Edison International Reports Fourth Quarter and Full-Year 2014 Results

ROSEMEAD, Calif.--()--Edison International (NYSE: EIX) today reported fourth quarter 2014 net income on a GAAP basis of $420 million, or $1.29 per share, compared to $301 million, or $0.92 per share, in the fourth quarter of 2013. On an adjusted basis, Edison International’s fourth quarter 2014 core earnings were $355 million, or $1.08 per share, compared to $264 million, or $0.81 per share, in the fourth quarter of 2013.

Southern California Edison’s (SCE) fourth quarter 2014 core earnings increased $98 million, or $0.30 per share, primarily due to higher authorized revenue from rate base growth, higher income tax benefits, and lower severance costs. In the fourth quarter of 2014, the California Public Utilities Commission (CPUC) authorized an increase in SCE's revenue due to a revised determination of rate base for deferred income taxes that increased earnings by $18 million, or $0.05 per share. Edison International Parent and Other’s fourth quarter 2014 core earnings decreased $7 million, or $0.03 per share, primarily due to lower income tax benefits and higher corporate expenses, partially offset by higher income from Edison Capital’s investments in affordable housing projects.

Edison International's fourth quarter 2014 core earnings exclude income of $24 million, or $0.08 per share, related to a revised estimated impact of the San Onofre Nuclear Generating Station (SONGS) Settlement, and income of $41 million, or $0.13 per share, primarily due to discontinued operations. Edison International's fourth quarter 2013 core earnings exclude income of $37 million, or $0.11 per share, from discontinued operations.

"Edison International delivered strong financial results in 2014," said Ted Craver, chairman and chief executive officer of Edison International. "Southern California Edison’s continued electric grid investments and good cost management are key factors in this performance. Our stock performed well as we resolved key uncertainties and took an important first step to return the dividend to our target payout ratio of 45-55% of SCE’s earnings. Looking ahead, we see sustained high levels of SCE investment to help meet California’s public policy objectives and assure grid reliability for our customers."

Full-Year Earnings

For the year ended December 31, 2014, Edison International reported net income on a GAAP basis of $1,612 million, or $4.95 per share, compared to $915 million, or $2.81 per share, during the same period in 2013. On an adjusted basis, Edison International’s core earnings were $1,497 million, or $4.59 per share, compared to $1,237 million, or $3.80 per share, in 2013.

SCE’s core earnings for 2014 increased $260 million, or $0.80 per share, from 2013 primarily due to higher authorized revenue from rate base growth, higher income tax benefits and lower severance costs. In the fourth quarter of 2014, the CPUC authorized an increase in SCE's revenue due to a revised determination of rate base for deferred income taxes that increased earnings by $18 million, or $0.05 per share. In addition, during 2014, SCE recorded earnings of $11 million, or $0.03 per share, from a change in estimate of revenues under its Federal Energy Regulatory Commission formula rate, and $9 million, or $0.03 per share, of benefits related to generator settlements. Edison International Parent and Other's core losses for 2014 included higher corporate and new business expenses, offset by higher income from Edison Capital's investments in affordable housing projects.

Edison International's full-year 2014 core earnings exclude charges of $72 million, or $0.22 per share, related to the SONGS Settlement Agreement, and income of $187 million, or $0.58 per share, primarily due to discontinued operations. Edison International's 2013 core earnings excludes a $365 million charge, or $1.12 per share, related to the permanent retirement of SONGS Units 2 and 3, and income of $43 million, or $0.13 per share, primarily due to 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 earnings.

2015 Earnings Guidance

Edison International will provide 2015 earnings guidance after a final decision has been issued by the California Public Utilities Commission on the Southern California Edison 2015 General Rate Case. See the presentation accompanying the company’s conference call for further information.

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 net income, basic EPS, core earnings, or core EPS also applies 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:     Tuesday, February 24, 2015, 2:00 p.m. (Pacific Time)
Telephone Numbers: 1-800-369-2198 (US) and 1-773-756-4618 (Int'l) - Passcode: Edison
Telephone Replay: 1-866-443-2924 (US) and 1-203-369-1100 (Int’l) - Passcode: 254516

Telephone replay available through March 5, 2015

Webcast:

www.edisoninvestor.com

 
       
Fourth Quarter and Full-Year Reconciliation of
Core Earnings Per Share to Basic Earnings Per Share
 
Three months ended
December 31,
Years ended
December 31,
    2014     2013     Change     2014     2013     Change
Earnings (loss) per share attributable to Edison International    
Continuing operations
SCE $ 1.17 $ 0.79 $ 0.38 $ 4.46 $ 2.76 $ 1.70
Edison International Parent and Other 0.02 (0.02 ) (0.08 ) (0.06 ) (0.02 )
Discontinued operations 0.12     0.11     0.01     0.57     0.11     0.46  
Edison International 1.29     0.92     0.37     4.95     2.81     2.14  
Less: Non-core items
SCE 0.08 0.08 (0.22 ) (1.12 ) 0.90
Edison International Parent and Other 0.01 0.01 0.01 0.02 (0.01 )
Discontinued operations 0.12     0.11     0.01     0.57     0.11     0.46  
Total non-core items 0.21     0.11     0.10     0.36     (0.99 )   1.35  
Core earnings (losses)
SCE 1.09 0.79 0.30 4.68 3.88 0.80
Edison International Parent and Other (0.01 )   0.02     (0.03 )   (0.09 )   (0.08 )   (0.01 )
Edison International   $ 1.08     $ 0.81     $ 0.27     $ 4.59     $ 3.80     $ 0.79  

Note: Diluted earnings were $1.27 and $0.92 per share for the three months ended December 31, 2014 and 2013, respectively, and $4.89 and $2.78 per share for the years ended December 31, 2014 and 2013, respectively.

       
Fourth Quarter and Full-Year Reconciliation of
Core Earnings to Basic Earnings (in millions)
 
Three months ended
December 31,
Years ended
December 31,
(in millions)   2014     2013     Change     2014     2013     Change
Net income (loss) attributable to Edison International    
Continuing operations
SCE $ 380 $ 258 $ 122 $ 1,453 $ 900 $ 553
Edison International Parent and Other 1 6 (5 ) (26 ) (21 ) (5 )
Discontinued operations 39     37     2     185     36     149  
Edison International 420     301     119     1,612     915     697  
Less: Non-core items
SCE 24 24 (72 ) (365 ) 293
Edison International Parent and Other 2 2 2 7 (5 )
Discontinued operations 39     37     2     185     36     149  
Total non-core items 65     37     28     115     (322 )   437  
Core earnings (losses)
SCE 356 258 98 1,525 1,265 260
Edison International Parent and Other (1 )   6     (7 )   (28 )   (28 )    
Edison International   $ 355     $ 264     $ 91     $ 1,497     $ 1,237     $ 260  
 
     
Consolidated Statements of Income   Edison International
     
Quarters ended December 31, Years ended December 31,
(in millions, except per-share amounts)   2014   2013   2014   2013
Total operating revenue $ 3,114     $ 2,943     $ 13,413     $ 12,581  
Purchased power and fuel 1,029 1,073 5,593 4,891
Operation and maintenance 901 892 3,149 3,473
Depreciation, decommissioning and amortization 472 398 1,720 1,622
Property and other taxes 87 79 322 309
Impairment and other charges (68 )   (4 )   157     571  
Total operating expenses 2,421     2,438     10,941     10,866  
Operating income 693 505 2,472 1,715
Interest and other income 39 33 147 124
Interest expense (138 ) (143 ) (560 ) (544 )
Other expenses (29 )   (36 )   (80 )   (74 )
Income from continuing operations before income taxes 565 359 1,979 1,221
Income tax expense 159     70     443     242  
Income from continuing operations 406 289 1,536 979
Income (loss) from discontinued operations, net of tax 39     37     185     36  
Net income (loss) 445 326 1,721 1,015
Preferred and preference stock dividend requirements of utility 28 25 112 100
Other noncontrolling interests (3 )       (3 )    
Net income (loss) attributable to Edison International common shareholders $ 420 $ 301 $ 1,612 $ 915
Amounts attributable to Edison International common shareholders:
Income from continuing operations, net of tax $ 381 $ 264 $ 1,427 $ 879
Income (loss) from discontinued operations, net of tax 39     37     185     36  
Net income (loss) attributable to Edison International common shareholders $ 420     $ 301     $ 1,612     $ 915  
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 $ 1.17 $ 0.81 $ 4.38 $ 2.70
Discontinued operations 0.12     0.11     0.57     0.11  
Total $ 1.29     $ 0.92     $ 4.95     $ 2.81  
Diluted earnings (loss) 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 $ 1.15 $ 0.81 $ 4.33 $ 2.67
Discontinued operations 0.12     0.11     0.56     0.11  
Total $ 1.27     $ 0.92     $ 4.89     $ 2.78  
Dividends declared per common share   $ 0.4175     $ 0.3550     $ 1.4825     $ 1.3675  
 
     
Consolidated Balance Sheets   Edison International
 
December 31,
(in millions)   2014   2013
ASSETS
Cash and cash equivalents $ 132 $ 146
Receivables, less allowances of $68 and $66 for uncollectible accounts at respective dates 790 838
Accrued unbilled revenue 632 596
Inventory 281 256
Derivative assets 102 122
Regulatory assets 1,254 538
Deferred income taxes 452 421
Other current assets 376     395
Total current assets 4,019     3,312
Nuclear decommissioning trusts 4,799 4,494
Other investments 207     207
Total investments 5,006     4,701
Utility property, plant and equipment, less accumulated depreciation and amortization of $8,132 and $7,493 at respective dates 32,859 30,379
Nonutility property, plant and equipment, less accumulated depreciation of $76 and $74 at respective dates 122     76
Total property, plant and equipment 32,981     30,455
Derivative assets 219 251
Regulatory assets 7,612 7,241
Other long-term assets 349     686
Total long-term assets 8,180     8,178
 
Total assets   $ 50,186     $ 46,646
 
     
Consolidated Balance Sheets   Edison International
 
December 31,
(in millions, except share amounts)   2014   2013
LIABILITIES AND EQUITY
Short-term debt $ 1,291 $ 209
Current portion of long-term debt 504 601
Accounts payable 1,580 1,407
Accrued taxes 81 358
Customer deposits 221 201
Derivative liabilities 196 152
Regulatory liabilities 401 767
Other current liabilities 1,205     1,186  
Total current liabilities 5,479     4,881  
Long-term debt 10,234     9,825  
Deferred income taxes and credits 7,313 7,346
Derivative liabilities 1,052 1,042
Pensions and benefits 2,155 1,378
Asset retirement obligations 2,821 3,418
Regulatory liabilities 5,889 4,995
Other deferred credits and other long-term liabilities 2,255     2,070  
Total deferred credits and other liabilities 21,485     20,249  
Total liabilities 37,198     34,955  
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) 2,445 2,403
Accumulated other comprehensive loss (58 ) (13 )
Retained earnings 8,573     7,548  
Total Edison International's common shareholders' equity 10,960     9,938  
Noncontrolling interests - preferred and preference stock of utility 2,022     1,753  
Total equity 12,982     11,691  
 
Total liabilities and equity   $ 50,186     $ 46,646  
 
     
Consolidated Statements of Cash Flows   Edison International
 
Years ended December 31,
(in millions)   2014     2013     2012  
Cash flows from operating activities:    
Net income (loss) $ 1,721 $ 1,015 $ (92 )
Less: Income (loss) from discontinued operations 185     36     (1,686 )
Income from continuing operations 1,536 979 1,594
Adjustments to reconcile to net cash provided by operating activities:
Depreciation, decommissioning and amortization 1,815 1,696 1,634
Allowance for equity during construction (65 ) (72 ) (96 )
Impairment and other charges 157 571 (28 )
Deferred income taxes and investment tax credits 522 345 141
Other 20 18 94
EME settlement payments (225 )
Changes in operating assets and liabilities:
Receivables 64 (56 ) (13 )
Inventory (25 ) 80 10
Accounts payable 14 45 14
Prepaid and accrued taxes (100 ) (92 ) 189
Other current assets and liabilities (103 ) (155 ) 114
Derivative assets and liabilities, net (40 ) (30 ) 262
Regulatory assets and liabilities, net (358 ) (322 ) (314 )
Nuclear decommissioning trusts 39 76 192
Other noncurrent assets and liabilities (3 )   (116 )   178  
Operating cash flows from continuing operations 3,248 2,967 3,971
Operating cash flows from discontinued operations, net         (637 )
Net cash provided by operating activities 3,248     2,967     3,334  
Cash flows from financing activities:
Long-term debt issued, net of discount and issuance costs of $6, $18 and $4 at respective periods 494 1,973 391
Long-term debt matured or repurchased (607 ) (1,017 ) (6 )
Bonds remarketed, net 195
Preference stock issued, net 269 387 804
Preference stock redeemed (400 ) (75 )
Short-term debt financing, net 1,079 32 (264 )
Cash contribution from redeemable noncontrolling interest 9
Dividends to noncontrolling interests (111 ) (101 ) (82 )
Dividends paid (463 ) (440 ) (424 )
Other (25 )   (48 )   (68 )
Financing cash flows from continuing operations 645 581 276
Financing cash flows from discontinued operations, net         374  
Net cash provided by financing activities 645     581     650  
Cash flows from investing activities:
Capital expenditures (3,906 ) (3,599 ) (4,149 )
Proceeds from sale of nuclear decommissioning trust investments 10,079 5,617 2,122
Purchases of nuclear decommissioning trust investments (10,123 ) (5,715 ) (2,337 )
Proceeds from sale of assets 6 181 114
Other 37     (56 )   4  
Investing cash flows from continuing operations (3,907 ) (3,572 ) (4,246 )
Investing cash flows from discontinued operations, net         (1,037 )
Net cash used by investing activities (3,907 )   (3,572 )   (5,283 )
Net decrease in cash and cash equivalents (14 ) (24 ) (1,299 )
Cash and cash equivalents at beginning of year 146     170     1,469  
Cash and cash equivalents at end of year   $ 132     $ 146     $ 170  
 
           
Consolidated Statements of Income     Southern California Edison Company
   
Quarters ended December 31, Years ended December 31,
(in millions)   2014     2013     2014     2013  
Operating revenue $ 3,104 $ 2,931 $ 13,380 $ 12,562
Purchased power and fuel 1,029 1,073 5,593 4,891
Operation and maintenance 870 876 3,057 3,416
Depreciation, decommissioning and amortization 472 398 1,720 1,622
Property and other taxes 86 79 318 307
Impairment and other charges (68 )       163     575  
Total operating expenses 2,389     2,426     10,851     10,811  
Operating income 715 505 2,529 1,751
Interest and other income 17 33 122 122
Interest expense (131 ) (136 ) (533 ) (520 )
Other expenses (29 )   (36 )   (79 )   (74 )
Income before income taxes 572 366 2,039 1,279
Income tax expense 164     83     474     279  
Net income 408 283 1,565 1,000
Less: Preferred and preference stock dividend requirements 28     25     112     100  
Net income available for common stock   $ 380     $ 258     $ 1,453     $ 900  
 
   
Consolidated Balance Sheets Southern California Edison Company
       
December 31,
(in millions)     2014     2013
ASSETS
Cash and cash equivalents $ 38 $ 54
Receivables, less allowances of $68 and $66 for uncollectible accounts at respective dates 749 813
Accrued unbilled revenue 632 596
Inventory 275 256
Derivative assets 102 122
Regulatory assets 1,254 538
Deferred income taxes 303
Other current assets 390     393
Total current assets 3,440     3,075
Nuclear decommissioning trusts 4,799 4,494
Other investments 158     140
Total investments 4,957     4,634
Utility property, plant and equipment, less accumulated depreciation of $8,132 and $7,493 at respective dates 32,859 30,379
Nonutility property, plant and equipment, less accumulated depreciation of $75 and $70 at respective dates 69     72
Total property, plant and equipment 32,928     30,451
Derivative assets 219 251
Regulatory assets 7,612 7,241
Other long-term assets 300     398
Total long-term assets 8,131     7,890
 
Total assets     $ 49,456     $ 46,050
 
   
Consolidated Balance Sheets Southern California Edison Company
     
December 31,
(in millions, except share amounts)     2014     2013  
LIABILITIES AND EQUITY
Short-term debt $ 667 $ 175
Current portion of long-term debt 300 600
Accounts payable 1,556 1,373
Accrued taxes 87 57
Customer deposits 221 201
Derivative liabilities 196 152
Regulatory liabilities 401 767
Deferred income taxes 209 39
Other current liabilities 1,183     1,034  
Total current liabilities 4,820     4,398  
Long-term debt 9,624     9,422  
Deferred income taxes and credits 8,288 7,841
Derivative liabilities 1,052 1,042
Pensions and benefits 1,672 951
Asset retirement obligations 2,819 3,418
Regulatory liabilities 5,889 4,995
Other deferred credits and other long-term liabilities 2,010     1,845  
Total deferred credits and other liabilities 21,730     20,092  
Total liabilities 36,174     33,912  
Commitments and contingencies
Common stock, no par value (560,000,000 shares authorized; 434,888,104 shares issued and outstanding at each date) 2,168 2,168
Additional paid-in capital 618 592
Accumulated other comprehensive loss (28 ) (11 )
Retained earnings 8,454     7,594  
Total common shareholder's equity 11,212 10,343
Preferred and preference stock 2,070     1,795  
Total equity 13,282     12,138  
Total liabilities and equity     $ 49,456     $ 46,050  
 
   
Consolidated Statements of Cash Flows Southern California Edison Company
     
Years ended December 31,
(in millions)   2014   2013   2012
Cash flows from operating activities:
Net income $ 1,565 $ 1,000 $ 1,660
Adjustments to reconcile to net cash provided by operating activities:
Depreciation, decommissioning and amortization 1,810 1,694 1,633
Allowance for equity during construction (65 ) (72 ) (96 )
Impairment and other charges 163 575 32
Deferred income taxes and investment tax credits 462 420 256
Other 11 14 86
Changes in operating assets and liabilities:
Receivables 64 (57 ) (23 )
Inventory (19 ) 80 10
Accounts payable 12 59 (9 )
Prepaid and accrued taxes 129 (93 ) 254
Other current assets and liabilities (107 ) (171 ) 114
Derivative assets and liabilities, net (40 ) (30 ) (86 )
Regulatory assets and liabilities, net (358 ) (322 ) 34
Nuclear decommissioning trusts 39 76 192
Other noncurrent assets and liabilities (6 )   (125 )   29  
Net cash provided by operating activities 3,660     3,048     4,086  
Cash flows from financing activities:
Long-term debt issued, net of discount and issuance costs of $2, $18 and $4, at respective dates 498 1,973 391
Long-term debt matured or repurchased (607 ) (1,016 ) (6 )
Bonds remarketed, net 195
Preferred stock issued, net 269 387 804
Preference stock redeemed (400 ) (75 )
Short-term debt financing, net 490 (1 ) (250 )
Dividends paid (489 ) (587 ) (551 )
Other 20     (43 )   (57 )
Net cash provided by financing activities 181     508     256  
Cash flows from investing activities:
Capital expenditures (3,857 ) (3,598 ) (4,149 )
Proceeds from sale of nuclear decommissioning trust investments 10,079 5,617 2,122
Purchases of nuclear decommissioning trust investments (10,123 ) (5,715 ) (2,337 )
Proceeds from sale of assets 4 181
Other 40     (32 )   10  
Net cash used by investing activities (3,857 )   (3,547 )   (4,354 )
Net (decrease) increase in cash and cash equivalents (16 ) 9 (12 )
Cash and cash equivalents, beginning of year 54     45     57  
Cash and cash equivalents, end of year   $ 38     $ 54     $ 45  
 

Contacts

Edison International
Media relations:
Charles Coleman, (626) 302-7982
Investor relations:
Scott Cunningham, (626) 302-2540

Contacts

Edison International
Media relations:
Charles Coleman, (626) 302-7982
Investor relations:
Scott Cunningham, (626) 302-2540