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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K
CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): October 29, 2010 EDISON INTERNATIONAL (Exact name of registrant as specified in its charter) 2244 Walnut Grove Avenue (P.O. Box 976) Rosemead, California 91770 (Address of principal executive offices, including zip code) 626-302-2222 (Registrants telephone number, including area code) Check the
appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
This current report
and its exhibit include forward-looking statements. Edison International based these forward-looking statements on its current expectations and projections about future events in light of its knowledge of facts as of the date of this current report
and its assumptions about future circumstances. These forward-looking statements are subject to various risks and uncertainties that may be outside the control of Edison International. Edison International has no obligation to publicly update or
revise any forward-looking statements, whether due to new information, future events, or otherwise. This current report should be read with Edison Internationals Annual Report on Form 10-K for the year ended December 31, 2009 and
subsequent Quarterly Reports on Form 10-Q. On October 29, 2010, Edison International issued a press release reporting its financial results for the quarter ended September 30, 2010. A copy of the press release is attached as
Exhibit 99.1. On the same day, members of Edison Internationals management spoke to investors via a financial teleconference. The presentation attached as Exhibit 99.2 accompanied managements comments on the financial
teleconference. The information furnished in this Item 2.02 and Exhibits 99.1 and 99.2 shall not be deemed to be filed for purposes of the Securities Exchange Act of 1934, nor shall it be deemed to be incorporated by reference in
any filing under the Securities Act of 1933. Members of Edison International management will use the information in the presentation attached hereto as Exhibit 99.2 in meetings with
institutional investors and analysts and at investor conference presentations. The attached presentation will also be posted on Edison Internationals website. See the Exhibit
Index below.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized. /s/ Mark C. Clarke Date:
October 29, 2010
EXHIBIT INDEX
Exhibit No. Description Exhibit 99.1
FOR IMMEDIATE RELEASE Edison International Reports Third Quarter 2010 Results; Increases 2010
Earnings Guidance ROSEMEAD, Calif., Oct. 29, 2010 Edison International (NYSE: EIX) today reported third quarter
2010 basic earnings of $1.56 per share compared to $1.23 per share in the same quarter last year. Excluding non-core items and discontinued operations, third quarter 2010 core earnings were $1.46 per share compared to $1.09 per share in the third
quarter of 2009. The core earnings increase is attributable to higher results at both Southern California Edison (SCE) and Edison Mission Group (EMG). Both of our companies delivered solid earnings growth this quarter, said Theodore F. Craver, Jr., chairman and chief executive officer of Edison International. Given our strong
year-to-date performance, weve increased our full-year earnings guidance accordingly, Craver added. The company raised its 2010 core earnings guidance range from $3.15 to $3.45 per share to $3.45 to $3.60 per share. Third Quarter Earnings Detail SCEs third quarter 2010 basic earnings were $1.21 per share compared to $1.06 per share in the third quarter of 2009. Core earnings were $1.08 per share compared to $0.92 per share in the same
quarter last year. The increase in core earnings was primarily due to higher authorized revenue to support rate base growth and higher capitalized financing costs. Non-core items included a $0.13 per share benefit in the third quarter of 2010 from
final resolution of interest charges related to a California Franchise Tax Board settlement and a $0.14 per share benefit in the third quarter of 2009 related to transferring a power plant to rate base. EMGs third quarter 2010 basic earnings were $0.34 per share compared to $0.19 per share in the third quarter of 2009. Core earnings
were $0.37 per share compared to $0.19 per share in the same quarter last year. Core earnings increased due to higher operating revenues from Midwest Generation and Homer City primarily from higher average realized energy prices, higher capacity
revenues, and a gain from the sale of bankruptcy claims. Non-core items in the third quarter of 2010 included a $0.03 per share charge related to the California tax settlement and discontinued operations. -more- Note: GAAP earnings and
losses refer to net income or losses attributable to Edison International throughout this release. Core earnings is a non-GAAP financial measure. See Reconciliation of Core Earnings to GAAP Earnings and Reconciliation of Core Earnings Per Share
Guidance to Basic Earnings Per Share Guidance.
Edison International Reports Third Quarter 2010 Financial Results Page
2
of 13 Edison
International parent company and other reported third quarter 2010 earnings of $0.01 per share compared to a $0.02 per share loss in the third quarter of 2009. Earnings in the third quarter of 2010 were mainly due to consolidated income tax
benefits. Year-to-Date Earnings Summary Edison International reported basic earnings of $3.33 per share for the nine-month period ending September 30, 2010, compared to $1.94 per share for the same period last year. Core earnings for the
first nine months of 2010 were $2.90 per share compared to $2.66 per share for the same period in 2009. Non-core items were a $0.43 per share benefit in the 2010 period compared to a $0.72 per share loss in the 2009 period, both primarily related to
tax settlements. Year-to-Date Earnings Detail SCEs year-to-date basic earnings through September 30, 2010 were $2.63 per share compared to $3.23 per share in the same period last year. Core earnings for the first nine months of 2010 were
$2.45 per share compared to $2.17 per share for the same period in 2009. The increase reflects higher authorized revenue to support rate base growth, lower income tax expense, and higher capitalized financing costs. The year-to-date increase was
partially offset by higher operating expenses that continue to reflect the impact of curtailed spending in the prior year period due to the timing of the 2009 general rate case decision. The year-to-date lower tax expense includes a change in method
of tax accounting for asset removal costs primarily related to SCEs infrastructure replacement program. Non-core items in the 2010 period included a $0.30 per share benefit from tax settlements and a $0.12 per share charge related to the tax
impact of health care legislation. Non-core items in 2009 included a $0.92 per share benefit from the tax settlement and a $0.14 per share benefit related to transferring a power plant to rate base. EMGs year-to-date basic earnings were $0.66 per share compared to a loss of $1.38 per share in the same period last year.
Year-to-date core earnings were $0.49 per share compared to $0.55 per share in the 2009 period. EMGs core earnings were lower primarily from higher plant maintenance costs in 2010 due to scheduled outages at EMGs merchant power plants,
partially offset by higher energy trading revenues. Non-core items included a $0.16 per share benefit from tax settlements and a $0.01 per share benefit from discontinued operations in the 2010 period and a $1.93 per share charge primarily related
to lease terminations and the tax settlement in the 2009 period. Edison International parent company and other reported basic
earnings through September 30, 2010 of $0.04 per share compared to basic earnings of $0.09 per share in the same period last year. Core losses were $0.04 per share in the 2010 period and $0.06 per share in the 2009 period, with the improvement
due primarily to consolidated income tax benefits. -more-
Edison International Reports Third Quarter 2010 Financial Results Page
3
of 13 2010 Earnings Guidance
Edison International increased its 2010 core earnings guidance range from $3.15 to $3.45 per share to $3.45 to $3.60 per
share. The company also updated its basic earnings per share guidance to reflect the increase in core guidance and year-to-date non-core items. See the risk disclosure statement on page 4 and the presentation accompanying the companys
conference call for further information. Reconciliation of 2010 Core Earnings Per Share Guidance to 2010 Basic Earnings Per Share Guidance1 Per Share EIX core earnings1 Non-Core Items: SCE Tax impact of health care legislation Tax settlements EMG Earnings from discontinued operations EIX basic earnings Midpoint of 2010 core guidance by business element: SCE EMG EIX parent company and other Total About Edison International Edison International, through its subsidiaries,
is a generator and distributor of electric power and an investor in infrastructure and energy assets, including renewable energy. Headquartered in Rosemead, California, Edison International is the parent company of Southern California Edison, one of
the nations largest electric utilities, and Edison Mission Group, a competitive power generation business and parent company to Edison Mission Energy and Edison Capital. # # #
Edison International Reports Third Quarter 2010 Financial Results Page
4
of 13 Appendix
Use of Non-GAAP Financial Measures, Conference Call Information, Risk Disclosure Statement and Financial Schedules Use of Non-GAAP Financial Measures Edison Internationals earnings
are prepared in accordance with generally accepted accounting principles used in the United States and represent the companys earnings as reported to the Securities and Exchange Commission. Our management uses core earnings and earnings per
share (EPS) by principal operating subsidiary internally for financial planning and for analysis of performance. We also use core earnings and EPS by principal operating subsidiary when communicating with analysts and investors regarding our
earnings results and outlook to facilitate comparisons of the Companys performance from period to period. Core earnings
is a non-GAAP financial measure and may not be comparable to those of other companies. Core earnings and core earnings per share are defined as GAAP earnings and basic earnings per share excluding income or loss from discontinued operations and
income or loss from significant discrete items that management does not consider representative of ongoing earnings. GAAP earnings refer to net income attributable to Edison International common shareholders or attributable to the common
shareholders of each subsidiary. Core earnings are reconciled to GAAP earnings in the attached tables. EPS by principal operating subsidiary is based on the principal operating subsidiaries net income attributable to the common shareholders of
each operating subsidiary, respectively, and Edison Internationals weighted average outstanding common shares. The impact of participating securities (vested stock options that earn dividend equivalents that may participate in undistributed
earnings with common stock) for each principal operating subsidiary is not material to each principal operating subsidiarys EPS and is therefore reflected in the results of the Edison International holding company, which we refer to as EIX
parent company and other. EIX core EPS and core EPS by principal operating subsidiary are reconciled to basic EPS. Reminder: Edison
International Will Hold a Conference Call Today Today, Edison International will hold a conference call to discuss its
third quarter 2010 financial results at 8 a.m. (Pacific Daylight Time). Two-way participation in the telephone call is limited to financial analysts and investors, while all other interested parties are invited to participate in a simultaneous
webcast at www.edisoninvestor.com. A presentation accompanying managements comments on the conference call will be available on the website as well at www.edisoninvestor.com. The domestic call-in number is (800) 369-2198 and the number
for international callers is (773) 756-4618. The pass code is Edison. In addition to the live simulcast, the webcast will remain posted at www.edisoninvestor.com and telephone replays will be available through November 5, 2010
at the following numbers: (866) 463-4177 for callers in the United States and (203) 369-1385 for international callers. The replay passcode is 80709. Risk Disclosure Statement Statements contained in this news release about
future performance, including, without limitation, earnings, asset and rate base growth, load growth, capital investments and other statements that are not purely historical, are forward-looking statements. 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 Managements Discussion and Analysis in Edison Internationals 2009 Form 10-K and other reports filed with the Securities and Exchange Commission and are available on our Web site 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.
Edison International Reports Third Quarter 2010 Financial Results Page
5
of 13 Summary
Financial Schedules Third Quarter Basic Earnings Per Share Per Share (Unaudited) SCE EMG EIX parent company and other EIX earnings from continuing operations EIX loss from discontinued operations EIX basic earnings1 EIX diluted earnings Third Quarter
Reconciliation of Core Earnings Per Share to Basic Earnings Per Share Per Share (Unaudited) Core Earnings1 SCE EMG EIX parent company and other EIX core earnings Non-core items SCE regulatory items Overall tax settlement SCE EMG EIX parent company and other EMG discontinued operations Total non-core items EIX basic earnings1
Edison International Reports Third Quarter 2010 Financial Results Page
6
of 13 Third Quarter
GAAP Earnings (In Millions) (Unaudited) SCE EMG EIX parent company and other EIX earnings from continuing operations EIX loss from discontinued operations EIX basic earnings Third Quarter Reconciliation of Core Earnings to GAAP Earnings (In Millions) (Unaudited) Core Earnings1 SCE EMG EIX parent company and other EIX core earnings Non-core items SCE regulatory items Overall tax settlement SCE EMG EIX parent company and other EMG discontinued operations Total non-core items EIX basic earnings
Edison International Reports Third Quarter 2010 Financial Results Page
7
of 13 Year-to-Date
Basic Earnings Per Share Per Share (Unaudited) SCE EMG EIX parent company and other EIX earnings from continuing operations EIX earnings (loss) from discontinued operations EIX basic earnings1 EIX diluted earnings Year-to-Date Reconciliation
of Core Earnings Per Share to Basic Earnings Per Share Per Share (Unaudited) Core Earnings1 SCE EMG EIX parent company and other EIX core earnings Non-core items SCE tax impacts of health care legislation SCE regulatory items Overall tax settlement SCE EMG EIX parent company and other EMG discontinued operations Total non-core items EIX basic earnings1
Edison International Reports Third Quarter 2010 Financial Results Page
8
of 13 Year-to-Date
GAAP Earnings (In Millions) (Unaudited) SCE EMG EIX parent company and other EIX earnings from continuing operations EIX earnings (loss) from discontinued operations EIX basic earnings Year-to-Date Reconciliation of Core Earnings to GAAP Earnings (In Millions) (Unaudited) Core Earnings1 SCE EMG EIX parent company and other EIX core earnings Non-core items SCE tax impacts of health care legislation SCE regulatory items Overall tax settlement SCE EMG EIX parent company and other EMG discontinued operations Total non-core items EIX basic earnings # # #
Edison International Reports Third Quarter 2010 Financial Results Page
9
of 13 (in millions, except per-share amounts) Electric utility Competitive power generation Total operating revenue Fuel Purchased power Operation and maintenance Depreciation, decommissioning and amortization Lease terminations and other Total operating expenses Operating income Interest and dividend income Equity in income from partnerships and unconsolidated subsidiaries net Other income Interest expense net of amounts capitalized Other expenses Income from continuing operations before income taxes Income tax expense (benefit) Income from continuing operations Income (loss) from discontinued operations net of tax Net income Less: Net income attributable to noncontrolling interests Net income attributable to Edison International common shareholders Amounts attributable to Edison International common shareholders: Income from continuing operations, net of tax Income (loss) from discontinued operations, net of tax Net income attributable to Edison International common shareholders Basic earnings per common share attributable to Edison International common shareholders: Weighted-average shares of common stock outstanding Continuing operations Discontinued operations Total Diluted earnings per common share attributable to Edison International common shareholders: Weighted-average shares of common stock outstanding, including effect of dilutive securities Continuing operations Discontinued operations Total Dividends declared per common share
Edison International Reports Third Quarter 2010 Financial Results Page
10
of 13 (in millions) ASSETS Cash and equivalents Short-term investments Receivables, less allowances of $59 and $53 for uncollectible accounts at respective dates Accrued unbilled revenue Inventory Derivative assets Restricted cash Margin and collateral deposits Regulatory assets Other current assets Total current assets Competitive power generation and other property less accumulated depreciation of $1,794 and $2,231 at respective
dates Nuclear decommissioning trusts Investments in partnerships and unconsolidated subsidiaries Other investments Total investments and other assets Utility plant, at original cost: Transmission and distribution Generation Accumulated depreciation Construction work in progress Nuclear fuel, at amortized cost Total utility plant Derivative assets Restricted deposits Rent payments in excess of levelized rent expense under plant operating leases Regulatory assets Other long-term assets Total long-term assets Total assets
Edison International Reports Third Quarter 2010 Financial Results Page
11
of 13 (in millions, except share amounts) LIABILITIES AND EQUITY Short-term debt Current portion of long-term debt Accounts payable Accrued taxes Accrued interest Customer deposits Derivative liabilities Regulatory liabilities Other current liabilities Total current liabilities Long-term debt Deferred income taxes Deferred investment tax credits Customer advances Derivative liabilities Pensions and benefits Asset retirement obligations Regulatory liabilities Other deferred credits and other long-term liabilities Total deferred credits and other liabilities Total liabilities Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at each
date) Accumulated other comprehensive income Retained earnings Total Edison Internationals common shareholders equity Noncontrolling interests Preferred and preference stock of utility not subject to mandatory redemption Total equity Total liabilities and equity
Edison International Reports Third Quarter 2010 Financial Results Page
12
of 13
CALIFORNIA
001-9936
95-4137452
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification No.)
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02
Results of Operations and Financial Condition
Item 7.01
Regulation FD Disclosure
Item 9.01
Financial Statements and Exhibits
(c)
Exhibits
EDISON INTERNATIONAL
(Registrant)
Mark C. Clarke
Vice President and Controller
99.1
Edison International Press Release dated October 29, 2010
99.2
Edison International Third Quarter 2010 Financial Teleconference Presentation dated October 29, 2010
Media relations contact:
Charles Coleman, (626) 302-7982
Investor relations contact:
Scott Cunningham, (626) 302-2540
August 5, 2010
Earnings
Guidance
October 29, 2010
Updated
Earnings Guidance
$
3.15 $3.45
$
3.45 $3.60
$
(0.12
)
$
(0.12
)
0.43
0.54
0.02
0.01
$
3.48 $3.78
$
3.88 $4.03
$
2.80
$
3.00
0.62
0.62
(0.12
)
(0.09
)
$
3.30
$
3.53
1
See Use of Non-GAAP Financial Measures on page 4. Basic earnings per share refer to basic earnings per common share attributable to Edison International common
shareholders. The expected impact of participating securities is $(0.01) per share and is included in EIX parent company and other.
Quarter Ended
September 30,
2010
2009
Change
$
1.21
$
1.06
$
0.15
0.35
0.19
0.16
0.01
(0.02
)
0.03
1.57
1.23
0.34
(0.01
)
(0.01
)
$
1.56
$
1.23
$
0.33
$
1.56
$
1.22
$
0.34
1
The impact of participating securities on the per share amounts is included in EIX parent company and other and was zero per share for the quarter ended
September 30, 2010 and $(0.01) per share for the quarter ended September 30, 2009.
Quarter Ended
September 30,
2010
2009
Change
$
1.08
$
0.92
$
0.16
0.37
0.19
0.18
0.01
(0.02
)
0.03
1.46
1.09
0.37
0.14
(0.14
)
0.11
0.11
2010
2009
$
0.13
$
(0.02
)
(0.01
)
(0.01
)
0.10
0.14
(0.04
)
$
1.56
$
1.23
$
0.33
1
See Use of Non-GAAP Financial Measures on page 4. The impact of participating securities on the per share amounts is included in EIX parent company and other and was
zero per share for the quarter ended September 30, 2010 and $(0.01) per share for the quarter ended September 30, 2009.
Quarter Ended
September 30,
2010
2009
Change
$
394
$
346
$
48
114
61
53
6
(3
)
9
514
404
110
(4
)
(1
)
(3
)
$
510
$
403
$
107
Quarter Ended
September 30,
2010
2009
Change
$
352
$
300
$
52
120
61
59
5
(3
)
8
477
358
119
46
(46
)
37
37
2010
2009
$
42
$
(6
)
1
(4
)
(1
)
(3
)
33
45
(12
)
$
510
$
403
$
107
1
See Use of Non-GAAP Financial Measures on page 4.
Year-to-Date
September 30,
2010
2009
Change
$
2.63
$
3.23
$
(0.60
)
0.65
(1.37
)
2.02
0.04
0.09
(0.05
)
3.32
1.95
1.37
0.01
(0.01
)
0.02
$
3.33
$
1.94
$
1.39
$
3.31
$
1.94
$
1.37
1
The impact of participating securities is included in EIX parent company and other and was $(0.01) per share for the year-to-date period ended September 30, 2010
and $(0.01) per share for the year-to-date period ended September 30, 2009.
Year-to-date
September 30,
2010
2009
Change
$
2.45
$
2.17
$
0.28
0.49
0.55
(0.06
)
(0.04
)
(0.06
)
0.02
2.90
2.66
0.24
(0.12
)
(0.12
)
0.14
(0.14
)
0.54
(0.85
)
1.39
2010
2009
$
0.30
$
0.92
0.16
(1.92
)
0.08
0.15
0.01
(0.01
)
0.02
0.43
(0.72
)
1.15
$
3.33
$
1.94
$
1.39
1
See Use of Non-GAAP Financial Measures on page 4. The impact of participating securities is included in EIX parent company and other and was $(0.01) per share for the
year-to-date period ended September 30, 2010 and $(0.01) per share for year-to-date period ended September 30, 2009.
Year-to-Date
September 30,
2010
2009
Change
$
858
$
1,053
$
(195
)
210
(445
)
655
18
34
(16
)
1,086
642
444
4
(5
)
9
$
1,090
$
637
$
453
Year-to-Date
September 30,
2010
2009
Change
$
802
$
707
$
95
158
179
(21
)
(10
)
(16
)
6
950
870
80
(39
)
(39
)
46
(46
)
175
(274
)
449
2010
2009
$
95
$
300
52
(624
)
28
50
4
(5
)
9
140
(233
)
373
$
1,090
$
637
$
453
1
See Use of Non-GAAP Financial Measures on page 4.
Consolidated Statements of Income
Edison International
Three Months Ended
September 30,
Nine Months Ended
September 30,
2010
2009
2010
2009
(Unaudited)
$
3,097
$
3,068
$
7,502
$
7,529
691
596
1,838
1,781
3,788
3,664
9,340
9,310
328
406
877
1,120
1,118
1,032
2,337
2,155
1,102
1,093
3,285
3,136
378
365
1,127
1,053
2
888
2,926
2,896
7,628
8,352
862
768
1,712
958
4
2
27
29
62
35
101
34
33
74
103
131
(175
)
(187
)
(518
)
(556
)
(12
)
(16
)
(39
)
(41
)
774
676
1,386
555
247
232
261
(169
)
527
444
1,125
724
(4
)
(1
)
4
(5
)
523
443
1,129
719
13
40
39
82
$
510
$
403
$
1,090
$
637
$
514
$
404
$
1,086
$
642
(4
)
(1
)
4
(5
)
$
510
$
403
$
1,090
$
637
326
326
326
326
$
1.57
$
1.23
$
3.32
$
1.95
(0.01
)
0.01
(0.01
)
$
1.56
$
1.23
$
3.33
$
1.94
328
329
328
328
$
1.57
$
1.22
$
3.30
$
1.95
(0.01
)
0.01
(0.01
)
$
1.56
$
1.22
$
3.31
$
1.94
$
0.315
$
0.310
$
0.945
$
0.930
Consolidated Balance Sheets
Edison International
September 30,
2010
December 31,
2009
(Unaudited)
$
2,009
$
1,673
4
10
1,075
1,017
612
347
547
533
174
357
15
69
91
125
404
120
110
179
5,041
4,430
5,265
5,147
3,347
3,140
581
216
251
251
9,444
8,754
23,747
22,214
2,731
2,667
(6,097
)
(5,921
)
3,020
2,701
340
305
23,741
21,966
266
268
44
43
1,186
1,038
5,227
4,139
617
806
7,340
6,294
$
45,566
$
41,444
Consolidated Balance Sheets
Edison International
September 30,
2010
December 31,
2009
(Unaudited)
$
98
$
85
43
377
1,228
1,347
163
186
200
196
224
238
231
107
804
367
896
884
3,887
3,787
12,117
10,437
4,896
4,334
103
102
114
119
1,330
529
2,143
2,061
3,372
3,241
3,663
3,328
2,395
2,500
18,016
16,214
34,020
30,438
2,325
2,304
26
37
8,283
7,500
10,634
9,841
5
258
907
907
11,546
11,006
$
45,566
$
41,444
Consolidated Statements of Cash Flows | Edison International | |||||||
Nine Months Ended September 30, |
||||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
Cash flows from operating activities: |
||||||||
Net income |
$ | 1,129 | $ | 719 | ||||
Less: Income (loss) from discontinued operations |
4 | (5 | ) | |||||
Income from continuing operations |
1,125 | 724 | ||||||
Adjustments to reconcile to net cash provided by operating activities: |
||||||||
Depreciation, decommissioning and amortization |
1,127 | 1,053 | ||||||
Regulatory impacts of net nuclear decommissioning trust earnings (reflected in accumulated depreciation) |
106 | 133 | ||||||
Other amortization |
90 | 95 | ||||||
Lease terminations and other |
2 | 888 | ||||||
Stock-based compensation |
20 | 17 | ||||||
Equity in income from partnerships and unconsolidated subsidiaries net |
(101 | ) | (34 | ) | ||||
Distributions and dividends from unconsolidated entities |
76 | 5 | ||||||
Deferred income taxes and investment tax credits |
414 | (1,322 | ) | |||||
Income from leveraged leases |
(3 | ) | (13 | ) | ||||
Changes in operating assets and liabilities: |
||||||||
Receivables |
(184 | ) | (154 | ) | ||||
Inventory |
(27 | ) | 4 | |||||
Restricted cash |
53 | (148 | ) | |||||
Margin and collateral deposits net of collateral received |
32 | (99 | ) | |||||
Other current assets |
(244 | ) | (65 | ) | ||||
Rent payments in excess of levelized rent expense |
(148 | ) | (161 | ) | ||||
Accounts payable |
28 | 267 | ||||||
Accrued taxes |
(23 | ) | (318 | ) | ||||
Other current liabilities |
(129 | ) | 9 | |||||
Derivative assets and liabilities net |
1,079 | (414 | ) | |||||
Regulatory assets and liabilities net |
(530 | ) | 951 | |||||
Proceeds from U.S. Treasury grants |
92 | | ||||||
Other assets |
(42 | ) | (136 | ) | ||||
Other liabilities |
(67 | ) | 835 | |||||
Operating cash flows from discontinued operations |
4 | (5 | ) | |||||
Net cash provided by operating activities |
2,750 | 2,112 | ||||||
Cash flows from financing activities: |
||||||||
Long-term debt issued |
1,652 | 939 | ||||||
Long-term debt issuance costs |
(35 | ) | (25 | ) | ||||
Long-term debt repaid |
(371 | ) | (566 | ) | ||||
Bonds repurchased |
| (219 | ) | |||||
Short-term debt financing net |
13 | (2,058 | ) | |||||
Settlements of stock-based compensation net |
(7 | ) | 4 | |||||
Cash contributions from noncontrolling interests |
| 2 | ||||||
Dividends and distributions to noncontrolling interests |
(39 | ) | (88 | ) | ||||
Dividends paid |
(308 | ) | (303 | ) | ||||
Net cash provided (used) by financing activities |
$ | 905 | $ | (2,314 | ) | |||
Edison International Reports Third Quarter 2010 Financial Results
Page 13 of 13
Consolidated Statements of Cash Flows | Edison International | |||||||
Nine Months Ended September 30, |
||||||||
(in millions) |
2010 | 2009 | ||||||
(Unaudited) | ||||||||
Cash flows from investing activities: |
||||||||
Capital expenditures |
$ | (3,129 | ) | $ | (2,287 | ) | ||
Purchase of interest in acquired companies |
(4 | ) | (7 | ) | ||||
Proceeds from termination of leases |
| 1,420 | ||||||
Proceeds from sale of nuclear decommissioning trust investments |
903 | 1,814 | ||||||
Purchases of nuclear decommissioning trust investments and other |
(1,036 | ) | (1,977 | ) | ||||
Proceeds from partnerships and unconsolidated subsidiaries, net of investment |
35 | 10 | ||||||
Maturities and sale of short-term investments |
7 | 3 | ||||||
Purchases of short-term investments |
(1 | ) | (1 | ) | ||||
Investments in other assets |
(3 | ) | (278 | ) | ||||
Effect of consolidation and deconsolidation of variable interest entities |
(91 | ) | | |||||
Net cash used by investing activities |
(3,319 | ) | (1,303 | ) | ||||
Net increase (decrease) in cash and equivalents |
336 | (1,505 | ) | |||||
Cash and equivalents, beginning of period |
1,673 | 3,916 | ||||||
Cash and equivalents, end of period |
$ | 2,009 | $ | 2,411 | ||||
Exhibit 99.2
Leading the Way in Electricity SM
Third Quarter 2010 Financial Teleconference
October 29, 2010
EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Forward-Looking Statements
Statements contained in this presentation about future performance, including, without limitation, earnings, asset and rate base growth, load growth, capital investments, and other statements that are not purely historical, are forward-looking statements. These forward-looking statements reflect our current expectations; however, such statements involve risks and uncertainties. Actual results could differ materially from current expectations. These forward-looking statements represent our expectations only as of the date of this presentation, and Edison International assumes no duty to update them to reflect new information, events or circumstances. Important factors that could cause different results are discussed under the headings Risk Factors, and Managements Discussion and Analysis in Edison Internationals 2009 Form 10-K, most recent Form 10-Q and other reports filed with the Securities and Exchange Commission, which are available on our website: www.edisoninvestor.com. These filings also provide additional information on historical and other factual data contained in this presentation.
October 29, 2010
EDISON INTERNATIONAL®
1 |
|
Leading the Way in Electricity SM
Third Quarter Earnings Summary
Q3 09 Q3 10 Variance
Core EPS1
SCE $0.92 $1.08 $0.16
EMG 0.19 0.37 0.18
EIX parent company (0.02) 0.01 0.03
and other
Core EPS $1.09 $1.46 $0.37
Non-Core Items
SCE $0.14 $0.13 $(0.01)
EMG (0.03) (0.03)
EIX parent company
and other
Total Non-Core $0.14 $0.10 $(0.04)
Basic EPS $1.23 $1.56 $0.33
Diluted EPS $1.22 $1.56 $0.34
Core Earnings1
($ millions)
$477 $358
Q3 09 Q3 10
Core EPS1
$1.46 $1.09
Q3 09 Q3 10
GAAP Earnings
($ millions)
$510 $403
Q3 09 Q3 10
Basic EPS
$1.56 $1.23
Q3 09 Q3 10
1 See Earnings Non-GAAP Reconciliations and Use of Non-GAAP Financial Measures in Appendix. The impact of participating securities is included in EIX parent company and other and was zero for the quarter ended September 30, 2010 and $(0.01) per share for the quarter ended September 30, 2009.
October 29, 2010
2 |
|
EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Third Quarter Highlights
EPS Q3 09 Q3 10 Variance
Core1 $0.92 $1.08 $0.16
Non-Core Items 0.14 0.13 (0.01)
Basic EPS
attributable to SCE1 $1.06 $1.21 $0.15
Key Core Earnings Drivers
Higher operating revenue $0.17
Rate base growth
Operating revenue and other
Higher operating expense (0.04)
Higher depreciation (0.04)
Higher AFUDC 0.05
Income taxes and other 0.02
Total $0.16
Recent Developments
Receipt of the final interest determination from the California Franchise Tax Board related to Global Settlement resulted in a $42 million non-core benefit
In October 2010, SCE began the process of installing the final two steam generators at San Onofre Unit 3 which are expected to be placed in service in early 2011
$500 million 30-year bond financing at 4.5% coupon rate and remarketed $100 million of 4.5% pollution control bonds due in 2029
Small Business Jobs Act of 2010 extended the 50% bonus depreciation provision for an additional year SCE expects additional $250 million to $300 million in cash flow benefits, primarily in 2010
1 See Use of Non-GAAP Financial Measures in Appendix and Third Quarter Earnings Summary slide for reconciliation of core earnings per share to basic earnings per share.
October 29, 2010 3 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Third Quarter Highlights
EPS Q3 09 Q3 10 Variance
Core1 $0.19 $0.37 $0.18
Non-Core Items (0.03) (0.03)
Basic EPS
attributable to EMG1 $0.19 $0.34 $0.15
Key Core Earnings Drivers
Merchant coal2 $0.14
Renewable projects 0.02
EMMTtrading 0.03
Natural gas projects 0.01
Edison Capital (0.02)
Total $0.18
Recent Developments
Settled Mitsubishi wind turbine dispute
Community Wind North (MN) 30 MW wind project moved into construction
Pinnacle (WV) 55 MW wind project moved to construction pending
Small Business Jobs Act of 2010 extended the 50% bonus depreciation provision for an additional year EMG expects additional $70 million to $100 million in cash flow benefits for the 2010 tax year
1 See Use of Non-GAAP Financial Measures in Appendix and Third Quarter Earnings Summary slide for reconciliation of core earnings per share to basic earnings per share.
2 |
|
Includes impact of unrealized gains of $0.01 per share in 2009 and unrealized losses of $0.02 per share in 2010. |
October 29, 2010 4 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Year-to-Date Earnings Summary
YTD 09 YTD 10 Variance
Core EPS1
SCE $2.17 $2.45 $0.28
EMG 0.55 0.49 (0.06)
EIX parent company (0.06) (0.04) 0.02
and other
Core EPS $2.66 $2.90 $0.24
Non-Core Items
SCE $1.06 $0.18 $(0.88)
EMG (1.93) 0.17 2.10
EIX parent company 0.15 0.08 (0.07)
and other
Total Non-Core $(0.72) $0.43 $1.15
Basic EPS $1.94 $3.33 $1.39
Diluted EPS $1.94 $3.31 $1.37
Core Earnings1
($ millions)
$950 $870
YTD 09 YTD 10
Core EPS1
$2.90 $2.66
YTD 09 YTD 10
GAAP Earnings
($ millions)
$1,090
$637
YTD 09 YTD 10
Basic EPS
$3.33
$1.94
YTD 09 YTD 10
1 See Earnings Non-GAAP Reconciliations and Use of Non-GAAP Financial Measures in Appendix. The impact of participating securities is included in EIX parent company and other and was $(0.01) per share for the year-to-date period ended September 30, 2010 and $(0.01) per share for the year-to-date period ended September 30, 2009.
October 29, 2010 5 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Midwest Generation (Illinois)
Operational Statistics
Q3 09 Q3 10 YTD 09 YTD 10
Total Generation (GWh) 8,272 8,449 21,722 22,091
Forced Outage Rate 5.3% 5.4% 6.0% 6.9%
Capacity Factor 68.6% 70.0% 60.7% 61.7%
Equivalent Availability 90.1% 91.7% 83.8% 79.4%
Load Factor 76.1% 76.4% 72.4% 77.8%
5,471 MW Six mid-merit facilities Utilizes Powder River Basin (PRB) coal Rail under contract through 2011
All-in Average Realized Prices1,3
$51.44 $49.32 $49.30
$44.61
$25.04 $33.36 $30.50 $31.89
$19.57 $18.08 $18.82 $17.41
Q3 09 Q3 10 YTD 09 YTD 10
Average realized gross margin ($/MWh)2 Average realized fuel cost ($/MWh)3
1 |
|
Includes the price of energy, capacity, ancillary services, etc. |
2 |
|
Average realized gross margin is equal to all-in average realized price less average fuel and emission costs. |
3 |
|
See Other Non-GAAP Reconciliations and Use of Non-GAAP Financial Measures in Appendix. |
October 29, 2010 6 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Homer City (Pennsylvania)
Operational Statistics
Q3 09 Q3 10 YTD 09 YTD 10
Total Generation (GWh) 2,994 2,984 8,677 8,227
Forced Outage Rate 3.8% 15.8% 7.6% 13.5%
Capacity Factor 71.8% 71.7% 70.1% 66.5%
Equivalent Availability 92.7% 81.7% 86.8% 75.5%
Load Factor 77.5% 87.7% 80.8% 88.1%
All-in Average Realized Prices1,3
$54.69 $57.55 $55.96 $59.48
$32.63 $35.00
$33.23 $33.91
$21.46 $24.92 $22.05 $24.48
Q3 09 Q3 10 YTD 09 YTD 10
Average realized gross margin ($/MWh)2 Average realized fuel cost ($/MWh)3
1,884 MW Three base-load units Utilizes Northern Appalachian (NAPP) coal Coal largely sourced locally and delivered by truck
1 |
|
Includes the price of energy, capacity, ancillary services, etc. |
2 |
|
Average realized gross margin is equal to all-in average realized price less average fuel and emission costs. |
3 |
|
See Other Non-GAAP Reconciliations and Use of Non-GAAP Financial Measures in Appendix. |
October 29, 2010 7 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Hedge Program Status
September 30, 2010
Remainder of
2010 2011 2012 2013
Midwest Generation1
Total estimated GWh hedged (NI & AEP/Dayton Hubs)3 5,341 13,318 2,746
Average price ($/MWh)3 $41.94 $37.66 $37.29 $
Coal under contract (millions of tons) 5.4 15.6 9.8
Homer City
Total estimated GWh hedged (West Hub)2,3 1,536 3,475 1,182
Average price ($/MWh)2,3 $65.21 $51.05 $51.81 $
Coal under contract (millions of tons) 1.4 4.4 1.9 0.5
1 As of September 30, 2010, EMMT had entered into 0.6 billion cubic feet of natural gas futures contracts (equivalent to approximately 102 GWh of energy only contracts using a ratio of 6 MMBtu to 1 MWh) for the Midwest Generation plants to economically hedge energy price risks during 2010 at an equivalent average price of approximately $38.40/MWh.
2 The average price/MWh includes 25 to 84 MW for periods ranging from October 1, 2010 to May 31, 2012 at Homer City sold in conjunction with load requirements services contracts.
3 In October 2010, offsetting positions were entered into to reduce the hedge position of EMEs merchant operations. Midwest Generations reduction in hedge positions is 2,448 GWhs with an average price of $37.12/MWh and Homer Citys reduction in hedge positions is 2,244 GWhs with an average price of $47.30/MWh.
October 29, 2010 8 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Wind Energy Business
Portfolio & Development Pipeline1
Recent Activities
24 projects in service (1,185 MW)
5 projects under construction (630 MW)
1 project in construction pending (55 MW)
24 projects in development pipeline (3,700 MW)
Wind Turbine Commitments/Inventory1
75 MW available for new projects at September 30, 2010
July 2010, completed $140 million non-recourse financing for Laredo Ridge
September 2010, purchased and began construction of Community Wind North (30 MW, MN)
September 2010, Pinnacle project (55 MW, WV) moved to construction pending
Settled Mitsubishi wind turbine dispute
Estimated Capital Expenditures to Complete Wind Projects at September 30, 2010 ($ millions)1
Investment Prior to
MW Spend Complete Total
Projects under construction/pending construction 685 $1,165 $429 $1,594 Turbine commitments/inventory2 75 27 82 109
Total 760 $1,192 $511 $1,703
1 Data as of September 30, 2010 adjusted for impact of MHI settlement dispute. Projects reflect EMG ownership share. Development pipeline includes projects owned or under exclusive agreements.
2 Amounts exclude balance of plant costs for 75 MW available for new projects, which would be an additional $50 million to $90 million based on typical project costs.
October 29, 2010
9 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Funding for 2010-11 Wind Investments
($ millions) $84 $242 $456 $1,125 $511
12/31/09 New Mitsubishi YTD Spend5 2010-2011 Sources
Estimated Projects4 Turbines1 Remaining
Spend Spend2
(at 9/30/10)
October 29, 2010
10 EDISON INTERNATIONAL® $939 $507 $432
Bank/Vendor
$253 million received to date $254 million available
U.S. Treasury Grants
$92 million received in April 2010 $340 million anticipated in 20113
1 EMEs turbine supply agreement with Mitsubishi Power Systems Americas, Inc. was adjusted for the impact of the settlement agreement.
2 Excludes balance of plant costs for 75 MW available for new projects, which would be an additional $50 million to $90 million based on typical project costs. Data as of
September 30, 2010 adjusted for impact of MHI settlement dispute.
3 Estimate based on estimated construction costs and anticipated commercial operation dates. Grants anticipated are reduced by the Laredo Ridge bridge loan where repayment is
due when grant funds are received.
4 In Q3 10, Community Wind North and Pinnacle projects were moved to construction and construction pending.
5 Including accruals.
Leading the Way in Electricity SM
2010 Earnings Guidance
NEEDS TO BE UPDATED
Prior 2010 Updated 2010
Earnings Guidance Earnings Guidance
as of 8/5/10 as of 10/29/10
Low Mid High Low Mid High
EIX core earnings per share1 $3.15 $3.30 $3.45 $3.45 $3.53 $3.60
Non-core items
SCE tax impact of health care
legislation (0.12) (0.12)
Tax settlement 0.43 0.54
EMG discontinued operations 0.02 0.01
Total non-core items 0.33 0.43
EIX basic earnings per share $3.48 $3.63 $3.78 $3.88 $3.96 $4.03
Midpoint of core guidance
by key business element
SCE $2.80 $3.00
EMG 0.62 0.62
EIX parent company and other1 (0.12) (0.09)
Total $3.30 $3.53
Assumptions
Southern California Edison
Average rate base $16.2 billion
Approved capital structure
48% equity, 11.5% ROE
Potential energy efficiency earnings of $0.05 per share included
Edison Mission Group
Forward hedge position and prices as of September 30, 2010
EMMT pre-tax trading margin of $110-$130 million
Other
Normal operating and weather conditions
No changes in GAAP accounting
Excludes future discontinued operations and other non-core items
1 See Use of Non-GAAP Financial Measures in Appendix. Expected 2010 impact of participating securities is $(0.01) per share and is included in EIX parent company and other.
October 29, 2010 11 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Appendix
October 29, 2010 12 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Updates Since Our Last Presentation
Q3 10 results and standard information
EMG Hedge Program Status (p. 8)
EMG Wind Energy Business (pp. 9 & 10)
2010 Earnings Guidance (p. 11)
Global Tax Settlement (p. 16)
Liquidity Profile (p. 17)
Debt Maturity Profiles (p. 18)
SCE Regulatory Key Events (p. 35)
EMG Capital Expenditures (p. 38)
EMG environmental compliance program (pp. 41-43)
October 29, 2010 13 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Delivering Superior and Sustained Value
Edison International
A diversified and flexible platform best positions EIX in an industry undergoing unprecedented change Leverage regulated and competitive businesses Positioned for long-term earnings and dividend growth
Southern California Edison
Balance electric reliability, rates and public policy needs to assure long-term sustainable growth Focus on grid reliability and transmission investments Establish foundation for technology investments Decoupled regulatory model mitigates demand and fuel cost risks
Edison Mission Group
Achieve durable coal fleet environmental solutions Effectively manage merchant coal margins Develop wind projects for existing turbine commitments Emphasize liquidity management
Our key operating principles emphasize financial discipline, superior execution and innovative solutions to the challenges of today and tomorrow
October 29, 2010 14 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Financing Strategies for 2010-2012
Southern California Edison
Authorized capital structure
48% equity at 11.5% ROE
43% long-term debt
9% preferred stock
Periodic debt and preferred capital market transactions
Retain cash from operations to support balanced capital structure
Edison Mission Group
Current wind construction program funded by non-recourse project debt and U.S. Treasury cash grants Balance of capital program funded by operating cash flow and existing liquidity No financial support from or distributions to Edison International
Dividend Policy
Target payout ratio is 45-55% of SCE earnings Modest annual increases (subject to Board approval)
Depending upon dividends from SCE, EIX may utilize borrowings under its credit facility to fund dividends and holding company costs
October 29, 2010 15 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Global Tax Settlement
September 30, 2010 ($ millions)
EIX
Edison parent co. EIX
SCE Capital & other consolidated1
Income Statement2
Overall tax settlement impacts $401 $(572) $92 $(79)
Cash3
Net proceeds from termination $ $1,385 $ $1,385
of cross-border leases
Taxes settled 1,170 (1,538) (94) (462)
Estimated future net tax
(payments)/receipts4 (500) (130) 146 (484)
Cash flow expected over time $670 $(283) $52 $439
1 |
|
Includes all other Edison International consolidated subsidiaries. |
2 Includes Q3 10 non-core impact of $42 million for SCE and $(4) million for Edison Capital from revised California interest computation.
3 See the EIX: Liquidity & Capital Resources Intercompany Tax-Allocation Agreement section of the 2009 EIX 10-K for additional information concerning the overall tax settlement with the Internal Revenue Service.
4 Comprised primarily of payments for the 2003-2009 Federal audit settlement and tax on California global settlement refund received.
October 29, 2010 16 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Liquidity Profile
September 30, 2010 ($ millions)
EMG
EME Edison EIX
& Capital parent co.
Sources SCE Subs & other1 & other
Credit Facility $2,894 $1,100 $ $1,426
Credit Facility (availability)2 $2,883 $960 $ $1,426
Cash & short-term investments 861 1,097 21 34
Available Liquidity $3,744 $2,057 $21 $1,460
1 |
|
Edison Capital & other includes Mission Energy Holding Company and other EMG subsidiaries. |
2 Excludes the unused and/or unfunded commitments of subsidiaries of Lehman Brothers Holdings of $36 million for EMG. In June 2009, SCE and EIX amended their credit facilities to remove a subsidiary of Lehman Brothers Holding as a lender.
October 29, 2010 17 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Debt Maturity Profiles
September 30, 2010 ($ millions)
Debt Profile 2010 2011 2012 2013
Short- and Long-Term Debt Maturities
SCE $ $ $ $
EMG1 19 192 49 555
EIX
Expiration of Credit Facilities
SCE2 $ $ $ $2,894
EME 600
MWG 500
EIX2 1,426
1 Cedro Hill construction loan $78 million and Laredo Ridge construction loan $20 million, included in 2011 convert to long-term financing subject to meeting specific provisions.
2 |
|
$98 million of SCE commitments and $47 million of the EIX commitments mature in 2012. |
October 29, 2010 18 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Appendix
October 29, 2010 19 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Highlights
One of the nations largest electric utilities
Over 13 million residents in service territory
4.9 million customer accounts
50,000 square-mile service area
Over 110,000 miles of distribution and transmission lines
8-11% five-year average annual rate base growth driven by $18 billion$21.5 billion capital program
System reliability investments
Smart grid technology
California Renewable Portfolio Standard
October 29, 2010 20 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Constructive Environment
Element
Forward-looking rate-making
Multi-year cost-of-capital mechanism
Decoupling of regulated revenues from sales
Reliable electric system
Advance approval of annual procurement plans
Procurement trigger mechanism
FERC transmission incentives
Benefits to Customers and Investors
Three-year process allows planning of capex and operating costs
Through 2012, return-on-common equity tied to trigger mechanism based on Moodys Baa Utility Bond Index; current rate is 11.5% Allows utility to promote energy conservation; stabilizes revenues during economic cycles
State regulatory actions supportive of reliable electric system; significant infrastructure replacement program
Upfront prudency review of utility procurement plan
Pre-established mechanism to adjust procurement rates should costs rise or fall significantly
Return on common equity adders, construction work in progress in rate base and abandoned plant treatment (if needed)
Regulatory framework supports growth and reliability needs
October 29, 2010 21 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Capital Investment Forecast
($ billions)
$4.6
$4.4
$4.0 $4.3 $4.2
$2.9
2009 2010 2011 2012 2013 2014
Forecast By Classification
$ %
Solar Photovoltaic 1.0 4
Edison SmartConnect 1.1 5
Generation 3.0 14
Transmission 5.5 26
Distribution 10.9 51
Total 21.5 100
By Proceeding %
2009 CPUC Rate Case 22
Total 2012 CPUC Rate Case 41
$21.5 Other CPUC 11
$18.0 FERC Rate Cases 26
Total 100
Forecast $4.0 $4.4 $4.6 $4.3 $4.2 Range1 $3.3 $3.7 $3.9 $3.6 $3.5
1 Forecast includes 2009 CPUC GRC & FERC Decisions and currently forecasted 2010-2014 FERC and 2012-2014 CPUC capital spending, subject to timely receipt of permitting, licensing and regulatory approvals. Forecast range reflects a 16.5% potential variability to annual investment levels related to execution risk, scope change, delays, regulatory constraints and other contingencies.
October 29, 2010 22 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Rate Base Forecast
($ billions)
$25.2
$23.0
$20.8
$18.1
$16.2
$14.8
2009 2010 2011 2012 2013 2014
5-Yr CAGR2
Forecast $14.8 $16.2 $18.1 $20.8 $23.0 $25.2 11% Range1 $15.8 $17.2 $19.0 $20.5 $22.2 8%
1 Forecast includes: (1) 2009 CPUC GRC & FERC Decisions; (2) forecasted 2010-2014 FERC and 2012-2014 CPUC rate base, subject to timely receipt of permitting, licensing and regulatory approvals; (3) FERC construction work in progress forecast; (4) estimated impact of accelerated depreciation of the Economic Stimulus Act of 2009; and (5) CPUC approved solar rooftop program. Rate Base forecast range reflects capital spending forecast range from SCE Capital Investment Forecast. Update to forecast expected after SCE 2012 GRC application filing. Does not include impact of recently enacted bonus depreciation.
2 |
|
Rate Base related earnings per share growth rate may vary depending on the level of financing and other activities. |
October 29, 2010 23 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Transmission Investment Program
San Joaquin Cross Valley Loop
Rector SCE Highwind Service Whirlwind WindhubTerritory
Antelope Eldorado
Santa Clarita Palmdale Ivanpah
Vincent
Pardee Devers MiraLoma
Los Angeles Alberhill SantaAna Valley PalmSprings Colorado River
San Diego
DCR 500kV Tehachapi Segments 1-3 500kV Alberhill Tehachapi Segments 4-11 500kV Eldorado Ivanpah San Joaquin Cross Valley Loop Existing Substation
2010-2014 Project Name Phase In-Service ($ millions)1
Tehachapi Segment 3-112 Complete/Construction 2009-2015 $1,742 Devers-Colorado River Project Licensing 2013 658 Eldorado-Ivanpah Licensing 2013 469 San Joaquin Cross Valley Loop Engineering/Construction 2014 128 Alberhill Licensing 2014 171 Other Projects3 Various Various 2,375
Grand Total $5,543
Transmission investment needed to strengthen system reliability and increase access to renewable energy
1 |
|
FERC jurisdictional assets only. Subject to timely receipt of permitting, licensing and regulatory approvals. |
2 A portion of Segment 3 was ready for service in 2009. The remainder is under construction and will be placed in service under a phased approach from 2011 through 2013.
3 Includes new transmission projects to connect renewable generation and projects related to reliability, load growth, infrastructure replacement and grid monitoring and control.
October 29, 2010 24 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Distribution Investment Program
Distribution investments required to meet customer growth, load growth, infrastructure needs, information technology and related general plant Demonstrated operational capability to execute infrastructure replacement programs Slower economy, resulting in less customer growth, allows for increased infrastructure replacement investment Smart Grid technology to provide increasing investment options
20102014
Investment in Distribution Assets $10.9 Billion
Other2
Load Growth General Plant1
New Service Connections
Infrastructure Replacement
1 |
|
Includes information technology, facilities/buildings, corporate center, etc. |
2 |
|
Includes underground conversions, customer requests/relocations, claims, etc. |
October 29, 2010 25 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE SONGS Steam Generator Replacement
Total approved investment of $630 million
$270 million remaining investment in 2010 and 2011 Unit 2 generators installed in December 2009, on-line April 2010 Unit 3 installation planned for Q4 2010
2009 2010 2011
Q4 Q1 Q2 Q3 Q4 Q1
Unit 2 Steam Generator Unit 3 Steam Generator
Replacement and refueling Replacement
outage
October 29, 2010 26 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Solar Photovoltaic Program
SCE authorized to build 250 MW and contract for 250 MW1
1-2 MW average project primarily on commercial rooftops
SCE-owned
Master Supply Agreements in place for all major components Projected 19 MW of SCE-owned solar installed and 25 MW in construction by year-end 2010 MOU w/ ProLogis in place for 50 MW Remaining ground mount sites in final negotiation
Contracted
Annual Request for Offers (RFO) to procure 250 MW, under 20-year contracts
Executed 36 solar PV contracts for 60 MW (DC) in July 2010
Online dates for majority of contracts anticipated in 2011 and 2012
Next RFO anticipated in the first half of 2011
SCE Construction
SCE Pilot Sites started on 6 rooftops
completed and 1 ground site SCE to construct approximately 50 MW each year
2009 2010 2011 2012 2013 2014
CPUC approval 60 MW awarded Various IPP sites in future construction
June 2009 to IPPs July 2010
1 CPUC decision received June 2009 authorized SCE to construct up to 250 MW for a cost of $1 billion, and ordered SCE to procure up to 250 MW from independent solar producers.
October 29, 2010 27 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE SmartConnectTM Program
Five million electric meters to be replaced with smart meters from 2009 through 2012 Total approved project: $1.6 billion ($1.25 billion capital) Implementation expected to:
Provide all residential and small commercial customers access to energy use and cost information and new dynamic rate options
Promote energy efficiency benefits, potentially reducing as much as 1,000 MW of peak demand
Avoid GHG emissions up to 365,000 metric tons per year
Provide capability to integrate smart appliances and devices within the home
2008 2009 2010 2011 2012
August 2008 program September 2009 1.6 million meters installed Enhanced information and 100% meter deployment,
approved by CPUC deployment launch program-to-date, services on SCE.com remote service switch
remote service switch for website, enhanced outage enhancements, load control,
customer move in/move information smart thermostat programs,
out, dynamic rate options and Home Area Network
(HAN) capabilities
October 29, 2010 28 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
California Renewable Policy
Governor Schwarzeneggers executive order advances renewable energy goals from 20% to 33%
California Air Resources Board (CARB) actions
Final regulation approved September 2010
Targets: 20% in 2013; 24% in 2016; 28% in 2018; 33% in 2020
Policy debates in other forums (e.g., CPUC, state legislature) center around
Use of out-of-state resources
Compliance flexibility around targets
Cost impacts for customers
Applicability to Municipal utilities and other retail electricity providers
SCE is taking a proactive approach towards environmental stewardship policy formulation
October 29, 2010 29 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Renewable Portfolio
SCE 2010 20% Renewable Energy Goal
Contracts are in place to meet 20% of customers energy requirement with renewable resources, but a portion of energy delivery may be delayed in 2010 due to transmission constraints. SCE expects to meet the 2010 goal with flexible compliance that allows banking of previous energy surplus and earmarking of future renewable energy deliveries.
Renewable Resources
(billion kWh)
Small Hydro 4% Solar 6% Biomass 7%
Wind 26%
Geothermal 57%
28.2
88% Increase
15.0
10% Increase
13.6
2009
2010 20% RPS
(forecast)
2020 Potential 33% RPS
(forecast)
SCE Renewable Resource % of Total Delivered Portfolio 17% 19+%
October 29, 2010 30 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Cost of Capital Mechanism
Moodys Baa Utility Index 12-month moving average and spot rate through 10/22/101
10 9 8 7 6 5 4
Rate (%)
Spot rate1
Average for measurement period
Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10
In 2008, In CPUC 2009, approved the CPUC multi -year cost of capital mechanism through 2010 with authorized return on equity (ROE) at 11.5% extended the mechanism through 2012 Cost of Capital mechanism allows for indexed changes in SCEs authorized ROE
Triggers based on 12-month average of Moodys Baa utility bond index, measured in September of each year
If index exceeds a 1% deadband from starting index value of 6.26%, ROE changes by half the difference As of September 2010, index averaged 6.05%
At September 2010, index did not exceed 7.26% and was not below 5.26% to trigger a ROE change
SCEs authorized ROE for 2011 will continue at 11.5%
1 Spot rate is daily yield on Moodys Baa Utility Bond Index and the Measurement Period Average is the average of the monthly yields on the index beginning with the first month of the measurement period.
October 29, 2010 31 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Rates and Bills Comparison
2008 Average Residential Rates1 (¢/kWh)
15.0
11.6
30% Higher
U.S. Average SCE
Key Factors
SCEs residential rates are above national average due, in part, to cleaner fuel mix
Costs for renewables are higher than high carbon sources
However, average monthly residential bills are lower than national average, with high rate levels offset by significantly lower average customer usage
Residential usage is 30% lower than national average, due to a combination of factors including relatively mild climate and higher efficiency building standards
2008 Average Residential Bills1 ($ per Month)
100
90
9%
Lower
U.S. Average SCE
1 |
|
EIAs 2008 Electric Sales, Revenue, and Average Price Data. |
October 29, 2010 32 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE 2012 CPUC General Rate Case
Notice of Intent submitted July 19, 2010
GRC sets base revenue requirement for 2012-2014
Primarily covers SCEs generation and distribution functions
Includes Solar Photovoltaic (PV) program beginning in 2012 and SmartConnect beginning in 2013
Excludes fuel and purchased power costs
Excludes cost of capital (separate proceeding) and FERC jurisdictional transmission 2012 revenue requirement request of $6.3 billion
$903 million increase or 7.9% increase over present rate revenues
Post test year1 requested increase of $305 million in 2013, followed by an additional increase of $542 million in 2014 2012-2014 revenue requirement increase driven by
System reliability critical need for sustained infrastructure replacement program
System expansion to accommodate load growth
O&M expense primarily for capital-related projects, information technology, insurance and pension.
1 |
|
Attrition adjustment. |
October 29, 2010 33 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE 2012 CPUC GRC Projected Schedule
2012 GRC application forecast to be filed in late November 2010 Final Decision expected in December 2011
2010 2011
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
July 19 GRC July 16-August 2 Final
Notice of Application Opening and Decision
Intent Filed Reply Briefs
June 1-16 ALJ Proposed
Evidentiary Decision
Hearings
October 29, 2010 34 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Regulatory Key Events
Case Date of Next
Number Filing Status Milestone
September 2009, FERC accepted SCEs proposed Hearings begin
2010 FERC Rate Case ER09-1534 07/31/09 2010 base transmission rates and made them effective March 1, 2010, subject to refund. December 1, 2010 ALJ order is expected in April 2011.
Tehachapi Transmission A. 07-06-031 06/28/07 October 2010, Federal Record of Decision obtained from U.S. Forest Service. Special Use Permit expected from the U. S. Forest Service in December 2010.
DCR Transmission A. 05-04-015 04/11/05 August 2010, SCE obtained final approval from the CPUC to commence construction. Federal Record of Decision expected from the Bureau of Land Management in Q4 2010.
Eldorado-Ivanpah Transmission A. 09-05-027 05/28/09 September 2010, SCE submitted Reply Briefs to the CPUC. Final EIR/EIS is expected from the CPUC in Q4 2010.
Alberhill A. 09-09-022 09/30/09 Permit to Construct (PTC) filed in September 2009 and converted to a CPCN filing in March 2010. Draft EIR is expected from the CPUC in Q4 2010.
San Joaquin Cross A. 08-05-039 05/30/08 July 2010, the CPUC issued a Certificate of Public N/A
Valley Loop Convenience and Necessity (CPCN).
October 29, 2010 35 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Appendix
October 29, 2010 36 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Business Platform
October 15, 2010
Operating Platform1 MW %
Coal 7,395 74
Natural Gas 1,269 13
Wind 1,185 12
Other 153 1
Total 10,002 100
Wind Development Pipeline MW
Pipeline2 ~3,700
Under Construction and Pending 685
Thermal Pipeline
Natural Gas3 479
145
141
1,884 145 67 53 5,471 305 40 19 964
190 114
311
1 Natural gas includes oil-fired; other includes Doga in Turkey (144 MW) and Huntington biomass (9 MW) which are not shown.
2 |
|
Owned or under exclusive agreement. |
3 Deliveries under the power sales agreement are expected to commence in 2013. Construction will be unable to begin until the legal challenges to the Priority Reserve emission credits are resolved or another source of credits for the project is identified.
October 29, 2010 37 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Capital Expenditures
September 30, 2010 ($ millions)
2009 20105 2011 2012
Midwest Generation
Plant capital expenditures $54 $76 $38 $22
Environmental expenditures1 24 50 151 132
Homer City
Plant capital expenditures 19 21 18 25
Environmental expenditures2 7
Renewable Projects
Capital & construction3 171 673 212
Turbine commitments4 265 82
Other capital expenditures 8 21 18 19
Total $548 $841 $519 $198
1 Environmental expenditures include primarily expenditures related to selective non-catalytic reduction (SNCR) equipment and $174 million for expenditures during the remainder of 2010 to 2012 to begin to retrofit initial units using dry scrubbing with sodium-based sorbents to comply with the CPS requirements for SO2 emissions. Midwest Generation could elect to shut down units instead of installing controls to be in compliance with the CPS, and, therefore, decisions about any particular combination of retrofits and shutdowns it may ultimately employ to comply remain subject to conditions applicable at the time decisions are required or made.
2 |
|
Excludes amounts that may become required under environmental regulations for future operations. |
3 Amounts include an unconsolidated project in which construction expenditures will be substantially funded by EME. Amounts also include projects under construction where project financing has been secured. The available balance under secured financing arrangements was $254 million as of September 30, 2010.
4 Amounts exclude balance of project costs for the 75 MW available for new projects, which EME estimates to be an additional $50 million to $90 million based on typical project costs. Turbine commitment figures include the impact of the October 8, 2010 Mitsubishi settlement agreement.
5 |
|
Includes actual expenditures, accruals and estimated remaining for 2010. |
October 29, 2010 38 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Capacity Sales
September 30, 2010
Installed Capacity MW Unsold Capacity1 MW Capacity Sold2 MW RPM Capacity Sold in Base Residual Auction MW Other Capacity Sales, Net of Purchases3 Price per MW-day1 Aggregate MW
Average Price per MW-day Average Price per MW-day
Oct 1, 2010 to May 31, 2011
Midwest Generation 5,477 (548) 4,929 4,929 $174.29 $174.29
Homer City 1,884 (261) 1,623 1,813 $174.29 (190) $53.95 $188.38
June 1, 2011 to May 31, 2012
Midwest Generation 5,477 (495) 4,982 4,582 $110.00 400 $85.00 $107.99
Homer City 1,884 (113) 1,771 1,771 $110.00 $110.00
June 1, 2012 to May 31, 2013
Midwest Generation 5,477 (773) 4,704 4,704 $16.46 $16.46
Homer City 1,884 (232) 1,652 1,736 $133.37 (84) 16.46 $139.31
June 1, 2013 to May 31, 2014
Midwest Generation 5,477 (827) 4,650 4,650 $27.73 $27.73
Homer City 1,884 (104) 1,780 1,780 $226.15 $221.034
1 Capacity not sold arises from: (1) capacity retained to meet forced outages under the RPM auction guidelines, and (2) capacity that PJM does not purchase at the clearing price resulting from the RPM auction.
2 Excludes 25 to 84 MW of capacity for periods ranging from October 1, 2010 to May 31, 2012 at Homer City sold in conjunction with load requirements services contracts.
3 Other capacity sales and purchases, net includes contracts executed in advance of the RPM base residual auction to hedge the price risk related to such auction, participation in RPM incremental auctions, and other capacity transactions entered into to manage capacity risks.
4 |
|
Includes the impact of a 100 MW capacity swap transaction executed prior to the base residual auction at $135 MW-day. |
October 29, 2010 39 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Debt Covenant Status
Status at
12/31/09 3/31/10 6/30/10 9/30/10
EME Credit Facility
Funds Flow Available for Interest Ratio 1.72 1.99 1.72 1.71
Covenant threshold (not less than) 1.20 1.20 1.20 1.20
Corporate-Debt-to-Capital Ratio 0.54 0.53 0.53 0.52
Covenant threshold (not more than) 0.75 0.75 0.75 0.75
Midwest Generation Credit Facility
Debt to Capitalization Ratio 0.18 0.16 0.16 0.15
Covenant threshold (less than or equal to) 0.60 0.60 0.60 0.60
Homer City Lease Agreement
Senior Rent Service Coverage Ratio 2.96 3.10 2.53 2.81
Covenant Threshold (greater than) 1.70 1.70 1.70 1.70
October 29, 2010 40 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Illinois Compliance Agreement Timeline
Compliance Deadlines and Estimated Construction Timelines1
Completed 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
ACI ($45 million) Waukegan 7 Will County 3
0.008 or 90% reduction
Mercury
Compliance deadlines and rates (lb/GWh) Construction timelines
NOx
Compliance deadlines and rates (lb/mmbtu) Construction timelines
SO2
Compliance deadlines and rates (lb/mmbtu)
Construction timelines
(Cost included in SO2 spend)
0.11
$158 million
Waukegan 7 Crawford 7,
0.44 Waukegan 8 Joliet,
0.41 Fisk Powerton,
0.28 0.195 Crawford 8 Will
0.15 County
0.13
0.11
Up to $1.2 billion
NOx SO2 Mercury
Unit-specific technology requirements
Fleet-wide average emission rate requirements Capital spending period
1 Simplified summary of key compliance deadlines and estimated construction timelines. Unit-specific deadlines as of December 31 of the calendar year shown. SO2 unit-specific deadlines apply to Unit 19 at Fisk, Units 7 and 8 at Waukegan, Units 7 and 8 at Crawford, Units 7 and 8 at Joliet, Units 5 and 6 at Powerton and Units 3 and 4 at Will County.
October 29, 2010 41 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
MWG Environmental Compliance Scenario
Pollutant Regulations Technology Cost Profile1
Mercury Illinois CPS, Future EPA Maximum Available Control Technology (MACT) Activate Carbon Injection & Particulate Removal Upgrades Additional cost included in SO scope 2
NO X Illinois CPS, EPA Clean Air Transport Rule (CATR) Selective Non-Catalytic Reduction Dry Sorbent-Injection $158 million 2010-2011
SO 2 Illinois CPS, EPA CATR using Sodium-Carbonate & Particulate Removal Upgrades Up to $1.2 billion 2010-2018
Hazardous Air Pollutant (HAP) Acid Gases Future EPA MACT Dry Sorbent-Injection using Sodium-Carbonate & Particulate Removal Upgrades Additional cost included in SO scope 2
1 |
|
Includes costs related to final regulations. The impact of future regulations may increase estimated costs. |
October 29, 2010 42 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
HC Environmental Compliance Scenario
Pollutant Regulations Technology Cost Profile
Mercury Future EPA MACT Wet Limestone or NID Flue Gas Desulphurization Dependent on future EPA rules
NO X EPA CATR, Future Pennsylvania State Implementation Plan (SIP) Selective Catalytic Reduction
SO 2 EPA CATR, Pennsylvania SIP Wet Limestone or NID Flue Gas Desulphurization
Hazardous Air Pollutant (HAP) Acid Gases Future EPA MACT Wet Limestone or NID Flue Gas Desulphurization
October 29, 2010 43 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Edison Mission Marketing & Trading (EMMT)
Markets energy and capacity of merchant generation fleet Manages gross margin by hedging power-related risks such as forward electricity prices
Typically a rolling 12 to 24 month hedging program
Target approximately 50% of gross margin at risk for prompt year with lesser percentages hedged in out years depending on market conditions Proprietary trading in markets where it is active in merchant generation
Primarily transmission-related transactions
Largely in eastern markets
Controls on types and sizes of exposures
VaR; CFaR; stress and scenario testing; volumetric, duration, and credit limits
EMMT Trading Revenue ($ millions, pre-tax)
$195 $164 $143 $130 $105
$49
2005 2006 2007 2008 2009 YTD 2010
October 29, 2010 44 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Comparative Operating Statistics
Fav./(Unfav.) Fav./(Unfav.)
Q3 09 Q3 10 Variance % YTD 09 YTD 10 Variance %
Midwest Generation
Generation (in GWh)
Energy only contracts 8,272 8,449 20,389 22,091
Load requirement services contracts 1,333
Total 8,272 8,449 177 2% 21,722 22,091 369 2%
Performance
Equivalent availability 90.1% 91.7% 1.6% 83.8% 79.4% -4.4%
Forced outage rate 5.3% 5.4% -0.1% 6.0% 6.9% -0.9%
Pricing Information
Average realized energy price ($/MWh)
Energy only contracts $38.74 $42.09 $3.35 9% $42.11 $40.99 $(1.12) -3%
Load requirement services contracts $ $ $ 0% $62.52 $ $(62.52) -100%
Average cost of fuel ($/MWh) $19.57 $18.08 $1.49 8% $18.82 $17.41 $1.41 7%
Flat energy price NI Hub ($/MWh) $25.68 $38.17 $12.49 49% $28.62 $35.02 $6.40 22%
Homer City
Generation (in GWh) 2,994 2,984 (10) 0% 8,677 8,227 (450) -5%
Performance
Equivalent availability 92.7% 81.7% - -11.0% 86.8% 75.5% -11.3%
Forced outage rate 3.8% 15.8% -12.0% 7.6% 13.5% -5.9%
Pricing Information
Average realized energy price ($/MWh) $44.83 $48.04 $3.21 7% $49.06 $49.01 $(0.05) 0%
Average cost of fuel ($/MWh) $21.46 $24.92 $(3.46) -16% $22.05 $24.48 $(2.43) -11%
Flat energy price PJM West Hub ($/MWh) $33.17 $52.18 $19.01 57% $38.65 $46.65 $8.00 21%
Flat energy price HC Busbar ($/MWh) $29.45 $42.82 $13.37 45% $35.16 $39.80 $4.64 13%
Flat energy price basis (PJM West Hub HC Busbar) $3.72 $9.36 $5.64 $3.49 $6.85 $3.36
October 29, 2010 45 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Our Shareholder Value Proposition
Dual platform operating across the full spectrum of the electricity industry
Southern California Edison
Among the best domestic electric utility growth platforms
Supportive regulatory framework
Leadership in renewable energy, energy efficiency, electric vehicles and smart grid development
Edison Mission Group
See real equity value in the portfolio
Working coal fleet environmental compliance issues
Current wind construction program is self-funding
Commitment to long-term shareholder value creation
Incentive compensation and stock ownership guidelines consistent with shareholder interests
Edison people committed to excellence in safety and customer service
October 29, 2010 46 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Adjusted EBITDA
September 30, 2010 ($ millions)
Reconciliation to Earnings1 Q3 09 Q3 10 YTD 09 YTD 10
Earnings $60 $110 $(450) $214
Addback (Deduct):
Discontinued operations 4 5 (4)
Income from continuing operations 60 114 (445) 210
Interest expense 81 65 232 198
Interest income (3) (2) (15) (9)
Income taxes 7 63 (263) (22)
Depreciation and amortization 63 62 176 182
EBITDA2 208 302 (315) 559
Production tax credits 10 12 40 45
Addback:
Gain on sale of assets 1 7
Lease termination & other 886
Adjusted EBITDA $218 $315 $611 $611
1 |
|
Earnings refer to net income attributable to Edison Mission Group. |
2 |
|
See Use of Non-GAAP Financial Measures in Appendix for additional information on EBITDA and Adjusted EBITDA. |
October 29, 2010 47 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Earnings Non-GAAP Reconciliations
($ millions)
Reconciliation of EIX Core Earnings to EIX GAAP Earnings
Earnings
Attributable to Edison International Q3 09 Q3 10 YTD 09 YTD 10
Core Earnings1
SCE $300 $352 $707 $802
EMG 61 120 179 158
EIX parent company and other (3) 5 (16) (10)
EIX Core Earnings 358 477 870 950
Non-core items
SCE tax settlement 42 300 95
health care legislation (39)
regulatory items 46 46
EMG tax settlement2 (6) (624) 52
EIX tax settlement 1 50 28
EMG discontinued operations (1) (4) (5) 4
Total non-core items 45 33 (233) 140
EIX GAAP Earnings $403 $510 $637 $1,090
1 |
|
See Use of Non-GAAP Financial Measures in Appendix. |
2 |
|
Includes termination of Edison Capitals cross-border leases. |
October 29, 2010 48 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Results of Operations (Third Quarter)
($ millions)
Three Months Ended Sept 30, 2009 Three Months Ended Sept 30, 2010
Utility Utility
Utility Cost- Utility Cost-
Earning Recovery Total Earning Recovery Total
Activities Activities Consolidated Activities Activities Consolidated
Operating Revenue $1,494 $1,575 $3,069 $1,601 $1,497 $3,098
Fuel and purchased power 1,209 1,209 1,218 1,218
Operation and maintenance 506 296 802 541 262 803
Depreciation, decommissioning and amortization 288 14 302 300 16 316
Property and other taxes 60 60 64 1 65
Total operating expenses 854 1,519 2,373 905 1,497 2,402
Operating income 640 56 696 696 696
Net interest expense and other (45) (45) (84) (84)
Income before income taxes 595 56 651 612 612
Income tax expense 236 236 205 205
Net income 359 56 415 407 407
Net income attributable to noncontrolling
interest 56 56
Dividends on preferred and preference
stock not subject to mandatory redemption 13 13 13 13
Net income available for common stock $346 $ $346 $394 $ $394
Core Earnings $300 $352
Non-Core Earnings1:
Global settlement 42
Regulatory items 46
Total SCE GAAP Earnings $346 $394
1 |
|
See Use of Non-GAAP Financial Measures in Appendix. |
October 29, 2010 49 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
SCE Results of Operations (Year-To-Date)
($ millions)
Operating Revenue Fuel and purchased power Operation and maintenance
Depreciation, decommissioning and amortization Property and other taxes Gain on sale of assets Total operating expenses Operating income Net interest expense and other Income before income taxes Income tax expense Net income Net income attributable to noncontrolling interest Dividends on preferred and preference stock not subject to mandatory redemption Net income available for common stock Core Earnings Non-Core Earnings1: Global settlement Tax impact of health care legislation Regulatory items Total SCE GAAP Earnings
1 See Use of Non-GAAP Financial Measures in Appendix.
Nine Months Ended Sept 30, 2009 Nine Months Ended Sept 30, 2010 Utility Utility Utility Cost- Utility Cost-Earning Recovery Total Earning Recovery Total Activities Activities Consolidated Activities Activities Consolidated
$3,951 $3,580 $7,531 $4,175 $3,329 $7,504
2,688 2,688 2,612 2,612 1,464 758 2,222 1,598 674 2,272 836 41 877 905 40 945 187 187 193 2 195
(1) (1) (1) (1) 2,487 3,486 5,973 2,696 3,327 6,023 1,464 94 1,558 1,479 2 1,481 (214) (4) (218) (244) (2) (246) 1,250 90 1,340 1,235 1,235 159 159 338 338 1,091 90 1,181 897 897
90 90
38 38 39 39 $1,053 $ $1,053 $858 $ $858 $707 $802
300 95
(39)
46 $1,053 $858
October 29, 2010
50 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Adjusted Operating Income
($ millions)
Midwest Generation plants Homer City facilities Renewable energy projects Energy trading Big 4 projects Sunrise Doga March Point Westside projects Leveraged lease income Lease termination and other Other projects Other operating income (expense)
Corporate administrative and general Corporate depreciation and amortization Adjusted Operating Income/(Loss)
Three Months Ended Sept 30, Nine Months Ended Sept 30, 2009 2010 2009 2010
$69 $150 $257 $198
52 48 135 85
8 37 37
13 27 40 105
27 33 44 49
30 27 31 30
8 15
4 7 17 (1) 2 1
1 2 13 4
1 (888) (3) (1) 3 6
7 (3) (3) 1 202 292 (314) 545 (44) (37) (128) (111) (4) (5) (10) (13) $154 $250 $(452) $421
Reconciliation of EMG Adjusted Operating Income (AOI) or loss (AOL) to Operating Income1
AOI (AOL) $154 $250 $(452) $421 Less: Equity in earnings of unconsolidated affiliates 63 61 78 100 Dividend income from projects 1 11 18 Production tax credits 10 12 40 45 Other income (expense), net (2) (4) 1 Net loss attributable to noncontrolling interests 2 2 Operating income $80 $177 $(579) $257
1 See Use of Non-GAAP Financial Measures in Appendix.
October 29, 2010 51 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
EMG Other Non-GAAP Reconciliations
($ millions)
Reconciliation of Midwest Generation and Homer City Operating Revenues and Fuel Costs to All-in Average Realized Price/MWh and Average Realized Fuel Cost/MWh
Midwest Generation Homer City
Q3 09 Q3 10 YTD 09 YTD 10 Q3 09 Q3 10 YTD 09 YTD 10
Generation (GWh) 8,272 8,449 21,722 22,091 2,994 2,984 8,677 8,227
Operating revenues $372 $444 $1,096 $1,104 $170 $173 $496 $477
Less: Unrealized (gains) losses (2) 16 (22) 12 (6) (1) (11) 13
Other revenues (1) (25) (2) (27) 1 (1)
Realized revenues $369 $435 $1,072 $1,089 $164 $172 $486 $489
All-in average realized price/MWh $44.61 $51.44 $49.32 $49.30 $54.69 $57.55 $55.96 $59.48
Fuel costs $164 $151 $397 $390 $65 $74 $192 $201
Add back: Unrealized gains (losses) (2) 2 12 (5)
Realized fuel costs $162 $153 $409 $385 $65 $74 $192 $201
Average realized fuel cost/MWh $19.57 $18.08 $18.82 $17.41 $21.46 $24.92 $22.05 $24.48
Reconciliation of Midwest Generation and Homer City Operating Revenues to Segment Revenues and Fuel Costs
Operating revenues Q3 09 Q3 10 YTD 09 YTD 10
Midwest Generation $372 $444 $1,096 $1,104
Homer City 170 173 496 477
Renewable projects 26 29 101 93
Other revenues 25 45 69 161
Segment revenues as reported $593 $691 $1,762 $1,835
Fuel Costs
Midwest Generation $164 $151 $397 $390
Homer City 65 74 192 201
Other revenues (1) 3 (2) 11
Segment revenues as reported $228 $228 $587 $602
October 29, 2010 52 EDISON INTERNATIONAL®
Leading the Way in Electricity SM
Use of Non-GAAP Financial Measures
Edison Internationals earnings are prepared in accordance with generally accepted accounting principles used in the United States and represent the companys earnings as reported to the Securities and Exchange Commission. Our management uses core earnings and EPS by principal operating subsidiary internally for financial planning and for analysis of performance. We also use core earnings and EPS by principal operating subsidiary when communicating with analysts and investors regarding our earnings results and outlook, to facilitate the companys performance from period to period.
Core earnings is a Non-GAAP financial measure and may not be comparable to those of other companies. Core earnings and core earnings per share are defined as GAAP earnings and basic earnings per share excluding income or loss from discontinued operations and income or loss from significant discrete items that management does not consider representative of ongoing earnings. GAAP earnings refer to net income attributable to Edison International common shareholders or attributable to the common shareholders of each subsidiary. EPS by principal operating subsidiary is based on the principal operating subsidiaries net income attributable to the common shareholders of each subsidiary, respectively, and Edison Internationals weighted average outstanding common shares. The impact of participating securities (vested stock options that earn dividend equivalents that may participate in undistributed earnings with common stock) for each principal operating subsidiary is not material to each principal operating subsidiarys EPS and is therefore reflected in the results of the Edison International holding company, which we refer to as EIX parent company and other.
EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. Adjusted EBITDA includes production tax credits from EMGs wind projects and excludes amounts from gain on the sale of assets, loss on early extinguishment of debt and leases, and impairment of assets and investments. Our management uses Adjusted EBITDA as an important financial measure for evaluating EMG.
The average realized energy price and average realized fuel cost is a non-GAAP performance measure since such statistical measures exclude unrealized gains or losses recorded as operating revenues and unrealized gains or losses recorded as fuel expenses. Management believes that the average realized energy price and average realized fuel cost is more meaningful for investors as it reflects the impact of hedge contracts at the time of actual generation in period-over-period comparisons or as compared to real-time market prices.
A reconciliation of Non-GAAP information to GAAP information, including the impact of participating securities, is included either on the slide where the information appears or on another slide referenced in this presentation.
October 29, 2010 53 EDISON INTERNATIONAL®
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