 | NEWS | |
FOR IMMEDIATE RELEASE
Media relations contact:
Charles Coleman, (626) 302-7982
Investor relations contact:
Scott Cunningham, (626) 302-2540
Edison International Reports Third Quarter 2014 Results
ROSEMEAD, Calif., October 28, 2014 - Edison International (NYSE: EIX) today reported third quarter 2014 net income on a GAAP basis of $480 million, or $1.47 per share, compared to $438 million, or $1.34 per share, in the third quarter of 2013. On an adjusted basis, Edison International’s third quarter 2014 core earnings were $496 million, or $1.52 per share, compared to $463 million, or $1.42 per share, in the third quarter of 2013.
Southern California Edison’s (SCE) third quarter 2014 core earnings increased $26 million, or $0.08 per share, primarily due to higher authorized revenues from rate base growth partially offset by lower income tax benefits. Edison International Parent and Other’s third quarter core losses decreased $7 million, or $0.02 per share, primarily due to higher income from Edison Capital's investments in affordable housing projects and higher income tax benefits, partially offset by higher corporate and new business expenses.
Edison International's third quarter 2014 core earnings exclude losses of $16 million, or $0.05 per share, from discontinued operations. Edison International's third quarter 2013 core earnings exclude losses of $25 million, or $0.08 per share, from discontinued operations.
“Edison International has delivered another quarter of strong financial results, and we have increased our 2014 core earnings guidance to $4.25-$4.35 per share," said Ted Craver, chairman and chief executive officer of Edison International. "The increased guidance complements our continued efforts to reduce uncertainties and return our dividend to the targeted payout level, in steps over time."
Year-to-Date Earnings
For the nine months period ended September 30, 2014, Edison International reported net income on a GAAP basis of $1,192 million, or $3.66 per share, compared to $614 million, or $1.88 per share, during the same period in 2013. On an adjusted basis, Edison International’s core earnings were $1,142 million, or $3.50 per share, compared to $973 million, or $2.98 per share, in the year-to-date period in 2013.
SCE’s core earnings for the nine months ended September 30, 2014, increased $161 million, or $0.49 per share, from the nine months ended September 30, 2013, primarily due to higher authorized revenues from rate base growth, higher income tax benefits, lower severance costs, and other income. Edison International Parent and Other’s core losses for the nine month period ended September 30, 2014, decreased $8 million, or $0.03 per share, from the nine months ended September 30, 2013, primarily due to higher income tax benefits and higher income from Edison Capital's investments in affordable housing projects, partially offset by new business expenses.
Edison International's year-to-date 2014 core earnings exclude charges of $96 million, or $0.29 per share, related to SCE’s settlement agreement for San Onofre Nuclear Generating Station (SONGS) and $146 million, or $0.45 per share, of income from discontinued operations. Year-to-date 2013 core earnings exclude the $365 million, or $1.12 per share, SONGS charge, and $7 million, or $0.02 per share, of earnings from tax benefits related to the sale of a lease investment in 2012.
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Edison International Reports Third Quarter 2014 Financial Results
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Edison International uses core earnings, which is a non-GAAP financial measure that adjusts for significant discrete items that management does not consider representative of ongoing earnings. Edison International management believes that core earnings provide more meaningful comparisons of performance from period to period. Please see the attached tables for a reconciliation of core earnings to basic earnings.
2014 Earnings Guidance
The company increased its 2014 core earnings guidance to $4.25 to $4.35 per share and its basic earnings guidance to $4.41 to $4.51 per share. See the risk disclosure statement in the Appendix and the presentation accompanying the company’s conference call for further information.
Reconciliation of 2014 Core Earnings Guidance to Basic Earnings Guidance
| 2014 Earnings Guidance | 2014 Earnings Guidance | ||||||
| as of 4/29/14 | as of 10/28/14 | ||||||
| Low | Mid | High | Low | Mid | High | ||
| SCE | $3.85 | $4.43 | |||||
| EIX Parent & Other | (0.15) | (0.13) | |||||
| EIX Core EPS | $3.60 | $3.70 | $3.80 | $4.25 | $4.30 | $4.35 | |
| Non-core Items* | (0.36) | (0.36) | (0.36) | 0.16 | 0.16 | 0.16 | |
| EIX Basic EPS | $3.24 | $3.34 | $3.44 | $4.41 | $4.46 | $4.51 | |
*Represents non-core items recorded for the three months ended March 31, 2014, and nine months ended September 30, 2014, respectively.
About Edison International
Edison International (NYSE:EIX), through its subsidiaries, is a generator and distributor of electric power and an investor in energy services and technologies, including renewable energy. Headquartered in Rosemead, Calif., Edison International is the parent company of Southern California Edison, one of the nation’s largest electric utilities.
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Edison International Reports Third Quarter 2014 Financial Results
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Appendix
Use of Non-GAAP Financial Measures
Edison International’s earnings are prepared in accordance with generally accepted accounting principles used in the United States and represent the company’s earnings as reported to the Securities and Exchange Commission. Our management uses core earnings and core earnings per share (EPS) internally for financial planning and for analysis of performance. We also use core earnings and core EPS when communicating with analysts and investors regarding our earnings results to facilitate comparisons of the Company’s performance from period to period. Financial measures referred to net income, basic EPS, core earnings, or core EPS also applies to the description of earnings or earnings per share.
Core earnings and core EPS are non-GAAP financial measures and may not be comparable to those of other companies. Core earnings and core EPS are defined as basic earnings and basic EPS excluding income or loss from discontinued operations and income or loss from significant discrete items that management does not consider representative of ongoing earnings. Basic earnings and losses refer to net income or losses attributable to Edison International shareholders. Core earnings are reconciled to basic earnings in the attached tables. The impact of participating securities (vested awards that earn dividend equivalents that may participate in undistributed earnings with common stock) for the principal operating subsidiary is not material to the principal operating subsidiary’s EPS and is therefore reflected in the results of the Edison International holding company, which is included in Edison International Parent and Other.
Risk Disclosure Statement
Forward-looking statements about the financial outlook for Edison International and its subsidiaries are included in this news release. These forward-looking statements reflect our current expectations; however, such statements involve risks and uncertainties. Actual results could differ materially from current expectations. Important factors that could cause different results are discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Edison International’s Form 10-K, most recent Form 10-Q, and other reports and presentations filed with the Securities and Exchange Commission which are available at: www.edisoninvestor.com. These forward-looking statements represent our expectations only as of the date of this news release, and Edison International assumes no duty to update them to reflect new information, events or circumstances.
Reminder: Edison International Will Hold a Conference Call Today
When: Tuesday, October 28, 2014, 2:00 p.m. (Pacific Time)
Telephone Numbers: 1-800-369-2198 (US) and 1-773-756-4618 (Int'l) - Passcode: Edison
Telephone Replay: 1-866-443-2924 (US) and 1-203-369-1100 (Int’l) - Passcode: 254516
Telephone replay available through November 6, 2014
Webcast: www.edisoninvestor.com
Edison International Reports Third Quarter 2014 Financial Results
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Third Quarter Reconciliation of
Core Earnings Per Share to Basic Earnings Per Share
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| 2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||
| Earnings (loss) per share attributable to Edison International | |||||||||||||||||||||||
| Continuing operations | |||||||||||||||||||||||
| SCE | $ | 1.54 | $ | 1.46 | $ | 0.08 | $ | 3.29 | $ | 1.97 | $ | 1.32 | |||||||||||
| Edison International Parent and Other | (0.02 | ) | (0.04 | ) | 0.02 | (0.08 | ) | (0.09 | ) | 0.01 | |||||||||||||
| Discontinued operations | (0.05 | ) | (0.08 | ) | 0.03 | 0.45 | — | 0.45 | |||||||||||||||
| Edison International | 1.47 | 1.34 | 0.13 | 3.66 | 1.88 | 1.78 | |||||||||||||||||
| Less: Non-core items | |||||||||||||||||||||||
| SCE | — | — | — | (0.29 | ) | (1.12 | ) | 0.83 | |||||||||||||||
| Edison International Parent and Other | — | — | — | — | 0.02 | (0.02 | ) | ||||||||||||||||
| Discontinued operations | (0.05 | ) | (0.08 | ) | 0.03 | 0.45 | — | 0.45 | |||||||||||||||
| Total non-core items | (0.05 | ) | (0.08 | ) | 0.03 | 0.16 | (1.10 | ) | 1.26 | ||||||||||||||
| Core earnings (losses) | |||||||||||||||||||||||
| SCE | 1.54 | 1.46 | 0.08 | 3.58 | 3.09 | 0.49 | |||||||||||||||||
| Edison International Parent and Other | (0.02 | ) | (0.04 | ) | 0.02 | (0.08 | ) | (0.11 | ) | 0.03 | |||||||||||||
| Edison International | $ | 1.52 | $ | 1.42 | $ | 0.10 | $ | 3.50 | $ | 2.98 | $ | 0.52 | |||||||||||
Note: Diluted earnings were $1.46 and $1.34 per share for the three months ended September 30, 2014 and 2013, respectively, and $3.62 and $1.87 per share for the nine months ended September 30, 2014 and 2013, respectively.
Third Quarter Reconciliation of
Core Earnings to Basic Earnings (in millions)
| Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
| (in millions) | 2014 | 2013 | Change | 2014 | 2013 | Change | |||||||||||||||||
| Net income (loss) attributable to Edison International | |||||||||||||||||||||||
| Continuing operations | |||||||||||||||||||||||
| SCE | $ | 503 | $ | 477 | $ | 26 | $ | 1,072 | $ | 642 | $ | 430 | |||||||||||
| Edison International Parent and Other | (7 | ) | (14 | ) | 7 | (26 | ) | (27 | ) | 1 | |||||||||||||
| Discontinued operations | (16 | ) | (25 | ) | 9 | 146 | (1 | ) | 147 | ||||||||||||||
| Edison International | 480 | 438 | 42 | 1,192 | 614 | 578 | |||||||||||||||||
| Less: Non-core items | |||||||||||||||||||||||
| SCE | — | — | — | (96 | ) | (365 | ) | 269 | |||||||||||||||
| Edison International Parent and Other | — | — | — | — | 7 | (7 | ) | ||||||||||||||||
| Discontinued operations | (16 | ) | (25 | ) | 9 | 146 | (1 | ) | 147 | ||||||||||||||
| Total non-core items | (16 | ) | (25 | ) | 9 | 50 | (359 | ) | 409 | ||||||||||||||
| Core earnings (losses) | |||||||||||||||||||||||
| SCE | 503 | 477 | 26 | 1,168 | 1,007 | 161 | |||||||||||||||||
| Edison International Parent and Other | (7 | ) | (14 | ) | 7 | (26 | ) | (34 | ) | 8 | |||||||||||||
| Edison International | $ | 496 | $ | 463 | $ | 33 | $ | 1,142 | $ | 973 | $ | 169 | |||||||||||
Edison International Reports Third Quarter 2014 Financial Results
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| Consolidated Statements of Income | Edison International | |||||||||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
| (in millions, except per-share amounts, unaudited) | 2014 | 2013 | 2014 | 2013 | ||||||||||||
| Operating revenue | $ | 4,356 | $ | 3,960 | $ | 10,298 | $ | 9,638 | ||||||||
| Fuel | 77 | 95 | 219 | 249 | ||||||||||||
| Purchased power | 2,105 | 1,713 | 4,344 | 3,569 | ||||||||||||
| Operation and maintenance | 879 | 971 | 2,480 | 2,809 | ||||||||||||
| Depreciation, decommissioning and amortization | 424 | 392 | 1,248 | 1,224 | ||||||||||||
| Impairment and other charges | (3 | ) | — | 228 | 575 | |||||||||||
| Total operating expenses | 3,482 | 3,171 | 8,519 | 8,426 | ||||||||||||
| Operating income | 874 | 789 | 1,779 | 1,212 | ||||||||||||
| Interest and other income | 40 | 28 | 109 | 91 | ||||||||||||
| Interest expense | (141 | ) | (137 | ) | (422 | ) | (402 | ) | ||||||||
| Other expenses | (29 | ) | (15 | ) | (52 | ) | (38 | ) | ||||||||
| Income from continuing operations before income taxes | 744 | 665 | 1,414 | 863 | ||||||||||||
| Income tax expense | 220 | 177 | 284 | 173 | ||||||||||||
| Income from continuing operations | 524 | 488 | 1,130 | 690 | ||||||||||||
| Income (loss) from discontinued operations, net of tax | (16 | ) | (25 | ) | 146 | (1 | ) | |||||||||
| Net income | 508 | 463 | 1,276 | 689 | ||||||||||||
| Preferred and preference stock dividend requirements of utility | 28 | 25 | 84 | 75 | ||||||||||||
| Net income attributable to Edison International common shareholders | $ | 480 | $ | 438 | $ | 1,192 | $ | 614 | ||||||||
| Amounts attributable to Edison International common shareholders: | ||||||||||||||||
| Income from continuing operations, net of tax | $ | 496 | $ | 463 | $ | 1,046 | $ | 615 | ||||||||
| Income (loss) from discontinued operations, net of tax | (16 | ) | (25 | ) | 146 | (1 | ) | |||||||||
| Net income attributable to Edison International common shareholders | $ | 480 | $ | 438 | $ | 1,192 | $ | 614 | ||||||||
| Basic earnings (loss) per common share attributable to Edison International common shareholders: | ||||||||||||||||
| Weighted-average shares of common stock outstanding | 326 | 326 | 326 | 326 | ||||||||||||
| Continuing operations | $ | 1.52 | $ | 1.42 | $ | 3.21 | $ | 1.88 | ||||||||
| Discontinued operations | (0.05 | ) | (0.08 | ) | 0.45 | — | ||||||||||
| Total | $ | 1.47 | $ | 1.34 | $ | 3.66 | $ | 1.88 | ||||||||
| Diluted earnings (loss) per common share attributable to Edison International common shareholders: | ||||||||||||||||
| Weighted-average shares of common stock outstanding, including effect of dilutive securities | 329 | 328 | 329 | 329 | ||||||||||||
| Continuing operations | $ | 1.51 | $ | 1.41 | $ | 3.18 | $ | 1.87 | ||||||||
| Discontinued operations | (0.05 | ) | (0.07 | ) | 0.44 | — | ||||||||||
| Total | $ | 1.46 | $ | 1.34 | $ | 3.62 | $ | 1.87 | ||||||||
| Dividends declared per common share | $ | 0.355 | $ | 0.3375 | $ | 1.065 | $ | 1.0125 | ||||||||
Edison International Reports Third Quarter 2014 Financial Results
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| Consolidated Balance Sheets | Edison International | ||||||
| (in millions, unaudited) | September 30, 2014 | December 31, 2013 | |||||
| ASSETS | |||||||
| Cash and cash equivalents | $ | 142 | $ | 146 | |||
| Receivables, less allowances of $70 and $66 for uncollectible accounts at respective dates | 1,218 | 838 | |||||
| Accrued unbilled revenue | 998 | 596 | |||||
| Inventory | 275 | 256 | |||||
| Derivative assets | 103 | 122 | |||||
| Regulatory assets | 1,170 | 538 | |||||
| Deferred income taxes | 125 | 421 | |||||
| Other current assets | 467 | 395 | |||||
| Total current assets | 4,498 | 3,312 | |||||
| Nuclear decommissioning trusts | 4,741 | 4,494 | |||||
| Other investments | 204 | 207 | |||||
| Total investments | 4,945 | 4,701 | |||||
| Utility property, plant and equipment, less accumulated depreciation and amortization of $7,997 and $7,493 at respective dates | 31,919 | 30,379 | |||||
| Nonutility property, plant and equipment, less accumulated depreciation of $74 at both dates | 102 | 76 | |||||
| Total property, plant and equipment | 32,021 | 30,455 | |||||
| Derivative assets | 245 | 251 | |||||
| Regulatory assets | 7,329 | 7,241 | |||||
| Other long-term assets | 437 | 686 | |||||
| Total long-term assets | 8,011 | 8,178 | |||||
| Total assets | $ | 49,475 | $ | 46,646 | |||
Edison International Reports Third Quarter 2014 Financial Results
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| Consolidated Balance Sheets | Edison International | |||||||
| (in millions, except share amounts, unaudited) | September 30, 2014 | December 31, 2013 | ||||||
| LIABILITIES AND EQUITY | ||||||||
| Short-term debt | $ | 1,349 | $ | 209 | ||||
| Current portion of long-term debt | 704 | 601 | ||||||
| Accounts payable | 1,455 | 1,407 | ||||||
| Accrued taxes | 191 | 358 | ||||||
| Customer deposits | 214 | 201 | ||||||
| Derivative liabilities | 154 | 152 | ||||||
| Regulatory liabilities | 794 | 767 | ||||||
| Other current liabilities | 988 | 1,186 | ||||||
| Total current liabilities | 5,849 | 4,881 | ||||||
| Long-term debt | 10,133 | 9,825 | ||||||
| Deferred income taxes and credits | 6,762 | 7,346 | ||||||
| Derivative liabilities | 947 | 1,042 | ||||||
| Pensions and benefits | 1,454 | 1,378 | ||||||
| Asset retirement obligations | 2,960 | 3,418 | ||||||
| Regulatory liabilities | 6,387 | 4,995 | ||||||
| Other deferred credits and other long-term liabilities | 2,225 | 2,070 | ||||||
| Total deferred credits and other liabilities | 20,735 | 20,249 | ||||||
| Total liabilities | 36,717 | 34,955 | ||||||
| Commitments and contingencies | ||||||||
| Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at respective dates) | 2,445 | 2,403 | ||||||
| Accumulated other comprehensive loss | (23 | ) | (13 | ) | ||||
| Retained earnings | 8,314 | 7,548 | ||||||
| Total Edison International's common shareholders' equity | 10,736 | 9,938 | ||||||
| Preferred and preference stock of utility | 2,022 | 1,753 | ||||||
| Total noncontrolling interests | 2,022 | 1,753 | ||||||
| Total equity | 12,758 | 11,691 | ||||||
| Total liabilities and equity | $ | 49,475 | $ | 46,646 | ||||
Edison International Reports Third Quarter 2014 Financial Results
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| Consolidated Statements of Cash Flows | Edison International | |||||||
| Nine months ended September 30, | ||||||||
| (in millions, unaudited) | 2014 | 2013 | ||||||
| Cash flows from operating activities: | ||||||||
| Net income | $ | 1,276 | $ | 689 | ||||
| Less: Income (loss) from discontinued operations | 146 | (1 | ) | |||||
| Income from continuing operations | 1,130 | 690 | ||||||
| Adjustments to reconcile to net cash provided by operating activities: | ||||||||
| Depreciation, decommissioning and amortization | 1,248 | 1,224 | ||||||
| Regulatory impacts of net nuclear decommissioning trust earnings | 100 | 82 | ||||||
| Impairment and other charges | 228 | 575 | ||||||
| Deferred income taxes and investment tax credits | 303 | 257 | ||||||
| Other | 70 | 70 | ||||||
| EME settlement payments | (225 | ) | — | |||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | (369 | ) | (406 | ) | ||||
| Inventory | (19 | ) | 68 | |||||
| Accounts payable | 211 | 155 | ||||||
| Other current assets and liabilities | (497 | ) | (458 | ) | ||||
| Derivative assets and liabilities, net | (68 | ) | 207 | |||||
| Regulatory assets and liabilities, net | 41 | 94 | ||||||
| Other noncurrent assets and liabilities | (126 | ) | (488 | ) | ||||
| Net cash provided by operating activities | 2,027 | 2,070 | ||||||
| Cash flows from financing activities: | ||||||||
| Long-term debt issued, net of premium, discount, and issuance costs of $5 and $6 at respective dates | 395 | 394 | ||||||
| Long-term debt matured or repurchased | (405 | ) | (201 | ) | ||||
| Bonds remarketed, net | — | 195 | ||||||
| Preference stock issued, net | 269 | 387 | ||||||
| Preference stock redeemed | — | (400 | ) | |||||
| Short-term debt financing, net | 1,138 | 1,352 | ||||||
| Settlements of stock-based compensation, net | (57 | ) | (40 | ) | ||||
| Dividends to noncontrolling interests | (88 | ) | (82 | ) | ||||
| Dividends paid | (347 | ) | (330 | ) | ||||
| Net cash provided by financing activities | 905 | 1,275 | ||||||
| Cash flows from investing activities: | ||||||||
| Capital expenditures | (2,856 | ) | (2,761 | ) | ||||
| Proceeds from sale of nuclear decommissioning trust investments | 5,846 | 4,574 | ||||||
| Purchases of nuclear decommissioning trust investments and other | (5,951 | ) | (4,674 | ) | ||||
| Other | 25 | (44 | ) | |||||
| Net cash used by investing activities | (2,936 | ) | (2,905 | ) | ||||
| Net (decrease) increase in cash and cash equivalents | (4 | ) | 440 | |||||
| Cash and cash equivalents at beginning of period | 146 | 170 | ||||||
| Cash and cash equivalents at end of period | $ | 142 | $ | 610 | ||||