EDISON INTERNATIONAL LOGO News Release
FOR IMMEDIATE RELEASE
Media Contact: (626) 302-1033
www.edison.com
Edison International Reports
Financial Results for the Second Quarter of 2004
ROSEMEAD, Calif., July 30, 2004 -- Edison International (NYSE: EIX) recorded a second quarter loss of
$1.15 per share in 2004, compared to earnings of seven cents per share in the same period last year. The
decrease is primarily due to a 2004 lease termination partially offset by a 2003 asset impairment and the net
effect of regulatory adjustments that occurred in 2003 and 2004.
Excluding these items, EIX's second quarter 2004 earnings were 32 cents per share, compared to earnings
of 37 cents per share for the same period last year. The decrease primarily reflects the expiration of the San
Onofre Nuclear Generating Station (SONGS) incentive mechanism at Southern California Edison (SCE) partially
offset by improved operating results at Edison Mission Energy's (EME) projects.
"With the July 8 Rate Case decision for SCE and with a total $3 billion in executed sales agreements for
our EME international power stations, we have taken critical steps forward. We can now look forward to making
the substantial capital investments necessary over the next five years to serve well our utility customers, and
to earnings and dividend growth for our shareholders," commented John E. Bryson, Chairman, Edison International.
Beginning in the second quarter of 2004, the results of Mission Energy Holding Company-parent only and its
wholly owned subsidiary, EME, are presented on a consolidated basis as Mission Energy Holding Company consolidated
(MEHC). This change is due primarily to the elimination of restrictions on dividends that EME may pay to its
parent company resulting from the removal of the ring-fencing provisions in the second quarter of 2004.
The 2004 results include a charge of $1.80 per share at MEHC related to the termination of the Collins
Facility lease and earnings of 33 cents per share at SCE from regulatory adjustments related to the
implementation of SCE's 2003 General Rate Case (GRC) decision. The 2003 results include a charge of 46 cents per
share at MEHC related to the impairment of eight small peaking plants in Illinois and earnings of 16 cents per
share at SCE from various positive regulatory adjustments.
SECOND-QUARTER EARNINGS DETAIL
Earnings (Loss) from Continuing Operations
SCE earnings from continuing operations were $242 million in the second quarter of 2004, compared with
$223 million in the second quarter of 2003. The expiration of the incremental cost incentive pricing (ICIP)
mechanism at SONGS resulted in a decrease in earnings of $47 million. This decrease was more than offset by a
quarter-over-quarter benefit in regulatory adjustments of $55 million and improved operating results. The
earnings impacts of these positive regulatory items in the second quarter of 2004 ($107 million) from the
implementation of the 2003 GRC decision were
-MORE-
partially offset by positive regulatory items that occurred in the second quarter of 2003 ($52 million) which
included the tax impacts of a Federal Energy Regulatory Commission (FERC) rate case and prior-period Palo Verde
incentive awards.
MEHC, on a consolidated basis with EME, had a loss from continuing operations of $1.88 per share compared
to a loss of 58 cents per share in the second quarter of 2003. MEHC's parent-only results for the second quarter
of 2004 were substantially unchanged from the results in the same period last year. EME's loss from continuing
operations was $585 million in the second quarter of 2004 compared to a loss from continuing operations of $165
million in the second quarter of 2003. The increase in EME's loss was primarily due to the $586 million charge
related to the termination of the lease of the 2,698-MW gas-fired Collins Station held by Midwest Generation. The
decrease in earnings also reflects higher corporate interest expense from $800 million in new debt at Mission
Energy Holdings International and the absence of earnings from the Four Star Oil & Gas project as compared to the
second quarter of 2003 due to the sale of EME's interest in that project in the first quarter of 2004. The
decrease in earnings was partially offset by the 2003 charge of $150 million related to the impairment of Midwest
Generation's small peaking plants and improved operating results at ISAB, Contact Energy, First Hydro and Homer
City. On an annual basis, EME's earnings are seasonal with higher earnings expected during the summer months.
Earnings in the second quarter of 2004 for Edison Capital were substantially unchanged from the results
in the same period last year.
The loss for "EIX parent company and other" decreased by $5 million primarily due to lower net interest
expense.
Earnings (Loss) from Discontinued Operations
The second-quarter 2003 financial results include earnings from discontinued operations of $2 million
from SCE's fuel oil pipeline and storage business which was sold in the third quarter of 2003, offset by a $2
million loss from adjustments related to the sale of MEHC's Fiddler's Ferry and Ferrybridge (FFF) and Lakeland
projects.
Quarter Ended June 30,
Earnings (Loss) Per Share (Unaudited) 2004 2003 Change
- ------------------------------------- -----------------------------------------------------
Southern California Edison $0.74 $0.68 $0.06
Mission Energy Holding Company (consolidated) (1.88) (0.58) (1.30)
MEHC parent (0.08) (0.08) --
Edison Mission Energy (1.80) (0.50) (1.30)
------ ------ ------
Edison Capital 0.04 0.04 --
EIX parent company and other (0.05) (0.07) 0.02
- ----------------------------------------------------------------------------------------------------------------
EIX Consol. Earnings (Loss) from Continuing Ops. (1.15) 0.07 (1.22)
- ----------------------------------------------------------------------------------------------------------------
Earnings from Discontinued Ops. - SCE -- 0.01 (0.01)
Loss from Discontinued Ops. - EME -- (0.01) 0.01
- ----------------------------------------------------------------------------------------------------------------
Total EIX Consolidated Earnings (Loss) $(1.15) $0.07 $(1.22)
================================================================================================================
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Quarter Ended June 30,
Earnings (Loss) (in millions) (Unaudited) 2004 2003 Change
- ----------------------------------------- -----------------------------------------------------
Southern California Edison $242 $223 $19
Mission Energy Holding Company (consolidated) (610) (189) (421)
MEHC parent (25) (24) (1)
Edison Mission Energy (585) (165) (420)
----- ----- -----
Edison Capital 11 12 (1)
EIX parent company and other (17) (22) 5
- ----------------------------------------------------------------------------------------------------------------
EIX Consol. Earnings (Loss) from Continuing Ops. (374) 24 (398)
- ----------------------------------------------------------------------------------------------------------------
Earnings from Discontinued Ops. - SCE -- 2 (2)
Loss from Discontinued Ops. - EME -- (2) 2
- ----------------------------------------------------------------------------------------------------------------
Total EIX Consolidated Earnings (Loss) $(374) $24 $(398)
================================================================================================================
YEAR-TO-DATE EARNINGS SUMMARY
EIX recorded a loss of 85 cents per share for the six-month period ending June 30, 2004, compared to
earnings of 25 cents per share for the same period last year. The 2004 results include a charge of $1.80 per
share related to the termination of the Collins Facility lease and the net benefit of the sale of the company's
interest in Four Star Oil and Gas of two cents at MEHC and earnings of 33 cents per share at SCE from regulatory
adjustments related to its 2003 GRC decision. The 2003 results include a charge of 46 cents per share at MEHC
related to the impairment of eight small peaking plants in Illinois and earnings of 16 cents per share at SCE
from various positive regulatory adjustments. Excluding these charges, earnings increased five cents per share
primarily from favorable operating results at several of EME's operating plants, offset by lower earnings at SCE
primarily from the expiration of the SONGS incentive mechanism.
EIX had a loss from continuing operations of $275 million for the six-month period ended June 30, 2004,
compared with earnings from continuing operations of $85 million for the same period last year. Continuing
operations exclude the impacts from changes in accounting principles and discontinued operations, as discussed
below.
YEAR-TO-DATE EARNINGS DETAIL
Earnings (Loss) from Continuing Operations
SCE's earnings from continuing operations in the first half of 2004 increased by $20 million, compared to
the same period last year. The reasons for the increase in SCE's year-to-date earnings from continuing
operations are the same as those discussed in the detailed description of the second quarter above.
MEHC, on a consolidated basis, had a loss from continuing operations of $603 million compared to a loss
of $222 million in the same period last year. MEHC's parent-only results for the six-month period ending June
30, 2004 were substantially unchanged from the results in the same period last year. EME's loss from continuing
operations for the six-month period ending June 30, 2004, increased by $381 million compared to the same period
last year primarily due to the $586 million charge for the termination of the Collins lease, partially offset by
the 2003 asset impairment charge of
-MORE-
$150 million. EME's results were favorably impacted by higher energy prices and increased generation at the
Illinois plants, the gain on the sale of EME's interest in the Four Star Oil & Gas project, and improved
operating results at First Hydro, Contact Energy, and ISAB. Partially offsetting these favorable items were a
reduction in revenue resulting from sale of EME's interest in the Four Star Oil & Gas investment, higher interest
expense and outages in 2004 at the Homer City project.
Edison Capital's earnings for the six-months ended June 30, 2004 were $22 million, down $5 million from
the same period last year. This decrease is primarily due to a maturing lease portfolio which produces lower
income.
The loss for the six months ended June 30, 2004 for "EIX parent company and other" decreased by $6
million compared to the results in the same period last year mainly due to lower net interest expense.
Earnings (Loss) from Discontinued Operations
The financial results for the six months ended June 30, 2003 include earnings from discontinued
operations of $6 million from SCE's fuel oil pipeline and storage business which was sold in the third quarter of
2003, offset by a $2 million loss from adjustments related to the sale of MEHC's Fiddler's Ferry and Ferrybridge
(FFF) and Lakeland projects.
Change in Accounting Principle
Edison Capital's 2004 results for the six months ended June 30, 2004 include a $1 million charge for the
cumulative effect of a change in accounting principle reflecting the impact of Edison Capital's implementation of
an accounting standard that requires the consolidation of certain variable interest entities. MEHC's
consolidated results for the six-month period ending June 30, 2003 include a three-cent, or $9 million, charge
for the cumulative effect of a change in accounting principle for asset retirement obligations adopted in 2003.
As SCE follows accounting principles for rate-regulated enterprises, implementation of this new standard did not
affect its earnings.
Year-To-Date Ended June 30,
Earnings (Loss) Per Share (Unaudited) 2004 2003 Change
- ------------------------------------- -----------------------------------------------------
Southern California Edison $1.05 $0.98 $0.07
Mission Energy Holding Company (consolidated) (1.85) (0.67) (1.18)
MEHC parent (0.15) (0.15) --
Edison Mission Energy (1.70) (0.52) (1.18)
------ ------ ------
Edison Capital 0.07 0.08 (0.01)
EIX parent company and other (0.12) (0.12) --
- ----------------------------------------------------------------------------------------------------------------
EIX Consol. Earnings (Loss) from Continuing Ops. (0.85) 0.27 (1.12)
- ----------------------------------------------------------------------------------------------------------------
Earnings from Discontinued Ops. -- 0.01 (0.01)
Cumulative Effect of Accounting Change -- (0.03) 0.03
- ----------------------------------------------------------------------------------------------------------------
Total EIX Consolidated Earnings (Loss) $(0.85) $0.25 $(1.10)
================================================================================================================
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Year-To-Date Ended June 30,
Earnings (Loss) (in millions) (Unaudited) 2004 2003 Change
- ----------------------------------------- -----------------------------------------------------
Southern California Edison $341 $321 $20
Mission Energy Holding Company (consolidated) (603) (222) (381)
MEHC parent (49) (49) --
Edison Mission Energy (554) (173) (381)
----- ----- -----
Edison Capital 22 27 (5)
EIX parent company and other (35) (41) 6
- ----------------------------------------------------------------------------------------------------------------
EIX Consol. Earnings (Loss) from Continuing Ops. (275) 85 (360)
- ----------------------------------------------------------------------------------------------------------------
Earnings from Discontinued Ops. -- 4 (4)
Cumulative Effect of Accounting Change (1) (9) 8
- ----------------------------------------------------------------------------------------------------------------
Total EIX Consolidated Earnings (Loss) $(276) $80 $(356)
================================================================================================================
Reminder: EIX to Hold Conference Call Today
Today, EIX will hold a conference call to discuss its financial outlook and 2004 second quarter financial
results at 8:30 a.m. PDT. Although two-way participation in the telephone call is limited to financial analysts
and investors, all other interested parties are invited to participate in a "listen-only mode" through a
simultaneous webcast on the company's Web site at www.edisoninvestor.com. The domestic call-in number is (800)
356-8584 and the Call ID# is 10000. Additional financial and statistical information presented during the
conference call will also be available on the company's Web site.
###
Based in Rosemead, Calif., Edison International is the parent company of Southern California Edison,
Edison Mission Energy and Edison Capital.
EDISON INTERNATIONAL
SUMMARY OF CONSOLIDATED EARNINGS
(UNAUDITED)
IN MILLIONS, EXCEPT PER-SHARE AMOUNTS QUARTER ENDED JUNE 30, YEAR TO DATE JUNE 30,
- -----------------------------------------------------------------------------------------------------------------------
2004 2003 2004 2003
- -----------------------------------------------------------------------------------------------------------------------
ELECTRIC UTILITY $ 2,176 $ 2,386 $ 3,872 $ 4,200
NONUTILITY POWER GENERATION 713 716 1,496 1,399
FINANCIAL SERVICES AND OTHER 30 23 61 48
- -----------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING REVENUE 2,919 3,125 5,429 5,647
- -----------------------------------------------------------------------------------------------------------------------
FUEL 465 293 806 627
PURCHASED POWER 527 722 1,107 1,174
PROVISIONS FOR REGULATORY ADJUSTMENT CLAUSES - NET (33) 505 (51) 809
OTHER OPERATION AND MAINTENANCE 927 827 1,832 1,610
ASSET IMPAIRMENT 954 251 954 251
DEPRECIATION, DECOMMISSIONING AND AMORTIZATION 302 252 598 539
PROPERTY AND OTHER TAXES 57 51 107 102
- -----------------------------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 3,199 2,901 5,353 5,112
- -----------------------------------------------------------------------------------------------------------------------
OPERATING INCOME (LOSS) (280) 224 76 535
INTEREST AND DIVIDEND INCOME 15 47 28 93
EQUITY IN INCOME FROM PARTNERSHIPS AND
UNCONSOLIDATED SUBSIDIARIES - NET 51 60 115 120
OTHER NONOPERATING INCOME 13 21 93 36
INTEREST EXPENSE Ÿ NET OF AMOUNTS CAPITALIZED (324) (290) (640) (589)
OTHER NONOPERATING DEDUCTIONS (22) (12) (38) (20)
MINORITY INTEREST (79) (10) (92) (14)
DIVIDENDS ON PREFERRED SECURITIES
SUBJECT TO MANDATORY REDEMPTION - (28) - (56)
DIVIDENDS ON UTILITY PREFERRED STOCK
NOT SUBJECT TO MANDATORY REDEMPTION (1) (1) (3) (3)
- -----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPS. BEFORE TAX (627) 11 (461) 102
INCOME TAX (BENEFIT) (253) (13) (186) 17
- -----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS (374) 24 (275) 85
INCOME FROM DISCONTINUED OPERATIONS - NET OF TAX - - - 4
- -----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE ACCOUNTING CHANGE (374) 24 (275) 89
CUMULATIVE EFFECT OF ACCOUNTING CHANGE - NET OF TAX - - (1) (9)
- -----------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (374) $ 24 $ (276) $ 80
=======================================================================================================================
WEIGHTED-AVERAGE SHARES OF
COMMON STOCK OUTSTANDING 326 326 326 326
BASIC EARNINGS (LOSS) PER SHARE:
CONTINUING OPERATIONS $ (1.15) $ 0.07 $ (0.85) $ 0.27
DISCONTINUED OPERATIONS - - - 0.01
CUMULATIVE EFFECT OF ACCOUNTING CHANGE - - - (0.03)
------------ ------------- ------------- -------------
TOTAL $ (1.15) $ 0.07 $ (0.85) $ 0.25
============ ============= ============= =============
WEIGHTED-AVERAGE SHARES, INCLUDING
EFFECT OF DILUTIVE SECURITIES 330 329 330 329
DILUTED EARNINGS (LOSS) PER SHARE:
CONTINUING OPERATIONS $ (1.13) $ 0.07 $ (0.84) $ 0.26
DISCONTINUED OPERATIONS - - - 0.01
CUMULATIVE EFFECT OF ACCOUNTING CHANGE - - - (0.03)
------------ ------------- ------------- -------------
TOTAL $ (1.13) $ 0.07 $ (0.84) $ 0.24
============ ============= ============= =============
DIVIDENDS DECLARED PER COMMON SHARE $ 0.20 $ - $ 0.40 $ -
EDISON INTERNATIONAL
Financial Overview
June 30, 2004
UNAUDITED
Dollars in Millions, Except Per-Share Amounts
EDISON INTERNATIONAL (Consolidated Totals)
Second Quarter Year-to-Date
-------------- ------------
2004 2003 2004 2003
------- ------- ------- -------
Assets $36,236 $35,192 $36,236 $35,192
Common Equity $4,987 $4,600 $4,987 $4,600
Revenue $2,919 $3,125 $5,429 $5,647
Earnings (Loss)* $(374) $24 $(276) $80
Earnings (Loss) Per Share* $(1.15) $0.07 $(0.85) $0.25
Book Value Per Share $15.30 $14.12 $15.30 $14.12
*includes parent company
SOUTHERN CALIFORNIA EDISON (Electric Utility)
Second Quarter Year-to-Date
-------------- ------------
2004 2003 2004 2003
------- ------- ------- -------
Assets $19,813 $19,721 $19,813 $19,721
Common Equity $4,257 $4,714 $4,257 $4,714
Revenue $2,176 $2,386 $3,872 $4,200
Earnings $242 $225 $341 $327
Earnings Per Share $0.74 $0.69 $1.05 $1.00
MISSION ENERGY HOLDING COMPANYŸCONSOLIDATED (Nonutility Power Generation)
Second Quarter Year-to-Date
-------------- ------------
2004 2003 2004 2003
------- ------- ------- -------
Assets $12,124 $12,139 $12,124 $12,139
Common Equity $233 $585 $233 $585
Revenue $713 $715 $1,496 $1,399
Earnings (Loss) $(610) $(191) $(603) $(232)
Earnings (Loss) Per Share $(1.88) $(0.59) $(1.85) $(0.71)
EDISON CAPITAL (Capital and Financial Services Provider)
Second Quarter Year-to-Date
-------------- ------------
2004 2003 2004 2003
------- ------- ------- -------
Assets $3,663 $3,517 $3,663 $3,517
Common Equity $654 $806 $654 $806
Revenue $27 $22 $56 $44
Earnings $11 $12 $21 $27
Earnings Per Share $0.04 $0.04 $0.07 $0.08
SOUTHERN CALIFORNIA EDISON
kWh Sales (In thousands)
June 30, 2004
QUARTER ENDED JUNE 30, 2004
---------------------------
INCREASE/(DECREASE)
FROM
KwH LAST YEAR %
-----------------------------------------------
RESIDENTIAL 6,309,350 497,402 8.56
AGRICULTURAL 362,791 92,761 34.35
COMMERCIAL 9,522,025 708,349 8.04
INDUSTRIAL 2,810,201 155,248 5.85
PUBLIC AUTHORITIES 1,560,137 93,309 6.36
RAILROADS & RAILWAYS 15,018 (84) (0.56)
INTERDEPARTMENTAL 159 74 87.06
----------------------------------
SALES TO ULTIMATE CONSUMERS 20,579,681 1,547,059 8.13
RESALE SALES 4,426,554 871,945 24.53
----------------------------------
TOTAL KWH SALES 25,006,235 2,419,004 10.71
==================================
SIX MONTHS ENDED JUNE 30, 2004
------------------------------
INCREASE/(DECREASE)
FROM
KwH LAST YEAR %
-----------------------------------------------
RESIDENTIAL 12,900,252 1,067,928 9.03
AGRICULTURAL 537,619 100,342 22.95
COMMERCIAL 18,223,890 1,055,177 6.15
INDUSTRIAL 5,391,618 92,434 1.74
PUBLIC AUTHORITIES 2,941,960 111,555 3.94
RAILROADS & RAILWAYS 30,700 225 0.74
INTERDEPARTMENTAL 298 136 83.95
----------------------------------
SALES TO ULTIMATE CONSUMERS 40,026,337 2,427,797 6.46
RESALE SALES 7,319,395 2,972,819 68.39
----------------------------------
TOTAL KWH SALES 47,345,732 5,400,616 12.88
==================================
