunity that we do at SCE, some not all, but some of the transactions that we've seen out there have been expensive acquisitions done by folks who don't enjoy the same sort of organic growth opportunity, so we don't feel any pressure to go pay the heavy premiums that you're seeing in the current market, in order to go chase further growth. That said, you never say never, always we remain open to understanding the landscape, but it'd have to be at a value point that is different from what we've seen in the market recently. And finally, if you'll ever see us do a transaction, it will be very well considered in terms of not only the valuation aspects, but the actual real work behind the transaction, which is the integration aspects. That's where you see a lot of deals goes out, and when you actually get real people and real teams together, and have to merge companies, and having done some of that in my days as a consultant, we know it's very hard work.

Got you. And just finally, one quick clarification. I know, the electrification call was very helpful and you talked about the opportunity there, but what does that mean for gas generators, given there was an earnings call from an IPP talking about RMR contracts. How do you see that playing out, and is there a need to have some gas around? Thanks, guys.

I'll give you a quick answer, and Kevin Payne or Ron Nichols might elaborate more. Thinking of the reality in our current California market is that, these resource stack includes gas, gas is needed, and I think, I've even said in prior comments that we need to make sure that the market pricing structures are fair to all the parties involved, and certainly we're seeing the pinch that gas generators are feeling. That said, over the longer-term, as we see the state continue to move towards 40% greenhouse gas reductions by 2030 and 80% by 2050, we do expect that, the amount of gas in the system will continue to be squeezed down, if the state is really going to make this greenhouse gas reduction and air quality targets. Kevin or Ron, anything you guys would add to that or?

Well, I'd just add to that, we do see a need for gas, but we're going to see more of it just being peakers and very flexible generation to be able to meet the ramps that we see as we increase more and more renewables. But it will be there likely burning less fuel over time.

Just on that point that, you might have seen, I think we talked publicly about couple of projects we did at two of our utility owned peakers, where we integrated 10 megawatts of battery storage into each of those 50 megawatt peaker projects. And to Ron's point, that's the kind of flexibility that's needed because more and more gas isn't about meeting peak demand, it's about meeting the ramps in the much more volatile California system.

Got you. Great. Thank you so much, guys.

You bet.

Thank you. Our next question is from Angie Storozynski from Macquarie. Angie, your line is now open.

Hi, Angie. Angie Storozynski - Macquarie Capital (USA), Inc.: Hi, how are you? So, just a couple of small questions. So on the MHI reversal of legal costs, I understand that you haven't recorded it yet. But could you quantify it, assuming the current allocation of the award, would it be about $0.09?

Yeah. So we had about $79 million of legal expenses that we – in total, a portion of which we had already recovered, and so the remaining amount would be about $0.09 we'd mentioned in the fourth quarter call. To the extent we realize that, that would be a core item. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. And so that would be trued up along with the update to your guidance on the second quarter earnings call, correct?

I think we'll still be looking at the status of whether or not the CPUC has determined reasonableness before what we do that. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. And then on the transmission ROE, I mean, I'm actually looking at the slide here, can you tell me if this 10.5% on the transmission ROE, I mean, is it still subject to the FERC quorum, what are we waiting for there?

That's our 2017 ROE, we're going to file it later this year for 2018. So the 2017 number has already been fully litigated and negotiated; we'd have to go back at the end of this year to get a new arrangement. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. And the last question. So yes, we're waiting for the remaining interveners to opine on your grid mod CapEx, among others. But now that you can actually talk to the Commission, are you getting any guidance or you think you're going to get any guidance as to what the Commission actually thinks about this level of spending? And what is the right pace of adaptation of those CapEx that is in a way requested by the state?

Yeah. Angie, this is Ron. I think that you might – there might be a little bit of confusion. When we were talking about our ability to go back and talk to the Commission, that's in the cost of capital case. We still are obviously in the middle of the GRC at this point right now. Angie Storozynski - Macquarie Capital (USA), Inc.: Okay.

The GRC decision is where we expect to get firm guidance on re-modernization by way of what approval that we get for the grid mod request that we made there.

Right. So that's... Angie Storozynski - Macquarie Capital (USA), Inc.: Okay. So just besides the positions of the interveners we're not going to know anything about the grid mod CapEx until the GRC approval?

Well, there is still the separate DRP (51:27) proceeding, and earlier they had intended to have something to us by end of Q2; now it looks like that's going to slip later into the year at this point. So there could be – it could be guidance, and that, we would not – it may or not be that – it wouldn't be explicit as to the GRC. It'd be broader guidance in general – general policy is where they're headed, but that would be later this year. Angie Storozynski - Macquarie Capital (USA), Inc.: Fantastic. And Scott, thank you so much for all your help. Thank you.

My pleasure, Angie.

Thank you. Next in queue, we have Mr. Travis Miller from Morningstar. Travis, your line is now open.

Good afternoon. Thank you. I think, again Scott it's worth reiterating, thank you. It's been a pleasure and certainly all the accolades are well-deserved, and I'll say, I hope you enjoy retirement in steps over time.

Well done, Travis.

Apart from that, I have a very quick question, follow up on that O&M. So the O&M and financing benefits, this quarter, if I'm reading that correctly, it was $0.06 lower O&M, $0.03 higher financing, so net $0.03, and that corresponds to that $0.31 in guidance such that there's $0.28 left, am I reading all that correctly?

No, the variances I was referring to were quarter-over-quarter, so year-over-year not relative to guidance. But the guidance that we gave had actually $0.31 of total benefit, we're continuing to work towards that, and extracting that value over the course of the year. So, it's two different, I'll say, comparison points.

Oh, because it was off the rate base, okay. I got it.

Thanks.

How are you tracking on that $0.31?

So, we reaffirmed guidance at $4.14, as Pedro mentioned earlier, the bias to the upside.

Okay. Very good. Thanks a lot.

Thanks, Trav.

Thank you. Next, we have Mr. Shar Pourreza from Guggenheim Partners. Shar, your line is now open.

Hey, guys. My questions were answered. Scott, congrats on the retirement.

Thanks, Shar.

One moment please. Thank you. Next, we have Mr. Paul Fremont from Mizuho. Paul, your line is now open.

All right. Thank you very much. First off all, best wishes to you, Scott and thanks for all your help. Can you guys breakout the EEG losses for the quarter and also how are you tracking relative to your expectation on the year for that?

Yeah, we have actually a table in the 10-Q when you get a chance to look at it, but it's about...

$6 million.

It's $6 million, so it's roughly $0.02 or so. It's – as you know, there's no – as I noted earlier, there is no quarter-over-quarter variance, and that's consistent with the guidance that we had for the year as well.

Okay. And then, on the holding company, what debt level would you expect to end the year at for EIX holding company?

Yeah. So we don't forecast sort of where we'll end up in terms of debt either at SCE or at Edison International. Right now, we're about 12% of the consolidated debt as a company, and we think that we're managing to a reasonable level. We're fairly conservative about the SCE and the EIX.

And then, on absolute basis, are you about $1.5 billion at EIX parent?

We just termed out. So that's about right. I should go back and double-check that, it's about right. All right.

Thank you very much.

Thank you. That was the last question. I will now turn the call back to Mr. Cunningham. Mr. Cunningham, you may proceed.

Thanks very much, Princess. First of all, I just wanted to say thanks to you, Pedro, particularly, and Maria, and those of who said nice things. It has been a lot of fun over the last 10 years. I worked with lot of you. And a few of you out there, I've worked with a lot longer than that. We won't get into those details. I do look forward to catching up with a lot of you on the phone, and also in travel later this month. So more formally, thanks very much for joining us today. And please call if you have any follow-up questions.

Thank you.

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