Edison International (NYSE: EIX) today reported third quarter
2019 net income of $471 million, or $1.36 per share, compared to
net income of $513 million, or $1.57 per share a year ago. As
adjusted, third quarter 2019 core earnings were $519 million, or
$1.50 per share, compared to core earnings of $510 million, or
$1.56 per share, in the third quarter 2018.
Southern California Edison's (SCE) third quarter 2019 earnings
per share (EPS) decreased by $0.19 from the third quarter 2018,
consisting of lower core EPS of $0.03 and lower non-core EPS of
$0.16. The decrease in SCE's core EPS from prior year was primarily
due to the increase in shares outstanding related to the equity
offering in July 2019 and higher wildfire mitigation expenses,
which were partially offset by the adoption of the 2018 General
Rate Case (GRC) final decision in the second quarter of 2019 and
higher Federal Energy Regulatory Commission (FERC) revenue due to
the pending settlement of SCE's 2018 Formula Rate proceeding. SCE's
lower non-core EPS was due to the amortization of SCE's
contributions to the Wildfire Insurance Fund.
Edison International Parent and Other’s third quarter 2019 loss
per share from continuing operations increased by $0.02 compared to
third quarter 2018, consisting of higher core loss per share of
$0.03 and lower non-core loss per share of $0.01. The higher core
loss per share was primarily due to higher interest expense as a
result of increased borrowings.
“During the quarter, we filed our 2021 General Rate Case
application that strikes a balance across SCE’s core work of
improving the reliability and security of electric service, helping
California meet its clean energy goals, and reducing the risk of
catastrophic wildfires,” said Pedro Pizarro, president and chief
executive officer of Edison International. “Additionally, we
continued to implement elements of Assembly Bill 1054 by making our
initial contribution of $2.4 billion to the wildfire fund.”
Year-to-Date Earnings
For the nine months ended September 30, 2019, Edison
International reported net income of $1.1 billion, or $3.43 per
share, compared to $1.0 billion, or $3.09 per share, during the
same period in 2018. As adjusted, Edison International’s core
earnings were $1.2 billion, or $3.73 per share, compared to $1.0
billion, or $3.21 per share, in the year-to-date period in
2018.
SCE's year-to-date 2019 EPS increased $0.22 from the same period
prior year, consisting of higher core EPS of $0.54, offset by
higher non-core loss per share of $0.32. The increase in SCE's core
EPS was primarily due to the adoption of the 2018 GRC final
decision in the second quarter 2019, higher FERC revenue due to the
pending settlement of SCE's 2018 Formula Rate proceeding and timing
of regulatory deferrals of wildfire insurance costs, which were
partially offset by the increase in shares outstanding related to
the equity offering in July 2019 and higher wildfire mitigation and
other maintenance expenses. SCE's higher non-core loss per share
was mainly due to a $0.14 loss per share of amortization related to
SCE's contributions to the Wildfire Insurance Fund and $0.38 loss
per share related to the impairment charge resulting from the
disallowance of certain historical capital expenditures in SCE's
2018 GRC final decision recorded in the second quarter 2019, which
were partially offset by $0.21 per share of income tax benefits
related to changes in the allocation of deferred tax re-measurement
between customers and shareholders as a result of a California
Public Utilities Commission (CPUC) resolution issued in February
2019.
Edison International Parent and Other’s year-to-date 2019 loss
per share from continuing operations decreased by $0.12 compared to
the same period in 2018, consisting of higher core loss per share
of $0.02 and lower non-core loss per share of $0.14. The higher
core loss per share was primarily due to higher interest expense,
partially offset by lower loss per share at the competitive
business under Edison Energy Group. The lower non-core loss per
share was primarily related to the absence of the loss recorded in
connection with the sale of SoCore Energy in April 2018.
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.
2019 Earnings Guidance
The company updated its earnings guidance for 2019 as summarized
in the following chart. See the presentation accompanying the
company’s conference call for further information including key
guidance assumptions.
2019 Earnings Guidance
2019 Earnings Guidance
2019 Earnings Guidance
as of July 25, 2019
as of October 29, 2019
Low
Mid
High
Low
Mid
High
EIX Basic EPS
$4.46
$4.56
$4.66
$4.41
$4.51
$4.61
Less: Non-core Items*
(0.15)
(0.15)
(0.15)
(0.29)
(0.29)
(0.29)
EIX Core EPS
$4.61
$4.71
$4.81
$4.70
$4.80
$4.90
* There were ($99) million, or ($0.29) per share of non-core items
recorded for the nine months ended September 30, 2019, calculated
based on an assumed weighted average share count for 2019.
About Edison International
Edison International (NYSE:EIX), through its subsidiaries, is a
distributor and generator of electric power, as well as a provider
of energy services and technologies, including renewable energy.
Headquartered in Rosemead, California, 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, a portfolio of competitive businesses
that provide commercial and industrial customers with energy
management and procurement services. Edison Energy is 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 through regulated rates,
including costs related to uninsured wildfire-related and
mudslide-related liabilities and costs incurred to prevent future
wildfires;
- ability to obtain sufficient insurance at a reasonable cost,
including insurance relating to SCE's nuclear facilities and
wildfire-related claims, and to recover the costs of such insurance
or, in the event liabilities exceed insured amounts, the ability to
recover uninsured losses from customers or other parties;
- risks associated with AB 1054 effectively mitigating the
significant risk faced by California investor-owned utilities
related to liability for damages arising from catastrophic
wildfires where utility facilities are a substantial cause,
including SCE's ability to maintain a valid safety certification,
SCE's ability to recover uninsured wildfire-related costs from the
Wildfire Insurance Fund, the longevity of the Wildfire Insurance
Fund, and the CPUC's interpretation of and actions under AB
1054;
- ability of SCE to implement its WMP, including effectively
implementing Public Safety Power Shut-Offs when appropriate;
- decisions and other actions by the CPUC, the FERC, the NRC and
other regulatory and legislative authorities, including decisions
and actions related to determinations of authorized rates of return
or return on equity, the recoverability of wildfire-related and
mudslide-related costs, wildfire mitigation efforts, and delays in
regulatory and legislative actions;
- ability of Edison International or SCE to borrow funds and
access the bank and capital markets on reasonable terms;
- actions by credit rating agencies to downgrade Edison
International or SCE's credit ratings or to place those ratings on
negative watch or outlook;
- risks associated with the decommissioning of San Onofre,
including those related to public opposition, permitting,
governmental approvals, on-site storage of spent nuclear fuel,
delays, contractual disputes, and cost overruns;
- extreme weather-related incidents and other natural disasters
(including earthquakes and events caused, or exacerbated, by
climate change, such as wildfires), which could cause, among other
things, public safety issues, property damage and operational
issues;
- risks associated with cost allocation resulting in higher rates
for utility bundled service customers because of possible customer
bypass or departure for other electricity providers such as CCAs
and Electric Service Providers;
- risks inherent in 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),
changes in the CAISO's transmission plans, and governmental
approvals; and
- risks associated with the operation of transmission and
distribution assets and power generating facilities, including
public and employee safety issues, the risk of utility assets
causing or contributing to wildfires, failure, availability,
efficiency, and output of equipment and facilities, and
availability and cost of spare parts.
Additional information about risks and uncertainties, including
more detail about the factors described in this report, is
contained throughout this report and in the 2018 Form 10-K,
including the "Risk Factors" section. Readers are urged to read
this entire report, including information incorporated by
reference, as well as the 2018 Form 10-K, and carefully consider
the risks, uncertainties, and other factors that affect Edison
International's and SCE's businesses. Forward-looking statements
speak only as of the date they are made and neither Edison
International nor SCE are obligated to publicly update or revise
forward-looking statements. Readers should review future reports
filed by Edison International and SCE with the SEC. Edison
International and SCE provide direct links to certain SCE and other
parties' regulatory filings and documents with the CPUC and the
FERC and certain agency rulings and notices in open proceedings at
www.edisoninvestor.com (SCE Regulatory Highlights) so that such
filings, rulings and notices are available to all investors. Edison
International and SCE post or provide direct links to certain
documents and information related to Southern California wildfires
which may be of interest to investors at www.edisoninvestor.com
(Southern California Wildfires) in order to publicly disseminate
such information. Edison International and SCE also routinely post
or provide direct links to presentations, documents and other
information that may be of interest to investors at
www.edisoninvestor.com (Events and Presentations) in order to
publicly disseminate such information.
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, October 29, 2019, 1:30 p.m.
(Pacific Time)
Telephone Numbers:
1-888-673-9780 (US) and 1-312-470-0178
(Int'l) - Passcode: Edison
Telephone Replay:
1-800-627-9894 (US) and 1-402-220-0238
(Int’l) - Passcode: 0219
Telephone replay available through
November 12, 2019
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,
2019
2018
Change
2019
2018
Change
Earnings (loss) per share attributable to
Edison International
Continuing operations
SCE
$
1.45
$
1.64
$
(0.19
)
$
3.65
$
3.43
$
0.22
Edison International Parent and Other
(0.09
)
(0.07
)
(0.02
)
(0.22
)
(0.34
)
0.12
Edison International
1.36
1.57
(0.21
)
3.43
3.09
0.34
Less: Non-core items
SCE
(0.14
)
0.02
(0.16
)
(0.30
)
0.02
(0.32
)
Edison International Parent and Other
—
(0.01
)
0.01
—
(0.14
)
0.14
Total non-core items
(0.14
)
0.01
(0.15
)
(0.30
)
(0.12
)
(0.18
)
Core earnings (losses)
SCE
1.59
1.62
(0.03
)
3.95
3.41
0.54
Edison International Parent and Other
(0.09
)
(0.06
)
(0.03
)
(0.22
)
(0.20
)
(0.02
)
Edison International
$
1.50
$
1.56
$
(0.06
)
$
3.73
$
3.21
$
0.52
Note: Diluted earnings were $1.35 and $1.57 per share for the three
months ended September 30, 2019 and 2018 respectively, and $3.42
and $3.08 per share for the nine months ended September 30, 2019
and 2018.
Third Quarter Reconciliation
of Basic Earnings to Core Earnings (in millions)
Three months ended September
30,
Nine months ended September
30,
(in millions)
2019
2018
Change
2019
2018
Change
Net income (loss) attributable to Edison
International
Continuing operations
SCE
$
503
$
536
$
(33
)
$
1,215
$
1,119
$
96
Edison International Parent and Other
(32
)
(23
)
(9
)
(74
)
(112
)
38
Edison International
471
513
(42
)
1,141
1,007
134
Less: Non-core items
SCE1,2
(48
)
7
(55
)
(99
)
7
(106
)
Edison International Parent and Other3
—
(4
)
4
—
(46
)
46
Total non-core items
(48
)
3
(51
)
(99
)
(39
)
(60
)
Core earnings (losses)
SCE
551
529
22
1,314
1,112
202
Edison International Parent and Other
(32
)
(19
)
(13
)
(74
)
(66
)
(8
)
Edison International
$
519
$
510
$
9
$
1,240
$
1,046
$
194
1
Includes a charge of $67 million ($48 million after-tax) recorded
in the third quarter of 2019 from the amortization of SCE’s
contributions to the Wildfire Insurance Fund. The nine months ended
September 30, 2019 also includes an impairment charge of $170
million ($123 million after-tax) related to disallowed historical
capital expenditures in SCE's 2018 GRC final decision in the second
quarter of 2019 and income tax benefits of $69 million recorded in
2019 related to the changes in allocation of deferred tax
re-measurement between customers and shareholders.
2
Includes income of $10 million ($7 million after-tax) recorded in
2018 related to the approval of the Revised San Onofre Settlement
Agreement
3
Includes loss of $62 million ($49 million after-tax) recorded in
2018 related to sale of SoCore Energy
Consolidated Statements of
Income
Edison International
Nine months ended September
30,
(in millions, except per-share amounts,
unaudited)
2019
2018
Total operating revenue
$
9,377
$
9,648
Purchased power and fuel
3,848
4,344
Operation and maintenance
2,318
2,068
Depreciation and amortization
1,260
1,391
Property and other taxes
302
301
Impairment and other
166
60
Other operating income
(5
)
(5
)
Total operating expenses
7,889
8,159
Operating income
1,488
1,489
Interest expense
(619
)
(538
)
Other income and (expense)
151
176
Income before taxes
1,020
1,127
Income tax (benefit) expense
(212
)
43
Net income
1,232
1,084
Preferred and preference stock dividend
requirements of SCE
91
91
Other noncontrolling interests
—
(14
)
Net income attributable to Edison
International common shareholders
$
1,141
$
1,007
Basic earnings per share:
Weighted-average shares of common stock
outstanding
333
326
Basic earnings per common share
attributable to Edison International common
shareholders
$
3.43
$
3.09
Diluted earnings per share:
Weighted-average shares of common stock
outstanding, including effect of dilutive securities
334
327
Diluted earnings per common share
attributable to Edison International common shareholders:
$
3.42
$
3.08
Consolidated Balance Sheets
Edison International
(in millions, unaudited)
September 30, 2019
December 31, 2018
ASSETS
Cash and cash equivalents
$
547
$
144
Receivables, less allowances of $51 and
$52 for uncollectible accounts at respective dates
1,099
730
Accrued unbilled revenue
639
482
Inventory
348
282
Income tax receivables
127
191
Prepaid expenses
293
148
Derivative assets
49
171
Regulatory assets
1,120
1,133
Wildfire Insurance Fund contributions
323
—
Other current assets
117
78
Total current assets
4,662
3,359
Nuclear decommissioning trusts
4,479
4,120
Other investments
89
63
Total investments
4,568
4,183
Utility property, plant and equipment,
less accumulated depreciation and amortization of $9,873 and $9,566
at respective dates
43,150
41,269
Nonutility property, plant and equipment,
less accumulated depreciation of $84 and $82 at respective
dates
85
79
Total property, plant and
equipment
43,235
41,348
Regulatory assets
5,731
5,380
Wildfire Insurance Fund contributions
2,849
—
Operating lease right-of-use assets
705
—
Other long-term assets
2,462
2,445
Total long-term assets
11,747
7,825
Total assets
$
64,212
$
56,715
Consolidated Balance Sheets
Edison International
(in millions, except share amounts,
unaudited)
September 30, 2019
December 31, 2018
LIABILITIES AND EQUITY
Short-term debt
$
1,000
$
720
Current portion of long-term debt
479
79
Accounts payable
1,663
1,511
Customer deposits
302
299
Regulatory liabilities
1,010
1,532
Current portion of operating lease
liabilities
91
—
Other current liabilities
1,458
1,254
Total current liabilities
6,003
5,395
Long-term debt
17,066
14,632
Deferred income taxes and credits
5,023
4,576
Pensions and benefits
861
869
Asset retirement obligations
3,030
3,031
Regulatory liabilities
8,544
8,329
Operating lease liabilities
615
—
Wildfire-related claims
4,669
4,669
Other deferred credits and other long-term
liabilities
3,048
2,562
Total deferred credits and other
liabilities
25,790
24,036
Total liabilities
48,859
44,063
Commitments and contingencies
Common stock, no par value (800,000,000
shares authorized; 358,522,961 and 325,811,206 shares issued and
outstanding at respective dates)
4,746
2,545
Accumulated other comprehensive loss
(55
)
(50
)
Retained earnings
8,469
7,964
Total Edison International's common
shareholders' equity
13,160
10,459
Noncontrolling interests – preferred and
preference stock of SCE
2,193
2,193
Total equity
15,353
12,652
Total liabilities and equity
$
64,212
$
56,715
Consolidated Statements of Cash
Flows
Edison International
Nine months ended September
30,
(in millions, unaudited)
2019
2018
Cash flows from operating
activities:
Net income
$
1,232
$
1,084
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization
1,316
1,639
Allowance for equity during
construction
(75
)
(76
)
Impairment and other
166
60
Deferred income taxes and investment tax
credits
(221
)
133
Other
88
48
Nuclear decommissioning trusts
(114
)
(86
)
Contributions to Wildfire Insurance
Fund
(2,363
)
—
Changes in operating assets and
liabilities:
Receivables
(383
)
(325
)
Inventory
(68
)
(25
)
Accounts payable
284
20
Tax receivables and payables
163
137
Other current assets and liabilities
(340
)
(424
)
Regulatory assets and liabilities, net
(470
)
213
Other noncurrent assets and
liabilities
(32
)
(127
)
Net cash (used in) provided by
operating activities
(817
)
2,271
Cash flows from financing
activities:
Long-term debt issued, net of premium,
discount and issuance costs of $2 and $63 for the respective
periods
2,902
3,237
Term loan issued
1,000
—
Long-term debt matured
(81
)
(654
)
Common stock issued
2,165
—
Short-term debt financing, net
(722
)
(2,228
)
Payments for stock-based compensation
(64
)
(37
)
Receipts from stock option exercises
51
20
Dividends to noncontrolling interests
(96
)
(96
)
Dividends paid
(594
)
(591
)
Other
(3
)
38
Net cash provided by (used in) financing
activities
4,558
(311
)
Cash flows from investing
activities:
Capital expenditures
(3,497
)
(3,241
)
Proceeds from sale of nuclear
decommissioning trust investments
3,354
3,017
Purchases of nuclear decommissioning trust
investments
(3,240
)
(2,931
)
Proceeds from sale of SoCore Energy, net
of cash acquired by buyer
—
78
Other
38
64
Net cash used in investing
activities
(3,345
)
(3,013
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
396
(1,053
)
Cash, cash equivalents and restricted cash
at beginning of period
152
1,132
Cash, cash equivalents and restricted
cash at end of period
$
548
$
79
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191029006031/en/
Investor relations contact: Sam Ramraj, (626)
302-2540
Media relations contact: Ron Gales, (626) 302-7927
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