ROSEMEAD, Calif.--(BUSINESS WIRE)--Edison International (NYSE: EIX) today reported third quarter 2015 net income on a GAAP basis of $421 million, or $1.29 per share, compared to $480 million, or $1.47 per share, in the third quarter of 2014. On an adjusted basis, Edison International’s third quarter 2015 core earnings were $377 million, or $1.16 per share, compared to $496 million, or $1.52 per share, in the third quarter of 2014.
Southern California Edison's (SCE) third quarter 2015 core earnings decreased by $114 million, or $0.35 per share, from the third quarter 2014 primarily due to an estimated revenue refund of $233 million, or $0.42 per share, based on the proposed decision in SCE's 2015 General Rate Case (GRC) and lower income tax benefits, partially offset by higher Federal Energy Regulatory Commission (FERC)-related revenue from rate base growth. The revenue requirement ultimately adopted by the California Public Utilities Commission (CPUC) will be retroactive to January 1, 2015.
Edison International Parent and Other’s third quarter 2015 core losses increased by $5 million, or $0.01 per share, compared to third quarter 2014 core losses primarily due to lower income from Edison Capital's investments in affordable housing projects.
Edison International's third quarter 2015 core earnings exclude income of $1 million related to losses allocated to tax equity investors under the hypothetical liquidation at book value (HLBV) accounting method and $43 million, or $0.13 per share, from discontinued operations. Edison International's third quarter 2014 core earnings exclude losses of $16 million, or $0.05 per share, from discontinued operations.
“Third quarter earnings comparisons were impacted by the proposed decision on SCE’s 2015 General Rate Case,” said Ted Craver, chairman and chief executive officer of Edison International. “While the case is generally constructive overall, SCE has identified several important items that the CPUC should correct.”
Year-to-Date Earnings
For the nine months ended September 30, 2015, Edison International reported net income on a GAAP basis of $1,099 million, or $3.37 per share, compared to $1,192 million, or $3.66 per share, during the same period in 2014. On an adjusted basis, Edison International’s core earnings were $1,049 million, or $3.22 per share, compared to $1,142 million, or $3.50 per share, in the year-to-date period in 2014.
SCE’s core earnings for the nine months ended September 30, 2015 decreased $89 million, or $0.27 per share, from the same period in 2014, primarily due to lower revenue related to the 2015 GRC proposed decision and lower other income, partially offset by higher FERC-related revenue from rate base growth and earnings on funds used during construction. In addition, income tax benefits were lower in 2015.
Edison International Parent and Other’s year-to-date 2015 core losses increased $4 million, or $0.01 per share, compared to the same period in 2014 primarily due to income taxes and expenses.
Edison International's year-to-date 2015 core earnings exclude income of $7 million, or $0.02 per share, related to losses allocated to tax equity investors under the HLBV accounting method and $43 million, or $0.13 per share, from discontinued operations. Edison International's year-to-date 2014 core earnings exclude a charge of $96 million, or $0.29 per share, related to the SCE San Onofre Settlement Agreement and $146 million, or $0.45 per share, of income from 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 GAAP earnings.
2015 Earnings Guidance
The company announced core earnings guidance of $3.77 to $3.87 per share and basic earnings guidance of $3.92 to $4.02 per share for 2015. See the presentation accompanying the company’s conference call for further information including key guidance assumptions.
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Reconciliation of 2015 Core Earnings Guidance to Basic Earnings Guidance |
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| 2015 Earnings Guidance as of October 27, 2015 | ||||||
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Low |
Midpoint |
High |
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| SCE | $3.97 | |||||
| EIX Parent & Other | (0.15) | |||||
| EIX Core EPS | $3.77 | $3.82 | $3.87 | |||
| Non-Core Items1 | 0.15 | 0.15 | 0.15 | |||
| EIX Basic EPS | $3.92 | $3.97 | $4.02 | |||
| 1 Represents non-core items recorded for the nine months ended September 30, 2015. | ||||||
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 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.
Regulatory Filings Access
Edison International and SCE provide direct links to SCE's regulatory filings with the CPUC and the FERC at www.edisoninvestor.com so that such filings are available to all investors upon SCE filing with the relevant agency.
Reminder: Edison International Will Hold a Conference Call Today
| When: | Tuesday, October 27, 2015, 1:30 p.m. (Pacific Time) | |
| Telephone Numbers: | 1-800-369-2198 (US) and 1-773-756-4618 (Int'l) - Passcode: Edison | |
| Telephone Replay: | 1-800-570-8796 (US) and 1-203-369-3293 (Int’l) - Passcode: 85749 | |
| Telephone replay available through November 5, 2015 | ||
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Webcast: |
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| Third Quarter and Year-to-Date Reconciliation of | ||||||||||||||||||||||||
| Core Earnings Per Share to Basic Earnings Per Share | ||||||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| 2015 | 2014 | Change | 2015 | 2014 | Change | |||||||||||||||||||
| Earnings (loss) per share attributable to Edison International | ||||||||||||||||||||||||
| Continuing operations | ||||||||||||||||||||||||
| SCE | $ | 1.19 | $ | 1.54 | $ | (0.35 | ) | $ | 3.31 | $ | 3.29 | $ | 0.02 | |||||||||||
| Edison International Parent and Other | (0.03 | ) | (0.02 | ) | (0.01 | ) | (0.07 | ) | (0.08 | ) | 0.01 | |||||||||||||
| Discontinued operations | 0.13 | (0.05 | ) | 0.18 | 0.13 | 0.45 | (0.32 | ) | ||||||||||||||||
| Edison International | 1.29 | 1.47 | (0.18 | ) | 3.37 | 3.66 | (0.29 | ) | ||||||||||||||||
| Less: Non-core items | ||||||||||||||||||||||||
| SCE | — | — | — | — | (0.29 | ) | 0.29 | |||||||||||||||||
| Edison International Parent and Other | — | — | — | 0.02 | — | 0.02 | ||||||||||||||||||
| Discontinued operations | 0.13 | (0.05 | ) | 0.18 | 0.13 | 0.45 | (0.32 | ) | ||||||||||||||||
| Total non-core items | 0.13 | (0.05 | ) | 0.18 | 0.15 | 0.16 | (0.01 | ) | ||||||||||||||||
| Core earnings (losses) | ||||||||||||||||||||||||
| SCE | 1.19 | 1.54 | (0.35 | ) | 3.31 | 3.58 | (0.27 | ) | ||||||||||||||||
| Edison International Parent and Other | (0.03 | ) | (0.02 | ) | (0.01 | ) | (0.09 | ) | (0.08 | ) | (0.01 | ) | ||||||||||||
| Edison International | $ | 1.16 | $ | 1.52 | $ | (0.36 | ) | $ | 3.22 | $ | 3.50 | $ | (0.28 | ) | ||||||||||
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Note: Diluted earnings were $1.28 and $1.46 per share for the three months ended September 30, 2015 and 2014, respectively, and $3.34 and $3.62 per share for the nine months ended September 30, 2015 and 2014, respectively. |
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| Third Quarter and Year-to-Date Reconciliation of | ||||||||||||||||||||||||
| Core Earnings to Basic Earnings (in millions) | ||||||||||||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| (in millions) | 2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||
| Net income (loss) attributable to Edison International | ||||||||||||||||||||||||
| Continuing operations | ||||||||||||||||||||||||
| SCE | $ | 389 | $ | 503 | $ | (114 | ) | $ | 1,079 | $ | 1,072 | $ | 7 | |||||||||||
| Edison International Parent and Other | (11 | ) | (7 | ) | (4 | ) | (23 | ) | (26 | ) | 3 | |||||||||||||
| Discontinued operations | 43 | (16 | ) | 59 | 43 | 146 | (103 | ) | ||||||||||||||||
| Edison International | 421 | 480 | (59 | ) | 1,099 | 1,192 | (93 | ) | ||||||||||||||||
| Less: Non-core items | ||||||||||||||||||||||||
| SCE | — | — | — | — | (96 | ) | 96 | |||||||||||||||||
| Edison International Parent and Other | 1 | — | 1 | 7 | — | 7 | ||||||||||||||||||
| Discontinued operations | 43 | (16 | ) | 59 | 43 | 146 | (103 | ) | ||||||||||||||||
| Total non-core items | 44 | (16 | ) | 60 | 50 | 50 | — | |||||||||||||||||
| Core earnings (losses) | ||||||||||||||||||||||||
| SCE | 389 | 503 | (114 | ) | 1,079 | 1,168 | (89 | ) | ||||||||||||||||
| Edison International Parent and Other | (12 | ) | (7 | ) | (5 | ) | (30 | ) | (26 | ) | (4 | ) | ||||||||||||
| Edison International | $ | 377 | $ | 496 | $ | (119 | ) | $ | 1,049 | $ | 1,142 | $ | (93 | ) | ||||||||||
| Consolidated Statements of Income | Edison International | |||||||||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| (in millions, except per-share amounts, unaudited) | 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Total operating revenue | $ | 3,763 | $ | 4,356 | $ | 9,183 | $ | 10,298 | ||||||||
| Purchased power and fuel | 1,785 | 2,182 | 3,648 | 4,563 | ||||||||||||
| Operation and maintenance | 780 | 802 | 2,159 | 2,245 | ||||||||||||
| Depreciation, decommissioning and amortization | 506 | 424 | 1,451 | 1,248 | ||||||||||||
| Property and other taxes | 84 | 77 | 255 | 235 | ||||||||||||
| Impairment and other charges | — | (3 | ) | — | 228 | |||||||||||
| Total operating expenses | 3,155 | 3,482 | 7,513 | 8,519 | ||||||||||||
| Operating income | 608 | 874 | 1,670 | 1,779 | ||||||||||||
| Interest and other income | 32 | 40 | 114 | 109 | ||||||||||||
| Interest expense | (138 | ) | (141 | ) | (420 | ) | (422 | ) | ||||||||
| Other expenses | (15 | ) | (29 | ) | (40 | ) | (52 | ) | ||||||||
| Income from continuing operations before income taxes | 487 | 744 | 1,324 | 1,414 | ||||||||||||
| Income tax expense | 82 | 220 | 195 | 284 | ||||||||||||
| Income from continuing operations | 405 | 524 | 1,129 | 1,130 | ||||||||||||
| Income (loss) from discontinued operations, net of tax | 43 | (16 | ) | 43 | 146 | |||||||||||
| Net income | 448 | 508 | 1,172 | 1,276 | ||||||||||||
| Preferred and preference stock dividend requirements of utility | 28 | 28 | 84 | 84 | ||||||||||||
| Other noncontrolling interests | (1 | ) | — | (11 | ) | — | ||||||||||
| Net income attributable to Edison International common shareholders | $ | 421 | $ | 480 | $ | 1,099 | $ | 1,192 | ||||||||
| Amounts attributable to Edison International common shareholders: | ||||||||||||||||
| Income from continuing operations, net of tax | $ | 378 | $ | 496 | $ | 1,056 | $ | 1,046 | ||||||||
| Income (loss) from discontinued operations, net of tax | 43 | (16 | ) | 43 | 146 | |||||||||||
| Net income attributable to Edison International common shareholders | $ | 421 | $ | 480 | $ | 1,099 | $ | 1,192 | ||||||||
| Basic earnings per common share attributable to Edison International common shareholders: | ||||||||||||||||
| Weighted-average shares of common stock outstanding | 326 | 326 | 326 | 326 | ||||||||||||
| Continuing operations | $ | 1.16 | $ | 1.52 | $ | 3.24 | $ | 3.21 | ||||||||
| Discontinued operations | 0.13 | (0.05 | ) | 0.13 | 0.45 | |||||||||||
| Total | $ | 1.29 | $ | 1.47 | $ | 3.37 | $ | 3.66 | ||||||||
| 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 | 329 | 329 | ||||||||||||
| Continuing operations | $ | 1.15 | $ | 1.51 | $ | 3.21 | $ | 3.18 | ||||||||
| Discontinued operations | 0.13 | (0.05 | ) | 0.13 | 0.44 | |||||||||||
| Total | $ | 1.28 | $ | 1.46 | $ | 3.34 | $ | 3.62 | ||||||||
| Dividends declared per common share | $ | 0.4175 | $ | 0.3550 | $ | 1.2525 | $ | 1.0650 | ||||||||
| Consolidated Balance Sheets | Edison International | |||||
| September 30, | December 31, | |||||
| (in millions, unaudited) | 2015 | 2014 | ||||
| ASSETS | ||||||
| Cash and cash equivalents | $ | 134 | $ | 132 | ||
| Receivables, less allowances of $66 and $68 for uncollectible accounts at respective dates | 1,211 | 790 | ||||
| Accrued unbilled revenue | 1,025 | 632 | ||||
| Inventory | 270 | 281 | ||||
| Derivative assets | 81 | 102 | ||||
| Regulatory assets | 473 | 1,254 | ||||
| Deferred income taxes | 152 | 452 | ||||
| Other current assets | 446 | 376 | ||||
| Total current assets | 3,792 | 4,019 | ||||
| Nuclear decommissioning trusts | 4,388 | 4,799 | ||||
| Other investments | 208 | 207 | ||||
| Total investments | 4,596 | 5,006 | ||||
| Utility property, plant and equipment, less accumulated depreciation and amortization of $8,407 and $8,132 at respective dates | 34,062 | 32,859 | ||||
| Nonutility property, plant and equipment, less accumulated depreciation of $81 and $76 at respective dates | 140 | 122 | ||||
| Total property, plant and equipment | 34,202 | 32,981 | ||||
| Derivative assets | 188 | 219 | ||||
| Regulatory assets | 8,121 | 7,612 | ||||
| Other long-term assets | 371 | 349 | ||||
| Total long-term assets | 8,680 | 8,180 | ||||
| Total assets | $ | 51,270 | $ | 50,186 | ||
| Consolidated Balance Sheets | Edison International | |||||||
| September 30, | December 31, | |||||||
| (in millions, except share amounts, unaudited) | 2015 | 2014 | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Short-term debt | $ | 1,154 | $ | 1,291 | ||||
| Current portion of long-term debt | 295 | 504 | ||||||
| Accounts payable | 1,330 | 1,580 | ||||||
| Accrued taxes | 80 | 81 | ||||||
| Customer deposits | 235 | 221 | ||||||
| Derivative liabilities | 207 | 196 | ||||||
| Regulatory liabilities | 888 | 401 | ||||||
| Other current liabilities | 1,050 | 1,205 | ||||||
| Total current liabilities | 5,239 | 5,479 | ||||||
| Long-term debt | 10,957 | 10,234 | ||||||
| Deferred income taxes and credits | 7,698 | 7,313 | ||||||
| Derivative liabilities | 1,167 | 1,052 | ||||||
| Pensions and benefits | 2,175 | 2,155 | ||||||
| Asset retirement obligations | 2,822 | 2,821 | ||||||
| Regulatory liabilities | 5,265 | 5,889 | ||||||
| Other deferred credits and other long-term liabilities | 2,316 | 2,255 | ||||||
| Total deferred credits and other liabilities | 21,443 | 21,485 | ||||||
| Total liabilities | 37,639 | 37,198 | ||||||
| Commitments and contingencies | ||||||||
| Redeemable noncontrolling interest | 11 | 6 | ||||||
| Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at respective dates) | 2,475 | 2,445 | ||||||
| Accumulated other comprehensive loss | (55 | ) | (58 | ) | ||||
| Retained earnings | 9,180 | 8,573 | ||||||
| Total Edison International's common shareholders' equity | 11,600 | 10,960 | ||||||
| Noncontrolling interests – preferred and preference stock of utility | 2,020 | 2,022 | ||||||
| Total equity | 13,620 | 12,982 | ||||||
| Total liabilities and equity | $ | 51,270 | $ | 50,186 | ||||
| Consolidated Statements of Cash Flows | Edison International | |||||||
| Nine months ended September 30, | ||||||||
| (in millions, unaudited) | 2015 | 2014 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 1,172 | $ | 1,276 | ||||
| Less: Income from discontinued operations | 43 | 146 | ||||||
| Income from continuing operations | 1,129 | 1,130 | ||||||
| Adjustments to reconcile to net cash provided by operating activities: | ||||||||
| Depreciation, decommissioning and amortization | 1,515 | 1,312 | ||||||
| Allowance for equity during construction | (63 | ) | (45 | ) | ||||
| Impairment and other charges | — | 228 | ||||||
| Deferred income taxes and investment tax credits | 202 | 303 | ||||||
| Other | (5 | ) | 14 | |||||
| EME insurance proceeds and settlement payments | (176 | ) | (225 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | (412 | ) | (369 | ) | ||||
| Inventory | 10 | (19 | ) | |||||
| Accounts payable | 164 | 211 | ||||||
| Prepaid and accrued taxes | (18 | ) | 106 | |||||
| Other current assets and liabilities | (572 | ) | (603 | ) | ||||
| Derivative assets and liabilities, net | 25 | (68 | ) | |||||
| Regulatory assets and liabilities, net | 1,318 | 41 | ||||||
| Nuclear decommissioning trusts | (249 | ) | 100 | |||||
| Other noncurrent assets and liabilities | (35 | ) | (89 | ) | ||||
| Net cash provided by operating activities | 2,833 | 2,027 | ||||||
| Cash flows from financing activities: | ||||||||
| Long-term debt issued or remarketed, net of discount and issuance costs of $16 and $5 at respective periods | 1,415 | 395 | ||||||
| Long-term debt matured or repurchased | (761 | ) | (405 | ) | ||||
| Preference stock issued, net | 319 | 269 | ||||||
| Preference stock redeemed | (325 | ) | — | |||||
| Short-term debt financing, net | (112 | ) | 1,138 | |||||
| Cash contribution from redeemable noncontrolling interest | 17 | — | ||||||
| Dividends to noncontrolling interests | (91 | ) | (88 | ) | ||||
| Dividends paid | (408 | ) | (347 | ) | ||||
| Other | (28 | ) | (57 | ) | ||||
| Net cash provided by financing activities | 26 | 905 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (3,134 | ) | (2,856 | ) | ||||
| Proceeds from sale of nuclear decommissioning trust investments | 12,915 | 5,846 | ||||||
| Purchases of nuclear decommissioning trust investments | (12,673 | ) | (5,951 | ) | ||||
| Other | 35 | 25 | ||||||
| Net cash used in investing activities | (2,857 | ) | (2,936 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 2 | (4 | ) | |||||
| Cash and cash equivalents at beginning of period | 132 | 146 | ||||||
| Cash and cash equivalents at end of period | $ | 134 | $ | 142 | ||||
