Consolidated Statements of Inco
Consolidated Statements of Income (USD $) | |||
In Millions, except Per Share data | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Consolidated Statements of Income | |||
Electric utility | $9,959 | $11,246 | $10,231 |
Competitive power generation | 2,374 | 2,808 | 2,575 |
Financial services and other | 28 | 58 | 62 |
Total operating revenue | 12,361 | 14,112 | 12,868 |
Fuel | 1,517 | 2,147 | 1,875 |
Purchased power | 2,751 | 3,845 | 3,235 |
Operations and maintenance | 4,387 | 4,288 | 4,065 |
Depreciation, decommissioning and amortization | 1,418 | 1,313 | 1,181 |
Lease terminations and other | 890 | (44) | 3 |
Total operating expenses | 10,963 | 11,549 | 10,359 |
Operating income | 1,398 | 2,563 | 2,509 |
Interest and dividend income | 32 | 62 | 154 |
Equity in income from partnerships and unconsolidated subsidiaries - net | 42 | 31 | 79 |
Other income | 171 | 113 | 95 |
Interest expense - net of amounts capitalized | (732) | (700) | (752) |
Other expenses | (57) | (125) | (45) |
Loss on early extinguishment of debt | (241) | ||
Income from continuing operations before income taxes | 854 | 1,944 | 1,799 |
Income tax expense (benefit) | (98) | 596 | 492 |
Income from continuing operations | 952 | 1,348 | 1,307 |
Loss from discontinued operations - net of tax | (7) | (2) | |
Net income | 945 | 1,348 | 1,305 |
Less: Net income attributable to noncontrolling interests | 96 | 133 | 207 |
Net income attributable to Edison International common shareholders | 849 | 1,215 | 1,098 |
Amounts attributable to Edison International common shareholders: | |||
Income from continuing operations, net of tax | 856 | 1,215 | 1,100 |
Loss from discontinued operations, net of tax | (7) | (2) | |
Net income attributable to Edison International common shareholders | $849 | $1,215 | $1,098 |
Basic earnings per common share attributable to Edison International common shareholders: | |||
Weighted-average shares of common stock outstanding (in shares) | 326 | 326 | 326 |
Continuing operations (in dollars per share) | 2.61 | 3.69 | 3.34 |
Discontinued operations (in dollars per share) | -0.02 | -0.01 | |
Total (in dollars per share) | 2.59 | 3.69 | 3.33 |
Diluted earnings per common share attributable to Edison International common shareholders: | |||
Weighted-average shares of common stock outstanding, including effect of dilutive securities (in shares) | 327 | 329 | 331 |
Continuing operations (in dollars per share) | 2.6 | 3.68 | 3.32 |
Discontinued operations (in dollars per share) | -0.02 | -0.01 | |
Total (in dollars per share) | 2.58 | 3.68 | 3.31 |
Dividends declared per common share | 1.245 | 1.225 | 1.175 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Consolidated Statements of Comprehensive Income | |||
Net income | $945 | $1,348 | $1,305 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 4 | (3) | (2) |
Pension and postretirement benefits other than pensions: | |||
Net loss arising during the period | (13) | (36) | (2) |
Amortization of net loss included in net income | 13 | 5 | |
Prior service cost arising during the period | (1) | ||
Amortization of prior service cost included in expense | 1 | (1) | (1) |
Unrealized gain (loss) on derivatives qualified as cash flow hedges: | |||
Unrealized holding gain (loss) arising during the period, net of income tax expense (benefit) of $36, $138 and $(160) for 2009, 2008 and 2007, respectively | 43 | 211 | (234) |
Reclassification adjustments included in net income, net of income tax expense (benefit) of $(124), $58 and $45 for 2009, 2008 and 2007, respectively | (178) | 89 | 64 |
Other comprehensive income (loss) | (130) | 259 | (170) |
Comprehensive income | 815 | 1,607 | 1,135 |
Less: Comprehensive income attributable to noncontrolling interests | 96 | 133 | 207 |
Comprehensive income attributable to Edison International | $719 | $1,474 | $928 |
1_Consolidated Statements of Co
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Consolidated Statements of Comprehensive Income | |||
Unrealized holding gain (loss) arising during the period, income tax expense (benefit) | $36 | $138 | ($160) |
Reclassification adjustments included in net income, income tax expense (benefit) | ($124) | $58 | $45 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | Dec. 31, 2009
| Dec. 31, 2008
|
ASSETS | ||
Cash and equivalents | $1,673 | $3,916 |
Short-term investments | 10 | 7 |
Receivables, less allowances of $53 and $39 for uncollectible accounts at respective dates | 1,017 | 1,006 |
Accrued unbilled revenue | 347 | 328 |
Inventory | 533 | 553 |
Derivative assets | 357 | 327 |
Restricted cash | 69 | 3 |
Margin and collateral deposits | 125 | 105 |
Regulatory assets | 120 | 605 |
Deferred income taxes | 3 | 104 |
Other current assets | 176 | 399 |
Total current assets | 4,430 | 7,353 |
Competitive power generation and other property - less accumulated depreciation of $2,231 and $2,019 at respective dates | 5,147 | 5,374 |
Nuclear decommissioning trusts | 3,140 | 2,524 |
Investments in partnerships and unconsolidated subsidiaries | 216 | 229 |
Investments in leveraged leases | 160 | 2,467 |
Other investments | 91 | 89 |
Total investments and other assets | 8,754 | 10,683 |
Utility plant, at original cost: | ||
Transmission and distribution | 22,214 | 20,006 |
Generation | 2,667 | 1,819 |
Accumulated depreciation | (5,921) | (5,570) |
Construction work in progress | 2,701 | 2,454 |
Nuclear fuel, at amortized cost | 305 | 260 |
Total utility plant | 21,966 | 18,969 |
Derivative assets | 268 | 244 |
Restricted deposits | 43 | 43 |
Rent payments in excess of levelized rent expense under plant operating leases | 1,038 | 878 |
Regulatory assets | 4,139 | 5,414 |
Other long-term assets | 806 | 1,031 |
Total long-term assets | 6,294 | 7,610 |
Total assets | 41,444 | 44,615 |
LIABILITIES AND EQUITY | ||
Short-term debt | 85 | 2,143 |
Current portion of long-term debt | 377 | 174 |
Accounts payable | 1,123 | 1,031 |
Accrued taxes | 186 | 590 |
Accrued interest | 196 | 187 |
Customer deposits | 238 | 228 |
Book overdrafts | 224 | 224 |
Derivative liabilities | 107 | 178 |
Regulatory liabilities | 367 | 1,111 |
Other current liabilities | 884 | 831 |
Total current liabilities | 3,787 | 6,697 |
Long-term debt | 10,437 | 10,950 |
Deferred income taxes | 4,334 | 5,717 |
Deferred investment tax credits | 102 | 109 |
Customer advances | 119 | 137 |
Derivative liabilities | 529 | 776 |
Pensions and benefits | 2,061 | 2,860 |
Asset retirement obligations | 3,241 | 3,042 |
Regulatory liabilities | 3,328 | 2,481 |
Other deferred credits and other long-term liabilities | 2,500 | 1,137 |
Total deferred credits and other liabilities | 16,214 | 16,259 |
Total liabilities | 30,438 | 33,906 |
Commitments and contingencies (Note 6) | ||
Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at each date) | 2,304 | 2,272 |
Accumulated other comprehensive income | 37 | 167 |
Retained earnings | 7,500 | 7,078 |
Total Edison International's common shareholders' equity | 9,841 | 9,517 |
Noncontrolling interests | 258 | 285 |
Preferred and preference stock of utility not subject to mandatory redemption | 907 | 907 |
Total equity | 11,006 | 10,709 |
Total liabilities and equity | $41,444 | $44,615 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
In Millions, except Share data | Dec. 31, 2009
| Dec. 31, 2008
|
Consolidated Balance Sheets | ||
Receivables, allowances for uncollectible accounts (in dollars) | $53 | $39 |
Competitive power generation and other property, accumulated depreciation (in dollars) | $2,231 | $2,019 |
Common stock, no par value (in dollars per share) | $0 | $0 |
Common stock, shares authorized (in shares) | 800,000,000 | 800,000,000 |
Common stock, shares issued (in shares) | 325,811,206 | 325,811,206 |
Common stock, shares outstanding (in shares) | 325,811,206 | 325,811,206 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Cash flows from operating activities: | |||
Net income | $945 | $1,348 | $1,305 |
Loss from discontinued operations | 7 | 2 | |
Income from continuing operations | 952 | 1,348 | 1,307 |
Adjustments to reconcile to net cash provided by operating activities: | |||
Depreciation, decommissioning and amortization | 1,418 | 1,313 | 1,181 |
Regulatory impacts of net nuclear decommissioning trust earnings (reflected in accumulated depreciation) | 158 | (10) | 143 |
Other amortization | 120 | 106 | 111 |
Lease terminations and other | 888 | (44) | 3 |
Stock-based compensation | 22 | 34 | 37 |
Equity in income from partnerships and unconsolidated subsidiaries - net | (42) | (31) | (75) |
Distributions and dividends from unconsolidated entities | 31 | (8) | 33 |
Deferred income taxes and investment tax credits | (1,457) | 207 | (39) |
Income from leveraged leases | (14) | (51) | (49) |
Loss on early extinguishment of debt | 241 | ||
Changes in operating assets and liabilities: | |||
Receivables | 80 | 128 | 8 |
Inventory | 20 | (114) | (41) |
Restricted cash | (69) | ||
Margin and collateral deposits - net of collateral received | 30 | (19) | 75 |
Other current assets | 202 | (48) | (147) |
Rent payments in excess of levelized rent expense | (160) | (162) | (160) |
Accounts payable | 152 | (176) | 28 |
Accrued taxes | (402) | 340 | 47 |
Book overdrafts | 16 | 72 | |
Other current liabilities | 31 | (39) | (30) |
Derivative assets and liabilities - net | (581) | 849 | (193) |
Regulatory assets and liabilities - net | 1,457 | (2,946) | 679 |
Other assets | 62 | 224 | (180) |
Other liabilities | 154 | 1,344 | 195 |
Operating cash flows from discontinued operations | (7) | (2) | |
Net cash provided by operating activities | 3,045 | 2,261 | 3,244 |
Cash flows from financing activities: | |||
Long-term debt issued | 939 | 2,632 | 2,930 |
Premiums paid on extinguishment of debt and long-term debt issuance costs | (25) | (21) | (241) |
Long-term debt repaid | (1,044) | (295) | (3,215) |
Bonds repurchased | (219) | (212) | (37) |
Preferred stock redeemed | (7) | ||
Rate reduction notes repaid | (246) | ||
Short-term debt financing - net | (2,058) | 1,643 | 500 |
Cash contributions from noncontrolling interests | 2 | 12 | |
Stock-based compensation - net | (3) | (26) | (84) |
Dividends and distributions to noncontrolling interests | (117) | (170) | (157) |
Dividends paid | (404) | (397) | (378) |
Net cash provided (used) by financing activities | (2,929) | 3,159 | (928) |
Cash flows from investing activities: | |||
Capital expenditures | (3,282) | (2,824) | (2,826) |
Purchase of interest in acquired companies | (22) | (19) | (33) |
Proceeds from termination of leases | 1,420 | ||
Proceeds from sale of property and interests in projects | 7 | 113 | 2 |
Proceeds from sale of nuclear decommissioning trust investments | 2,217 | 3,130 | 3,697 |
Purchases of nuclear decommissioning trust investments and other | (2,416) | (3,137) | (3,830) |
Proceeds from partnerships and unconsolidated subsidiaries, net of investment | 11 | 65 | 42 |
Maturities and sale of short-term investments | 4 | 96 | 9,953 |
Purchase of short-term investments | (7) | (22) | (9,476) |
Restricted cash | 4 | 4 | 99 |
Investments in other assets | (295) | (351) | (298) |
Net cash used by investing activities | (2,359) | (2,945) | (2,670) |
Net increase (decrease) in cash and equivalents | (2,243) | 2,475 | (354) |
Cash and equivalents, beginning of year | 3,916 | 1,441 | 1,795 |
Cash and equivalents, end of year | $1,673 | $3,916 | $1,441 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity (USD $) | |||
In Millions | 12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 |
Changes in Equity | |||
Balance | $10,709 | $9,654 | $8,895 |
Net income | 945 | 1,348 | 1,305 |
Adoption of accounting guidance for uncertainty in income taxes | 250 | ||
Other comprehensive income (loss) | (130) | 259 | (170) |
Common stock dividends declared ($1.245, $1.225 and $1.175 per share for the year 2009, 2008 and 2007, respectively) | (406) | (399) | (383) |
Preferred stock redeemed, net of gain | (6) | ||
Dividends, distributions to noncontrolling interests and other | (123) | (143) | (183) |
Stock-based compensation - net | (3) | (26) | (85) |
Noncash stock-based compensation and other | 14 | 22 | 25 |
Balance | 11,006 | 10,709 | 9,654 |
Equity Attributable to Edison International | |||
Changes in Equity | |||
Balance | 9,517 | 8,444 | 7,709 |
Net income | 849 | 1,215 | 1,098 |
Adoption of accounting guidance for uncertainty in income taxes | 250 | ||
Other comprehensive income (loss) | (130) | 259 | (170) |
Common stock dividends declared ($1.245, $1.225 and $1.175 per share for the year 2009, 2008 and 2007, respectively) | (406) | (399) | (383) |
Preferred stock redeemed, net of gain | 2 | ||
Stock-based compensation - net | (3) | (26) | (85) |
Noncash stock-based compensation and other | 14 | 22 | 25 |
Balance | 9,841 | 9,517 | 8,444 |
Common Stock | |||
Changes in Equity | |||
Balance | 2,272 | 2,225 | 2,080 |
Preferred stock redeemed, net of gain | 2 | ||
Stock-based compensation - net | 9 | 10 | 45 |
Noncash stock-based compensation and other | 23 | 35 | 32 |
Change in classification of shares purchased to settle performance shares | 68 | ||
Balance | 2,304 | 2,272 | 2,225 |
Accumulated Other Comprehensive Income (Loss) | |||
Changes in Equity | |||
Balance | 167 | (92) | 78 |
Other comprehensive income (loss) | (130) | 259 | (170) |
Balance | 37 | 167 | (92) |
Retained Earnings | |||
Changes in Equity | |||
Balance | 7,078 | 6,311 | 5,551 |
Net income | 849 | 1,215 | 1,098 |
Adoption of accounting guidance for uncertainty in income taxes | 250 | ||
Common stock dividends declared ($1.245, $1.225 and $1.175 per share for the year 2009, 2008 and 2007, respectively) | (406) | (399) | (383) |
Stock-based compensation - net | (12) | (36) | (130) |
Noncash stock-based compensation and other | (9) | (13) | (7) |
Change in classification of shares purchased to settle performance shares | (68) | ||
Balance | 7,500 | 7,078 | 6,311 |
Noncontrolling Interests - Other | |||
Changes in Equity | |||
Balance | 285 | 295 | 271 |
Net income | 45 | 82 | 156 |
Dividends, distributions to noncontrolling interests and other | (72) | (92) | (132) |
Balance | 258 | 285 | 295 |
Noncontrolling Interests - Preferred and Preference Stock | |||
Changes in Equity | |||
Balance | 907 | 915 | 915 |
Net income | 51 | 51 | 51 |
Preferred stock redeemed, net of gain | (8) | ||
Dividends, distributions to noncontrolling interests and other | (51) | (51) | (51) |
Balance | $907 | $907 | $915 |
2_Consolidated Statements of Ch
Consolidated Statements of Changes in Equity (Parenthetical) (USD $) | |||
12 Months Ended
Dec. 31, 2009 | 12 Months Ended
Dec. 31, 2008 | 12 Months Ended
Dec. 31, 2007 | |
Consolidated Statements of Changes in Equity | |||
Common stock dividends declared (in dollars per share) | 1.245 | 1.225 | 1.175 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Summary of Significant Accounting Policies | Note1. Summary of Significant Accounting Policies Edison International's principal wholly owned subsidiaries include: SCE, a rate-regulated electric utility that supplies electric energy to a 50,000 square-mile area of central, coastal and southern California; and EMG, a wholly owned non-utility subsidiary; EMG is the holding company of EME and Edison Capital. EME is a holding company whose subsidiaries and affiliates are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities; EME also conducts hedging and energy trading activities in competitive power markets. Edison Capital is a provider of capital and financial services. EME has domestic projects and one foreign project in Turkey; Edison Capital has domestic and foreign investments, primarily in Europe, Australia and Africa. Basis of Presentation The consolidated financial statements include Edison International and its wholly owned subsidiaries. Edison International consolidates subsidiaries in which it has a controlling interest and VIEs in which it is the primary beneficiary. In addition, Edison International generally uses the equity method to account for significant interests in (1)partnerships and subsidiaries in which it owns a significant but less than controlling interest and (2)VIEs in which it is not the primary beneficiary. Intercompany transactions have been eliminated, except EME's profits from energy sales to SCE, which are allowed in utility rates. Edison International's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the rate-making policies of the CPUC and the FERC. SCE applies authoritative guidance for rate-regulated enterprises to the portion of its operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on capital. Due to timing and other differences in the collection of electric utility revenue, these principles allow an incurred cost that would otherwise be charged to expense by a nonregulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the principles allow recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred. See Note11 for composition of regulatory assets and liabilities. Financial statements prepared in conformity with accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingency assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Edison International has performed an evaluation of subsequent events through the date the financial statements were issu |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Derivative Instruments and Hedging Activities | Note2. Derivative Instruments and Hedging Activities Electric Utility SCE uses derivative financial instruments to manage financial exposure on its investments and fluctuations in commodity prices and interest rates. SCE manages these risks in part by entering into interest rate swap, cap and lock agreements, and forward commodity transactions, including options, swaps and futures. SCE is exposed to credit loss in the event of nonperformance by counterparties. To mitigate credit risk from counterparties, master netting agreements are used whenever possible and counterparties may be required to pledge collateral depending on the creditworthiness of each counterparty and the risk associated with the transaction. Commodity Price Risk SCE is exposed to commodity price risk which represents the potential impact that can be caused by a change in the market value of a particular commodity. SCE's hedging program reduces ratepayer exposure to variability in market prices related to SCE's power and gas activities. SCE recovers its related hedging costs through the ERRA balancing account and as a result, exposure to commodity price is not expected to impact earnings, but may impact cash flows. SCE's electricity price exposure arises from energy produced and sold in the MRTU market as a result of differences between SCE's load requirements versus the amount of energy delivered from its generating facilities, existing bilateral contracts and CDWR contracts allocated to SCE. Approximately 37% of SCE's purchased power supply is subject to natural gas price volatility. SCE's natural gas price exposure arises from purchasing natural gas for generation at Mountainview and peaker plants, from bilateral contracts where pricing is based on natural gas prices (this includes contract energy prices for most renewable QFs which are based on the monthly index price of natural gas delivered at the southern California border), and power contracts in which SCE has agreed to provide the natural gas needed for generation, referred to as tolling arrangements. Natural Gas and Electricity Price Risk SCE's hedging program reduces ratepayer exposure to variability in market prices. As part of this program, SCE enters into energy options, swaps, forward arrangements, tolling arrangements, and congestion revenue rights (CRRs). These transactions are pre-approved by the CPUC or executed in compliance with CPUC-approved procurement plans. In addition, SCE's risk management committee regularly reviews and evaluates exposure and approves transactions. Notional Volumes of Derivative Instruments The following table summarizes the notional volumes of derivatives used for hedging activities at December31, 2009: Commodity Unit of Measure Economic Hedges Electricity options, swaps and forward arrangements MWh 14,868,034 Natural gas options, swaps and forward arrangements Bcf 266 Congestion revenue rights1 MWh 195,367,422 Tolling arrangements2 MWh 116,398,216 1 In September 2007 and November 2008, the CAISO allocated CRRs for the period April 2009 through December 2017 based on SCE's load requir |
Liabilities and Lines of Credit
Liabilities and Lines of Credit | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Liabilities and Lines of Credit | Note3. Liabilities and Lines of Credit Long-Term Debt The following table summarizes long-term debt (rates and terms are as of December31, 2009): December31, (in millions) 2009 2008 First and refunding mortgage bonds: 20142039 (4.15% to 6.05% and variable) $ 5,475 $ 4,875 Pollution-control bonds: 20152035 (2.9% to 5.55% and variable) 1,196 1,196 Bonds repurchased (468 ) (249 ) Debentures and notes: 20102053 (noninterest-bearing to 8.75%) 4,631 5,320 Long-term debt due within one year (377 ) (174 ) Unamortized debt discountnet (20 ) (18 ) Total $ 10,437 $ 10,950 Long-term debt maturities and sinking-fund requirements for the next five years are: 2010$377million; 2011$36million; 2012$40million; 2013$545million; and 2014$1.1billion. In January 2010, Edison Capital redeemed in full its medium-term loans. The balance of these loans was $89million at December31, 2009. Almost all SCE properties are subject to a trust indenture lien. SCE has pledged first and refunding mortgage bonds as collateral for borrowed funds obtained from certain pollution-control bonds issued by government agencies. SCE used these proceeds to finance construction of pollution-control facilities. SCE has a debt covenant that requires a debt to total capitalization ratio be met. At December31, 2009, SCE was in compliance with this debt covenant. Bondholders have limited discretion in redeeming certain pollution-control bonds, and SCE has arranged with securities dealers to remarket or purchase them if necessary. In late 2007 and early 2008, SCE purchased in the secondary market its auction rate bonds, totaling $249million, and converted the issue from an auction-based reset process to a variable rate structure. In 2009, SCE purchased two issues of its tax-exempt bonds totaling $219million that were subject to remarketing and also converted those issues to a variable rate structure. SCE continues to hold these bonds which remain outstanding and have not been retired or cancelled. EME Senior Notes EME has $3.7billion of senior notes due 2013 through 2027. The senior notes are redeemable by EME at any time at a price equal to 100% of the principal amount, plus accrued and unpaid interest and liquidated damages, if any, of the senior notes plus a "make-whole" premium. The senior notes are EME's senior unsecured obligations, ranking equal in right of payment to all of EME's existing and future senior unsecured indebtedness, and will be senior to all of EME's future subordinated indebtedness. EME's secured debt and its other secured obligations are effectively senior to the senior notes to the extent of the value of the assets securing such debt or other obligations. None of EME's subsidiaries have guaranteed the senior notes and, as a result, all the existing and future liabilities of EME's subsidiaries are effectively senior to the senior notes. EME recorded a total pre-tax loss of $160million ($98million after tax) on early extinguishment of debt in 2007 related to the early repayment of EME's 7.73% senio |
Income Taxes
Income Taxes | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Income Taxes | Note4. Income Taxes The sources of income (loss) before income taxes are: Years ended December31, (in millions) 2009 2008 2007 Domestic $ 758 $ 1,809 $ 1,570 Foreign 2 22 Income from continuing operations attributable to common shareholders 758 1,811 1,592 Discontinued operations (7 ) 5 3 Income attributable to common shareholders $ 751 $ 1,816 $ 1,595 The components of income tax expense (benefit) by location of taxing jurisdiction are: Years ended December31, (in millions) 2009 2008 2007 Current: Federal $ 1,211 $ 183 $ 359 State 361 80 95 Foreign 1,572 263 454 Deferred: Federal (1,638 ) 307 57 State (32 ) 26 (19 ) (1,670 ) 333 38 Total continuing operations (98 ) 596 492 Discontinued operations (2 ) 5 5 Total $ (100 ) $ 601 $ 497 The components of the net accumulated deferred income tax liability are: December31, (in millions) 2009 2008 Deferred tax assets: Property and software related $ 692 $ 556 Unrealized gains and losses 322 77 Regulatory balancing accounts 229 436 Decommissioning 173 168 Accrued charges 108 Pension and PBOPs 216 203 Other 827 490 Total 2,459 2,038 Deferred tax liabilities: Property-related 5,285 4,079 Leveraged leases 194 2,313 Capitalized software costs 286 231 Regulatory balancing accounts 257 433 Unrealized gains and losses 315 70 Other 453 525 Total 6,790 7,651 Accumulated deferred income tax liabilitynet $ 4,331 $ 5,613 Classification of accumulated deferred income taxesnet: Included in total deferred credits and other liabilities $ 4,334 $ 5,717 Included in current assets $ 3 $ 104 The federal statutory income tax rate is reconciled to the effective tax rate from continuing operations attributable to common shareholders, as follows: Years ended December31, 2009 2008 2007 Federal statutory rate 35.0% 35.0% 35.0% State taxnet of federal benefit 6.4 4.2 4.1 Property-related (7.6 ) (3.2 ) (0.2 ) Housing and production credits (8.4 ) (3.1 ) (2.9 ) Tax reserve adjustments 2.4 0.7 (3.5 ) Global tax settlement (42.5 ) Other 1.8 (0.7 ) (1.6 ) Effective tax rate (12.9% ) 32.9% 30.9% The effective tax rate of (12.9%) in 2009 included benefits related to both the Global Settlement and recognition of additional AFUDC equity resulting from the transfer of the Mountainview power plant to utility rate base. Production tax credits increased in 2009 due to growth in EME's wind portfolio. The effect |
Compensation and Benefit Plans
Compensation and Benefit Plans | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Compensation and Benefit Plans | Note5. Compensation and Benefit Plans Employee Savings Plan Edison International has a 401(k) defined contribution savings plan designed to supplement employees' retirement income. The plan received employer contributions of $83million in 2009, $80million in 2008 and $73million in 2007. Pension Plans and Postretirement Benefits Other Than Pensions Pension Plans Noncontributory defined benefit pension plans (some with cash balance features) cover most employees meeting minimum service requirements. SCE recognizes pension expense for its nonexecutive plan as calculated by the actuarial method used for ratemaking. The expected contributions (all by the employer) are approximately $108million for the year ending December31, 2010. Volatile market conditions have affected the value of Edison International's trusts established to fund its future long-term pension benefits. The market value of the investments (reflecting investment returns, contributions and benefit payments) within the plan trusts declined 35% during 2008. This reduction in the value of plan assets resulted in a change in the pension plan funding status from overfunded to underfunded and will also result in increased future expense and increased future contributions. Improved market conditions in 2009 partially offset the impacts of the 2008 market conditions. Changes in the plan's funded status also affect the assets and liabilities recorded on the consolidated balance sheets. Due to SCE's regulatory recovery treatment, the recognition of the funded status is offset by regulatory liabilities and assets. In the 2009 GRC, SCE requested recovery of and continued balancing account treatment for amounts contributed to these trusts. The Pension Protection Act of 2006 establishes new minimum funding standards and restricts plans underfunded by more than 20% from providing lump-sum distributions and adopting amendments that increase plan liabilities. Information on plan assets and benefit obligations is shown below: Years ended December31, (in millions) 2009 2008 Change in projected benefit obligation Projected benefit obligation at beginning of year $ 3,439 $ 3,355 Service cost 124 120 Interest cost 207 199 Amendments 21 Actuarial loss 80 3 Benefits paid (183 ) (238 ) Projected benefit obligation at end of year $ 3,688 $ 3,439 Change in plan assets Fair value of plan assets at beginning of year $ 2,340 $ 3,597 Actual return (loss) on plan assets 577 (1,105 ) Employer contributions 123 86 Benefits paid (183 ) (238 ) Fair value of plan assets at end of year $ 2,857 $ 2,340 Funded status at end of year $ (831 ) $ (1,099 ) Amounts recognized in the consolidated balance sheets consistof: Current liabilities $ (10 ) $ (9 ) Long-term liabilities (821 ) (1,090 ) $ (831 ) $ (1,099 ) Amounts recognized in accumulated other comprehensive loss consistof: Prior service cost $ 2 $ 2 Net |
Commitments and Contingencies
Commitments and Contingencies | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Commitments and Contingencies | Note6. Commitments and Contingencies Lease Commitments In the ordinary course of business, SCE enters into various agreements to purchase power, resource capacity, and environmental attributes. SCE evaluates these agreements under authoritative accounting literature to determine whether such agreements contain a lease. Unit specific contracts in which SCE takes virtually all of the output of a facility are generally considered to be leases. Based on authoritative accounting guidance for leases, SCE then classifies each lease as capital or operating. As of December31, 2009, SCE accounted for three power purchase agreements as capital leases. Gross capital leases reflected in "Utility plant" on the consolidated balance sheets were $248million and $25million at December31, 2009 and 2008, respectively. The asset carrying amount, net of amortization, was $235million and $16million at December31, 2009 and 2008, respectively. The related obligations were reflected on the consolidated balance sheets in "Other current liabilities" and "Other deferred credits and other long-term liabilities." On December7, 2001, a subsidiary of EME completed a sale-leaseback of EME's Homer City facilities to third-party lessors for an aggregate purchase price of $1.6billion, consisting of $782million in cash and assumption of debt (the fair value of which was $809million). Under the terms of the 33.67-year leases, EME's subsidiary is obligated to make semi-annual lease payments on each April1 and October1. If a lessor intends to sell its interest in the Homer City facilities, EME has a right of first refusal to acquire the interest at fair market value. Minimum lease payments (included in the table above) are $155million in 2010, $160million in 2011, $160million in 2012, $149million in 2013, and $138million in 2014, and the total remaining minimum lease payments are $1.4billion. The gain on the sale of the facilities has been deferred and is being amortized over the term of the leases. On August24, 2000, a subsidiary of EME completed a sale-leaseback of EME's Powerton and Joliet power facilities located in Illinois to third-party lessors for an aggregate purchase price of $1.4billion. Under the terms of the leases (33.75years for Powerton and 30years for Joliet), EME's subsidiary makes semi-annual lease payments on each January2 and July2, which began January2, 2001. EME guarantees its subsidiary's payments under the leases. If a lessor intends to sell its interest in the Powerton or Joliet power facility, EME has a right of first refusal to acquire the interest at fair market value. Minimum lease payments (included in the table above) are $170million in 2010, $151million in each of 2011, 2012, 2013 and 2014. The total remaining minimum lease payments are $337million. The gain on the sale of the power facilities has been deferred and is being amortized over the term of the leases. Under the terms of the foregoing sale-leaseback transactions, distributions are restricted by EME's subsidiaries unless specified financial covenants are met. At December31, 2009, EME's subsidiaries met these covenants. In addition, the lease agreements and the Midwest Gener |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Accumulated Other Comprehensive Income | Note7. Accumulated Other Comprehensive Income Edison International's accumulated other comprehensive income consists of: (in millions) Unrealized Gain (Loss) on Cash Flow Hedges Foreign Currency Translation Adjustment Pension and PBOP Net Gain (Loss) Pension and PBOP Prior Service Cost Accumulated Other Comprehensive Income (Loss) Balance at December31, 2007 $ (60 ) $ (1 ) $ (34 ) $ 3 $ (92 ) Change for 2008 300 (3 ) (36 ) (2 ) 259 Balance at December31, 2008 240 (4 ) (70 ) 1 167 Change for 2009 (135 ) 4 1 (130 ) Balance at December31, 2009 $ 105 $ $ (70 ) $ 2 $ 37 Unrealized gain/(loss) on cash flow hedges, net of tax, at December31, 2009 primarily consisted of commodity hedge gains of $106million. Unrealized gains on commodity hedges consist primarily of Midwest Generation and Homer City futures and forward electricity contracts that qualify for hedge accounting. These gains arise because current forecasts of future electricity prices in these markets are lower than the contract prices. As EME's hedged positions for continuing operations are realized, $99million, after tax, of the net unrealized gains on cash flow hedges at December31, 2009 are expected to be reclassified into earnings during the next 12months. Management expects that reclassification of net unrealized gains will increase energy revenue recognized at market prices. Actual amounts ultimately reclassified into earnings over the next 12months could vary materially from this estimated amount as a result of changes in market conditions. The maximum period over which a cash flow hedge is designated is through December31, 2011. On September15, 2008, Lehman Brothers Holdings filed for protection under Chapter11 of the U.S. Bankruptcy Code. EME had power contracts with Lehman Brothers Commodity Services,Inc., a subsidiary of Lehman Brothers Holdings, for Midwest Generation for 2009 and 2010. Lehman Brothers Commodity Services also filed for bankruptcy protection on October3, 2008. The obligations of Lehman Brothers Commodity Services under the power contracts were guaranteed by Lehman Brothers Holdings. These contracts qualified as cash flow hedges until EME de-designated the power contracts effective September12, 2008 when it determined that it was no longer probable that performance would occur. The amount recorded in accumulated other comprehensive income (loss) related to the effective portion of the hedges was $24million pre-tax ($15million, after tax) on that date. Since the power contracts are no longer being accounted for as cash flow hedges and subsequently were terminated, the subsequent change in fair value was recorded as an unrealized loss in 2008 and included in operating revenues on EME's consolidated statement of income. In 2009, $14million of the pre-tax amount recorded in accumulated other comprehensive income (loss) was reclassified to operating revenues. The remaining amount will be reclassified in 2010, unless it becomes probable that the forecasted transactions will no longer occur. EME has |
Property and Plant
Property and Plant | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Property and Plant | Note8. Property and Plant Competitive Power Generation and Other Property Competitive power generation and other property included on the consolidated balance sheets is comprised of the plant and related facilities of EME, Edison Capital and VIEs consolidated by SCE: December31, (in millions) 2009 2008 Building, plant and equipment $ 5,192 $ 5,250 Emission allowances 1,305 1,305 Leasehold improvements 156 132 Furniture and equipment 75 82 Land (including easements) 31 80 Construction in progress1 619 544 7,378 7,393 Accumulated provision for depreciation (2,231 ) (2,019 ) Competitive power generation and other property net $ 5,147 $ 5,374 1 Construction in progress consisted of $451million and $276million at December31, 2009 and 2008, respectively, related to wind projects including those under construction. The power sales agreements of certain EME wind projects qualify as operating leases pursuant to authoritative accounting for leases. The carrying amount and related accumulated depreciation of the property of these wind projects totaled $1.3billion and $123million, respectively, at December31, 2009. EME records rental income from wind projects that are accounted for as operating leases as electricity is delivered at rates defined in power sales agreements. Revenue from these power sales agreements were $83million, $46million and $24million in 2009, 2008 and 2007, respectively. In connection with Midwest Generation's financing activities, EME has given a first priority security interest in substantially all of the coal-fired generating plants owned by Midwest Generation and the assets relating to those plants, and receivables of EMMT directly related to Midwest Generation's hedging activities. The total amount of assets pledged or mortgaged was approximately $2.8billion at December31, 2009. In addition to these assets, Midwest Generation's membership interests and the capital stock of Edison Mission Midwest Holdings were pledged. Emission allowances have not been pledged. On March12, 2009, the CPUC issued a final decision in SCE's 2009 GRC, authorizing the transfer of the Mountainview power plant to utility rate base. SCE received FERC and other necessary approvals, and on July1, 2009, terminated the FERC-approved power-purchase agreement between Mountainview Power Company,LLC and SCE, and transferred assets and liabilities valued at $680million and $173million, respectively. The transfer resulted in a $603million increase in SCE's utility plant (primarily generation plant) with a corresponding decrease in competitive power generation and other property (primarily building, plant and equipment). In addition, SCE recognized a one time, non-cash accounting benefit of approximately $46million primarily resulting from the establishment of regulatory assets to recognize differences in the accounting treatment for non-regulated and rate-regulated entities mainly related to AFUDC-equity. There was no economic impact to customers from this change as compared to the FERC-approved power-p |
Supplemental Cash Flows Informa
Supplemental Cash Flows Information | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Supplemental Cash Flows Information | Note9. Supplemental Cash Flows Information The following is Edison International's supplemental cash flows information: Years ended December31, (in millions) 2009 2008 2007 Cash payments (receipts) for interest and taxes: Interest net of amounts capitalized $ 661 $ 608 $ 709 Tax payments (refunds) net 427 377 332 Noncash investing and financing activities: Details of capital lease obligations: Capital lease purchased $ (223 ) $ $ (10 ) Capital lease obligation issued 223 10 Dividends declared but not paid: Common Stock $ 103 $ 101 $ 99 Preferred and preference stock of utility not subject to mandatory redemption $ 13 $ 13 $ 13 Details of assets acquired: Fair value of assets acquired $ 14 $ $ 41 Liabilities assumed 3 Net assets acquired $ 11 $ $ 41 Details of consolidation of variable interest entities: Assets $ 3 $ 3 $ 12 Liabilities (4 ) (4 ) (5 ) In connection with certain wind projects acquired during the past three years, the purchase price included payments that were due upon the start and/or completion of construction. Accordingly, EME accrued for estimated payments or made payments that were due upon commencement of construction and/or completion of construction scheduled during 2007 through 2009. |
Fair Value Measurements
Fair Value Measurements | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Fair Value Measurements | Note10. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an "exit price"). Fair value for a liability should reflect the entity's non-performance risk. Fair value is determined using a hierarchy to prioritize the inputs to valuation models. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets and liabilities (Level1 measurements) and the lowest priority to unobservable inputs (Level3 measurements). The three levels of the fair value hierarchy are: Level1Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets and liabilities; Level2Pricing inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the derivative instrument; and Level3Prices or valuations that require inputs that are both significant to the fair value measurements and unobservable. Edison International's assets and liabilities carried at fair value primarily consist of derivative contracts, SCE nuclear decommissioning trust investments and money market funds. Derivative contracts primarily relate to power and gas and include contracts for forward physical sales and purchases, options and forward price swaps which settle only on a financial basis (including futures contracts). Derivative contracts can be exchange traded or over-the-counter traded. The fair value of derivative contracts takes into account quoted market prices, time value of money, volatility of the underlying commodities and other factors. Derivatives that are exchange traded in active markets for identical assets or liabilities are classified as Level1. The majority of EME's derivative contracts used for hedging purposes are based on forward market prices in active markets (PJM West Hub, Northern Illinois Hub peak and AEP/Dayton) adjusted for nonperformance risks. EME obtains forward market prices from traded exchanges (ICE Futures U.S. or New York Mercantile Exchange) and available broker quotes. Then, EME selects a primary source that best represents traded activity for each market to develop observable forward market prices in determining the fair value of these positions. Broker quotes or prices from exchanges are used to validate and corroborate the primary source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources that EME believes to provide the most liquid market for the commodity. EME considers broker quotes to be observable when corroborated with other information which may include a combination of prices from exchanges, other brokers and comparison to executed trades. SCE's Level2 derivatives primarily consist of financial natural gas swaps, fixed float swaps, and natural gas physical trades for which SCE obtains the applicable Henry Hub and basis forward market prices from the New York Merc |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Regulatory Assets and Liabilities | Note11. Regulatory Assets and Liabilities Included in SCE's regulatory assets and liabilities are regulatory balancing accounts. Sales balancing accounts accumulate differences between recorded electric utility revenue and revenue SCE is authorized to collect through rates. Cost balancing accounts accumulate differences between recorded costs and costs SCE is authorized to recover through rates. Under-collections are recorded as regulatory balancing account assets. Over-collections are recorded as regulatory balancing account liabilities. SCE's regulatory balancing accounts accumulate balances until they are refunded to or received from SCE's customers through authorized rate adjustments. Primarily all of SCE's balancing accounts can be classified as one of the following types: generation-revenue related, distribution-revenue related, generation-cost related, distribution-cost related, transmission-cost related or public purpose and other cost related. Balancing account under-collections and over-collections accrue interest based on a three-month commercial paper rate published by the Federal Reserve. Income tax effects on all balancing account changes are deferred. Amounts included in regulatory assets and liabilities are generally recorded with corresponding offsets to the applicable income statement accounts. Regulatory assets included on the consolidated balance sheets are: December31, (in millions) 2009 2008 Current: Regulatory balancing accounts $ 94 $ 455 Energy derivatives 25 138 Other 1 12 $ 120 $ 605 Long-term: Regulatory balancing accounts $ 43 $ 29 Deferred income taxes net 1,561 1,337 ARO 224 Unamortized nuclear investment net 340 375 Nuclear-related ARO investment net 258 278 Unamortized coal plant investment net 73 79 Unamortized loss on reacquired debt 287 309 Pensions and other postretirement benefits 1,014 1,882 Energy derivatives 357 723 Environmental remediation 36 40 Other 170 138 $ 4,139 $ 5,414 Total Regulatory Assets $ 4,259 $ 6,019 SCE's regulatory asset related to energy derivatives is primarily an offset to unrealized losses on recorded derivatives. Based on current regulatory ratemaking and income tax laws, SCE expects to recover its net regulatory assets related to income taxes over the life of the assets that give rise to the accumulated deferred income taxes. SCE's regulatory asset related to the ARO represents timing differences between the recognition of AROs in accordance with generally accepted accounting principles and the amounts recognized for rate-making purposes. SCE's nuclear-related regulatory assets related to San Onofre are expected to be recovered by 2022. SCE's nuclear-related regulatory assets related to Palo Verde are expected to be recovered by 2027. SCE's net regulatory asset related to its unamortized coal plant investment is being recovered through June 2016. Although SCE's unamortized nuclear and coal plant |
Other Income and Expenses
Other Income and Expenses | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Other Income and Expenses | Note12. Other Income and Expenses Other income and expenses are as follows: Years ended December31, (in millions) 2009 2008 2007 Equity AFUDC $ 116 $ 54 $ 46 Increase in cash surrender value of life insurance policies 23 24 23 Energy settlement 9 3 4 Other 12 20 16 Total utility other income $ 160 $ 101 $ 89 Competitive power generation other income 11 12 6 Total other income $ 171 $ 113 $ 95 Various penalties $ $ 59 $ 5 Civic, political and related activities and donations 28 34 25 Other 21 30 15 Total utility other expenses $ 49 $ 123 $ 45 Competitive power generation other expenses 8 2 Total other expenses $ 57 $ 125 $ 45 |
Jointly Owned Utility Projects
Jointly Owned Utility Projects | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Jointly Owned Utility Projects | Note13. Jointly Owned Utility Projects SCE owns interests in several generating stations and transmission systems for which each participant provides its own financing. SCE's proportionate share of expenses for each project is included on the consolidated statements of income. The following is SCE's investment in each project as of December31, 2009: (in millions) Investment in Facility Accumulated Depreciation and Amortization Ownership Interest Transmission systems: Eldorado $ 73 $ 13 60 % Pacific Intertie 182 62 50 Generating stations: Four Corners Units 4 and 5(coal) 580 477 48 Mohave (coal) 351 303 56 Palo Verde (nuclear) 1,858 1,527 16 San Onofre (nuclear) 5,131 4,075 78 Total $ 8,175 $ 6,457 All of Mohave and a portion of San Onofre and Palo Verde are included in regulatory assets on the consolidated balance sheetssee Note11. Mohave ceased operations on December31, 2005. In December 2006, SCE acquired the City of Anaheim's approximately 3% ownership interest of San Onofre Units 2 and 3. |
Variable Interest Entities
Variable Interest Entities | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Variable Interest Entities | Note14. Variable Interest Entities As of December31, 2009, the FASB authoritative guidance defines a variable interest entity as a legal entity whose equity owners do not have sufficient equity at risk or a controlling financial interest in the entity. This guidance identifies the primary beneficiary as the variable interest holder that absorbs a majority of expected losses; if no variable interest holder meets this criterion, then it is the variable interest holder that receives a majority of the expected residual returns. The primary beneficiary is required to consolidate the variable interest entity unless specific exceptions or exclusions are met. Edison International uses variable interest entities to conduct its business as described below. Description of Use of Variable Interest Entities EME is a holding company which operates primarily through its subsidiaries and affiliates which are engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from independent power production facilities. EME's subsidiaries or affiliates have typically been formed to own all or some of the interests in one or more power plants and ancillary facilities, with each plant or group of related plants being individually referred to by EME as a project. EME's subsidiaries and affiliates have financed the development and construction or acquisition of its projects by capital contributions from EME and the incurrence of debt or lease obligations by its subsidiaries and affiliates owning the operating facilities. These project level debt or lease obligations are generally structured as non-recourse to EME, with several exceptions, including EME's guarantee of the Powerton and Joliet leases as part of a refinancing of indebtedness incurred by its project subsidiary to purchase the Midwest Generation plants. As a result, these project level debt or lease obligations have structural priority with respect to revenues, cash flows and assets of the project companies over debt obligations incurred by EME as a holding company. Distributions to EME from projects are generally only available after all current debt service or lease obligations at the project level have been paid and are further restricted by contractual restrictions on distributions included in the documentation evidencing the project level debt obligations. Assets of EME's subsidiaries are not available to satisfy EME's obligations or the obligations of any of its other subsidiaries. However, unrestricted cash or other assets that are available for distribution may, subject to applicable law and the terms of financing arrangements of the parties, be advanced, loaned, paid as dividends or otherwise distributed or contributed to EME or to its subsidiary holding companies. In seeking to find and invest in new wind projects, EME has entered into joint development agreements with third-party development companies that provide for funding by an EME subsidiary of development costs including through loans (referred to as development loans) and joint decision-making on key contractual agreements such as power purchase contracts, site agreements and |
Preferred and Preference Stock
Preferred and Preference Stock of Utility Not Subject to Mandatory Redemption | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Preferred and Preference Stock of Utility Not Subject to Mandatory Redemption | Note15. Preferred and Preference Stock of Utility Not Subject to Mandatory Redemption SCE's authorized shares are: $100 cumulative preferred 12million shares, $25 cumulative preferred 24million shares and preference with no par value 50million shares. There are no dividends in arrears for the preferred stock or preference shares. Shares of SCE's preferred stock have liquidation and dividend preferences over shares of SCE's common stock and preference stock. All cumulative preferred stock is redeemable. When preferred shares are redeemed, the premiums paid, if any, are charged to common equity. No preferred stock not subject to mandatory redemption was issued or redeemed in the years ended December31, 2009 and 2008. In January 2008, SCE repurchased 350,000 shares of 4.08% cumulative preferred stock at a price of $19.50 per share. There is no sinking fund requirement for redemptions or repurchases of preferred stock. Shares of SCE's preference stock rank junior to all of the preferred stock and senior to all common stock. Shares of SCE's preference stock are not convertible into shares of any other class or series of SCE's capital stock or any other security. The preference shares are noncumulative and have a $100 liquidation value. There is no sinking fund for the redemption or repurchase of the preference shares. SCE's preferred and preference stock not subject to mandatory redemption is: December31, (in millions, except per-share amounts) Shares Outstanding Redemption Price 2009 2008 Cumulative preferred stock $25 par value: 4.08% Series 650,000 $ 25.50 $ 16 $ 16 4.24% Series 1,200,000 $ 25.80 30 30 4.32% Series 1,653,429 $ 28.75 41 41 4.78% Series 1,296,769 $ 25.80 33 33 Preference stock No par value: 5.349% SeriesA 4,000,000 $ 100.00 400 400 6.125% SeriesB 2,000,000 $ 100.00 200 200 6.00% SeriesC 2,000,000 $ 100.00 200 200 920 920 Less issuance costs (13 ) (13 ) Total $ 907 $ 907 The SeriesA preference stock, issued in 2005, may not be redeemed prior to April30, 2010. After April30, 2010, SCE may, at its option, redeem the shares in whole or in part and the dividend rate may be adjusted. The SeriesB preference stock, issued in 2005, may not be redeemed prior to September30, 2010. After September30, 2010, SCE may, at its option, redeem the shares in whole or in part. The SeriesC preference stock, issued in 2006, may not be redeemed prior to January31, 2011. After January31, 2011, SCE may, at its option, redeem the shares in whole or in part. No preference stock not subject to mandatory redemption was redeemed in the last three years. At December31, 2009 accrued dividends related to SCE's preferred and preference stock not subject to mandatory redemption were $13million. |
Business Segments
Business Segments | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Business Segments | Note16. Business Segments Edison International's reportable business segments include its electric utility operation segment (SCE), a competitive power generation segment (EME), and a financial services and other segment (Edison Capital and other EMG subsidiaries). Edison International evaluates performance based on net income attributable to common shareholders. SCE is a rate-regulated electric utility that supplies electric energy to a 50,000 square-mile area of central, coastal and Southern California. SCE also produces electricity. EME is engaged in the business of developing, acquiring, owning or leasing, operating and selling energy and capacity from electric power generation facilities. EME also conducts hedging and energy trading activities in power markets open to competition. Edison Capital is a provider of financial services with investments worldwide. The significant accounting policies of the segments are the same as those described in Note1. In the past three fiscal years, EME's merchant plants sold electric power generally into the PJM market by participating in PJM's capacity and energy markets or by selling capacity and energy on a bilateral basis. Sales into PJM accounted for approximately 48%, 50% and 51% of EME's consolidated operating revenues for the years ended December31, 2009, 2008 and 2007, respectively. For the years ended December31, 2009 and 2008, a second customer, Constellation Energy Commodities Group,Inc. accounted for 16% and 10%, respectively, of EME's consolidated operating revenues. Sales to Constellation are primarily generated from EME's merchant plants and largely consist of energy sales under forward contracts. In 2008 and 2007, EME also derived a significant source of its revenues from the sale of energy, capacity and ancillary services generated at the Illinois Plants to Commonwealth Edison under load requirements services contracts. These contracts had all expired by May 2009. Sales under these contracts accounted for 12% and 19% of EME's consolidated operating revenues for the years ended December31, 2008 and 2007, respectively. Reportable Segments Information The following is information (including the elimination of intercompany transactions) related to Edison International's reportable segments: (in millions) Electric Utility Competitive Power Generation Financial Services and Other1 Parent and Other2 Edison International Year ended December31, 2009 Operating revenue $ 9,965 $ 2,377 $ 22 $ (3 ) $ 12,361 Depreciation, decommissioning and amortization 1,178 236 3 1 1,418 Interest and dividend income 11 19 11 (9 ) 32 Equity in income (loss) from partnerships and unconsolidated subsidiaries net 100 (11 ) (47 ) 42 Interest expense net of amounts capitalized 420 296 10 6 732 Income tax expense (benefit) continuing operations 249 10 (294 ) (63 ) (98 ) Income (loss) from continuing operations 1,371 207 (598 ) (28 ) 952 Net income (loss) attributable to common shareholders 1,226 |
Acquisitions
Acquisitions | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Acquisitions | Note17. Acquisitions In October 2009, EME completed a transaction with Cedro Hill Wind,LLC to acquire 100% of the membership interests and ownership rights in the Cedro Hill wind project, a 150 MW wind development project in Texas which has a 20-year power purchase agreement with the City of San Antonio. To construct this project, EME plans to install 100 turbines (150 MW) to be purchased under its turbine supply agreement with General Electric Company. This project started construction in October 2009 and is scheduled for completion during the fourth quarter of 2010. The fair value of the Cedro Hill wind project was allocated to property, plant and equipment on EME's consolidated balance sheet. The impact of the Cedro Hill wind project acquisition on EME's consolidated financial statements was not material. EME plans to obtain project financing for this project prior to completion of construction. |
Investments in Leveraged Leases
Investments in Leveraged Leases, Partnerships and Unconsolidated Subsidiaries | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Investments in Leveraged Leases, Partnerships and Unconsolidated Subsidiaries | Note18. Investments in Leveraged Leases, Partnerships and Unconsolidated Subsidiaries Leveraged Leases Edison Capital is a lessor in power and affordable housing projects with terms of 25 to 30years. Pursuant to an agreement with the Internal Revenue Service, Edison Capital terminated its interests in cross-border leases during the first half of 2009 (see "Global Settlement" in Note4 for further discussion). The net proceeds and loss, before income tax, from termination of the cross-border leases were $1.385billion and $920million, respectively. The after-tax loss on termination of the cross-border leases, as well as the federal and state income tax impact of the Global Settlement, was $614million. In addition, Edison Capital sold its interest in another leverage lease transaction, Midland Cogeneration Ventures, during the second quarter of 2009 and recorded a pre-tax gain on sale of $33million, $20million after tax. Each of Edison Capital's leveraged lease transactions was completed and accounted for in accordance with authoritative guidance on accounting for leases. All operating, maintenance, insurance and decommissioning costs are the responsibility of the lessees. The acquisition costs of these facilities were $609million and $6.5billion at December31, 2009 and 2008, respectively. The equity investment in these facilities is generally 20% of the cost to acquire the facilities. The balance of the acquisition costs was funded by nonrecourse debt ($454million as of December31, 2009) secured by first liens on the leased property. The lenders do not have recourse to Edison Capital in the event of loan default. The net income from leveraged leases is: Years ended December31, (in millions) 2009 2008 2007 Income from leveraged leases $ 14 $ 51 $ 50 Tax effect of pre-tax income: Current 16 11 26 Deferred (19 ) (30 ) (43 ) Total tax (expense) benefit (3 ) (19 ) (17 ) Net income from leveraged leases $ 11 $ 32 $ 33 The net investment in leveraged leases (including current portion) is: December31, (in millions) 2009 2008 Rental receivables net $ 200 $ 3,259 Estimated residual value 21 42 Unearned income (42 ) (802 ) Investments in leveraged leases $ 179 $ 2,499 Deferred income taxes (193 ) (2,313 ) Net investments in leveraged leases $ (14 ) $ 186 Rental receivables are net of principal and interest on nonrecourse debt and credit reserves. Credit reserves were $5million and $6million at December31, 2009 and 2008, respectively. The current portion of rentals receivable was $19million and $32million at December31, 2009 and 2008, respectively. First Energy exercised an early buyout right under the terms of an existing lease agreement with Edison Capital related to Unit No.2 of the Beaver Valley Nuclear Power Plant. The termination date of the lease under the early buyout option was June1, 2008. Proceeds from the sale were $72million. Edison Capital recorded a pre-tax gain of $41million ($23million |
Quarterly Financial Data
Quarterly Financial Data (Unaudited) | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | |
Quarterly Financial Data (Unaudited) | Note19. Quarterly Financial Data (Unaudited) 2009 (in millions, except per-share amounts) Total Fourth Third Second First Operating revenue $ 12,361 $ 3,050 $ 3,664 $ 2,834 $ 2,812 Operating income (loss) 1,398 439 768 (364 ) 553 Income from continuing operations 952 227 444 14 266 Income (loss) from discontinued operations net (7 ) (1 ) (1 ) (7 ) 3 Net income (loss) attributable to common shareholders 849 212 403 (16 ) 250 Basic earnings (loss) per share: Continuing operations 2.61 0.65 1.23 (0.03 ) 0.75 Discontinued operations (0.02 ) (0.02 ) 0.01 Total 2.59 0.65 1.23 (0.05 ) 0.76 Diluted earnings (loss) per share: Continuing operations 2.60 0.65 1.22 (0.03 ) 0.75 Discontinued operations (0.02 ) (0.02 ) 0.01 Total 2.58 0.65 1.22 (0.05 ) 0.76 Dividends declared per share 1.245 0.315 0.310 0.310 0.310 Common stock prices: High 36.72 36.72 35.20 32.52 34.17 Low 23.09 31.42 29.71 27.50 23.09 Close 34.78 34.78 33.58 31.46 28.81 2008 (in millions, except per-share amounts) Total Fourth Third Second First Operating revenue $ 14,112 $ 3,228 $ 4,294 $ 3,477 $ 3,113 Operating income 2,563 466 965 506 628 Income from continuing operations 1,348 235 493 298 325 Income (loss) from discontinued operations net 6 (1 ) (5 ) Net income attributable to common shareholders 1,215 217 439 261 299 Basic earnings (loss) per share: Continuing operations 3.69 0.66 1.31 0.79 0.92 Discontinued operations 0.02 (0.01 ) Total 3.69 0.66 1.33 0.79 0.91 Diluted earnings (loss) per share: Continuing operations 3.68 0.66 1.31 0.79 0.92 Discontinued operations 0.02 (0.01 ) Total 3.68 0.66 1.33 0.79 0.91 Dividends declared per share 1.225 0.310 0.305 0.305 0.305 Common stock prices: High 55.70 40.94 52.35 54.17 55.70 Low 26.73 26.73 37.86 49.14 46.81 Close 32.12 32.12 39.90 51.38 49.02 Due to the seasonal nature of Edison International's business, a significant amount of revenue and earnings are recorded in the third quarter of each year. As a result of rounding, the total of the four quarters does not always equal the amount for the year. In 2009, Edison International recorded a charge of $254million, after tax, related to the Global Settlement. |
Schedule I Condensed Financial
Schedule I Condensed Financial Information of Parent | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Schedule I Condensed Financial Information of Parent | |
Schedule I Condensed Financial Information of Parent | EDISON INTERNATIONAL SCHEDULE ICONDENSED FINANCIAL INFORMATION OF PARENT CONDENSED BALANCE SHEETS December31, (in millions) 2009 2008 Assets: Cash and equivalents $ 18 $ 320 Other current assets 668 135 Total current assets 686 455 Investments in subsidiaries 10,124 9,688 Other 13 125 Total assets $ 10,823 $ 10,268 Liabilities and Shareholders' Equity: Accounts payable $ 1 $ 2 Other current liabilities 901 550 Total current liabilities 902 552 Long-term debt 26 24 Other deferred credits 54 175 Common stockholders' equity 9,841 9,517 Total liabilities and common stockholders' equity $ 10,823 $ 10,268 EDISON INTERNATIONAL SCHEDULE ICONDENSED FINANCIAL INFORMATION OF PARENT CONDENSED STATEMENTS OF INCOME For the Years Ended December31, 2009, 2008 and 2007 (in millions, except per-share amounts) 2009 2008 2007 Operating revenue $ 1 $ 27 $ 49 Operating expenses 50 74 83 Operating loss (49 ) (47 ) (34 ) Equity in earnings of subsidiaries 833 1,244 1,116 Income before income taxes 784 1,197 1,082 Income tax benefit (65 ) (18 ) (16 ) Net income $ 849 $ 1,215 $ 1,098 Weighted-average shares of common stock outstanding 325,811 325,811 325,811 Basic earnings per share $ 2.59 $ 3.69 $ 3.33 Diluted earnings per share $ 2.58 $ 3.68 $ 3.31 EDISON INTERNATIONAL SCHEDULE ICONDENSED FINANCIAL INFORMATION OF PARENT CONDENSED STATEMENTS OF CASH FLOWS For the Years Ended December31, 2009, 2008 and 2007 (in millions) 2009 2008 2007 Net cash provided by operating activities $ 267 $ 319 $ 353 Cash flows from financing activities: Proceeds from issuance of long-term debt 9 120 55 Short-term debt financing-net (165 ) 250 Payments on long-term debt (7 ) (75 ) Dividends paid (404 ) (397 ) (378 ) Capital transfer and other (2 ) (9 ) (2 ) Net cash used by financing activities (569 ) (36 ) (400 ) Cash (used) provided by investing activities: Maturities and sales of short-term investments 2,386 Purchase of short-term investments (2,386 ) Net cash provided by investing activities Net increase (decrease) in cash and equivalents (302 ) 283 (47 ) Cash and equivalents, beginning of year 320 37 84 Cash and equivalents, end of year $ 18 $ 320 $ 37 Cash dividends received from consolidated subsidiaries $ 300 $ 325 $ 373 Note1. Basis of Presentation The accompanying condensed financial statements of EIX (parent) should be read in conjunction with the consolidated financial statements and notes thereto of Edison International and subsidiaries ("Registrant") included in PartII, Item8 of this Form10-K. EIX's (parent) significant accounting p |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts | |
12 Months Ended
Dec. 31, 2009 USD / shares | |
Schedule II Valuation and Qualifying Accounts | |
Schedule II Valuation and Qualifying Accounts | EDISON INTERNATIONAL SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS For the Year Ended December31, 2009 Additions (in millions) Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Uncollectible accounts Customers $ 30.8 $ 28.7 $ $ 23.3 $ 36.2 All other 61.0 21.2 12.0 70.2 Total $ 91.8 $ 49.9 $ $ 35.3 (a) $ 106.4 a Accounts written off, net. EDISON INTERNATIONAL SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS For the Year Ended December31, 2008 Additions (in millions) Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Uncollectible accounts Customers $ 20.6 $ 28.7 $ 2.5 $ 21.0 $ 30.8 All other 17.2 9.0 48.1 b 13.3 61.0 Total $ 37.8 $ 37.7 $ 50.6 $ 34.3 (a) $ 91.8 a Accounts written off, net. b For more information, see "Item8. Edison International Notes to Consolidated Financial StatementsNote7. Accumulated Other Comprehensive Income." EDISON INTERNATIONAL SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS For the Year Ended December31, 2007 Additions (in millions) Balance at Beginning of Period Charged to Costs and Expenses Charged to Other Accounts Deductions Balance at End of Period Uncollectible accounts Customers $ 18.5 $ 19.4 $ $ 17.3 $ 20.6 All other 13.0 14.8 10.6 17.2 Total $ 31.5 $ 34.2 $ $ 27.9 (a) $ 37.8 a Accounts written off, net. |
Document and Entity Information
Document and Entity Information (USD $) | |||
In Billions, except Share data | 12 Months Ended
Dec. 31, 2009 | Feb. 25, 2010
| Jun. 30, 2009
|
Document and Entity Information | |||
Entity Registrant Name | EDISON INTERNATIONAL | ||
Entity Central Index Key | 0000827052 | ||
Document Type | 10-K | ||
Document Period End Date | 2009-12-31 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Public Float | 10.25 | ||
Entity Common Stock, Shares Outstanding | 325,811,206 |