Good afternoon, and welcome to the Edison International Second Quarter 2014 Financial Teleconference. My name is Brian and I'll be the operator today. (Operator Instructions) Today's call is being recorded. I’d now like to turn the call over to Mr. Scott Cunningham, Vice President of Investor Relations. Thank you. You may begin.

Thanks, Brian, and good afternoon everyone. Our principal speakers today will be Chairman and Chief Executive Officer, Ted Craver and Executive Vice President and Chief Financial Officer, Jim Scilacci. Also with us are other members of the management team. The presentation that accompanies Jim's comments, the earnings press release and our Form 10-Q are available on our Web site at www.edisoninvestor.com. After the call, we will be posting Ted’s and Jim’s prepared remarks. Tomorrow we will file and distribute and regular business update presentation, which has additional information on current topics. During this call, we will make forward-looking statements about the financial outlook for Edison International and its subsidiaries and about other future events. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our SEC filings. We encourage you to read these carefully. The presentation includes certain outlook assumptions, as well as reconciliation of non-GAAP measures to the nearest GAAP measure. When we get to Q&A, please limit yourself to one question and one follow-up. If you have further questions, please return to the queue. With that, I'll turn the call over to Ted Craver.

Thank you, Scott, and good afternoon everyone. Before we begin the call, I would like to welcome Maria Rigatti, who joined us this week as Senior Vice President and Chief Financial Officer of Southern California Edison. Many of you know Maria from her prior role as Chief Financial Officer of Edison Mission Energy. We are pleased to have Maria’s depth of experience and leadership. I’d also like to welcome Connie Erickson to her first earnings call. Connie is Southern California Edison’s new Controller, and joined us in May from a utility in the Southeast. Okay. Let’s go ahead and get down to the business at hand. Edison International today reported second quarter core earnings per share of a $1.08. This is a 37% increase over core earnings per share in last year’s second quarter. This strong performance reflects continued earnings growth from investing in modernizing and expanding our core wires infrastructure, managing our costs, and benefiting from favorable tax items. Based on our year-to-date results, we expect full-year earnings for EIX to be well above the high-end of our core earnings guidance range, that is, above $3.80 core earnings per share. There are several components driving this expectation, which Jim will discuss in his remarks. Obviously, this effectively moots our current earnings guidance. We are not providing new earnings guidance at this time. We want to at least get through the summer, since our earnings are weighted most heavily to the third quarter, and may provide new guidance when we release third quarter earnings. Of course we are also focused on completing the remaining steps for getting the SONGS OII settlement approved. The record of the proceeding is now complete. We are currently awaiting a proposed decision from the administrative law judge. As we previously reported, the Settlement has a…

Thanks, Ted and good afternoon, everyone. I’d like to add my congratulations to Maria and Connie on their new roles too. I’d also like to thank Stu Hemphill for being the acting CFO, bridging the time period between Linda Sullivan’s departure and Maria’s arrival. Thanks a lot, Stu. My comments over the -- will cover the following topics: second quarter earnings, capital spending and rate base forecast, the regulatory calendar, and earnings guidance. Please turn to Page 3 of the presentation. As Ted already mentioned, EIX’s core earnings for the second quarter of 2014 are $1.08 per share, or $0.29 ahead of last year. Higher revenues include $0.17 per share in authorized CPUC and FERC revenue increases that support rate base growth as well as higher costs. $0.03 of this increase is from a revision to estimated revenue under the FERC formula rate mechanism and the 2008 FERC construction work in process proceeding. These $0.03 were not included in our original guidance. The net SONGS impact is a positive $0.03 per share compared to last year mainly related to severance costs that impacted earnings in the second quarter of last year and a small property tax refund this quarter. O&M costs increased $0.02 per share and include $0.01 of non-SONGS severance compared to $0.02 in the second quarter of last year. Most of this O&M variance is timing-related. Higher depreciation and financing costs reflect the growth in rate base and the capital structure supporting that rate base. Income tax benefits are a significant contributor to earnings during the quarter. We recorded a $0.09 per share tax benefit from changes in estimates of the uncertain tax positions. This primarily relates to progress made by the Company and the IRS Appeals in settling the 2003 through 2006 audit cycle. This also had…

Good morning, guys.

Hi, Dan.

Jim, on slide 9, can you just re-run through those numbers of all the additional benefits that weren’t in the original guidance, just to make sure, they went pretty fast -- to make sure I have the right accounting for them?

Okay. Four items. $0.09 for uncertain tax positions release of reserves; $0.08 of additional repair and cost of removal deductions; $0.03 for generator refunds and $0.03 for FERC revenue -- additional FERC revenue.

Okay. And then …

Which you get to 23.

And then the extra -- are those the core pieces that are going to get you well above the high-end of your range or are there other things you’re seeing in addition to those that would be additive to those expectations?

Its -- those are the core things.

Okay. And then when we think about with the GRC coming through, the upside or the benefit from the taxes and the cost savings that are adding this year, we should calibrate those back because those are unique to this period and not to the next GRC period, is that still correct?

Yes.

Okay. What tax rate should we be assuming beyond this year?

Well that’s a good question. Tell me what’s going to happen when with tax policy. That’s the real hard one to pin down. So we still are carrying some NOLs. So even if they didn’t extend bonus depreciation, there could be an impact in future years. But we haven’t put a forecast out. We don’t forecast tax policy or tax rates. So its going to be somewhere between the maximum rate and slightly lower if they don’t extend bonus and I can tell you where it will go to if they do extend bonus.

Okay. And I guess one last question. Sorry, I didn’t mean to rapid fire all those, but just one last question.

Yes, go ahead.

Pinnacle raised today the idea of or talked about on their call today, utility-owned rooftop solar as a way of trying to allocate or get that resource into the hands of people who probably couldn’t otherwise afford it or couldn’t qualify for it. Is that an opportunity you would see working in California to try and bridge the gap as to where some of the disproportionate subsidies or benefits are going within the California rate design system?

There are a number of things we’re considering. I think Ted’s comments touched on some of the things that we’re important -- we’re thinking about from an investment perspective. And our principal focus is looking at the grid and how we can better make investments around the grid to allow greater penetrations of distributed generation. And we think there are meaningful investments that could be made to support more distributed generations. I will pause there and look at Ted or Ron, did you want to add on to that?

Yes, maybe just a little bit on it Dan. I think really our focus has been primarily on the wire side as opposed to the generation side. And we’ve in SCE something like 90 megawatts of roof top solar already, something like 35 different commercial roofs. But we’ve not really been adding to that portfolio. Frankly, it’s a good competitive environment. There are plenty of opportunities for lots of third parties to engage in this. Most of the times they can do it more efficiently than we can in the utility and where we’ve I think a unique contribution to make is in facilitating all of these technology, whether its roof top solar, whether its potential electrification of transportation, in energy storage, etcetera. Really all of that fundamentally relies on distribution system in particular to really work effectively and efficiently. We are uniquely positioned to provide that investment, that’s where we’re focused. So I don’t think you will see us rush to get into the generation side of this in --- within the utility so much as you really see the utility focus its investment on the wire side.

Very good. Thank you.

Yes, just one last thing to, of course we’ve a small investment in the company by the name of SoCore that focuses on commercial industrial customers. We’ve avoided the residential side, because with the commercial industrial area we think its more economic and there is a lot of potential there. Operator?

Next question from Julien Dumoulin-Smith, UBS. Your line is open.

Yes. Sorry to nitpick a little bit further, could you elaborate a little bit with regards to whether the FERC side of the equation there could persist, when you call it out in that $0.23 or specifically the FERC revenue of $0.03?

When you say persist …

Is it strictly a one-time item here or should we think about this as continuing on for a certain period of time?

Yes, it’s more one-time Julien. What we’re doing is updating our formula rate for actuals and for the 2008 proceeding around our construction work in process, proceeding that case was ongoing for a long time, and it was resolved. So it’s mostly one-time.

Got you. And then when it comes to the energy settlements, I mean, obviously these things come in -- are somewhat lumpy. Are there others that are pending to be settled at one go here, is there anything else on that front we should be expecting?

There is not much left on the energy settlement. So we’ve been litigating those for over 10 years. So we are getting to the end of those.

Got you. So ultimately, if you could summarize and I don’t want to put words in your mouth, so I will let you talk, how would you think about the guidance in the context of year-to-date earnings, just to be clear? If you can provide any comment, I mean, is it as simple as saying, well, $0.23 on top of your guidance year-to-date? I mean, is that begin to approximate, how would you think about it?

Well, I think, I will go back to the statement we used, and I don’t want to go beyond that or try to expand. So we’d see earnings being well above the high-end of the range. And the $0.23 we try to list for you that occurred in the first half alone. And we’ve projected other tax benefits and O&M savings to occur during the course of the year, the balance of the year. So that’s by putting all these factors together, we see it well above.

Excellent. Moving on to more substantive issues, when it comes to the ROE, I would be curious, how are you thinking about positioning yourself within the context of your future ROE case at FERC, given the New England case and the resolution we recently got or at least the clarity we’ve gotten?

Well, we got some clarity. Again, we have a settlement in place until mid 2015. Under the settlement we entered into over a year-ago and at that point of time later next year, we will take a look at it, run all the models and see what they yield and take into consideration what the FERC has provided us in terms of its recent guidance. And we will have to see if that implies an upward bias. It’s going to come down to interest rates and where dividend growth rates are in terms of using the FERC model and cranking it through. So there potentially could be some upside there, but you have to moderate it, because its really only 20% of our total rate base, it’s the CPUC side that really drives things overall.

Right, absolutely. Thank you.

All right.

Next question Gregg Orrill, Barclays. Your line is open.

Thanks. Two quick ones. First, a point of clarification on whether this year you have pulled forward any benefits of repair tax accounting or maybe if you can provide an update on what you are looking for in 2015 there? And then, at this point on the SONGS OII, are you still working to bring any more parties on board or do you see any gaps in groups on the settlement?

So, why don’t we handle that reverse order, Ted?

Yes, just one the second one, all the intervenors who are going to provide testimony have done so and that was really what I was kind of capturing there. In terms of the direct signatories, it’s the two utilities, the labor group queue, ORA, TURN, and Friends of the Earth. So those were the direct signatories representing in all four of the main intervenor groups. In the testimony, several other groups, mostly consumer various forms of consumer related groups also provided a positive supportive testimony of the settlement. And as I indicated in my comments, really relatively few came forward with any opposition to the settlement. So I think basically everyone who has standing that wants to speak, has spoken and at this point really all that part is over with. We are really at the stage of waiting for the ALJ Proposed Decision.

Okay, great. Let me cover the first part of it. I think it is the tax benefits you were referring to and what potential tax benefits there could be going forward into ’15. And as we’ve said all along, we will update with our GRC filing. All the numbers and we’d expect the benefits that we’re receiving currently, the $0.14 referred to before would go away and that’s incorporated in our rates starting in ’15. But we’re trying to point out here in ’14 the $0.09 of share, that’s a release of reserves related to our 2003 to 2006 audit cycle. We took the -- essentially the hit in the past and now, because of the way the negotiations are coming out; we can release those reserves and have benefits earnings. And I also said, the second item, when we said there would be 14 in total for the year, when we started the year. What I’ve said in my comments, there was an additional $0.08 over and above the 14 of additional repair and costs of removal deductions. So I think that’s the full line of tax benefits that we see as of the $0.14 for the full-year and through the first six months in the year.

Thanks.

Okay.

Next question Kit Konolige, BGC. Your line is open.

Good afternoon, guys.

Hi, Kit.

Ted, maybe just to focus a little bit on grid readiness, which I think you have described as the biggest single item. I know you don’t want to put a number on that, but maybe you can give us a little more color on what you see as likely to be involved here. You’ve certainly talked about the two way flows that would be demanded by distributed generation, in particular, in the past. But now that you’re going to have to be presenting a specific plan, maybe you can give us some detail about what would be involved here from the utilities viewpoint?

Yes, I will make maybe a couple of overarching points in that, and then I will give it to Ron, who is really much more directly involved in this part. We are -- I will do it in terms of buckets. I think there are a number of things on as you termed it, grid readiness side. I think of it as modernizing and expanding the grid system focusing primarily on the distribution system to make it more flexible and resilient and responsive. So some of that gets into the stuff that you mentioned, the two way flows of electricity today is pretty much designed to handle one way flows. And the more of the new technologies get introduced, whether that’s distributed generation or storage or some of the things around electric transportation, the more that distribution system needs to be flexible and responsive. One of the phrases we’ve used, its essentially creating a network system, a plug and play system, if you will, that can handle a lot of those new technologies and still remain reliable. The second really big bucket I think is on the transmission side and there are a number of things that we’re looking at, both within the utility as well as potentially outside the utility in competitive transition -- transmission work. We see a lot of opportunities, particularly in the West on those activities. So those are probably two of the larger ones. Beyond that, its some of the unregulated business and that’s where as we’ve referred to, its energy services focused on the commercial and industrial customers which we see as the most price sensitive as well as having a large enough footprint -- energy footprint that a lot of these things will be economic even without subsidies. Whereas on the residential side, I think continued subsidies will be required to really make those alternatives competitive with the grid. So those are the big buckets. Ron can cover more on the grid readiness part.

The particulars on grid readiness really comes down to the control systems and the protection systems on the distribution grid. We are going to have to put in much more sophisticated, more dynamic voltage controls for years. We got away with capacitors that just switch twice per day, once on peak and off peak. We are going to have to put in more sophisticated voltage controls to deal with a lot more voltage fluctuation. As we get into two way flows, we’re going to have to go with much more sophisticated relaying and protection systems that can detect both the distance and the direction of the fault, similar to what we’ve on the transmission grid and then once all that’s in place, as Ted mentioned, we can loop many more distribution circuits together and operate it more like a network which would actually improve reliability. And so, it’s primarily a controls game. What I’ve just described for you is essentially our plans around our urban circuits which are already suited for this, from the physical infrastructure itself. When you get out to our rural circuits though, however, we probably are going to have to upgrade some conductor sizes as well.

Okay. And just so I understood it correctly, did I hear you say before that this bucket, this grid readiness area, is the biggest single prospect for growth beyond ’17 or am I misunderstanding that?

No, that’s correct.

Thank you.

Next question Michael Lapides, Goldman Sachs. Your line is open. Michael Lapides - Goldman Sachs & Co.: Hey guys, just kind of thinking about the bridge for the next couple of years, am I right to think a little bit that if you just kind of do rate base math on 2015, because you’re having such a great 2014 in a little bit of an unusual 2014, that 2015 is kind of a down year before growth reaccelerates in ’16?

Yes, Michael, this is Jim. I think you’re right. We are guiding people to go back to the simplified model starting in ’15 because the way the regulatory mechanisms work here, we pass back to the ratepayer, the O&M savings that we talked about $0.35 that are embedded in our guidance and the tax benefits. Those all go back and they were back to the normal, I mean, if you take the rate base and times the return on common equity, times the 48% common equity ratio and you’re to get earnings pretty fast. There could be some volatility around that to a certain degree, because we will continue to focus on operational and service excellence, and there is the potential for additional savings. But we're not going to forecast anything here, but we will continue to look for things to optimize around our costs. Michael Lapides - Goldman Sachs & Co.: Got it. And I want to just kind of focus on the balance sheet a little bit. You talked a little bit about having ramped up short-term debt at the parent. Can you give us some of the puts and takes? Meaning when do you -- when and how much cash flow do you expect to get this year and next year related to the ERRA? What are your plans in terms of short-term debt at the parent? Just kind of high-level movers outside of CapEx and some of the tax issues you’ve already talked about and, obviously, net income and D&A.

That’s a broad question. So let me just pick at it, then we will let others chime in. At the utility in terms of ERRA, we said they were at $1.6 billion and we had the big rate increase that went in just …

June 1st.

… June 1st. And we’ve generator refunds. There is $200 million that will be applied against the $1.6 billion and as rates have now gone up, we will start to amortize that down. An important element in terms of where we get at the end of the year is the SONGS settlement. There is a large refund that will come out of there and there is an advice filing pending before the Nuclear Decommissioning, and if they allow us to go into the decommissioning trust, that balance then will be refunded into your account. So where it ends up, I would say right now if they do improve the SONGS settlement and the advice filing, we will be materially reduced from where we’re today. There still could be a balance and that will pick up in ’14 will be materially reduced. And that balance, if any will be picked up in the ’15 year proceeding and amortized down if there is anything remaining. So any other short-term borrowings? There is actually fairly small amounts of borrowings at the utility right now. We will see that as a surge, if we have capital requirements or other things. But historically we’ve kept the balances well and it will just depend on capital expenditures going forward. Moving upstairs to the holding company, we said we’re up to $660 million of short-term borrowings and we did that because we made the first payment and we did the tax deposit. Now we’ve additional payments in ’15 and ’16 for the EME settlement. And really it’s going to come down to what’s going to happen with tax policy, which is going to affect the utility too, obviously, because that will be a source of cash and there will be less monetization of tax benefits at the…

Yes, definitely. And I mean that’s -- I’m kind of running out of new ways to say it. But I introduced one, new one this time that job number one is delivering on getting our payout ratio back into the targeted 45% to 55% of SCE’s earnings. And that’s probably about as close as I can get to saying everything you just outlined is exactly right, that we see increased capacity to move the dividend along at a higher growth rate than certainly what we’ve been doing in the past. And we’ve to do that. It has to grow faster than earnings in order to get back into that 45% to 55% payout ratio. People have been -- investors have been patient. We’re aware of that. We’re appreciative of that and we think we’re getting to that spot now where its time to deliver on getting our payout ratio back to where it belongs. Michael Lapides - Goldman Sachs & Co.: Got it. Thanks, Ted. Much appreciated.

You’re welcome.

Next question Paul Patterson, Glenrock Associates. Your line is open.

Good afternoon.

Hi, Paul.

A lot of my questions have been answered. Just sort of on the competitive transmission opportunity that you were talking about, and the benefit of having the transmission corridor, could you give us a flavor or sort of how substantial that advantage is, I mean, in terms of cost or timing of whatever the sort, I mean, whatever you can tell?

So what you’re referring to just for the clarification, is that Delaney-Colorado River transmission line. Remember going back and you’ve followed us long enough, there is already a transmission line that goes through that corridor. That’s Devers-Palo Verde transmission line number one. And we tried to do Devers-Palo Verde transmission line number two and Ron Litzinger can tell you all about how fun that was and if we built up to the Colorado River, and we stopped there. Now it’s the adjoining piece that goes out through Arizona. So I will pause there and let Ron give some more of the details.

Yes. So, we continue to have the entirety of the right of way and we see that as a competitive advantage and now that’s it a competitive gain, we’ve got to seek to maximize that and whatever others we can find.

Do you -- I mean, I just was wondering if there was -- if you had -- in terms of the competitive outlook, how -- is there a value that you can ascribe to that, in terms of how much money that saves you, vis-à-vis other competitive alternatives?

Just what we know historically getting this route and what the alternatives are, but we’re putting a dollar figure on that.

Yes, Paul just logically just trying to figure it out, on top of our heads, if you have a right of way that it already exists, how difficult it is to secure a right of way and going through all the combination process and getting all the approvals that you need. It is not easy to do that. We’ve got a large transmission construction going on and its one of the most challenging things for us to do. So that’s why I think its important.

Okay. I just was wondering if there was a -- I mean if there was -- if you could quantify it, but I understand if you don’t want to do that. And then just in terms of financing and what have you, I mean, one wonders whether or not infrastructure funds or something might be involved in some of the activity. Do you guys think that there would be with these competitive -- these transmission lines for competitive bid, whether there would be a change in sort of the capital structure or leverage that might be employed to develop these things or do you see it pretty much the same as other transmission investments that you've made?

No, I don’t -- I can’t foresee it at this point in time. It would be similar to what the -- if you see capital structure would be.

Okay. Thanks so much.

Next question Ali Agha, SunTrust. Your line is open.

Ted, as you alluded to, given the schedule that the GRC is moving under, it’s likely to spill into next year. Now normally, you make your dividend decisions in December. Is it fair to assume that you would want the GRC behind you before getting aggressive on the dividend, I guess, point A. And related to that, is there anything to move you from that December timeline, is that just consistency, or how are you thinking about these issues?

I think you’ve outlined certainly the -- some of the considerations that will go into figuring out where we go from here. But I'm really not prepared at this point to speculate a lot on timing or amount. I've done everything I can to make clear that this is a top priority for us and we just have to assess the situation as it presents itself and make the best decision that we can and then explain our decision to investors.

Okay. We will keep an eye on that. Jim, can you let us know from the way the regulatory accounting math works, what is the equity ratio at SCE right now? And I know you guys have been very clear that through the ’17 period, you don’t need equity, but listening to your CapEx plans beyond that, when at the earliest do you think equity does come into the equation, if at all, for the Company?

Question one, 48.5 at June 30th.

Okay.

Question two; we have no plans for equity.

Not just still ’17, it could be well beyond that as well?

Just no plans.

Okay. Thank you.

Next question Ashar Khan, Visium. Your line is open.

My question has been answered. Thank you so much.

Okay.

Neel Mitra, Tudor, Pickering. Your line is open. Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc.: Good afternoon. I had a question on slide 7, with the infrastructure liability investment past 2017. How -- what’s the pace of the drop off? Obviously, that’s the big rate base growth for you guys through 2017. Can you kind of give us maybe the trajectory for it past 2017 and what the drivers are really for rate base growth?

Well, I will start. Again, we don’t have any projections out there and I think Ted made some comments, that we’re very clear around this. Our distribution spending, we don’t see a drop off. There are certain components that we need to step up the level of replacements to get to the level that we think is appropriate. So we don’t have reliability concerns. What could cause our capital spending to go up or down were some of these other things that you see on Page 7 that would be transmission expenditures, the grid readiness. Right now that’s not in anything we’ve shown the commission. Ted indicted that we will make a filing next year that will detail some of those expenditures. So drop off I don’t think would be the appropriate word. I think in our investor materials, we’ve said it’s plateaued and it will go up or down depending upon what happens with some of these other things. Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. So capital spending for kind of the wires business will substantially outpace depreciation for past 2017 in your view? Just the (indiscernible).

That will well pass ’17. Neel Mitra - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay, great. Thank you.

Next question from Travis Miller, Morningstar. Your line is open.

Good afternoon.

Hi, Travis.

Quick question on the decommissioning fund, do you intend to turn that over to a third-party ultimately or manage that yourself in terms of the decommission activities?

Right now we have managed that as the principal owner. That’s obviously an option. We have seen others in the industry have done that and -- but I won’t speculate if we would go down that path.

Okay. And then other topic, those $0.23 of earnings, how much of that was cash that you are realizing, above and beyond the guidance?

That’s a good question. So the generator refunds were certainly cash. FERC revenues were certainly -- will be cash. Tax benefits, the $0.08 is definitely cash …

Eventually.

… eventually as it comes around and I don’t know on the $0.09, because you’re releasing reserves. And so that’s an earnings benefit and not a cash benefit.

Okay, great. Thanks a lot. Appreciate it.

You’re welcome.

(Operator Instructions) At this time, I’m showing no questions.

Thanks very much everyone for participating on our call today, and don’t hesitate to follow-up, if you have any other questions. Thank you.