Consolidated Statements of Inco
Consolidated Statements of Income (USD $) | ||
In Millions, except Per Share data | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Consolidated Statements of Income | ||
Electric utility | $2,159 | $2,189 |
Competitive power generation | 652 | 624 |
Other | (1) | (1) |
Total operating revenue | 2,810 | 2,812 |
Fuel | 295 | 387 |
Purchased power | 608 | 540 |
Operations and maintenance | 1,037 | 969 |
Depreciation, decommissioning and amortization | 369 | 342 |
Lease terminations and other | 3 | 21 |
Total operating expenses | 2,312 | 2,259 |
Operating income | 498 | 553 |
Interest and dividend income | 19 | 10 |
Equity in income (loss) from partnerships and unconsolidated subsidiaries - net | 18 | (8) |
Other income | 34 | 26 |
Interest expense - net of amounts capitalized | (168) | (187) |
Other expenses | (8) | (6) |
Income from continuing operations before income taxes | 393 | 388 |
Income tax expense | 150 | 122 |
Income from continuing operations | 243 | 266 |
Income from discontinued operations - net of tax | 6 | 3 |
Net income | 249 | 269 |
Less: Net income attributable to noncontrolling interests | 13 | 19 |
Net income attributable to Edison International common shareholders | 236 | 250 |
Amounts attributable to Edison International common shareholders: | ||
Income from continuing operations, net of tax | 230 | 247 |
Income from discontinued operations, net of tax | 6 | 3 |
Net income attributable to Edison International common shareholders | $236 | $250 |
Basic earnings per common share attributable to Edison International common shareholders: | ||
Weighted-average shares of common stock outstanding (in shares) | 326 | 326 |
Continuing operations (in dollars per share) | 0.7 | 0.75 |
Discontinued operations (in dollars per share) | 0.02 | 0.01 |
Total (in dollars per share) | 0.72 | 0.76 |
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) | 328 | 327 |
Continuing operations (in dollars per share) | 0.7 | 0.75 |
Discontinued operations (in dollars per share) | 0.02 | 0.01 |
Total (in dollars per share) | 0.72 | 0.76 |
Dividends declared per common share (in dollars per share) | 0.315 | 0.31 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Consolidated Statements of Comprehensive Income | ||
Net income | $249 | $269 |
Pension and postretirement benefits other than pensions: | ||
Net gain arising during the period | 12 | |
Amortization of net (gain) loss included in net income | (8) | 2 |
Prior service adjustment arising during the period | 2 | |
Amortization of prior service adjustment | (2) | |
Unrealized gain on derivatives qualified as cash flow hedges: | ||
Unrealized holding gain arising during the period, net of income tax expense of $62 and $98 for 2010 and 2009, respectively | 95 | 151 |
Reclassification adjustments included in net income, net of income tax expense of $14 and $32 for 2010 and 2009, respectively | (20) | (49) |
Other comprehensive income | 79 | 104 |
Comprehensive income | 328 | 373 |
Less: Comprehensive income attributable to noncontrolling interests | 13 | 19 |
Comprehensive income attributable to Edison International | $315 | $354 |
1_Consolidated Statements of Co
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Consolidated Statements of Comprehensive Income | ||
Unrealized holding gain arising during the period, income tax expense | $62 | $98 |
Reclassification adjustments included in net income, income tax expense | $14 | $32 |
Consolidated Balance Sheets
Consolidated Balance Sheets (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 12 Months Ended
Dec. 31, 2009 |
ASSETS | ||
Cash and equivalents | $1,418 | $1,673 |
Short-term investments | 10 | 10 |
Receivables, less allowances of $53 for uncollectible accounts at both dates | 843 | 1,017 |
Accrued unbilled revenue | 360 | 347 |
Inventory | 522 | 533 |
Derivative assets | 324 | 357 |
Restricted cash | 66 | 69 |
Margin and collateral deposits | 129 | 125 |
Regulatory assets | 303 | 120 |
Deferred income taxes | 3 | |
Other current assets | 292 | 176 |
Total current assets | 4,267 | 4,430 |
Competitive power generation and other property - less accumulated depreciation of $1,669 and $2,231 at respective dates | 4,917 | 5,147 |
Nuclear decommissioning trusts | 3,248 | 3,140 |
Investments in partnerships and unconsolidated subsidiaries | 527 | 216 |
Investments in leveraged leases | 162 | 160 |
Other investments | 98 | 91 |
Total investments and other assets | 8,952 | 8,754 |
Utility plant, at original cost: | ||
Transmission and distribution | 22,674 | 22,214 |
Generation | 2,680 | 2,667 |
Accumulated depreciation | (6,064) | (5,921) |
Construction work in progress | 2,790 | 2,701 |
Nuclear fuel, at amortized cost | 314 | 305 |
Total utility plant | 22,394 | 21,966 |
Derivative assets | 223 | 268 |
Restricted deposits | 44 | 43 |
Rent payments in excess of levelized rent expense under plant operating leases | 1,083 | 1,038 |
Regulatory assets | 4,675 | 4,139 |
Other long-term assets | 719 | 806 |
Total long-term assets | 6,744 | 6,294 |
Total assets | 42,357 | 41,444 |
LIABILITIES AND EQUITY | ||
Short-term debt | 277 | 85 |
Current portion of long-term debt | 46 | 377 |
Accounts payable | 977 | 1,347 |
Accrued taxes | 190 | 186 |
Accrued interest | 215 | 196 |
Customer deposits | 234 | 238 |
Derivative liabilities | 179 | 107 |
Regulatory liabilities | 288 | 367 |
Deferred income taxes | 155 | |
Other current liabilities | 696 | 884 |
Total current liabilities | 3,257 | 3,787 |
Long-term debt | 11,025 | 10,437 |
Deferred income taxes | 4,522 | 4,334 |
Deferred investment tax credits | 100 | 102 |
Customer advances | 112 | 119 |
Derivative liabilities | 931 | 529 |
Pensions and benefits | 2,090 | 2,061 |
Asset retirement obligations | 3,274 | 3,241 |
Regulatory liabilities | 3,521 | 3,328 |
Other deferred credits and other long-term liabilities | 2,542 | 2,500 |
Total deferred credits and other liabilities | 17,092 | 16,214 |
Total liabilities | 31,374 | 30,438 |
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) | 2,311 | 2,304 |
Accumulated other comprehensive income | 116 | 37 |
Retained earnings | 7,642 | 7,500 |
Total Edison International's common shareholders' equity | 10,069 | 9,841 |
Noncontrolling interests | 7 | 258 |
Preferred and preference stock of utility not subject to mandatory redemption | 907 | 907 |
Total equity | 10,983 | 11,006 |
Total liabilities and equity | $42,357 | $41,444 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | ||
In Millions, except Share data | Mar. 31, 2010
| Dec. 31, 2009
|
Consolidated Balance Sheets | ||
Receivables, allowances for uncollectible accounts (in dollars) | $53 | $53 |
Competitive power generation and other property, accumulated depreciation (in dollars) | $1,669 | $2,231 |
Common stock, par value (in dollars per share) | ||
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 325,811,206 | 325,811,206 |
Common stock, shares outstanding | 325,811,206 | 325,811,206 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (USD $) | ||
In Millions | 3 Months Ended
Mar. 31, 2010 | 3 Months Ended
Mar. 31, 2009 |
Cash flows from operating activities: | ||
Net income | $249 | $269 |
Income from discontinued operations - net of tax | 6 | 3 |
Income from continuing operations | 243 | 266 |
Adjustments to reconcile to net cash provided by operating activities: | ||
Depreciation, decommissioning and amortization | 369 | 342 |
Regulatory impacts of net nuclear decommissioning trust earnings (reflected in accumulated depreciation) | 38 | 32 |
Other amortization | 24 | 26 |
Lease terminations and other | 3 | 21 |
Stock-based compensation | 7 | 5 |
Equity in (income) loss from partnerships and unconsolidated subsidiaries - net | (18) | 8 |
Distributions and dividends from unconsolidated entities | 22 | (3) |
Deferred income taxes and investment tax credits | 218 | 63 |
Income from leveraged leases | (1) | (11) |
Changes in operating assets and liabilities: | ||
Receivables | 150 | 86 |
Inventory | (2) | 4 |
Restricted cash | 3 | |
Margin and collateral deposits - net of collateral received | (6) | (23) |
Other current assets | (154) | 37 |
Rent payments in excess of levelized rent expense | (45) | (49) |
Accounts payable | (138) | (141) |
Accrued taxes | (6) | 85 |
Other current liabilities | (182) | (44) |
Derivative assets and liabilities - net | 695 | (220) |
Regulatory assets and liabilities - net | (636) | 244 |
Other assets | (11) | (13) |
Other liabilities | 20 | (32) |
Operating cash flows from discontinued operations | 6 | 3 |
Net cash provided by operating activities | 599 | 686 |
Cash flows from financing activities: | ||
Long-term debt issued | 547 | 750 |
Long-term debt issuance costs | (20) | (10) |
Long-term debt repaid | (343) | (179) |
Bonds repurchased | (219) | |
Short-term debt financing - net | 192 | (585) |
Stock-based compensation - net | (1) | 1 |
Dividends and distributions to noncontrolling interests | (13) | (25) |
Dividends paid | (103) | (101) |
Net cash provided (used) by financing activities | 259 | (368) |
Cash flows from investing activities: | ||
Capital expenditures | (951) | (785) |
Purchase of interest in acquired companies | (6) | |
Proceeds from termination of leases | 121 | |
Proceeds from sale of nuclear decommissioning trust investments | 286 | 658 |
Purchases of nuclear decommissioning trust investments and other | (335) | (700) |
Proceeds from partnerships and unconsolidated subsidiaries, net of investment | 32 | 10 |
Maturities and sale of short-term investments | 2 | 1 |
Purchase of short-term investments | (1) | (1) |
Investments in other assets | (55) | 11 |
Net cash used by investing activities | (1,022) | (691) |
Effect of consolidation of variable interest entities | 5 | |
Effect of deconsolidation of variable interest entities | (96) | |
Net decrease in cash and equivalents | (255) | (373) |
Cash and equivalents, beginning of period | 1,673 | 3,916 |
Cash and equivalents, end of period | $1,418 | $3,543 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | |
3 Months Ended
Mar. 31, 2010 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note1. Summary of Significant Accounting Policies Edison International's principal wholly owned subsidiaries are 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 competitive power generation subsidiary. EMG 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. EMG's subsidiaries also conduct hedging and energy trading activities in competitive power markets. Basis of Presentation Edison International's significant accounting policies were described in Note1 of "Edison International Notes to Consolidated Financial Statements" included in its 2009 Annual Report on Form10-K. Edison International follows the same accounting policies for interim reporting purposes, with the exception of accounting principles adopted as of January1, 2010 as discussed below in "New Accounting Guidance." This quarterly report should be read in conjunction with such financial statements. In the opinion of management, all adjustments, including recurring accruals, have been made that are necessary to fairly state the consolidated financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America for the periods covered by this quarterly report on Form10-Q. The results of operations for the three month period ended March31, 2010 are not necessarily indicative of the operating results for the full year. Management has performed an evaluation of subsequent events through the date the financial statements were issued. The December31, 2009 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Except as indicated, amounts presented in the Notes to the Consolidated Financial Statements relate to continuing operations. Cash and Equivalents Cash equivalents included money market funds totaling $1.05billion and $1.46billion at March31, 2010 and December31, 2009, respectively. The carrying value of cash equivalents equals the fair value, as all investments have maturities of less than three months. For further discussion of money market funds, see Note10. Edison International has a cash management program under which the ending daily cash balance in its primary disbursement accounts are temporarily invested until required for check clearing. Edison International reclassified $240million and $224million of checks issued against these accounts, but not yet paid by the financial institution, from cash to accounts payable at March31, 2010 and December31, 2009, respectively. Earnings Per Share Edison International computes EPS using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based comp |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | |
3 Months Ended
Mar. 31, 2010 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | Note2. Derivative Instruments and Hedging Activities Electric Utility 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. 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. SCE recovers its related hedging costs through the ERRA balancing account and as a result, exposure to commodity price risk 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. A portion 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. Notional Volumes of Derivative Instruments The following table summarizes the notional volumes of derivatives used for hedging activities: March31, 2010 December31, 2009 Commodity Unit of Measure Economic Hedges Economic Hedges (Unaudited) Electricity options, swaps and forward arrangements GWh 14,943 14,868 Natural gas options, swaps and forward arrangements Bcf 251 266 Congestion revenue rights GWh 180,518 195,367 Tolling arrangements1 GWh 116,398 116,398 1 In compliance with a CPUC mandate, SCE held an open, competitive solicitation that produced agreements with different project developers who have agreed to construct new southern California generating resources. SCE has entered into a number of contracts which are recorded as derivative instruments. The contracts provide for fixed capacity payments as well as pricing for energy delivered based on a heat rate and contractual operation and maintenance prices. However, due to uncertainty regarding the availability of required emission credits, some of the new generating resources may not be constructed and the contracts associated with these resources could therefore terminate, at which time SCE would no longer account for these contracts as derivatives. Fair Value of Derivative Instruments The following table summarizes the gross and net fair values of commodity derivative instruments at March31, 2010: |
Liabilities and Lines of Credit
Liabilities and Lines of Credit | |
3 Months Ended
Mar. 31, 2010 | |
Liabilities and Lines of Credit | |
Liabilities and Lines of Credit | Note3. Liabilities and Lines of Credit Long-Term Debt In March 2010, SCE issued $500million of 5.5% first and refunding mortgage bonds due in 2040. The bond proceeds were used to repay commercial paper borrowings and for general corporate purposes. In March 2010, EMG completed through its subsidiary, Cedro Hill Wind,LLC, a non-recourse financing of its interests in the Cedro Hill wind project. The financing included a $135.3million construction loan that is required to be converted to a 15-year amortizing term loan by May31, 2011, subject to specific conditions. As of March31, 2010, there was $47million outstanding under the construction loan at a weighted average interest rate of 3.24%. EMG consolidated the Ambit project in the first quarter of 2010. At March31, 2010, this project had $71million of bonds payable. Principal payments are due annually through October1, 2017. Interest rates are reset weekly based on current bond yields for similar securities. The average interest rate for the quarter ended March31, 2010 was 0.23%. Annual maturities of this debt at March31, 2010 for the next five years are summarized as follows: $8million in 2010, $8million in 2011, $9million in 2012, $10million in 2013, and $10million in 2014. In January 2010, Edison Capital repaid in full its medium-term loans. The balance of these loans was $89million at December31, 2009. Credit Agreements and Short-Term Debt SCE's short-term debt is generally used to finance fuel inventories, balancing account under-collections and general, temporary cash requirements including power purchase payments. At March31, 2010, the outstanding short-term debt was $180million at a weighted-average interest rate of .28%. This short-term debt was supported by a $2.4billion credit line. At December31, 2009, the outstanding short-term debt was zero. Edison International (parent) short-term debt is generally used to finance operating expenses and dividends. At March31, 2010, the outstanding short-term debt was $97million at a weighted-average interest rate of .61%. At December31, 2009, the outstanding short-term debt was $85million at a weighted-average interest rate of .60%. Letters of Credit As of March31, 2010, letters of credit under EME and its subsidiaries' credit facilities aggregated $128million and are scheduled to expire as follows: $77million in 2010 and $51million in 2011. Letters of credit under SCE's credit facility aggregated $82million and are scheduled to expire in 2010. |
Income Taxes
Income Taxes | |
3 Months Ended
Mar. 31, 2010 | |
Income Taxes | |
Income Taxes | Note4. Income Taxes Edison International's effective tax rates were 39% and 33% (excluding income attributable to non-controlling interests) for the three months ended March31, 2010 and 2009, respectively. The increase in the effective tax rate was primarily due to a $39million non-cash charge recorded in the first quarter of 2010 to reverse previously recognized federal tax benefits eliminated by the federal health care legislation enacted in March 2010, partially offset by higher property-related flow-through tax deductions in 2010 at SCE. The Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act, was enacted in March 2010. The new health care legislation includes a provision that eliminates the federal tax deduction of retiree health care costs to the extent those costs are eligible for federal Medicare PartD subsidies. Although this change does not take effect until January1, 2013, Edison International is required to recognize the full accounting impact of the legislation in its financial statements in the period of enactment. The CPUC requires flow-through rate-making treatment for the current tax benefit arising from certain property-related and other temporary differences, which reverse over time. The accounting treatment for these temporary differences results in recording regulatory assets and liabilities for amounts that would otherwise be recorded to deferred income tax expense. EMG applied for U.S. Treasury grants in January 2010 for PhaseII of the Goat Wind and High Lonesome wind projects in lieu of investment tax credits and received proceeds, pursuant to these applications, of approximately $92million from the U.S. Treasury Department in April 2010. Accounting for Uncertainty in Income Taxes Unrecognized tax benefits increased $119million during the first quarter of 2010 mainly as a result of tax positions taken for a prior period. |
Compensation and Benefit Plans
Compensation and Benefit Plans | |
3 Months Ended
Mar. 31, 2010 | |
Compensation and Benefit Plans | |
Compensation and Benefit Plans | Note5. Compensation and Benefit Plans Pension Plans and Postretirement Benefits Other Than Pensions Pension Plans For the three months ended March31, 2010, Edison International made 2010 plan year contributions of $22million and expects to make $86million of additional contributions during the remainder of 2010. SCE recovers contributions made to most of its pension plans through CPUC-approved regulatory mechanisms. Annual contributions to these plans are expected to be, at a minimum, equal to the related annual expense. Expense components are: Three Months Ended March31, (in millions) 2010 2009 (Unaudited) Service cost $ 34 $ 32 Interest cost 54 52 Expected return on plan assets (52 ) (42 ) Amortization of prior service cost 2 4 Amortization of net loss 7 14 Expense under accounting standards 45 60 Regulatory adjustment deferred (14 ) (37 ) Total expense recognized $ 31 $ 23 Postretirement Benefits Other Than Pensions For the three months ended March31, 2010, Edison International made 2010 plan year contributions of $5million and expects to make $40million of additional 2010 plan year contributions during the remainder of 2010. SCE's annual contributions are recovered through CPUC-approved regulatory mechanisms and are expected to be, at a minimum, equal to its total annual expense. Expense components are: Three Months Ended March31, (in millions) 2010 2009 (Unaudited) Service cost $ 8 $ 11 Interest cost 31 36 Expected return on plan assets (25 ) (21 ) Amortization of prior service cost (credit) (9 ) (8 ) Amortization of net loss 8 16 Total expense $ 13 $ 34 Stock-Based Compensation During the first quarter of 2010, Edison International granted its 2010 stock-based compensation awards, which included stock options, performance shares and restricted stock units. Total stock-based compensation expense (reflected in the caption "Other operation and maintenance" on the consolidated statements of income) was $8million and $5million for the three months ended March31, 2010 and 2009, respectively. The income tax benefit recognized in the consolidated statements of income was $3million and $2million for the three months ended March31, 2010 and 2009, respectively. Consistent with SCE's 2009 GRC, no stock-based compensation was capitalized beginning in 2009. Excess tax benefits included in "Stock-based compensation net" in the financing section of the consolidated statements of cash flows were $1million and $2million for the three months ended March31, 2010 and 2009, respectively. Stock Options The following is a summary of the status of Edison International stock options: Weighted-Average Stock options Exercise Price Remaining Contractual Term (Years) Aggregate Intrinsic Value (Unaudited) Outstanding at December31, 2009 17,368,032 $ 32.15 Granted 3,614,245 33.30 Forfeited (83,3 |
Commitments and Contingencies
Commitments and Contingencies | |
3 Months Ended
Mar. 31, 2010 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note6. Commitments and Contingencies Other Commitments At March31, 2010, EMG's subsidiaries had firm commitments to spend approximately $462million during the remainder of 2010 on capital and construction expenditures. These expenditures primarily relate to the construction of wind projects and non-environmental improvements at the fossil-fueled facilities. EMG intends to fund these expenditures through project level and turbine vendor financing, U.S. Treasury grants, cash on hand and cash generated from operations. EMG has entered into various turbine supply agreements with vendors to support its wind development efforts. As of March31, 2010, EMG had commitments to purchase 129 wind turbines (268 MW) and had 13 wind turbines (33 MW) in storage to be used for future wind projects. EMG has 59 wind turbines (102 MW) available for future projects, excluding turbines allocated to projects in construction and pending construction and turbines subject to a legal dispute. EMG has payment commitments related to the 59 wind turbines of $82million remaining in 2010 and $4million due in 2011. EMG's turbine supply agreement with Mitsubishi Power Systems Americas,Inc. is subject to a legal dispute. EMG has made deposits of $68million for the purchase of 83 wind turbines (199 MW) under this agreement. The resolution of this dispute could impact future payments due under this agreement. The remaining payments under this agreement subject to dispute are $289million, mostly related to undelivered wind turbines. For additional information regarding this dispute, see "Legal Proceedings" in PartII of this quarterly report. At March31, 2010, Midwest Generation and Homer City had fuel purchase commitments with various third-party suppliers for the purchase of coal. Based on the contract provisions, which consist of fixed prices, subject to adjustment clauses, these minimum commitments are estimated to aggregate $1.0billion, summarized as follows: $351million for the remainder of 2010, $389million in 2011, $247million in 2012, and $33million in 2013. At March31, 2010, Midwest Generation and Homer City had contractual agreements for the transport of coal to their respective facilities. The commitments under these contracts are based on either actual coal purchases or minimum quantities. Accordingly, contractual obligations for transportation based on actual coal purchases are derived from committed coal volumes set forth in fuel supply contracts. The minimum commitments under these contracts are estimated to aggregate $369million, summarized as follows: $198million for the remainder of 2010, and $171million in 2011. EME and SCE have letters of credit outstanding under their credit facilities. For further discussion, see Note3. Guarantees and Indemnities Edison International's subsidiaries have various financial and performance guarantees and indemnifications which are issued in the normal course of business. As discussed below, these contracts include performance guarantees, guarantees of debt and indemnifications. Environmental Indemnities Related to the Midwest Generation Plants In connection with the acquisition of the Midwest G |
Consolidated Statement of Chang
Consolidated Statement of Changes in Equity | |
3 Months Ended
Mar. 31, 2010 | |
Consolidated Statement of Changes in Equity | |
Consolidated Statement of Changes in Equity | Note7. Consolidated Statement of Changes in Equity The following table provides the changes in equity for the three months ended March31, 2010: Equity Attributable to Edison International Noncontrolling Interests (in millions) Common Stock Accumulated Other Comprehensive Income Retained Earnings Subtotal Other Preferred and Preference Stock Total Equity (Unaudited) Balance at December31, 2009 $ 2,304 $ 37 $ 7,500 $ 9,841 $ 258 $ 907 $ 11,006 Net income 236 236 13 249 Other comprehensive income 79 79 79 Deconsolidation of variable interest entities (249 ) (249 ) Cumulative effect of a change in accounting principle, net of tax 15 15 15 Common stock dividends declared ($0.315 per share) (103 ) (103 ) (103 ) Dividends, distributions to noncontrolling interests and other (2 ) (13 ) (15 ) Stock-based compensation net 2 (2 ) Noncash stock-based compensation and other 5 (4 ) 1 1 Balance at March31, 2010 $ 2,311 $ 116 $ 7,642 $ 10,069 $ 7 $ 907 $ 10,983 The following table provides the changes in equity for the three months ended March31, 2009: Equity Attributable to Edison International Noncontrolling Interests (in millions) Common Stock Accumulated Other Comprehensive Income Retained Earnings Subtotal Other Preferred and Preference Stock Total Equity (Unaudited) Balance at December31, 2008 $ 2,272 $ 167 $ 7,078 $ 9,517 $ 285 $ 907 $ 10,709 Net income 250 250 6 13 269 Other comprehensive income 104 104 104 Common stock dividends declared ($0.31 per share) (101 ) (101 ) (101 ) Dividends, distributions to noncontrolling interests and other (14 ) (13 ) (27 ) Stock-based compensation net 2 (1 ) 1 1 Noncash stock-based compensation and other 4 (7 ) (3 ) (3 ) Balance at March31, 2009 $ 2,278 $ 271 $ 7,219 $ 9,768 $ 277 $ 907 $ 10,952 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | |
3 Months Ended
Mar. 31, 2010 | |
Accumulated Other Comprehensive Income | |
Accumulated Other Comprehensive Income | Note8. Accumulated Other Comprehensive Income Edison International's accumulated other comprehensive income consists of: (in millions) Unrealized Gain on Cash Flow Hedges Pension and PBOP Net Gain (Loss) Pension and PBOP Prior Service Cost Accumulated Other Comprehensive Income (Unaudited) Balance at December31, 2009 $ 105 $ (70 ) $ 2 $ 37 Current period change 75 4 79 Balance at March31, 2010 $ 180 $ (66 ) $ 2 $ 116 Included in accumulated other comprehensive income at March31, 2010 was $183million, net of tax, of unrealized gains on commodity-based cash flow hedges. Unrealized gains on commodity hedges consist of 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. Approximately $160million of the unrealized gains on cash flow hedges, net of tax, at March31, 2010 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 commodity cash flow hedge is designated is through December31, 2012. |
Supplemental Cash Flows Informa
Supplemental Cash Flows Information | |
3 Months Ended
Mar. 31, 2010 | |
Supplemental Cash Flows Information | |
Supplemental Cash Flows Information | Note9. Supplemental Cash Flows Information Edison International's supplemental cash flows information is: Three Months Ended March31, (in millions) 2010 2009 (Unaudited) Cash payments (receipts) for interest and taxes Interest net of amounts capitalized $ 137 $ 137 Tax payments (receipts) 10 (33 ) Noncash investing and financing activities Consolidation of variable interest entities: Assets other than cash $ 94 $ Liabilities and non-controlling interests 99 Deconsolidation of variable interest entities: Assets other than cash $ 380 $ Liabilities and non-controlling interests 476 Dividends declared but not paid Common stock $ 103 $ 101 Preferred and preference stock of utility not subject to mandatory redemption 8 8 |
Fair Value Measurements
Fair Value Measurements | |
3 Months Ended
Mar. 31, 2010 | |
Fair Value Measurements | |
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 are primarily commodity contracts for the purchase and sale of 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. Investments in money market funds are generally classified as Level1, as fair value is determined by observable market prices in active markets. EMG's derivative contracts, valued based on forward market prices in active markets (PJM West Hub, Northern Illinois Hub peak and AEP/Dayton) adjusted for nonperformance risks, are classified as Level2. EMG obtains forward market prices from traded exchanges (ICE Futures U.S. or New York Mercantile Exchange) and available broker quotes. Then, EMG 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 EMG believes to provide the most liquid market for the commodity. EMG 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 fi |
Regulatory Assets and Liabiliti
Regulatory Assets and Liabilities | |
3 Months Ended
Mar. 31, 2010 | |
Regulatory Assets and Liabilities | |
Regulatory Assets and Liabilities | Note11. Regulatory Assets and Liabilities Regulatory assets included on the consolidated balance sheets are: (in millions) March31, 2010 December31, 2009 (Unaudited) Current: Regulatory balancing accounts $ 166 $ 94 Energy derivatives 136 25 Other 1 1 303 120 Long-term: Regulatory balancing accounts 51 43 Deferred income taxes net 1,640 1,561 Unamortized nuclear investment net 325 340 Nuclear-related ARO investment net 253 258 Unamortized coal plant investment net 73 73 Unamortized loss on reacquired debt 282 287 Pensions and other postretirement benefits 1,009 1,014 Energy derivatives 826 357 Environmental remediation 39 36 Other 177 170 4,675 4,139 Total Regulatory Assets $ 4,978 $ 4,259 Regulatory liabilities included on the consolidated balance sheets are: (in millions) March31, 2010 December31, 2009 (Unaudited) Current: Regulatory balancing accounts $ 282 $ 363 Other 6 4 288 367 Long-term: Regulatory balancing accounts 750 642 ARO 230 171 Costs of removal 2,541 2,515 3,521 3,328 Total Regulatory Liabilities $ 3,809 $ 3,695 |
Other Income and Expenses
Other Income and Expenses | |
3 Months Ended
Mar. 31, 2010 | |
Other Income and Expenses | |
Other Income and Expenses | Note12. Other Income and Expenses Other income and expenses are as follows: Three Months Ended March31, (in millions) 2010 2009 (Unaudited) Other Income: Equity AFUDC $ 27 $ 16 Increase in cash surrender value of life insurance policies 6 6 Other 1 4 Total utility other income 34 26 Competitive power generation and parent Total other income $ 34 $ 26 Other Expense: Civic, political and related activities and donations $ 5 $ 4 Other 5 4 Total utility other expense 10 8 Competitive power generation and parent (2 ) (2 ) Total other expenses $ 8 $ 6 |
Variable Interest Entities
Variable Interest Entities | |
3 Months Ended
Mar. 31, 2010 | |
Variable Interest Entities | |
Variable Interest Entities | Note13. Variable Interest Entities Effective January1, 2010, Edison International adopted the FASB's new guidance regarding variable interest entities ("VIEs"). A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb losses, or the right to receive the expected residual returns of the entity. The new guidance replaces the predominantly quantitative model for determining which reporting entity, if any, has a controlling financial interest in a VIE with a qualitative approach. Under this new qualitative model, the primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE unless specific exceptions or exclusions are met. Commercial and operating activities are generally the factors that most significantly impact the economic performance of VIEs in which Edison International has a variable interest. Commercial and operating activities include construction, operation and maintenance, fuel procurement, dispatch and compliance with regulatory and contractual requirements. Projects or Entities that are Consolidated At March31, 2010 and December31, 2009, EMG had majority interests in 15 wind projects with a total generating capacity of 700 MW that have minority interests held by others. The projects are located in Iowa, Minnesota, New Mexico, Nebraska and Texas. As of December31, 2009, all of these projects were consolidated by Edison International. Upon the application of the new authoritative guidance effective January1, 2010, Edison International deconsolidated two of these projects. See further discussion below in "Projects that are not Consolidated." In determining that EMG was the primary beneficiary of the 13 projects consolidated at March31, 2010, the key factors considered were EMG's ability to direct commercial and operating activities and EMG's obligation to absorb losses and right to receive benefits that could potentially be significant to the variable interest entities. The following table presents summarized financial information of the wind projects that had minority interests held by others and were consolidated by Edison International: (in millions) March31, 2010 December31, 2009 (Unaudited) Current assets $ 62 $ 73 Net property, plant and equipment1 690 944 Other long-term assets 2 2 Total assets1 $ 754 $ 1,019 Current liabilities $ 15 $ 17 Long-term obligations net of current maturities 19 20 Deferred revenues 57 58 Other long-term liabilities 19 21 Total liabilities $ 110 $ 116 Noncontrolling interests $ 5 $ 76 1 Amounts included asset |
Business Segments
Business Segments | |
3 Months Ended
Mar. 31, 2010 | |
Business Segments | |
Business Segments | Note14. Business Segments Edison International's reportable business segments include its electric utility operation segment (SCE) and a competitive power generation segment (EMG). Prior to January1, 2010, Edison International reported three business segments; electric utility operations segment, competitive power generation segment and financial services segments. As a result of termination of the cross-border leases during 2009 and the continued decline of the remaining portfolio of the financial services segment, the remaining business activity is no longer significant enough to report separately. Accordingly, the financial services segment has been combined into the competitive power generation segment for all periods presented. The combination of these business activities is consistent with the management structure of EMG and evaluation of performance by Edison International. The significant accounting policies of the segments are the same as those described in Note1. Segment income statement information was: Three Months Ended March31, (in millions) 2010 2009 (Unaudited) Operating Revenue (Loss): Electric utility $ 2,159 $ 2,189 Competitive power generation 652 624 Parent and other2 (1 ) (1 ) Consolidated Edison International 2,810 2,812 Net Income (Loss) attributable to Edison International: Electric utility 164 208 Competitive power generation1 77 48 Parent and other2 (5 ) (6 ) Consolidated Edison International $ 236 $ 250 Segment balance sheet information was: (in millions) March31, 2010 December31, 2009 (Unaudited) Total Assets: Electric utility $ 32,975 $ 32,474 Competitive power generation 9,787 9,543 Parent and other2 (405 ) (573 ) Consolidated Edison International $ 42,357 $ 41,444 1 Includes earnings from discontinued operations of $6million and $3million for the three months ended March31, 2010 and 2009, respectively. 2 Includes amounts from Edison International (parent) and other Edison International subsidiaries that are not significant as a reportable segment, as well as intercompany eliminations. |
Document and Entity Information
Document and Entity Information | ||
3 Months Ended
Mar. 31, 2010 | May. 03, 2010
| |
Document and Entity Information | ||
Entity Registrant Name | EDISON INTERNATIONAL | |
Entity Central Index Key | 0000827052 | |
Document Type | 10-Q | |
Document Period End Date | 2010-03-31 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 325,811,206 | |
Document Fiscal Year Focus | 2,010 | |
Document Fiscal Period Focus | Q1 |