EIX Edison International

Edison International (NYSE: EIX) today reported first quarter 2016 net income on a GAAP basis of $271 million, or $0.83 per share, compared to $299 million, or $0.92 per share, in the first quarter of 2015. On an adjusted basis, Edison International’s first quarter 2016 core earnings were $268 million, or $0.82 per share, compared to $294 million, or $0.90 per share, in the first quarter of 2015.

Southern California Edison's (SCE) first quarter 2016 core earnings decreased by $18 million, or $0.05 per share, from the first quarter 2015 primarily due to the timing of revenue recognized in 2015 due to the delay in receiving the 2015 California Public Utilities Commission General Rate Case decision, higher operation and maintenance costs and lower incremental income tax benefits.

Edison International Parent and Other’s first quarter 2016 core losses increased by $8 million, or $0.03 per share, compared to first quarter 2015 core losses primarily due to higher development and operating costs at Edison Energy Group and subsidiaries and income in the first quarter of 2015 from Edison Capital's investments in affordable housing projects.

Edison International's first quarter 2016 core earnings exclude income of $3 million, or $0.01 per share, and first quarter 2015 core earnings exclude income of $5 million, or $0.02 per share, both primarily related to losses allocated to tax equity investors under the hypothetical liquidation at book value accounting method.

“First quarter results were consistent with our expectation leading us to reaffirm 2016 core earnings guidance,” said Ted Craver, chairman and chief executive officer of Edison International. “At SCE, we continue to see significant rate base growth driven by continued investment in infrastructure reliability and public safety and supporting California’s low-carbon policy objectives.”

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.

2016 Earnings Guidance

The company reaffirmed core earnings guidance of $3.81 to $4.01 per share for 2016 and updated its basic earnings guidance to $3.82 to $4.02 per share for a first quarter non-core item. See the presentation accompanying the company’s conference call for further information including key guidance assumptions.

                   

2016 Core and Basic Earnings Guidance

  2016 Earnings Guidance 2016 Earnings Guidance as of February 23, 2016 as of May 2, 2016 Low     Mid     High Low     Mid     High SCE $ 4.09 $ 4.09 EIX Parent & Other (0.18 ) (0.18 ) EIX Core EPS $ 3.81 $ 3.91 $ 4.01 $ 3.81 $ 3.91 $ 4.01 Non-core Items* - - - 0.01 0.01 0.01 EIX Basic EPS $ 3.81 $ 3.91 $ 4.01 $ 3.82 $ 3.92 $ 4.02

* Non-core items recorded for the three months ended March 31, 2016.

 

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 of Edison International and Southern California Edison. 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.

Reminder: Edison International Will Hold a Conference Call Today

When:       Monday, May 2, 2016, 1:30 p.m. (Pacific Time) Telephone Numbers: 1-800-369-2198 (US) and 1-773-756-4618 (Int'l) - Passcode: Edison Telephone Replay: 1-866-378-7479 (US) and 1-203-369-0329 (Int’l) - Passcode: 50216 Telephone replay available through May 13, 2016 Webcast:

www.edisoninvestor.com

               

First Quarter Reconciliation of Core Earnings Per Share to Basic Earnings Per Share

 

Three months endedMarch 31,

        2016     2015     Change Earnings (loss) per share attributable to Edison International     Continuing operations SCE $ 0.88 $ 0.93 $ (0.05 ) Edison International Parent and Other (0.05 ) (0.01 ) (0.04 ) Discontinued operations —       —       —   Edison International 0.83       0.92       (0.09 ) Less: Non-core items SCE — — — Edison International Parent and Other 0.01 0.02 (0.01 ) Discontinued operations —       —       —   Total non-core items 0.01       0.02       (0.01 ) Core earnings (losses) SCE 0.88 0.93 (0.05 ) Edison International Parent and Other (0.06 )     (0.03 )     (0.03 ) Edison International       $ 0.82       $ 0.90       $ (0.08 )  

Note: Diluted earnings were $0.82 and $0.91 per share for the three months ended March 31, 2016 and 2015, respectively.

   

First Quarter Reconciliation of Core Earnings to Basic Earnings (in millions)

 

Three months endedMarch 31,

(in millions)       2016     2015     Change Net income (loss) attributable to Edison International Continuing operations SCE $ 287 $ 305 $ (18 ) Edison International Parent and Other (17 ) (6 ) (11 ) Discontinued operations 1       —       1   Edison International 271       299       (28 ) Less: Non-core items SCE — — — Edison International Parent and Other 2 5 (3 ) Discontinued operations 1       —       1   Total non-core items 3       5       (2 ) Core earnings (losses) SCE 287 305 (18 ) Edison International Parent and Other (19 )     (11 )     (8 ) Edison International       $ 268       $ 294       $ (26 )                 Consolidated Statements of Income       Edison International

Three months ended March 31,

(in millions, except per-share amounts, unaudited)       2016     2015 Total operating revenue $ 2,440       $ 2,512   Purchased power and fuel 794     786 Operation and maintenance 629 636 Depreciation, decommissioning and amortization 477 463 Property and other taxes 92       89   Total operating expenses 1,992       1,974   Operating income 448 538 Interest and other income 31 39 Interest expense (140 ) (143 ) Other expenses (6 )     (10 ) Income from continuing operations before income taxes 333 424 Income tax expense 38       106   Income from continuing operations 295 318 Income from discontinued operations, net of tax 1       —   Net income 296 318 Preferred and preference stock dividend requirements of SCE 30 28 Other noncontrolling interests (5 )     (9 ) Net income attributable to Edison International common shareholders $ 271       $ 299   Amounts attributable to Edison International common shareholders: Income from continuing operations, net of tax $ 270 $ 299 Income from discontinued operations, net of tax 1       —   Net income attributable to Edison International common shareholders $ 271       $ 299   Basic earnings per common share attributable to Edison International common shareholders: Weighted-average shares of common stock outstanding 326 326 Continuing operations $ 0.83       $ 0.92   Total $ 0.83       $ 0.92   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 Continuing operations $ 0.82       $ 0.91   Total $ 0.82       $ 0.91   Dividends declared per common share       $ 0.4800       $ 0.4175               Consolidated Balance Sheets       Edison International     (in millions, unaudited)      

March 31,2016

   

December 31,2015

ASSETS Cash and cash equivalents $ 137 $ 161 Receivables, less allowances of $59 and $62 for uncollectible accounts at respective dates 649 771 Accrued unbilled revenue 512 565 Inventory 268 267 Derivative assets 65 79 Regulatory assets 538 560 Other current assets 258       251 Total current assets 2,427       2,654 Nuclear decommissioning trusts 4,290 4,331 Other investments 208       203 Total investments 4,498       4,534 Utility property, plant and equipment, less accumulated depreciation and amortization of $8,751 and $8,548 at respective dates 35,323 34,945 Nonutility property, plant and equipment, less accumulated depreciation of $88 and $85 at respective dates 141       140 Total property, plant and equipment 35,464       35,085 Derivative assets 78 84 Regulatory assets 7,628 7,512 Other long-term assets 364       360 Total long-term assets 8,070       7,956     Total assets       $ 50,459       $ 50,229             Consolidated Balance Sheets       Edison International     (in millions, except share amounts, unaudited)      

March 31,2016

   

December 31,2015

LIABILITIES AND EQUITY Short-term debt $ 363 $ 695 Current portion of long-term debt 295 295 Accounts payable 938 1,310 Accrued taxes 139 72 Customer deposits 253 242 Derivative liabilities 232 218 Regulatory liabilities 1,157 1,128 Other current liabilities 856       967   Total current liabilities 4,233       4,927   Long-term debt 11,243       10,883   Deferred income taxes and credits 7,699 7,480 Derivative liabilities 1,136 1,100 Pensions and benefits 1,771 1,759 Asset retirement obligations 2,597 2,764 Regulatory liabilities 5,920 5,676 Other deferred credits and other long-term liabilities 2,225       2,246   Total deferred credits and other liabilities 21,348       21,025   Total liabilities 36,824       36,835   Commitments and contingencies Redeemable noncontrolling interest 4 6 Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at respective dates) 2,491 2,484 Accumulated other comprehensive loss (54 ) (56 ) Retained earnings 9,002       8,940   Total Edison International's common shareholders' equity 11,439       11,368   Noncontrolling interests – preferred and preference stock of SCE 2,192       2,020   Total equity 13,631       13,388       Total liabilities and equity       $ 50,459       $ 50,229               Consolidated Statements of Cash Flows       Edison International  

Three months ended March 31,

(in millions, unaudited)       2016     2015 Cash flows from operating activities:     Net income $ 296 $ 318 Less: Income from discontinued operations 1       —   Income from continuing operations 295 318 Adjustments to reconcile to net cash provided by operating activities: Depreciation, decommissioning and amortization 499 485 Allowance for equity during construction (22 ) (21 ) Deferred income taxes and investment tax credits 35 72 Other 5 5 Nuclear decommissioning trusts (106 ) 29 Changes in operating assets and liabilities: Receivables 117 31 Inventory (1 ) (10 ) Accounts payable (184 ) 63 Prepaid and accrued taxes 66 38 Other current assets and liabilities (43 ) (229 ) Derivative assets and liabilities, net 5 (10 ) Regulatory assets and liabilities, net 119 193 Other noncurrent assets and liabilities 68       —   Net cash provided by operating activities 853       964   Cash flows from financing activities:

Long-term debt issued, net of discount and issuance costs of $3 and $13 for respective periods

397 1,287 Long-term debt matured (40 ) (419 ) Preference stock issued, net 294 — Preference stock redeemed (125 ) — Short-term debt financing, net (332 ) (355 ) Dividends to noncontrolling interests (35 ) (34 ) Dividends paid (156 ) (136 ) Other (46 )     (30 ) Net cash (used in) provided by financing activities (43 )     313   Cash flows from investing activities: Capital expenditures (951 ) (1,268 ) Proceeds from sale of nuclear decommissioning trust investments 793 1,026 Purchases of nuclear decommissioning trust investments (687 ) (1,062 ) Other 11       10   Net cash used in investing activities (834 )     (1,294 ) Net decrease in cash and cash equivalents (24 ) (17 ) Cash and cash equivalents at beginning of period 161       132   Cash and cash equivalents at end of period       $ 137       $ 115    

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