Good afternoon, and welcome to the Edison International Third Quarter 2017 Financial Teleconference. My name is Markie, and I will be your operator today. 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, and welcome, 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, prepared remarks from Pedro and Maria, and the teleconference presentation. Tomorrow, 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. 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.

Thank you, Sam, and good afternoon, everyone. Before I discuss our quarterly results, I would like to express my deep sorrow for the lives lost and the significant damage during the recent wildfires in Northern California. SCE has provided support to PG&E during this catastrophe, including sending 16 crews to assist with restoration efforts. We will continue with further assistance as necessary. Moments like this reaffirm the commitment that we have, and that I know we share with other utilities and with our regulators, to making the safety of our communities and our workers our number one priority. I will talk more about SCE's management of wildfire risks later in my remarks. Now, on to the quarter. Edison International reported strong third quarter earnings of $1.44 per share, which were $0.15 per share above last year's third quarter earnings of $1.29 per share. Based on the continuing strong performance at SCE and tax benefits we have received throughout the year, we have increased our 2017 earnings per share guidance to a midpoint of $4.32 per share, and tightened the range to plus or minus $0.05 per share. Maria will cover this in more detail in her remarks. Please turn to page 2 of our presentation. As I have discussed with you in the past, we believe we must be a key enabler of California's ambitious environmental policies. These are important not only to the state broadly, but specifically to our customers and stakeholders. Edison International will strengthen and grow our business, and lead the transformation of the industry by focusing on opportunities in clean energy, efficient electrification, a modernized and more reliable grid, and enabling customers' technology choices. At SCE, this means focusing on four key priorities. One, cleaning the power system with continued leadership in procurement of renewable power;…

Thank you, Pedro, and good afternoon, everyone. My comments today will cover third quarter and year-to-date results, our updated capital expenditure and rate base forecasts, our updated earnings guidance and our updated cost of capital. Let's begin by looking at the key SCE earnings drivers for the quarter shown to the right on slide 3. For the third quarter 2017, Edison reported earnings of $1.44 per share, an increase of $0.15 from the same period last year. Included in this, SCE had a positive $0.09 variance for the quarter. SCE's revenues increased $0.18 per share in the third quarter versus the prior year. This was mainly attributable to $0.11 per share of increased revenue related to the attrition mechanism in SCE's 2015 General Rate Case. The remaining $0.07 per share were related to various CPUC items outside of the General Rate Case, including balancing account activity which is non-earnings related. SCE's operations and maintenance costs were not an earnings driver quarter-over-quarter, with $0.03 per share of savings from the ongoing implementation of various operational and service excellence initiatives offset by increased transmission and distribution line clearance and maintenance and higher software license costs. Net financing costs increased $0.01 per share over last year and was mainly due to $0.03 of higher interest expense, partially offset by increased AFUDC earnings over the prior year. Lower income tax benefits versus last year accounted for a negative $0.06 per share. Of this variance, $0.03 resulted from a true-up of 2016 income tax expense. The remaining $0.03 variance relates largely to a lower property-related deductions in the quarter that are offset in revenue. For the quarter, EIX parent and other had a positive $0.06 per share earnings variance, including $0.02 per share benefit at the holding company related to net operating loss carrybacks that…

Our first question comes from Ali Agha of SunTrust. Your line is now open.

Thank you. Good afternoon.

Hi, Ali.

Hi, Ali.

Hi. First question, given the timeline that we do know for the schedule in both SONGS and GRC, just based on that and prior experience on how much time PDs, et cetera take, roughly when at the earliest could we...

Ali, it looks like we may have lost you. For other folks on the call though, I think where Ali may have been headed was a question on timing of these base decisions. And we can't speculate on when those would be received. I think what we did say was that we don't expect the GRC PD to be issued within 2017. Operator, next question. Operator?

Markie?

Our next question comes from Julien Dumoulin-Smith of Bank of America Merrill Lynch. Your line is now open.

Can you hear me?

Yes. Hi, Julien. How are you?

Excellent. Good. Thank you. Perhaps just a follow-up on some of the commentary you provided. How are you thinking about SONGS with respect to the timeline and specifically around, sort of, the reopening of the multiple phases, because we really nearly got to that in the prior – prior to your initial original settlement here? How are you thinking about the prospects here in terms of going back to each one of the separate phases? Or would it be correct to kind of read this as a going directly to the question of cost allocation?

I think the way we read the – where the process is, and again, we'll all be reading the various comments from parties filed today. But the ACR that the Assigned Commissioner and the ALJ issued jointly specified a list of topics to be addressed. As I said in my comments, if they determined that the settlement was – they're not continuing to be reasonable. They also commented on a proposed timeline for addressing all those questions, where they envision hearings completing in March of next year. Beyond that bill, I don't think they provided any guidance as to timing. So, we're not able to speculate on how long that would take. And at this point, as I mentioned also, the next step is the November 7 proceeding I think to get parties talking further about their various filings. And from all of that, the PUC will issue a scoping memo determining final topics for consideration, as we go towards the hearings that they have tentatively scheduled for March. So, Julien, I think that's about all we can read from the ACR, and we'll have to stay tuned here.

And just a quick – a couple of housekeeping items more with respect to your commentary around capital spending contingency plans. By what date next year, broadly, would you need to get that in place in order to execute on the contingency to keep capital spending on track? Is it by midyear or by 1Q really that you think?

Hey, Julien. Hi, this is Maria. We're actually – our plans are being put in place even as we speak. And the plan revolves around ensuring that we have the proper resources and the right – whether it's crews or what have you to really spend at a level, mostly focused particularly on the grid mod space around safety and reliability types of projects, but spend at a level that will allow us to then ramp up over the course of the year in our – I'll say, more traditional programs, the sustained planning that we would do every year. And so, we really don't see any need at any time during the year to have any sort of bright line sort of test. We'll be planning as we always would for that.

And, Julien, I think it's probably pretty obvious, but the sooner we have clarity, the better for everybody, but I think the team is working hard to continue to build and retain as much optionality as possible as they think about their plans for 2018.

Excellent. Thank you all very much.

Thanks, Julien.

Thank you. The next question comes from Praful Mehta of Citigroup. Your line is now open.

Thanks so much. Hi, guys.

Hey, Praful.

Hi.

Hi. So, I just wanted to clarify on the stock-based compensation and the tax benefits, it looks like the $0.09 incremental benefit. Just wanted to understand what drove that. And secondly, is that all showing up as cash flow or is this more GAAP related or not really cash flow?

So, as to your first question, the incremental piece of it, that's all related to three areas. We have stock-based compensation incremental since we updated guidance in July, we have some net operating loss carrybacks for periods that had higher tax rates, and so, we got some tax – some benefit there. And then, the third area is sort of around the audit settlement. So there's really three things that are driving that. In terms of cash flow versus earnings, we do get obviously benefit from cash flow. We are not a taxpayer right now, and so we will see that over time.

Got you. So, the cash flow benefit is not incremental, because you're already not a cash taxpayer effectively?

That's right.

Got you. Okay. And secondly, on the grid mod, I get, the spend is more safety related at least till you have the decision. Could we understand what percentage of the grid mod spend is safety related, and at what point kind of do you run out of steam on the safety and you got to have to spend on, I guess, the other components of the spend?

So, I think, Praful, in terms of grid mod spend, I think you've probably heard us talk about this before. There's an aspect of it that it relates to true modernization, whether that's a new generation of sensors or communication network so what have you. Another part of it is related to reinforcing the grid and increasing business resiliency and the like, so around, say, our worst circuits, and our Worst Circuit Rehab program, as well as replacing 4 kV circuits with 12 kV or 16 kV circuits. We're still in the planning phases right now, so we have not buttoned down the numbers for next year, obviously. But we have a significant portion of the spend that we can aim at next year that's related to safety and reliability.

Got you. Thanks so much, guys, and I look forward to catching up at EI.

Yeah, we look forward to it. Thanks, Praful.

Thanks.

Thank you. The next question comes from Jonathan Arnold of Deutsche Bank. Your line is now open.

Oh, good. Good afternoon, guys.

Hi, Jonathan.

Can I just ask if you could give me a – or ask a preview of what you're going to file on the SONGS issue statement today?

Sure. I'll turn it over to Ron Nichols to answer that.

Sure, Jonathan. This is Ron. We'll be planning a statement, pretty perfunctory actually that lays out just the fact that we continue to support the existing settlement. I think it's fair and equitable allocation of cost. There were about nine items, specific items topically that the Assigned Commissioner ruling came out asking for areas that could be addressed and asking for positions on them. Rather than going into a lot of detail on those, we actually referred to many different proceedings in which we've already commented on these. And we'll have a very brief summary table that will describe in summary fashion what our position is on each of those that really referring back to the final – the prior discussions which went into quite a bit of detail in the record.

So, in summary, you're going to hold your position and not to sort of invite some offer on any of those topics?

Yeah. As Ron said, we reaffirmed our view that the current settlement is reasonable and in customers' interest. And obviously, we've been through the set of confidential meet and confer and mediation sessions. As I mentioned earlier, that those were not successful interchange, I think this is consistent with what we said all along, I think the settlement is reasonable, Jonathan. We certainly approached the meet and confer mediation sessions with an open mind and engaged, I think, in full good faith. I can't comment beyond that because those were confidential. But at this point, I think we're back to more of a litigation approach, and we do stand firmly by our current position.

And do you believe the process this commission's laid out where everyone just opines on this case, questions the cost allocation. And then the commission will have sufficient record to make a decision at that point? Is that, procedurally, do you see that as correct?

Yeah, let me – this is Pedro Pizarro, let me turn over to Adam Umanoff, our GC.

I think simply put, we can't speculate on where this is going to lead. The commission has laid out a process. We're going to fully participate in that process, and we'll see what results. As you know, the timing is still uncertain. Hearings are scheduled tentatively to end by the first quarter of next year, but that's really all we can say about the process for now.

Okay.

Look, Jonathan, as you can hear from our comments, we're really staying away from speculating on the process, and quietly remain committed to doing our part and I think the commission, the ACR, laid out a process, laid out some initial timing and steps that's constructive, but I think we'll all stay tuned.

Okay. And then – I think that's it. Thank you.

Thanks, Jonathan.

Thank you. The next question comes from Michael Lapides of Goldman Sachs. Your line is now open. Michael Lapides - Goldman Sachs & Co. LLC: Hey, guys. A couple of things. First of all, historically, was there much differentiation between during your annual PO filings, the authorized ROE get at the FERC level for FERC transmission assets versus what California had granted you?

So, Michael, the FERC has actually acknowledged that distribution investments carry with them a higher level of risk than transmission investment. So, in our filing that we made on Friday, we did reiterate that position that they have already expressed. I think, from what's in the record perspective, the FERC has said that they don't have to be guided by that, by whatever the state-level ROE is, but in fact that they do view distribution or have viewed distribution as a more risky investment than transmission. In our filing, we actually did have a base ROE that was equivalent to the 10.3% that we have here in California, but then we added to that the 50 basis point adder for CAISO, and then depending on what level of spend is in there for different projects that have incentives, you'll see something over that. Michael Lapides - Goldman Sachs & Co. LLC: Got it. And I just want to make sure and I'm looking at the CapEx slides you put out today, and the repeat of stuff you had our earlier. The CapEx does not include much for the transportation, electrification, and how much of the storage is actually in there?

So, in terms of the transportation electrification, storage, et cetera, the only thing we really have in here is the pilot for Charge Ready, which is about $12 million or so. There is Phase II of Charge Ready, which is the light-duty vehicle charging infrastructure CapEx, that's not in here yet. We have to file a report by next May on the pilot program. And then, in 2018, we'll file the application for the balance of that program. The transportation electrification investment that we filed in the application in January, so, the medium and heavy duty charging infrastructure, as well as in those small or priority projects, none of that is in here. And the storage that we have in here is really related to – we have some storage in our GRC, so that's in the request. And so you'll see that in here, it's buried in there. And then the Aliso Canyon – the 40 megawatts of Aliso Canyon storage is in our numbers now. It's not – and it's flowing through rate base. It doesn't make a material difference, because it's relatively modest number so. Michael Lapides - Goldman Sachs & Co. LLC: Got it. And last things, which significant transmission projects still require major permits before they can go ahead with construction?

So, we have a number of projects that, as you know, we've disclosed in the 10-Q, West of Devers, Mesa, Alberhill, Riverside and Eldorado-Lugo-Mohave Upgrade. They're in various stages. West of Devers, as you know, we had some of the issues with the CPUC getting our Certificate of Public Convenience and Necessity, that's all behind us. We've certainly still have some local permits that we need to obtain, but it's more of that nature. The Mesa Substation also we had some, I'd say, pushback on the CPUC end, but we've now obtained that. We're out for competitive bids on that. It's going to be done in two phases. So, one of them still yet to be done. The Alberhill System is still going through a CPUC decision process. The final environmental impact report was issued, and it did reject various alternatives, but we're still going through that approval process, expecting that, obtain that in 2018. The Riverside Transmission Reliability Project, which is the fourth of the five disclosed projects, is really a joint project, and that is still going through its own process. We've agreed with some revisions that have been recommended for the project, but the CPUC is continuing to collect information on it. And then, finally, the Eldorado-Lugo-Mohave Upgrade Project, we proposed an expedited schedule for that and the regulatory permitting agencies are still considering that. So, I would say we are in varying stages of approvals. Certainly West of Devers and Mesa, we've gotten through our CPUC process with those.

And quite frankly, Michael, that's why we wanted to provide this increased level of disclosure over the last several cycles here, just because there are some big items in terms of – certainly those five projects. So we thought that it'd be good for investors to have a little bit more click-down visibility on that. Michael Lapides - Goldman Sachs & Co. LLC: Got it. Thank you, guys. Much appreciated.

You bet.

Thank you. The next question comes from Travis Miller of Morningstar. Your line is now open.

Good afternoon. Thank you.

Hi, Travis.

I was wondering if there was anything within the EIX vision, all the different programs and thoughts (39:44) transportation electrification, and storage, where if you did not get CPUC approval through rate base, through the DRC that you could perhaps do those projects, invest that capital through, say, Edison Energy or some other unregulated, less regulated entity?

Thanks for the question. I think when we talk about the California piece of the story and certainly the elements within Southern California, and we look at those elements like electric transportation or, as you will see in our white paper tomorrow, the emphasis on building electrification, water heaters, the use of – regular use of clean energy resources. At the core, I think most of that activity keeps coming back to the essential role for the grid being at the center of helping all that happen for the state of California. But I think the focus, certainly, as we've been talking about some of these key elements with you all, the focus keeps going back to all of that being supportive of the long-term capital investment story at SCE, and being able to support the program at the $4-plus-billion a year level over – likely multiple rate case cycles. There's always a possibility that any given other piece of work could be done outside the utility. I think again most of the – what we see that most of the impact of the company, it's less about, for example, you look at the charging infrastructure programs, we, to-date, have not really gotten into the actual ownership of the charter, right? Our focus has been on ensuring that the grid is sufficiently robust and modern to be able to accommodate the chargers that are going to be coming online. And then we provided support for customers doing that by, in the Charge Ready program, rate basing some of the customer side infrastructure up to, but not including the charger itself. So, again, I think that the bulk of the capital story for us around these programs is the support for grid investment at SCE. Now, as we look outside of SCE and frankly outside of California, technology is opening up efficient electrification opportunities across a number of sectors. I do think that's a place where there's Edison Energy is advising large commercial-industrial customers that – I think folks understand what we're doing there, based on our August Edison Insights discussion, but I think that's a focus outside of the California story per se.

Okay. Great. I appreciate the color.

That makes sense?

Yeah.

Thank you. The next question, we have Ali Agha back in queue of SunTrust, your line is now open.

Ali, you had us worried there. And you're back.

I am back, Pedro. Thank you for letting me come back. I just wanted to clarify a point you'd made, when you talked about the SONGS proceedings going forward, most likely now, will be litigated and will come to a decision, does that mean that a potential for – or a re-potential for settlement, that is essentially now no longer a viable option, now it is litigation, that's the way we should be thinking about this?

Ali, I think that would require us to speculate on whatever twists and turns continue to happen as we go towards a final decision. I would just make a general blanket statement frankly about any regulatory proceeding that's litigated that has at least two sides to the equation. We are always, as a matter of fact, open to hearing ideas that folks may have around different potential solutions short of a litigated outcome. With SONGS in particular, we went through the meet-and-confer process, we went through the mediation, we were unable to get there. We can't comment on what happened inside the room, as I said before, because of the confidentiality issues. And so, that's not what we're focused right now. We're focused on our filing today and the conference coming up November 7 and the next steps after that. Like with anything in life, you never say never, if folks have different ideas as we walk down the pathway here. But we're surely very focused now on how we do high-quality filings in the rest of the process that the PUC is prescribing.

I see. Understood. And, Maria, just one clarification from you. The tax benefit that you've been recording and getting over the course of this year. At the end, is it better to continue as we look forward, or do you think all the audits, et cetera, are done, or this could still be a swing factor going forward as well?

We haven't given guidance for our future years, Ali, but we've said before in terms of the different buckets of tax benefits, share-based compensation, people make their own decisions about when they're going to exercise their options, and so we can't really anticipate when and then if there'll be some benefits associated with that. In terms of the audits and the return to provision kinds of elements, we do every year have to true up our tax returns and, sometimes, it's up and sometimes it's down, but it varies. If you look at prior years, we've had some things that have gone in the opposite direction. And then as far as audit settlements, we disclose what's still open in terms of audits. At the federal level, we're up through 12. We've completed all our audits. At the state, we still have a number of years that are open either in being audited or some subject still to examination that's because the state lags until the federal stuff has been resolved. We will continue provide disclosure around that as we get closer to when those things are completed.

Understood. Thank you.

Thank you.

Thank you. Our next question comes from Shahriar Pourreza of Guggenheim Partners. Your line is now open.

Hey, everyone.

Hi, Shar.

So, most of my questions were answered, and I apologize I hopped in a little bit late here. But a lot of the timing of, sort of, the procedural items you discussed today is kind of unknown, but you're hoping to get closure with most of it by sometime in early 2018. You do have somewhat of a resource-constrained CPUC. Is there sort of any indirect impact to your procedural plans with sort of the Sonoma fires likely maybe inundating a lot of their time and resources? So, net-net, I guess, I'm asking, had the fires – I mean, could the fires push out any of your plans somewhat?

Let me take it, Shar. And couple things on that; one, obviously, I think that the PUC and PG&E and a lot of state entities are all still grappling with the aftermath of the fires. So, that is a new piece of work, if you will, that hadn't been foreseen a month ago. And so, that certainly will require some work by some of the staff at the PUC. That said, I think the PUC always does a nice job at segmenting work across a various staff areas. So, I wouldn't expect that necessarily this would mean that all 700 staffers at the PUC are now turning their attention on this one topic. So, maybe long way of saying don't know, but I would speculate that while, let's say, wild fires may create a new amount of workload for the PUC, it doesn't necessarily mean that everything else stops or gets delayed. The other thing I'd clarify though is, just to make sure that we're telegraphing precisely what we mean to all of you. As we pointed to two key proceedings here, the GRC and the SONGS proceeding, – in your question, you mentioned – it sounded like you had carried away in expectation that we'd be seeing decisions early in 2018. So I want to clarify, we did not say that. We did say that, in the GRC, we think it's very unlikely that we would see a PD coming out within 2017. So, that implies that we'd see a PD some time in 2018. Once that PD is issued – first of all, PDs can take a while to be issued. And secondly, once a PD is issued, then there's the process, until it actually gets adopted, is a final decision. So, that's why we're not speculating at what point in 2018 or even in what year, we'd get a rate case decision. We would hope it would be in 2018, but we can't say with certainty. In the SONGS case, likewise, we pointed to an early 2018 date as the date in the SONGS ACR, the March date, March 2018 date by which the PUC expects to have completed hearings. But again, after that, then you have the process of ultimately preparing a PD, and then, I mean, that become a final decision voted on by the PUC, and we're not speculating on what dates that might entail. But just with both of those, I would think it's probably further unlikely – certainly unlikely, we would have a SONGS decision in early 2018, since hearings wouldn't be completed until March. With the GRC, given that PDs usually take similar amount of time to get completed and we still have public participation hearings coming up here soon, I'd think it's probably also unlikely we'd have a final decision in the rate case in early 2018.

Understood. Thanks so much for the clarification. Thanks, guys.

Yeah. You bet.

Thank you. Speakers, that was the last question. I will turn the call back to Mr. Sam Ramraj.