Financing Plan and Equity Needs
Q: Can you elaborate on equity needs and dividend timing?
A: Management explained they built a plan assuming a reasonable balance of utility debt, parent company debt, dividend growth, and routine equity financing. The plan includes a $2.5 billion dividend use of funds, which will grow more slowly in the front end of the 5-year plan and ramp up over time. They also introduced a routine ATM program expected to be ratable over the plan period.

Dividend Growth Trajectory
Q: Is dividend growth slower in cents or percent basis?
A: Management intends to achieve a competitive payout ratio over the long term. They will start slower in the first half of the 5-year plan due to prioritizing customer capital investment, then ramp up more quickly later. Combined with their forecasted at least 9% EPS growth from 2025 to 2028, they believe this offers a compelling investment thesis.

Wildfire Risk Mitigation
Q: Thoughts on Buffett's letter about wildfire risk?
A: Management believes Buffett got it wrong regarding California. They have reduced 94% of wildfire risk, with the remaining 6% protected by situational awareness and state investments. Investor exposure is limited to a $50 million deductible due to self-insurance. They extended the wildfire fund's life to 20 years, showing their risk reduction efforts are working.

Data Center Growth Opportunity
Q: How are you addressing data center demand?
A: Management stated they are positioned to benefit from demand growth from data centers and electric transportation. They are engaging with major customers like AWS, Microsoft, Apple, and Google. The California ISO forecasts an additional 120 gigawatts of clean electricity over 20 years, doubling the current system. They aim to be the energy provider fueling these ambitious goals.

FFO to Debt Ratio Improvement
Q: Is FFO to debt ratio improving over time?
A: Management confirmed they remain on target with capital investment and EPS growth. Operating cash flow increases by $3 billion from 2023 to 2024, driving improved balance sheet health and credit metrics over the plan period.

Investment Grade Status Progress
Q: What's the timeline for achieving investment grade?
A: Management continues to make good progress toward investment grade status. They intend to meet regulatory and balance sheet targets, including a 52% utility equity ratio by mid-2025 when the waiver expires.

Authorized Capital Structure
Q: Do you assume returning to authorized capital structure?
A: Management confirmed their plan meets regulatory and balance sheet targets, including the 52% utility equity ratio by mid-2025, aligning with the waiver expiration.

Liability and Earthquake Fund
Q: Update on $1.6B liability and tapping earthquake fund?
A: Management has paid $870 million in cash settlements as of Q1. They cannot tap the earthquake fund until settling $1 billion, expected over the summer. They are working closely with the earthquake authority for a smooth claims process.