EIX Edison International

Edison International (NYSE: EIX) today reported third quarter 2015 net income on a GAAP basis of $421 million, or $1.29 per share, compared to $480 million, or $1.47 per share, in the third quarter of 2014. On an adjusted basis, Edison International’s third quarter 2015 core earnings were $377 million, or $1.16 per share, compared to $496 million, or $1.52 per share, in the third quarter of 2014.

Southern California Edison's (SCE) third quarter 2015 core earnings decreased by $114 million, or $0.35 per share, from the third quarter 2014 primarily due to an estimated revenue refund of $233 million, or $0.42 per share, based on the proposed decision in SCE's 2015 General Rate Case (GRC) and lower income tax benefits, partially offset by higher Federal Energy Regulatory Commission (FERC)-related revenue from rate base growth. The revenue requirement ultimately adopted by the California Public Utilities Commission (CPUC) will be retroactive to January 1, 2015.

Edison International Parent and Other’s third quarter 2015 core losses increased by $5 million, or $0.01 per share, compared to third quarter 2014 core losses primarily due to lower income from Edison Capital's investments in affordable housing projects.

Edison International's third quarter 2015 core earnings exclude income of $1 million related to losses allocated to tax equity investors under the hypothetical liquidation at book value (HLBV) accounting method and $43 million, or $0.13 per share, from discontinued operations. Edison International's third quarter 2014 core earnings exclude losses of $16 million, or $0.05 per share, from discontinued operations.

“Third quarter earnings comparisons were impacted by the proposed decision on SCE’s 2015 General Rate Case,” said Ted Craver, chairman and chief executive officer of Edison International. “While the case is generally constructive overall, SCE has identified several important items that the CPUC should correct.”

Year-to-Date Earnings

For the nine months ended September 30, 2015, Edison International reported net income on a GAAP basis of $1,099 million, or $3.37 per share, compared to $1,192 million, or $3.66 per share, during the same period in 2014. On an adjusted basis, Edison International’s core earnings were $1,049 million, or $3.22 per share, compared to $1,142 million, or $3.50 per share, in the year-to-date period in 2014.

SCE’s core earnings for the nine months ended September 30, 2015 decreased $89 million, or $0.27 per share, from the same period in 2014, primarily due to lower revenue related to the 2015 GRC proposed decision and lower other income, partially offset by higher FERC-related revenue from rate base growth and earnings on funds used during construction. In addition, income tax benefits were lower in 2015.

Edison International Parent and Other’s year-to-date 2015 core losses increased $4 million, or $0.01 per share, compared to the same period in 2014 primarily due to income taxes and expenses.

Edison International's year-to-date 2015 core earnings exclude income of $7 million, or $0.02 per share, related to losses allocated to tax equity investors under the HLBV accounting method and $43 million, or $0.13 per share, from discontinued operations. Edison International's year-to-date 2014 core earnings exclude a charge of $96 million, or $0.29 per share, related to the SCE San Onofre Settlement Agreement and $146 million, or $0.45 per share, of income from discontinued operations.

Edison International uses core earnings, which is a non-GAAP financial measure that adjusts for significant discrete items that management does not consider representative of ongoing earnings. Edison International management believes that core earnings provide more meaningful comparisons of performance from period to period. Please see the attached tables for a reconciliation of core earnings to basic GAAP earnings.

2015 Earnings Guidance

The company announced core earnings guidance of $3.77 to $3.87 per share and basic earnings guidance of $3.92 to $4.02 per share for 2015. See the presentation accompanying the company’s conference call for further information including key guidance assumptions.

 

Reconciliation of 2015 Core Earnings Guidance to Basic Earnings Guidance

    2015 Earnings Guidance as of October 27, 2015

Low

 

Midpoint

 

High

SCE $3.97 EIX Parent & Other (0.15) EIX Core EPS $3.77 $3.82 $3.87 Non-Core Items1 0.15 0.15 0.15 EIX Basic EPS $3.92 $3.97 $4.02   1 Represents non-core items recorded for the nine months ended September 30, 2015.  

About Edison International

Edison International (NYSE:EIX), through its subsidiaries, is a generator and distributor of electric power and an investor in energy services and technologies, including renewable energy. Headquartered in Rosemead, Calif., Edison International is the parent company of Southern California Edison, one of the nation’s largest electric utilities.

Appendix

Use of Non-GAAP Financial Measures

Edison International’s earnings are prepared in accordance with generally accepted accounting principles used in the United States and represent the company’s earnings as reported to the Securities and Exchange Commission. Our management uses core earnings and core earnings per share (EPS) internally for financial planning and for analysis of performance. We also use core earnings and core EPS when communicating with analysts and investors regarding our earnings results to facilitate comparisons of the Company’s performance from period to period. Financial measures referred to as net income, basic EPS, core earnings, or core EPS also apply to the description of earnings or earnings per share.

Core earnings and core EPS are non-GAAP financial measures and may not be comparable to those of other companies. Core earnings and core EPS are defined as basic earnings and basic EPS excluding income or loss from discontinued operations and income or loss from significant discrete items that management does not consider representative of ongoing earnings. Basic earnings and losses refer to net income or losses attributable to Edison International shareholders. Core earnings are reconciled to basic earnings in the attached tables. The impact of participating securities (vested awards that earn dividend equivalents that may participate in undistributed earnings with common stock) for the principal operating subsidiary is not material to the principal operating subsidiary’s EPS and is therefore reflected in the results of the Edison International holding company, which is included in Edison International Parent and Other.

Risk Disclosure Statement

Forward-looking statements about the financial outlook for Edison International and its subsidiaries are included in this news release. These forward-looking statements reflect our current expectations; however, such statements involve risks and uncertainties. Actual results could differ materially from current expectations. Important factors that could cause different results are discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Edison International’s Form 10-K, most recent Form 10-Q, and other reports and presentations filed with the Securities and Exchange Commission which are available at: www.edisoninvestor.com. These forward-looking statements represent our expectations only as of the date of this news release, and Edison International assumes no duty to update them to reflect new information, events or circumstances.

Regulatory Filings Access

Edison International and SCE provide direct links to SCE's regulatory filings with the CPUC and the FERC at www.edisoninvestor.com so that such filings are available to all investors upon SCE filing with the relevant agency.

Reminder: Edison International Will Hold a Conference Call Today

When:   Tuesday, October 27, 2015, 1:30 p.m. (Pacific Time) Telephone Numbers: 1-800-369-2198 (US) and 1-773-756-4618 (Int'l) - Passcode: Edison Telephone Replay: 1-800-570-8796 (US) and 1-203-369-3293 (Int’l) - Passcode: 85749 Telephone replay available through November 5, 2015

Webcast:

www.edisoninvestor.com

    Third Quarter and Year-to-Date Reconciliation of Core Earnings Per Share to Basic Earnings Per Share     Three months ended     Nine months ended   September 30, September 30,       2015       2014     Change     2015       2014     Change Earnings (loss) per share attributable to Edison International     Continuing operations SCE $ 1.19 $ 1.54 $ (0.35 ) $ 3.31 $ 3.29 $ 0.02 Edison International Parent and Other (0.03 ) (0.02 ) (0.01 ) (0.07 ) (0.08 ) 0.01 Discontinued operations   0.13       (0.05 )     0.18       0.13       0.45       (0.32 ) Edison International   1.29       1.47       (0.18 )     3.37       3.66       (0.29 ) Less: Non-core items SCE — — — — (0.29 ) 0.29 Edison International Parent and Other — — — 0.02 — 0.02 Discontinued operations   0.13       (0.05 )     0.18       0.13       0.45       (0.32 ) Total non-core items   0.13       (0.05 )     0.18       0.15       0.16       (0.01 ) Core earnings (losses) SCE 1.19 1.54 (0.35 ) 3.31 3.58 (0.27 ) Edison International Parent and Other   (0.03 )     (0.02 )     (0.01 )     (0.09 )     (0.08 )     (0.01 ) Edison International   $ 1.16     $ 1.52     $ (0.36 )   $ 3.22     $ 3.50     $ (0.28 )  

Note: Diluted earnings were $1.28 and $1.46 per share for the three months ended September 30, 2015 and 2014, respectively, and $3.34 and $3.62 per share for the nine months ended September 30, 2015 and 2014, respectively.

    Third Quarter and Year-to-Date Reconciliation of Core Earnings to Basic Earnings (in millions)     Three months ended     Nine months ended   September 30, September 30, (in millions)     2015       2014     Change     2015       2014     Change Net income (loss) attributable to Edison International     Continuing operations SCE $ 389 $ 503 $ (114 ) $ 1,079 $ 1,072 $ 7 Edison International Parent and Other (11 ) (7 ) (4 ) (23 ) (26 ) 3 Discontinued operations   43       (16 )     59       43       146       (103 ) Edison International   421       480       (59 )     1,099       1,192       (93 ) Less: Non-core items SCE — — — — (96 ) 96 Edison International Parent and Other 1 — 1 7 — 7 Discontinued operations   43       (16 )     59       43       146       (103 ) Total non-core items   44       (16 )     60       50       50       —   Core earnings (losses) SCE 389 503 (114 ) 1,079 1,168 (89 ) Edison International Parent and Other   (12 )     (7 )     (5 )     (30 )     (26 )     (4 ) Edison International   $ 377     $ 496     $ (119 )   $ 1,049     $ 1,142     $ (93 )       Consolidated Statements of Income   Edison International Three months ended   Nine months ended September 30, September 30, (in millions, except per-share amounts, unaudited)     2015       2014       2015       2014   Total operating revenue $ 3,763     $ 4,356     $ 9,183     $ 10,298   Purchased power and fuel 1,785   2,182 3,648   4,563 Operation and maintenance 780 802 2,159 2,245 Depreciation, decommissioning and amortization 506 424 1,451 1,248 Property and other taxes 84 77 255 235 Impairment and other charges   —       (3 )     —       228   Total operating expenses   3,155       3,482       7,513       8,519   Operating income 608 874 1,670 1,779 Interest and other income 32 40 114 109 Interest expense (138 ) (141 ) (420 ) (422 ) Other expenses   (15 )     (29 )     (40 )     (52 ) Income from continuing operations before income taxes 487 744 1,324 1,414 Income tax expense   82       220       195       284   Income from continuing operations 405 524 1,129 1,130 Income (loss) from discontinued operations, net of tax   43       (16 )     43       146   Net income 448 508 1,172 1,276 Preferred and preference stock dividend requirements of utility 28 28 84 84 Other noncontrolling interests   (1 )     —       (11 )     —   Net income attributable to Edison International common shareholders $ 421     $ 480     $ 1,099     $ 1,192   Amounts attributable to Edison International common shareholders: Income from continuing operations, net of tax $ 378 $ 496 $ 1,056 $ 1,046 Income (loss) from discontinued operations, net of tax   43       (16 )     43       146   Net income attributable to Edison International common shareholders $ 421     $ 480     $ 1,099     $ 1,192   Basic earnings per common share attributable to Edison International common shareholders: Weighted-average shares of common stock outstanding 326 326 326 326 Continuing operations $ 1.16 $ 1.52 $ 3.24 $ 3.21 Discontinued operations   0.13       (0.05 )     0.13       0.45   Total $ 1.29     $ 1.47     $ 3.37     $ 3.66   Diluted earnings per common share attributable to Edison International common shareholders: Weighted-average shares of common stock outstanding, including effect of dilutive securities 328 329 329 329 Continuing operations $ 1.15 $ 1.51 $ 3.21 $ 3.18 Discontinued operations   0.13       (0.05 )     0.13       0.44   Total $ 1.28     $ 1.46     $ 3.34     $ 3.62   Dividends declared per common share   $ 0.4175     $ 0.3550     $ 1.2525     $ 1.0650         Consolidated Balance Sheets   Edison International   September 30, December 31, (in millions, unaudited)   2015   2014 ASSETS Cash and cash equivalents $ 134 $ 132 Receivables, less allowances of $66 and $68 for uncollectible accounts at respective dates 1,211 790 Accrued unbilled revenue 1,025 632 Inventory 270 281 Derivative assets 81 102 Regulatory assets 473 1,254 Deferred income taxes 152 452 Other current assets   446     376 Total current assets   3,792     4,019 Nuclear decommissioning trusts 4,388 4,799 Other investments   208     207 Total investments   4,596     5,006 Utility property, plant and equipment, less accumulated depreciation and amortization of $8,407 and $8,132 at respective dates 34,062 32,859 Nonutility property, plant and equipment, less accumulated depreciation of $81 and $76 at respective dates   140     122 Total property, plant and equipment   34,202     32,981 Derivative assets 188 219 Regulatory assets 8,121 7,612 Other long-term assets   371     349 Total long-term assets   8,680     8,180   Total assets   $ 51,270   $ 50,186       Consolidated Balance Sheets   Edison International   September 30, December 31, (in millions, except share amounts, unaudited)   2015   2014 LIABILITIES AND EQUITY Short-term debt $ 1,154 $ 1,291 Current portion of long-term debt 295 504 Accounts payable 1,330 1,580 Accrued taxes 80 81 Customer deposits 235 221 Derivative liabilities 207 196 Regulatory liabilities 888 401 Other current liabilities   1,050       1,205   Total current liabilities   5,239       5,479   Long-term debt   10,957       10,234   Deferred income taxes and credits 7,698 7,313 Derivative liabilities 1,167 1,052 Pensions and benefits 2,175 2,155 Asset retirement obligations 2,822 2,821 Regulatory liabilities 5,265 5,889 Other deferred credits and other long-term liabilities   2,316       2,255   Total deferred credits and other liabilities   21,443       21,485   Total liabilities   37,639       37,198   Commitments and contingencies Redeemable noncontrolling interest 11 6 Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at respective dates) 2,475 2,445 Accumulated other comprehensive loss (55 ) (58 ) Retained earnings   9,180       8,573   Total Edison International's common shareholders' equity   11,600       10,960   Noncontrolling interests – preferred and preference stock of utility   2,020       2,022   Total equity   13,620       12,982     Total liabilities and equity   $ 51,270     $ 50,186         Consolidated Statements of Cash Flows   Edison International   Nine months ended September 30, (in millions, unaudited)     2015       2014   Cash flows from operating activities:   Net income $ 1,172 $ 1,276 Less: Income from discontinued operations   43       146   Income from continuing operations 1,129 1,130 Adjustments to reconcile to net cash provided by operating activities: Depreciation, decommissioning and amortization 1,515 1,312 Allowance for equity during construction (63 ) (45 ) Impairment and other charges — 228 Deferred income taxes and investment tax credits 202 303 Other (5 ) 14 EME insurance proceeds and settlement payments (176 ) (225 ) Changes in operating assets and liabilities: Receivables (412 ) (369 ) Inventory 10 (19 ) Accounts payable 164 211 Prepaid and accrued taxes (18 ) 106 Other current assets and liabilities (572 ) (603 ) Derivative assets and liabilities, net 25 (68 ) Regulatory assets and liabilities, net 1,318 41 Nuclear decommissioning trusts (249 ) 100 Other noncurrent assets and liabilities   (35 )     (89 ) Net cash provided by operating activities   2,833       2,027   Cash flows from financing activities: Long-term debt issued or remarketed, net of discount and issuance costs of $16 and $5 at respective periods 1,415 395 Long-term debt matured or repurchased (761 ) (405 ) Preference stock issued, net 319 269 Preference stock redeemed (325 ) — Short-term debt financing, net (112 ) 1,138 Cash contribution from redeemable noncontrolling interest 17 — Dividends to noncontrolling interests (91 ) (88 ) Dividends paid (408 ) (347 ) Other   (28 )     (57 ) Net cash provided by financing activities   26       905   Cash flows from investing activities: Capital expenditures (3,134 ) (2,856 ) Proceeds from sale of nuclear decommissioning trust investments 12,915 5,846 Purchases of nuclear decommissioning trust investments (12,673 ) (5,951 ) Other   35       25   Net cash used in investing activities   (2,857 )     (2,936 ) Net increase (decrease) in cash and cash equivalents 2 (4 ) Cash and cash equivalents at beginning of period   132       146   Cash and cash equivalents at end of period   $ 134     $ 142  

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Edison InternationalMedia relations contact:Charles Coleman, (626) 302-7982orInvestor relations contact:Scott Cunningham, (626) 302-2540