Edison International (NYSE: EIX) today reported third quarter
2016 net income of $419 million, or $1.29 per share, compared to
$421 million, or $1.29 per share, in the third quarter of 2015.
There were no non-core items in the third quarter 2016 results. As
adjusted, third quarter 2015 core earnings were $377 million or
$1.16 per share.
SCE's third quarter 2016 net income increased by $46 million, or
$0.15 per share, from the third quarter 2015 primarily due to the
timing of the implementation of the 2015 General Rate Case (GRC)
proposed decision and incremental return on pole loading rate base,
partially offset by higher income tax expense.
SCE's 2015 earnings were impacted by the timing of the 2015 GRC
decision. During 2015, SCE recorded revenue refunds to customers
which totaled $451 million to reflect the final decision in the
2015 GRC. In the third quarter of 2015, SCE recorded a refund of
$233 million as a result of receiving the proposed GRC decision, of
which a total of $70 million ($41 million after-tax), or $0.13 per
share, was attributable to the first six months of 2015. In
addition, third quarter 2016 earnings included an increase in
revenue of approximately $46 million ($27 million after-tax),
or $0.08 per share, from the revenue escalation mechanism in the
2015 GRC decision.
Edison International Parent and Other’s third quarter 2016
losses from continuing operations increased by $5 million, or $0.02
per share, compared to third quarter 2015. The higher losses
reflected higher operating and development costs and lower revenue
and gross margin from the sale of solar systems at Edison Energy
Group.
Edison International Parent and Other's third quarter 2015
non-core items included income of $1 million related to losses (net
of distributions) allocated to tax equity investors under the
hypothetical liquidation at book value (HLBV) accounting method.
Additionally, during the third quarter 2015, Edison International
recorded $43 million, or $0.13 per share, of earnings from
discontinued operations.
“Third quarter results reflect the ongoing strength of SCE’s
earnings and we’ve reaffirmed our 2016 earnings guidance
accordingly,” said Pedro Pizarro, president and chief executive
officer of Edison International. “We continue to see a long-term
opportunity for above-average earnings and dividend growth based on
SCE infrastructure replacement and electric grid modernization
helping achieve California’s vision for a low-carbon economy.”
Year-to-Date Earnings
For the nine months ended September 30, 2016, Edison
International reported net income of $965 million, or $2.96 per
share, compared to $1,099 million, or $3.37 per share, during the
same period in 2015. On an adjusted basis, Edison International’s
core earnings were $961 million, or $2.95 per share, compared to
$1,049 million, or $3.22 per share, in the year-to-date period in
2015.
SCE’s net income for the nine months ended September 30, 2016
decreased $42 million, or $0.13 per share, from the same period in
2015, primarily due to $100 million, or $0.31 per share, of income
tax benefits from revisions to liabilities for uncertain tax
positions recorded in the second quarter of 2015, partially offset
by an increase in revenues of $142 million ($84 million after-tax),
or $0.26 per share, from the escalation mechanism in the 2015 GRC
decision and 2016 incremental return on the pole loading rate
base.
Edison International Parent and Other’s losses from continuing
operations from the nine months ended September 30, 2016 increased
by $48 million, or $0.15 per share, compared to same period 2015.
During the second quarter 2016, Edison International Parent and
Other recorded an after-tax charge of $13 million, or $0.04 per
share, related to the buy-out of an earn-out provision with the
former shareholders of a company acquired by Edison Energy at the
end of 2015. In addition, the increased losses also reflect higher
operating and development costs and lower revenue and gross margin
from the sale of solar systems at Edison Energy Group, as well as
losses at Edison Capital compared to income from investments in
affordable housing projects sold at the end of 2015.
Edison International's non-core items for the nine months ended
September 30, 2016 included income of $5 million, or $0.01 per
share, compared to income of $7 million, or $0.02 per share, for
the same period in 2015 related to losses (net of distributions)
allocated to tax equity investors under the HLBV accounting method.
Additionally, during the nine months ended September 30, 2016,
Edison International recorded $1 million of losses from
discontinued operations as compared to $43 million, or $0.13 per
share, of earnings in the same period of 2015.
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.
Reaffirmed 2016 Earnings
Guidance
The company reaffirmed its earnings guidance for 2016 as
summarized in the following chart. See the presentation
accompanying the company’s conference call for further information
including key guidance assumptions.
2016 Earnings Guidance
2016 Earnings Guidance
2016 Earnings Guidance as of July 28,
2016 as of November 1, 2016 Low Mid
High Low Mid High EIX Basic EPS
$ 3.82 $ 3.92 $ 4.02
$ 3.87 $ 3.92 $ 3.97
Less: Non-core Items* 0.01 0.01 0.01 0.01 0.01 0.01
EIX Core
EPS $ 3.81 $ 3.91 $
4.01 $ 3.86 $ 3.91 $
3.96
* Non-core items recorded for the nine
months ended September 30, 2016.
About Edison International
Edison International (NYSE:EIX), through its subsidiaries, is a
generator and distributor of electric power, as well as a provider
of 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. Edison International is also the parent
company of Edison Energy Group, a portfolio of competitive
businesses that provide commercial and industrial customers with
energy management and procurement services and distributed solar
generation. Edison Energy Group companies are independent from
Southern California Edison.
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.
Safe Harbor Statement
Statements contained in this release about future performance,
including, without limitation, operating results, rate base growth,
financial outlook, and other statements that are not purely
historical, are forward-looking statements. 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 include, but are not limited to
the:
- ability of SCE to recover its costs in
a timely manner from its customers through regulated rates,
including regulatory assets related to San Onofre;
- decisions and other actions by the
CPUC, the FERC, the NRC and other regulatory authorities, including
the determinations of authorized rates of return or return on
equity, outcome of San Onofre CPUC proceedings and delays in
regulatory actions;
- risks associated with cost allocation,
including the potential movement of costs to bundled customers,
caused by the ability of cities, counties and certain other public
agencies to generate and/or purchase electricity for their local
residents and businesses, along with other possible customer bypass
or departure due to technological advancements in the generation,
storage, transmission, distribution and use of electricity, and
supported by public policy, government regulations and
incentives;
- risks inherent in the construction of
transmission and distribution infrastructure replacement and
expansion projects, including those related to project site
identification, public opposition, environmental mitigation,
construction, permitting, power curtailment costs (payments due
under power contracts in the event there is insufficient
transmission to enable acceptance of power delivery), and
governmental approvals;
- ability to obtain sufficient insurance,
including insurance relating to SCE's nuclear facilities and
wildfire-related liability, and to recover the costs of such
insurance or in the absence of insurance the ability to recover
uninsured losses; and
- risks associated with the retirement
and decommissioning of nuclear generating facilities.
Other important factors are discussed under the headings “Risk
Factors” and “Management’s Discussion and Analysis” in Edison
International’s Form 10-K, most recent Form 10-Q, and other reports
filed with the Securities and Exchange Commission, which are
available on our website: www.edisoninvestor.com. These filings
also provide additional information on historical and other factual
data contained in this news release.
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:
Tuesday, November 1, 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: 1-888-568-0514 (US) and
1-402-530-8003 (Int’l) - Passcode: 22316 Telephone replay available
through November 10, 2016 Webcast:
www.edisoninvestor.com
Third Quarter Reconciliation of Basic
Earnings Per Share to Core Earnings Per Share
Three months ended September 30, Nine months
ended September 30, 2016 2015 Change
2016 2015 Change Earnings (loss) per share
attributable to Edison International Continuing operations
SCE $ 1.34 $ 1.19 $ 0.15 $ 3.18 $ 3.31 $ (0.13 )
Edison International Parent and Other (0.05 ) (0.03 ) (0.02 ) (0.22
) (0.07 ) (0.15 ) Discontinued operations — 0.13
(0.13 ) — 0.13
(0.13 ) Edison International 1.29 1.29
— 2.96 3.37 (0.41 ) Less:
Non-core items SCE — — — — — — Edison International Parent and
Other — — — 0.01 0.02 (0.01 ) Discontinued operations —
0.13 (0.13 ) — 0.13
(0.13 ) Total non-core items — 0.13
(0.13 ) 0.01 0.15
(0.14 ) Core earnings (losses) SCE 1.34 1.19 0.15 3.18 3.31 (0.13 )
Edison International Parent and Other (0.05 ) (0.03 )
(0.02 ) (0.23 ) (0.09 ) (0.14 ) Edison
International $ 1.29 $ 1.16 $ 0.13
$ 2.95 $ 3.22 $
(0.27 )
Note: Diluted earnings were $1.27
and $1.28 per share for the three months ended September 30,
2016 and 2015, respectively and $2.94 and $3.34 per share for the
nine months ended September 30, 2016 and 2015, respectively.
Third Quarter Reconciliation of Basic
Earnings to Core Earnings (in millions)
Three months ended September 30, Nine months
ended September 30, (in millions) 2016 2015
Change 2016 2015 Change Net income (loss)
attributable to Edison International Continuing operations
SCE $ 435 $ 389 $ 46 $ 1,037 $ 1,079 $ (42 ) Edison
International Parent and Other (16 ) (11 ) (5 ) (71 ) (23 ) (48 )
Discontinued operations — 43 (43 )
(1 ) 43 (44 ) Edison International 419
421 (2 ) 965 1,099
(134 ) Less: Non-core items SCE — — — — — — Edison
International Parent and Other — 1 (1 ) 5 7 (2 ) Discontinued
operations — 43 (43 ) (1 )
43 (44 ) Total non-core items —
44 (44 ) 4 50 (46
) Core earnings (losses) SCE 435 389 46 1,037 1,079 (42 ) Edison
International Parent and Other (16 ) (12 ) (4 )
(76 ) (30 ) (46 ) Edison International $ 419
$ 377 $ 42 $ 961
$ 1,049 $ (88 )
Consolidated Statements of
Income
Edison International
Three months endedSeptember 30,
Nine months endedSeptember 30,
(in millions, except per-share amounts, unaudited) 2016
2015 2016 2015
Total operating revenue
$ 3,767 $ 3,763 $ 8,985 $
9,183 Purchased power and fuel 1,719 1,785 3,576 3,648
Operation and maintenance 740 780 2,090 2,159 Depreciation,
decommissioning and amortization 521 506 1,504 1,451 Property and
other taxes 92 84 269 255 Impairment and other charges —
— 21 —
Total operating
expenses 3,072 3,155 7,460
7,513
Operating income 695 608 1,525 1,670
Interest and other income 32 32 97 114 Interest expense (147 ) (138
) (431 ) (420 ) Other expenses (9 ) (15 ) (29 )
(40 )
Income from continuing operations before income
taxes 571 487 1,162 1,324 Income tax expense 122
82 113 195
Income from
continuing operations 449 405 1,049 1,129 Income (loss) from
discontinued operations, net of tax — 43
(1 ) 43
Net income 449 448 1,048 1,172
Preferred and preference stock dividend requirements of SCE 31 28
92 84 Other noncontrolling interests (1 ) (1 ) (9 )
(11 )
Net income attributable to Edison International
common shareholders $ 419 $ 421 $
965 $ 1,099
Amounts attributable to Edison
International common shareholders:
Income from continuing operations, net of tax $ 419 $ 378 $ 966 $
1,056 Income (loss) from discontinued operations, net of tax —
43 (1 ) 43
Net income
attributable to Edison International common shareholders $ 419
$ 421 $ 965 $ 1,099
Basic earnings per common share attributable to Edison
International common shareholders: Weighted-average shares of
common stock outstanding 326 326 326 326 Continuing operations $
1.29 $ 1.16 $ 2.96 $ 3.24 Discontinued operations —
0.13 — 0.13
Total $ 1.29
$ 1.29 $ 2.96 $ 3.37
Diluted earnings per common share attributable to Edison
International common shareholders: Weighted-average shares of
common stock outstanding, including effect of dilutive securities
329 328 329 329 Continuing operations $ 1.27 $ 1.15 $ 2.94 $ 3.21
Discontinued operations — 0.13 —
0.13
Total $ 1.27 $ 1.28
$ 2.94 $ 3.34
Dividends declared per
common share $ 0.4800 $ 0.4175
$ 1.4400 $ 1.2525
Consolidated Balance Sheets
Edison International (in millions, unaudited)
September 30,2016
December 31,2015
ASSETS
Cash and cash equivalents $ 84 $ 161 Receivables, less
allowances of $58 and $62 for uncollectible accounts at respective
dates 999 771 Accrued unbilled revenue 570 565 Inventory 310 267
Derivative assets 60 79 Regulatory assets 321 560 Other current
assets 261 251
Total current assets 2,605
2,654 Nuclear decommissioning trusts 4,376 4,331
Other investments 76 203
Total investments
4,452 4,534 Utility property, plant and equipment,
less accumulated depreciation and amortization of $8,753 and $8,548
at respective dates 36,064 34,945 Nonutility property, plant and
equipment, less accumulated depreciation of $96 and $85 at
respective dates 167 140
Total property, plant and
equipment 36,231 35,085 Derivative assets 67 84
Regulatory assets 7,844 7,512 Other long-term assets 358
360
Total long-term assets 8,269 7,956
Total assets $ 51,557 $ 50,229
Consolidated Balance Sheets
Edison International
(in millions, except share amounts, unaudited)
September 30,2016
December 31,2015
LIABILITIES AND EQUITY Short-term debt $ 757 $ 695 Current
portion of long-term debt 881 295 Accounts payable 1,180 1,310
Accrued taxes 130 72 Customer deposits 264 242 Derivative
liabilities 223 218 Regulatory liabilities 1,030 1,128 Other
current liabilities 877 967
Total current
liabilities 5,342 4,927
Long-term
debt 10,407 10,883 Deferred income taxes
and credits 8,177 7,480 Derivative liabilities 1,070 1,100 Pensions
and benefits 1,776 1,759 Asset retirement obligations 2,592 2,764
Regulatory liabilities 6,020 5,676 Other deferred credits and other
long-term liabilities 2,168 2,246
Total
deferred credits and other liabilities 21,803
21,025
Total liabilities 37,552 36,835
Commitments and contingencies
Redeemable noncontrolling
interest — 6 Common stock, no par value (800,000,000 shares
authorized; 325,811,206 shares issued and outstanding at respective
dates) 2,503 2,484 Accumulated other comprehensive loss (51 ) (56 )
Retained earnings 9,362 8,940
Total Edison
International's common shareholders' equity 11,814
11,368 Noncontrolling interests – preferred and
preference stock of SCE 2,191 2,020
Total
equity 14,005 13,388
Total liabilities and equity $ 51,557 $
50,229
Consolidated Statements of Cash
Flows Edison International
Nine months endedSeptember 30,
(in millions, unaudited) 2016 2015
Cash flows from operating
activities:
Net income $ 1,048 $ 1,172 Less: (Loss) income from
discontinued operations (1 ) 43 Income from
continuing operations 1,049 1,129 Adjustments to reconcile to net
cash provided by operating activities: Depreciation,
decommissioning and amortization 1,575 1,515 Allowance for equity
during construction (58 ) (63 ) Deferred income taxes and
investment tax credits 127 202 Other 17 (5 ) Nuclear
decommissioning trusts (159 ) (249 ) EME settlement payments, net
of insurance proceeds (209 ) (176 ) Changes in operating assets and
liabilities: Receivables (235 ) (412 ) Inventory (43 ) 10 Accounts
payable 151 164 Prepaid and accrued taxes 56 (18 ) Other current
assets and liabilities (68 ) (572 ) Derivative assets and
liabilities, net 15 25 Regulatory assets and liabilities, net 189
1,318 Other noncurrent assets and liabilities 93 (35
)
Net cash provided by operating
activities
2,500 2,833
Cash flows from financing
activities:
Long-term debt issued or remarketed, net of discount and issuance
costs of $3 and $16 for respective periods 397 1,415 Long-term debt
matured (83 ) (761 ) Preference stock issued, net 294 319
Preference stock redeemed (125 ) (325 ) Short-term debt financing,
net 60 (112 ) Dividends to noncontrolling interests (98 ) (91 )
Dividends paid (469 ) (408 ) Other (76 ) (11 )
Net cash
provided by financing activities (100 ) 26
Cash flows from investing activities: Capital expenditures
(2,773 ) (3,134 ) Proceeds from sale of nuclear decommissioning
trust investments 2,075 2,507 Purchases of nuclear decommissioning
trust investments (1,916 ) (2,265 ) Life insurance policy proceeds
140 — Other (3 ) 35
Net cash used in investing
activities (2,477 ) (2,857 )
Net (decrease) increase
in cash and cash equivalents (77 ) 2 Cash and cash equivalents
at beginning of period 161 132
Cash and cash equivalents at end of
period
$ 84 $ 134
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Edison InternationalMedia relations
contact:Charles Coleman, 626-302-7982orInvestor relations
contact:Scott Cunningham, 626-302-2540
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