Edison International (NYSE:EIX) today reported fourth quarter
2016 net income of $345 million, or $1.06 per share, compared to a
net loss of $79 million, or $0.24 loss per share, in the fourth
quarter 2015. As adjusted, fourth quarter 2016 core earnings were
$332 million, or $1.02 per share, compared to core earnings of $287
million, or $0.88 per share, in the fourth quarter 2015.
Southern California Edison's (SCE) fourth quarter 2016 net
income increased by $419 million, or $1.29 per share, from the
fourth quarter 2015. SCE's increase in net income consisted of $49
million of higher core earnings and $370 million of higher non-core
earnings. The increase in core earnings was due to an increase in
revenue from the escalation mechanism as set forth in the 2015
General Rate Case (GRC) and lower operations and maintenance
expenses, partially offset by higher net financing costs and tax
expense. There were no SCE non-core items in the fourth quarter
2016 results. Fourth quarter 2015 SCE core earnings excluded losses
of $370 million, or $1.14 per share. This is primarily related to
the $382 million, or $1.18 per share, write-down of SCE deferred
income tax regulatory asset from certain 2012-2014 tax repair
deductions.
Fourth quarter 2016 losses from continuing operations at Edison
International Parent and Other increased by $16 million, or $0.05
per share, compared to fourth quarter 2015. This increase consisted
of $4 million of higher core losses and $12 million of non-core
income related to the fourth quarter 2015. The higher core losses
reflected lower revenue from Edison Capital's affordable housing
investment portfolio, partially offset by lower corporate expenses.
There were no non-core items in the fourth quarter 2016 for Edison
International Parent and Other. Fourth quarter 2015 non-core items
included income of $10 million, or $0.03 per share, related to the
completion of the sale of Edison Capital's affordable housing
investment portfolio and $2 million, or $0.01 per share, of income
under the hypothetical liquidation at book value (HLBV) accounting
method. Additionally, Edison International recorded $13 million of
income, or $0.04 per share, and losses of $8 million, or $0.02 per
share, from discontinued operations for the fourth quarter 2016 and
fourth quarter 2015, respectively.
“Edison International delivered excellent fourth quarter and
full-year results at the high end of our guidance range, led by
SCE’s strong operating performance,” said Pedro Pizarro, Edison
International president and chief executive officer. “Additionally,
we have introduced 2017 earnings guidance with the midpoint above
consensus analyst estimates.”
Full Year Earnings
For 2016, Edison International reported net income of $1,311
million, or $4.02 per share, compared to $1,020 million, or $3.13
per share, in 2015. On an adjusted basis, Edison International’s
core earnings were $1,294 million, or $3.97 per share, compared to
$1,336 million, or $4.10 per share, in 2015.
SCE’s 2016 net income increased $378 million, or $1.16 per
share, from 2015. SCE's increased net income consisted of $8
million, or $0.02 per share, of higher core earnings and $370
million, or $1.14 per share, of higher non-core earnings. The
increase in core earnings was due to an increase in revenue from
the escalation mechanism as set forth in the 2015 GRC and lower
operations and maintenance expenses, partially offset by higher net
financing costs and tax expense. There were no non-core items in
2016 SCE results. 2015 SCE core earnings excluded losses of $370
million, or $1.14 per share. This loss primarily related to the
$382 million, or $1.18 per share, write-down of SCE deferred income
tax regulatory asset from certain 2012-2014 tax repair
deductions.
Edison International Parent and Other losses from continuing
operations for 2016 increased by $64 million, or $0.19 per share,
compared to 2015. This increase consisted of $50 million, or $0.15
per share, of higher core losses and $14 million, or $0.04 per
share, of higher non-core losses. 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, higher
core losses reflected higher Edison Energy Group operating and
development costs and lower results at SoCore Energy. Results
during 2015 included income from Edison Capital's investments in
affordable housing projects, which were sold at the end of
2015.
Edison International Parent and Other's non-core items for 2016
included income of $5 million, or $0.02 per share, compared to
income of $9 million, or $0.03 per share, for 2015 related to
losses under the HLBV accounting method. During 2015, Edison
International Parent and Other recorded non-core income of $10
million, or $0.03 per share, related to the completion of the sale
of Edison Capital's affordable housing investment portfolio.
Additionally, Edison International recorded income of $12 million,
or $0.03 per share, and $35 million, or $0.11 per share, from
discontinued operations for 2016 and 2015, respectively.
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.
2017 Earnings Guidance
The company announced basic and core earnings
guidance of $4.04 to $4.24 per share for 2017. See the presentation
accompanying the company’s conference call for further information
including key guidance assumptions.
2017 Basic and Core Earnings Guidance
as of February 21, 2017
Low
Midpoint
High
SCE $4.39 EIX Parent & Other (0.25)
EIX Basic EPS
$4.04 $4.14 $4.24 Less: Non-Core Items - - -
EIX Core EPS $4.04 $4.14 $4.24
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, capital
expenditures, rate base growth, dividend policy, 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. These forward-looking statements
represent our expectations only as of the date of this release, and
Edison International assumes no duty to update them to reflect new
information, events or circumstances. 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 costs related to San Onofre and proposed spending on grid
modernization;
- 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, approval of proposed spending on grid modernization, the
outcome of San Onofre CPUC proceedings, and delays in regulatory
actions;
- risks associated with cost allocation,
including the potential movement of costs to certain 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 increased adoption of distributed energy
resources or 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
SCE’s transmission and distribution infrastructure investment
program, 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
decommissioning of San Onofre, including those related to public
opposition, permitting, governmental approvals, and cost
overruns.
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, February 21, 2017, 1:30 p.m. (Pacific Time)
Telephone Numbers:
1-800-369-2198 (US) and 1-773-756-4618
(Int’l) - Passcode: Edison
Telephone Replay:
1-800-873-2041 (US) and 1-203-369-4005
(Int’l) - Passcode: 26421
Telephone replay available through March 7, 2017 Webcast:
www.edisoninvestor.com
Fourth Quarter and Full-Year
Reconciliation of
Core Earnings Per Share to Basic
Earnings Per Share
Three months endedDecember 31, Years endedDecember 31,
2016 2015 Change 2016
2015 Change Earnings (loss) per share attributable to Edison
International Continuing operations SCE $ 1.04 $
(0.25 ) $ 1.29 $ 4.22 $ 3.06 $ 1.16 Edison International Parent and
Other (0.02 ) 0.03 (0.05 ) (0.23 ) (0.04 ) (0.19 ) Discontinued
operations 0.04 (0.02 ) 0.06
0.03 0.11 (0.08 ) Edison International
1.06 (0.24 ) 1.30 4.02
3.13 0.89 Less: Non-core items SCE —
(1.14 ) 1.14 — (1.14 ) 1.14 Edison International Parent and Other —
0.04 (0.04 ) 0.02 0.06 (0.04 ) Discontinued operations 0.04
(0.02 ) 0.06 0.03 0.11
(0.08 ) Total non-core items 0.04 (1.12
) 1.16 0.05 (0.97 ) 1.02
Core earnings (losses) SCE 1.04 0.89 0.15 4.22 4.20 0.02
Edison International Parent and Other (0.02 ) (0.01 )
(0.01 ) (0.25 ) (0.10 ) (0.15 ) Edison
International $ 1.02 $ 0.88 $
0.14 $ 3.97 $ 4.10 $
(0.13 ) Note: Diluted earnings were $1.05 and $(0.24) per share for
the three months ended December 31, 2016 and 2015, respectively,
and $3.97 and $3.10 per share for the years ended December 31, 2016
and 2015, respectively. An accounting standards update on
share-based payments was adopted in the fourth quarter of 2016,
effective January 1, 2016. The fourth quarter 2016 basic and
dilutive EPS adjusted for the retroactive adoption would have been
$1.01 and $1.00, respectively.
Fourth Quarter and Full-Year
Reconciliation of
Core Earnings to Basic Earnings (in
millions)
Three months endedDecember 31, Years endedDecember 31, (in
millions) 2016 2015 Change 2016
2015 Change Net income (loss) attributable to Edison
International Continuing operations SCE $ 339 $ (80 )
$ 419 $ 1,376 $ 998 $ 378 Edison International Parent and Other (7
) 9 (16 ) (77 ) (13 ) (64 ) Discontinued operations 13
(8 ) 21 12 35
(23 ) Edison International 345 (79 )
424 1,311 1,020 291
Less: Non-core items SCE — (370 ) 370 — (370 ) 370 Edison
International Parent and Other — 12 (12 ) 5 19 (14 ) Discontinued
operations 13 (8 ) 21 12
35 (23 ) Total non-core items 13
(366 ) 379 17 (316 ) 333
Core earnings (losses) SCE 339 290 49 1,376 1,368 8 Edison
International Parent and Other (7 ) (3 ) (4 )
(82 ) (32 ) (50 ) Edison International $ 332
$ 287 $ 45 $ 1,294
$ 1,336 $ (42 ) Note: Due to the accounting
standards update on share-based payments adopted in the fourth
quarter of 2016, effective January 1, 2016, the fourth quarter net
income adjusted for the retroactive adoption would have been $329
million.
Consolidated Statements of
Income Edison International
Quarters ended December 31, Years ended December 31, (in millions,
except per-share amounts) 2016 2015 2016
2015
Total operating revenue $ 2,884 $
2,341 $ 11,869 $ 11,524
Purchased power and fuel 951 618 4,527 4,266 Operation and
maintenance 779 830 2,868 2,990 Depreciation, decommissioning and
amortization 504 467 2,007 1,919 Property and other taxes 84 81 354
336 Impairment and other charges — 5 21
5
Total operating expenses 2,318
2,001 9,777 9,516
Operating income 566 340 2,092 2,008 Interest and other
income 27 58 123 174 Interest expense (150 ) (136 ) (581 ) (555 )
Other expenses (17 ) (18 ) (44 ) (59 )
Income from continuing operations before income taxes 426
244 1,590 1,568 Income tax expense 63 291
177 486
Income (loss) from
continuing operations 363 (47 ) 1,413 1,082 Income (loss) from
discontinued operations, net of tax 13 (8 ) 12
35
Net income (loss) 376 (55 ) 1,425
1,117 Preferred and preference stock dividend requirements of
utility 31 29 123 113 Other noncontrolling interests —
(5 ) (9 ) (16 )
Net income (loss)
attributable to Edison International common shareholders $ 345
$ (79 ) $ 1,311 $ 1,020
Amounts attributable to Edison International common
shareholders: Income (loss) from continuing operations, net of
tax $ 332 $ (71 ) $ 1,299 $ 985 Income (loss) from discontinued
operations, net of tax 13 (8 ) 12
35
Net income (loss) attributable to Edison
International common shareholders $ 345 $ (79 )
$ 1,311 $ 1,020
Basic earnings
(loss) per common share attributable to Edison International common
shareholders: Weighted-average shares of common stock
outstanding 326 326 326 326 Continuing operations $ 1.02 $ (0.22 )
$ 3.99 $ 3.02 Discontinued operations 0.04 (0.02 )
0.03 0.11
Total $ 1.06
$ (0.24 ) $ 4.02 $ 3.13
Diluted earnings (loss) per common share attributable to Edison
International common shareholders: Weighted-average shares of
common stock outstanding, including effect of dilutive securities
330 328 330 329 Continuing operations $ 1.01 $ (0.22 ) $ 3.94 $
2.99 Discontinued operations 0.04 (0.02 ) 0.03
0.11
Total $ 1.05 $ (0.24
) $ 3.97 $ 3.10
Dividends declared
per common share $ 0.5425 $ 0.4800
$ 1.9825 $ 1.7325
Consolidated Balance Sheets Edison
International December 31, (in millions) 2016
2015
ASSETS Cash and cash equivalents $ 96 $ 161
Receivables, less allowances of $62 for uncollectible accounts at
both dates 714 771 Accrued unbilled revenue 370 565 Inventory 239
267 Derivative assets 73 79 Regulatory assets 350 560 Other current
assets 281 251
Total current assets 2,123
2,654 Nuclear decommissioning trusts 4,242 4,331
Other investments 83 203
Total investments
4,325 4,534 Utility property, plant and equipment,
less accumulated depreciation and amortization of $9,000 and $8,548
at respective dates 36,806 34,945 Nonutility property, plant and
equipment, less accumulated depreciation of $99 and $85 at
respective dates 194 140
Total property, plant and
equipment 37,000 35,085 Derivative assets 1 84
Regulatory assets 7,455 7,512 Other long-term assets 415
360
Total long-term assets 7,871 7,956
Total assets $ 51,319 $ 50,229
Consolidated Balance Sheets
Edison International December 31, (in millions,
except share amounts) 2016 2015
LIABILITIES AND
EQUITY Short-term debt $ 1,307 $ 695 Current portion of
long-term debt 981 295 Accounts payable 1,342 1,310 Accrued taxes
50 72 Customer deposits 269 242 Derivative liabilities 216 218
Regulatory liabilities 756 1,128 Other current liabilities 991
967
Total current liabilities 5,912
4,927
Long-term debt 10,175
10,883 Deferred income taxes and credits 8,327 7,480
Derivative liabilities 941 1,100 Pensions and benefits 1,354 1,759
Asset retirement obligations 2,590 2,764 Regulatory liabilities
5,726 5,676 Other deferred credits and other long-term liabilities
2,102 2,246
Total deferred credits and
other liabilities 21,040 21,025
Total
liabilities 37,127 36,835 Commitments and
contingencies
Redeemable noncontrolling interest 5 6 Common
stock, no par value (800,000,000 shares authorized; 325,811,206
shares issued and outstanding at respective dates) 2,505 2,484
Accumulated other comprehensive loss (53 ) (56 ) Retained earnings
9,544 8,940
Total Edison International's
common shareholders' equity 11,996 11,368
Noncontrolling interests – preferred and preference stock of
utility 2,191 2,020
Total equity 14,187
13,388
Total liabilities and
equity $ 51,319 $ 50,229
Consolidated Statements of Cash Flows
Edison International Years ended December 31, (in
millions) 2016 2015 2014
Cash flows from
operating activities: Net income $ 1,425 $ 1,117 $ 1,721
Less: Income from discontinued operations 12 35
185 Income from continuing operations 1,413
1,082 1,536 Adjustments to reconcile to net cash provided by
operating activities: Depreciation, decommissioning and
amortization 2,098 2,005 1,815 Allowance for equity during
construction (74 ) (87 ) (65 ) Impairment and other charges — 5 157
Deferred income taxes and investment tax credits 190 449 522 Other
20 (28 ) 20 Nuclear decommissioning trusts (179 ) (428 ) 39 EME
settlement payments, net of insurance proceeds (209 ) (176 ) (225 )
Changes in operating assets and liabilities: Receivables 52 49 64
Inventory 8 14 (25 ) Accounts payable 35 8 14 Prepaid and accrued
taxes (6 ) (28 ) (100 ) Other current assets and liabilities 211
(24 ) (103 ) Derivative assets and liabilities, net 13 45 (40 )
Regulatory assets and liabilities, net (292 ) 1,729 (358 ) Other
noncurrent assets and liabilities (24 ) (106 ) (3 )
Net cash provided by operating activities 3,256
4,509 3,248
Cash flows from
financing activities: Long-term debt issued or remarketed, net
of discount and issuance costs of $7, $17, and $6 at respective
periods 397 1,420 494 Long-term debt matured or repurchased (220 )
(762 ) (607 ) Preference stock issued, net 294 319 269 Preference
stock redeemed (125 ) (325 ) — Short-term debt financing, net 611
(572 ) 1,079 Cash contribution from redeemable noncontrolling
interest — — — Dividends to noncontrolling interests (123 ) (116 )
(111 ) Dividends paid (626 ) (544 ) (463 ) Other (113 ) (8 )
(16 )
Net cash provided by (used in) financing
activities 95 (588 ) 645
Cash
flows from investing activities: Capital expenditures (3,734 )
(4,225 ) (3,906 ) Proceeds from sale of nuclear decommissioning
trust investments 3,212 3,506 2,617 Purchases of nuclear
decommissioning trust investments (3,033 ) (3,132 ) (2,661 ) Life
insurance policy loans proceeds 140 — — Other (1 ) (41 )
43
Net cash used in investing activities
(3,416 ) (3,892 ) (3,907 )
Net (decrease) increase
in cash and cash equivalents (65 ) 29 (14 ) Cash and cash
equivalents at beginning of year 161 132
146
Cash and cash equivalents at end of year
$ 96 $ 161 $ 132
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Edison InternationalMedia relations contact:Charles
Coleman, 626-302-7982orInvestor relations
contact:Scott Cunningham, 626-302-2540
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