EXHIBIT 99.2 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma condensed consolidated financial statements of Edison International are included herein: 1. Pro forma Condensed Consolidated Balance Sheet as of September 30, 2004 2. Pro forma Condensed Consolidated Statement of Income (Loss) for the nine months ended September 30, 2004 3. Pro forma Condensed Consolidated Statement of Income for the year ended December 31, 2003 4. Pro forma Condensed Consolidated Statement of Income for the year ended December 31, 2002 5. Pro forma Condensed Consolidated Statement of Income for the year ended December 31, 2001 6. Notes to the Pro Forma Condensed Consolidated Financial Statements The above-referenced unaudited pro forma condensed consolidated financial statements reflect the sale of MEC International B.V. and related assets by Edison Mission Energy (EME), a subsidiary of Edison International. As previously described in Item 2.01 of this report, on December 16, 2004, EME completed the sale of its international power generation portfolio (excluding its interests in the CBK, Tri Energy and Doga projects) to a consortium comprised of International Power plc and Mitsui & Co., Ltd. Net proceeds from EME's sale of MEC International B.V. may be used by EME to repay debt, to support contracting and hedges of power sales, to make capital expenditures for its remaining domestic projects and for investment. In anticipation of the sale, Mission Energy Holdings International, Inc., a subsidiary of EME, repaid on December 14, 2004 the remaining $200 million of the $800 million secured loan that was funded on December 11, 2003. The unaudited pro forma condensed consolidated financial statements have been prepared by applying pro forma adjustments to the consolidated financial statements included in Edison International's Annual Report to Shareholders, incorporated by reference into Edison International's Annual Report on Form 10-K for the year ended December 31, 2003, and to the consolidated financial statements included in Edison International's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004. The unaudited pro forma condensed consolidated balance sheet reflects EME's sale of MEC International B.V., assuming the transaction had been consummated as of September 30, 2004. Under the Purchase Agreement for EME's sale of MEC International B.V., EME was required to liquidate a partnership that held an ownership interest in two international projects. The liquidation of this partnership, together with dividends that were paid prior to December 16, 2004, has been combined with the sale of the stock of MEC International B.V. in preparing the pro forma balance sheet at September 30, 2004. On October 22, 2004, The America Jobs Creation Act of 2004 (Act) was enacted which, among other things, includes a provision regarding repatriation of foreign dividends. Since this Act was not effective at September 30, 2004, the potential benefits related to repatriation of foreign dividends prior to completion of sale of MEC International B.V. are not reflected in the pro forma balance sheet set forth herein. The estimated gain on sale for purposes of these unaudited pro forma condensed consolidated financial statements will ultimately differ from the actual gain to be recorded in the quarter ending December 31, 2004. The unaudited pro forma condensed consolidated statements of income reflect EME's sale of MEC International B.V., assuming the transaction had been consummated as of the beginning of the fiscal period presented. Edison International accounted for the disposition as discontinued operations in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 in accordance with Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" (SFAS 144). MEC International B.V. was included in Income from continuing operations for the years ended December 31, 2003, 2002 and 2001 because SFAS 144 criteria requiring discontinued operations presentation had not been met during these periods. Page On September 30, 2004, EME completed the sale of Universal Holdings to Origin Energy New Zealand Limited. The sale of Universal Holdings included the sale of EME's 51.2% ownership interest in Contact Energy Ltd. Universal Holdings' operating results were included in Income from continuing operations for the years ended December 31, 2003, 2002 and 2001 because SFAS 144 criteria requiring discontinued operations presentation had not been met during these periods. Accordingly, pro forma adjustments are included to eliminate these results from continuing operations for the years ended December 31, 2003, 2002 and 2001. Pro forma adjustments have also been included to eliminate the operating results of EME's CBK, Tri Energy and Doga projects, which were reclassified as discontinued operations in Edison International's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004 in accordance with SFAS 144. However, operating results were included in Income from continuing operations for the years ended December 31, 2003, 2002 and 2001 because SFAS 144 criteria requiring discontinued operations presentation had not been met during these periods. Accordingly, pro forma adjustments are included to eliminate these results from continuing operations for the years ended December 31, 2003, 2002 and 2001. The pro forma adjustments as described in the notes to the unaudited pro forma condensed consolidated financial statements are estimates based on currently available information and certain adjustments that management believes are reasonable. The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and are not necessarily indicative of the financial position or operating results that would have occurred had EME's sale of MEC International B.V. and Universal Holdings been consummated on, or as of, the dates indicated, nor are they necessarily indicative of Edison International's future operating results or financial position. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical financial statements of Edison International included in its Annual Report to Shareholders, incorporated by reference into Edison International's Annual Report on Form 10-K for the year ended December 31, 2003, and included in Edison International's Quarterly Report on Form 10-Q for the quarter ended September 30, 2004. Page EDISON INTERNATIONAL UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET SEPTEMBER 30, 2004 (In millions, except share amount) Sale of MEC Edison International Pro Forma Pro Forma International B.V. (A) Adjustments Consolidated - ------------------------------------------------------------------------------------------------------------------ ASSETS Cash and equivalents $ 2,434 $ 1,773 $ (797)(B) $3,410 Other current assets 2,702 -- -- 2,702 - ------------------------------------------------------------------------------------------------------------------ Total current assets 5,136 1,773 (797) 6,112 - ------------------------------------------------------------------------------------------------------------------ Nonutility property - less accumulated provision for depreciation of $1,267 3,883 -- -- 3,883 Nuclear decommissioning trusts 2,609 -- -- 2,609 Investments in partnerships and unconsolidated subsidiaries 650 -- -- 650 Investments in leveraged leases 2,410 -- -- 2,410 Other investments 209 -- -- 209 - ------------------------------------------------------------------------------------------------------------------ Total investments and other assets 9,761 -- -- 9,761 - ------------------------------------------------------------------------------------------------------------------ Utility plant, at original cost Transmission and distribution 15,396 -- -- 15,396 Generation 1,367 -- -- 1,367 Accumulated provision for depreciation (4,588) -- -- (4,588) Construction work in progress 737 -- -- 737 Nuclear fuel, at amortized cost 153 -- -- 153 - ------------------------------------------------------------------------------------------------------------------ Total utility plant 13,065 -- -- 13,065 - ------------------------------------------------------------------------------------------------------------------ Restricted cash 130 -- -- 130 Regulatory assets - net 265 -- -- 265 Other deferred charges 869 -- (14)(B) 855 - ------------------------------------------------------------------------------------------------------------------ Total deferred charges 1,264 -- (14) 1,250 - ------------------------------------------------------------------------------------------------------------------ Assets of discontinued operations 4,512 (4,347) -- 165 - ------------------------------------------------------------------------------------------------------------------ Total assets $ 33,738 $ (2,574) $ (811) $30,353 - ------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------ LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------------------------------------------------------------------------------------ Current liabilities $ 4,401 $ 15 $ (604)(B) $ 3,812 - ------------------------------------------------------------------------------------------------------------------ Long-term debt 11,129 -- (197)(B) 10,932 - ------------------------------------------------------------------------------------------------------------------ Accumulated deferred income taxes - net 4,984 (22) -- 4,962 Accumulated deferred investment tax credits 141 -- -- 141 Customer advances and other deferred credits 954 -- -- 954 Power-purchase contracts 154 -- -- 154 Preferred securities subject to mandatory redemption 139 -- -- 139 Accumulated provision for pensions and benefits 496 -- -- 496 Asset retirement obligations 2,158 -- -- 2,158 Other long-term liabilities 256 17 -- 273 - ------------------------------------------------------------------------------------------------------------------ Total deferred credits and other liabilities 9,282 (5) -- 9,277 - ------------------------------------------------------------------------------------------------------------------ Liabilities of discontinued operations 2,794 (2,783) -- 11 - ------------------------------------------------------------------------------------------------------------------ Total liabilities 27,606 (2,773) (801) 24,032 - ------------------------------------------------------------------------------------------------------------------ Minority interest 355 (1) -- 354 - ------------------------------------------------------------------------------------------------------------------ Preferred stock not subject to mandatory redemption 129 -- -- 129 - ------------------------------------------------------------------------------------------------------------------ Common stock (325,811,206 shares outstanding) 1,985 -- -- 1,985 Accumulated other comprehensive loss (129) 96 -- (33) Retained earnings 3,792 104 (10)(B) 3,886 - ------------------------------------------------------------------------------------------------------------------ Total common shareholders' equity 5,648 200 (10) 5,838 - ------------------------------------------------------------------------------------------------------------------ Total liabilities and shareholders' equity $ 33,738 $ (2,574) $ (811) $30,353 - ------------------------------------------------------------------------------------------------------------------ See notes to unaudited pro forma condensed consolidated financial statements. Page EDISON INTERNATIONAL UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004 (In millions) Edison Sale of MEC Pro Forma Pro Forma International International B.V. Adjustments Consolidated - ---------------------------------------------------------------------------------------------------------------------- Electric utility $ 6,527 $ -- $ -- $ 6,527 Nonutility power generation 1,228 -- -- 1,228 Financial services and other 85 -- -- 85 - ---------------------------------------------------------------------------------------------------------------------- Total operating revenue 7,840 -- -- 7,840 - ---------------------------------------------------------------------------------------------------------------------- Fuel 1,010 -- -- 1,010 Purchased power 2,022 -- -- 2,022 Provisions for regulatory adjustment clauses - net (85) -- -- (85) Other operation and maintenance 2,351 -- -- 2,351 Asset impairment and loss on lease termination 989 -- -- 989 Depreciation, decommissioning and amortization 752 -- -- 752 Property and other taxes 148 -- -- 148 - ---------------------------------------------------------------------------------------------------------------------- Total operating expenses 7,187 -- -- 7,187 - ---------------------------------------------------------------------------------------------------------------------- Operating income 653 -- -- 653 Interest and dividend income 32 -- -- 32 Equity in income from partnerships and unconsolidated subsidiaries - net 57 -- -- 57 Other nonoperating income 97 -- -- 97 Interest expense - net of amounts capitalized (746) -- -- (746) Other nonoperating deductions (50) -- -- (50) Minority interest (119) -- -- (119) Dividends on utility preferred stock not subject to mandatory redemption (4) -- -- (4) - ---------------------------------------------------------------------------------------------------------------------- Loss from continuing operations before tax (80) -- -- (80) Income tax benefit (39) -- -- (39) - ---------------------------------------------------------------------------------------------------------------------- Loss from continuing operations $ (41) $ -- $ -- $ (41) - ---------------------------------------------------------------------------------------------------------------------- See notes to unaudited pro forma condensed consolidated financial statements Page EDISON INTERNATIONAL UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2003 (In millions) Edison Sale of MEC Pro Forma Pro Forma International International B.V.(C) Adjustments Consolidated - ------------------------------------------------------------------------------------------------------------------------ Electric utility $ 8,853 $ -- $ -- $ 8,853 Nonutility power generation 3,181 (646) (881) (D) 1,654 Financial services and other 101 -- -- 101 - ------------------------------------------------------------------------------------------------------------------------ Total operating revenue 12,135 (646) (881) 10,608 - ------------------------------------------------------------------------------------------------------------------------ Fuel 1,338 (256) (261) (D) 821 Purchased power 2,786 -- -- 2,786 Provisions for regulatory adjustment clauses - net 1,138 -- -- 1,138 Other operation and maintenance 3,389 (142) (367) (D) 2,880 Asset impairment 304 -- -- 304 Depreciation, decommissioning and amortization 1,184 (73) (69) (D) 1,042 Property and other taxes 210 (17) -- 193 Net gain on sale of utility plant (5) -- -- (5) - ------------------------------------------------------------------------------------------------------------------------ Total operating expenses 10,344 (488) (697) 9,159 - ------------------------------------------------------------------------------------------------------------------------ Operating income 1,791 (158) (184) 1,449 Interest and dividend income 127 (8) (1) (D) 118 Equity in income from partnerships and unconsolidated subsidiaries - net 354 (116) (7) (D) 231 Other nonoperating income 91 (15) 3 (D) 79 Interest expense - net of amounts capitalized (1,226) 135 80 (D)(E) (1,011) Other nonoperating deductions (84) 11 34 (D) (39) Dividends on preferred securities (51) -- 4 (D) (47) Dividends on utility preferred stock (10) -- -- (10) - ------------------------------------------------------------------------------------------------------------------------ Income from continuing operations before tax 992 (151) (71) 770 Income tax 213 (49) (48) (D) 116 - ------------------------------------------------------------------------------------------------------------------------ Income from continuing operations $ 779 $ (102) $ (23) $ 654 - ------------------------------------------------------------------------------------------------------------------------ See notes to unaudited pro forma condensed consolidated financial statements Page EDISON INTERNATIONAL UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2002 (In millions) Edison Sale of MEC Pro Forma Pro Forma International International B.V. (C) Adjustments Consolidated - ----------------------------------------------------------------------------------------------------------------------- Electric utility $ 8,705 $ -- $ -- $ 8,705 Nonutility power generation 2,750 (542) (607) (D) 1,601 Financial services and other 33 -- -- 33 - ----------------------------------------------------------------------------------------------------------------------- Total operating revenue 11,488 (542) (607) 10,339 - ----------------------------------------------------------------------------------------------------------------------- Fuel 1,186 (203) (196) (D) 787 Purchased power 2,016 -- -- 2,016 Provisions for regulatory adjustment clauses - net 1,502 -- -- 1,502 Other operation and maintenance 3,156 (125) (241) (D) 2,790 Asset impairment 86 -- -- 86 Depreciation, decommissioning and amortization 1,030 (62) (48) (D) 920 Property and other taxes 145 (14) 1 (D) 132 Net gain on sale of utility plant (5) -- -- (5) - ----------------------------------------------------------------------------------------------------------------------- Total operating expenses 9,116 (404) (484) 8,228 - ----------------------------------------------------------------------------------------------------------------------- perating income 2,372 (138) (123) 2,111 Interest and dividend income 287 (5) (5) (D) 277 Equity in income from partnerships and unconsolidated subsidiaries - net 249 (78) (8) (D) 163 Other nonoperating income 90 (4) (1) (D) 85 Interest expense - net of amounts capitalized (1,283) 119 50 (D) (1,114) Other nonoperating deductions (74) 11 23 (D) (40) Dividends on preferred securities (96) -- 7 (D) (89) Dividends on utility preferred stock (19) -- -- (19) - ----------------------------------------------------------------------------------------------------------------------- Income from continuing operations before tax 1,526 (95) (57) 1,374 Income tax 391 (30) (36) (D) 325 - ----------------------------------------------------------------------------------------------------------------------- Income from continuing operations $ 1,135 $ (65) $ (21) $ 1,049 - ----------------------------------------------------------------------------------------------------------------------- See notes to unaudited pro forma condensed consolidated financial statements Page EDISON INTERNATIONAL UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE YEAR ENDED DECEMBER 31, 2001 (In millions) Edison Sale of MEC Pro Forma Pro Forma International International B.V. (C) Adjustments Consolidated - ------------------------------------------------------------------------------------------------------------------------ Electric utility $ 8,120 $ -- $ -- $ 8,120 Nonutility power generation 2,594 (421) (414) (D) 1,759 Financial services and other 348 -- -- 348 - ------------------------------------------------------------------------------------------------------------------------ Total operating revenue 11,062 (421) (414) 10,227 - ------------------------------------------------------------------------------------------------------------------------ Fuel 1,128 (115) (165) (D) 848 Purchased power 3,770 -- -- 3,770 Provisions for regulatory adjustment clauses - net (3,028) -- -- (3,028) Other operation and maintenance 3,029 (135) (131) (D) 2,763 Depreciation, decommissioning and amortization 973 (64) (32) (D) 877 Property and other taxes 114 (17) (2) (D) 95 Net gain on sale of utility plant (6) -- -- (6) - ------------------------------------------------------------------------------------------------------------------------ Total operating expenses 5,980 (331) (330) 5,319 - ------------------------------------------------------------------------------------------------------------------------ Operating income 5,082 (90) (84) 4,908 Interest and dividend income 282 (13) (2) (D) 267 Equity in income from partnerships and unconsolidated subsidiaries - net 343 (32) (8) (D) 303 Other nonoperating income 108 10 (4) (D) 114 Interest expense - net of amounts capitalized (1,582) 107 35 (D) (1,440) Other nonoperating deductions (70) 4 20 (D) (46) Dividends on preferred securities (92) -- 8 (D) (84) Dividends on utility preferred stock (22) -- -- (22) - ------------------------------------------------------------------------------------------------------------------------ Income from continuing operations before tax 4,049 (14) (35) 4,000 Income tax 1,647 2 (25) (D) 1,624 - ------------------------------------------------------------------------------------------------------------------------ Income from continuing operations $ 2,402 $ (16) $ (10) $ 2,376 - ------------------------------------------------------------------------------------------------------------------------ See notes to unaudited pro forma condensed consolidated financial statements Page EDISON INTERNATIONAL NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (A) Reflects the sales proceeds and elimination of historical costs of the assets and liabilities of MEC International B.V. and related assets and the resulting estimated gain on the sale as follows (in millions): Net proceeds from sale of MEC International B.V. $ 1,959 Net assets of MEC International B.V. (1,585) Cumulative translation adjustment (96) ------------- Pre-tax gain 278 Income tax expense 174 ------------- After-tax gain $ 104 ============= (B) Primarily reflects the repayment of the $800 million secured loan at Mission Energy Holdings International, Inc. In addition, reflects the write-off of unamortized debt issue costs and elimination of accrued interest related to the early repayment of the secured loan. (C) Reflects the elimination of the results of MEC International B.V. for the period. (D) Reflects the elimination of the results of Universal Holdings for the period and exclusion of results of CBK, Tri Energy and Doga projects from continuing operations. These projects have been classified as discontinued operations in the 2004 Third Quarter Report on Form 10-Q. (E) Reflects pro forma decrease in interest expense of approximately $4 million resulting from the repayment of debt utilizing cash proceeds primarily from the sale of Universal Holdings.
Edison International (EIX) 8-KCompletion of Acquisition or Disposition of Assets
Filed: 21 Dec 04, 12:00am