EX-99.1 2 ex991-2q2014earningspressr.htm EIX PRESS RELEASE DATED 7/31/14 ex991-2Q2014EarningsPressRelease


 
NEWS
 
 
 
FOR IMMEDIATE RELEASE        
Media relations contact:
Charles Coleman, (626) 302-7982
Investor relations contact:
Scott Cunningham, (626) 302-2540

Edison International Reports Second Quarter 2014 Results

ROSEMEAD, Calif., July 31, 2014 - Edison International (NYSE: EIX) today reported second quarter 2014 net income on a GAAP basis of $536 million, or $1.64 per share, compared to losses of $94 million, or $0.29 per share, in the second quarter of 2013. On an adjusted basis, Edison International’s second quarter 2014 core earnings were $352 million, or $1.08 per share, compared to $259 million, or $0.79 per share, in the second quarter of 2013.

Southern California Edison’s (SCE) second quarter 2014 core earnings increased $88 million, or $0.27 per share, primarily due to higher authorized revenues from rate base growth, income tax benefits, and other income. Edison International Parent and Other’s second quarter core losses decreased $5 million primarily due to consolidated state income tax benefits.
    
Second quarter 2014 core earnings exclude income of $184 million, or $0.56 per share, from discontinued operations. Second quarter 2013 core earnings exclude a charge of $365 million, or $1.12 per share, related to the shut down of SCE's San Onofre Nuclear Generating Station (SONGS), and $12 million, or $0.04 per share, of income from discontinued operations.
 
“Edison International continues to deliver strong earnings growth from investing in our core wires business infrastructure, managing our costs, and benefiting from favorable tax items," said Ted Craver, chairman and chief executive officer of Edison International. "Based on our year-to-date results, we expect full-year earnings to be well above the high end of our core earnings guidance range. We are not providing new earnings guidance at this time, but may consider adjusting guidance when third quarter results are reported."
Year-to-Date Earnings

For the six months ended June 30, 2014, Edison International reported net income on a GAAP basis of $712 million, or $2.18 per share, compared to $176 million, or $0.54 per share, during the same period in 2013. On an adjusted basis, Edison International’s core earnings were $646 million, or $1.98 per share, compared to $510 million, or $1.57 per share, in the year-to-date period in 2013.

SCE’s core earnings for the six months ended June 30, 2014 increased $136 million, or $0.41 per share, from the six months ended June 30, 2013, primarily due to higher authorized revenues from rate base growth, income tax benefits, lower operation and maintenance expenses and other income. Edison International Parent and Other’s core losses for the six month periods ended June 30, 2014, and 2013, were comparable with tax benefits related to consolidated state income taxes offset by higher corporate and new business expenses.
    
Year-to-date 2014 core earnings exclude charges of $96 million, or $0.29 per share, related to SCE’s settlement agreement for SONGS and $162 million, or $0.49 per share, of income from discontinued operations. Year-to-date 2013 core earnings exclude the $365 million, or $1.12 per share, SONGS charge, $7 million, or $0.02 per share, of earnings from tax benefits related to a sale of a lease investment in 2012, and $24 million, or $0.07 per share, of income from discontinued operations.
    

-more-


Edison International Reports Second Quarter 2014 Financial Results
Page 2 of 8


    
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

Based on the company’s year-to-date results, full-year earnings are expected to be above the high end of the guidance range due to several items not included in guidance. The company may consider adjusting guidance when third quarter results are reported. 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
as of 4/29/14
Low Mid High
SCE                             $3.85
EIX Parent & Other                     (0.15)
EIX Core EPS $3.60     $3.70 $3.80
Non-core Items     (0.36)
EIX Basic EPS $3.24 $3.34 $3.44

Note: Excludes $0.23 per share in core items recorded year-to-date but not in guidance, and $0.56 per share in non-core discontinued operations earnings recorded in the second quarter 2014 results but not in guidance.

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.
-###-


Edison International Reports Second Quarter 2014 Financial Results
Page 3 of 8


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:    Thursday, July 31, 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:    1-866-491-2936 (US) and 1-203-369-1724 (Int’l) - Passcode: 326512
Telephone replay available through August 9, 2014
Webcast:     www.edisoninvestor.com


Edison International Reports Second Quarter 2014 Financial Results
Page 4 of 8



Second Quarter Reconciliation of
Core Earnings Per Share to Basic Earnings Per Share

 
Three months ended June 30,
 
 
 
Six months ended June 30,
 
 
(in millions)
2014
 
2013
 
Change
 
2014
 
2013
 
Change
Earnings (loss) attributable to Edison International
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
 
 
 
 
 
 
 
 
 
 
SCE
$
1.11

 
$
(0.28
)
 
$
1.39

 
$
1.75

 
$
0.51

 
$
1.24

Edison International Parent and Other
(0.03
)
 
(0.05
)
 
0.02

 
(0.06
)
 
(0.04
)
 
(0.02
)
Discontinued operations
0.56

 
0.04

 
0.52

 
0.49

 
0.07

 
0.42

Edison International
1.64

 
(0.29
)
 
1.93

 
2.18

 
0.54

 
1.64

Less: Non-core items
 
 
 
 
 
 
 
 
 
 
 
     SCE
—

 
(1.12
)
 
1.12

 
(0.29
)
 
(1.12
)
 
0.83

     Edison International Parent and Other
—

 
—

 
—

 
—

 
0.02

 
(0.02
)
     Discontinued operations
0.56

 
0.04

 
0.52

 
0.49

 
0.07

 
0.42

Total non-core items
0.56

 
(1.08
)
 
1.64

 
0.20

 
(1.03
)
 
1.23

Core earnings (losses)
 
 
 
 
 
 
 
 
 
 
 
SCE
1.11

 
0.84

 
0.27

 
2.04

 
1.63

 
0.41

Edison International Parent and Other
(0.03
)
 
(0.05
)
 
0.02

 
(0.06
)
 
(0.06
)
 
—

Edison International
$
1.08

 
$
0.79

 
$
0.29

 
$
1.98

 
$
1.57

 
$
0.41

Note: Diluted earnings were $1.63 and $(0.29) per share for the three months ended June 30, 2014 and 2013, respectively, and $2.17 and $0.54 per share for the six months ended June 30, 2014 and 2013, respectively.
Second Quarter Reconciliation of
Core Earnings to Basic Earnings (in millions)

 
Three months ended June 30,
 
 
 
Six months ended June 30,
 
 
(in millions)
2014
 
2013
 
Change
 
2014
 
2013
 
Change
Net income (loss) attributable to Edison International
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
 
 
 
 
 
 
 
 
 
 
SCE
$
362

 
$
(91
)
 
$
453

 
$
570

 
$
165

 
$
405

Edison International Parent and Other
(10
)
 
(15
)
 
5

 
(20
)
 
(13
)
 
(7
)
Discontinued operations
184

 
12

 
172

 
162

 
24

 
138

Edison International
536

 
(94
)
 
630

 
712

 
176

 
536

Less: Non-core items
 
 
 
 
 
 
 
 
 
 
 
     SCE
—

 
(365
)
 
365

 
(96
)
 
(365
)
 
269

     Edison International Parent and Other
—

 
—

 
—

 
—

 
7

 
(7
)
     Discontinued operations
184

 
12

 
172

 
162

 
24

 
138

Total non-core items
184

 
(353
)
 
537

 
66

 
(334
)
 
400

Core earnings (losses)
 
 
 
 
 
 
 
 
 
 
 
SCE
362

 
274

 
88

 
666

 
530

 
136

Edison International Parent and Other
(10
)
 
(15
)
 
5

 
(20
)
 
(20
)
 
—

Edison International
$
352

 
$
259

 
$
93

 
$
646

 
$
510

 
$
136





Edison International Reports Second Quarter 2014 Financial Results
Page 5 of 8




Consolidated Statements of Income
 
Edison International
 
 
 
 
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
(in millions, except per-share amounts, unaudited)
2014
 
2013
 
2014
 
2013
Operating revenue
$
3,016

 
$
3,046

 
$
5,943

 
$
5,678

Fuel
71

 
81

 
143

 
154

Purchased power
1,168

 
1,076

 
2,239

 
1,855

Operation and maintenance
788

 
967

 
1,600

 
1,840

Depreciation, decommissioning and amortization
414

 
418

 
824

 
832

Impairment and other charges
—

 
575

 
231

 
575

Total operating expenses
2,441

 
3,117

 
5,037

 
5,256

Operating income (loss)
575

 
(71
)
 
906

 
422

Interest and other income
46

 
34

 
69

 
63

Interest expense
(139
)
 
(133
)
 
(281
)
 
(265
)
Other expenses
(16
)
 
(14
)
 
(23
)
 
(21
)
Income (loss) from continuing operations before income taxes
466

 
(184
)
 
671

 
199

Income tax expense (benefit)
84

 
(102
)
 
65

 
(4
)
Income (loss) from continuing operations
382

 
(82
)
 
606

 
203

Income from discontinued operations, net of tax
184

 
12

 
162

 
24

Net income (loss)
566

 
(70
)
 
768

 
227

Preferred and preference stock dividend requirements of utility
30

 
24

 
56

 
51

Net income (loss) attributable to Edison International common shareholders
$
536

 
$
(94
)
 
$
712

 
$
176

Amounts attributable to Edison International common shareholders:
 
 
 
 
 
 
 
Income (loss) from continuing operations, net of tax
$
352

 
$
(106
)
 
$
550

 
$
152

Income from discontinued operations, net of tax
184

 
12

 
162

 
24

Net income (loss) attributable to Edison International common shareholders
$
536

 
$
(94
)
 
$
712

 
$
176

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
$
1.08

 
$
(0.33
)
 
$
1.69

 
$
0.47

Discontinued operations
0.56

 
0.04

 
0.49

 
0.07

Total
$
1.64

 
$
(0.29
)
 
$
2.18

 
$
0.54

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

 
326

 
329

 
329

Continuing operations
$
1.07

 
$
(0.33
)
 
$
1.68

 
$
0.47

Discontinued operations
0.56

 
0.04

 
0.49

 
0.07

Total
$
1.63

 
$
(0.29
)
 
$
2.17

 
$
0.54

Dividends declared per common share
$
0.355

 
$
0.3375

 
$
0.710

 
$
0.6750





Edison International Reports Second Quarter 2014 Financial Results
Page 6 of 8


Consolidated Balance Sheets
 
Edison International
 
 
 
 
 
 
(in millions, unaudited)
 
June 30,
2014
 
December 31, 2013
ASSETS
 
 
 
 
Cash and cash equivalents
 
$
190

 
$
146

Receivables, less allowances of $67 and $66 for uncollectible accounts at respective dates
 
1,034

 
838

Accrued unbilled revenue
 
870

 
596

Inventory
 
277

 
256

Derivative assets
 
93

 
122

Regulatory assets
 
1,265

 
538

Deferred income taxes
 
389

 
421

Other current assets
 
433

 
395

Total current assets
 
4,551

 
3,312

Nuclear decommissioning trusts
 
4,740

 
4,494

Other investments
 
202

 
207

Total investments
 
4,942

 
4,701

Utility property, plant and equipment, less accumulated depreciation of $7,774 and $7,493 at respective dates
 
31,287

 
30,379

Nonutility property, plant and equipment, less accumulated depreciation of $77 and $74 at respective dates
 
77

 
76

Total property, plant and equipment
 
31,364

 
30,455

Derivative assets
 
217

 
251

Regulatory assets
 
7,345

 
7,241

Other long-term assets
 
445

 
686

Total long-term assets
 
8,007

 
8,178

 
 
 
 
 
Total assets
 
$
48,864

 
$
46,646



Edison International Reports Second Quarter 2014 Financial Results
Page 7 of 8


Consolidated Balance Sheets
 
Edison International
 
 
 
 
 
 
(in millions, except share amounts, unaudited)
 
June 30,
2014
 
December 31,
2013
LIABILITIES AND EQUITY
 
 
 
 
Short-term debt
 
$
1,253

 
$
209

Current portion of long-term debt
 
900

 
601

Accounts payable
 
1,306

 
1,407

Accrued taxes
 
127

 
358

Customer deposits
 
209

 
201

Derivative liabilities
 
144

 
152

Regulatory liabilities
 
826

 
767

Other current liabilities
 
1,008

 
1,186

Total current liabilities
 
5,773

 
4,881

Long-term debt
 
9,926

 
9,825

Deferred income taxes and credits
 
6,709

 
7,346

Derivative liabilities
 
1,051

 
1,042

Pensions and benefits
 
1,327

 
1,378

Asset retirement obligations
 
2,919

 
3,418

Regulatory liabilities
 
6,234

 
4,995

Other deferred credits and other long-term liabilities
 
2,522

 
2,070

Total deferred credits and other liabilities
 
20,762

 
20,249

Total liabilities
 
36,461

 
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)
 
2,434

 
2,403

Accumulated other comprehensive loss
 
(13
)
 
(13
)
Retained earnings
 
7,960

 
7,548

Total Edison International's common shareholders' equity
 
10,381

 
9,938

Preferred and preference stock of utility
 
2,022

 
1,753

Total noncontrolling interests
 
2,022

 
1,753

Total equity
 
12,403

 
11,691

 
 
 
 
 
Total liabilities and equity
 
$
48,864

 
$
46,646




Edison International Reports Second Quarter 2014 Financial Results
Page 8 of 8


Consolidated Statements of Cash Flows
 
Edison International
 
 
 
 
 
 
Six months ended June 30,
(in millions, unaudited)
 
2014
 
2013
Cash flows from operating activities:
 
 
 
 
Net income
 
$
768

 
$
227

Less: Income from discontinued operations
 
162

 
24

Income from continuing operations
 
606

 
203

Adjustments to reconcile to net cash provided by operating activities:
 
 
 
 
Depreciation, decommissioning and amortization
 
824

 
832

Regulatory impacts of net nuclear decommissioning trust earnings
 
78

 
161

Impairment and other charges
 
231

 
575

Deferred income taxes and investment tax credits
 
110

 
85

Other
 
46

 
45

EME settlement payments
 
(225
)
 
—

Changes in operating assets and liabilities:
 
 
 
 
Receivables
 
(185
)
 
(47
)
Inventory
 
(21
)
 
73

Accounts payable
 
116

 
88

Other current assets and liabilities
 
(392
)
 
(393
)
Derivative assets and liabilities, net
 
64

 
152

Regulatory assets and liabilities, net
 
(317
)
 
(11
)
Other noncurrent assets and liabilities
 
(332
)
 
(502
)
Net cash provided by operating activities
 
603

 
1,261

Cash flows from financing activities:
 
 
 
 
Long-term debt issued, net of premium, discount, and issuance costs of $4 and $6 at respective dates
 
396

 
394

Long-term debt matured or repurchased
 
(4
)
 
(199
)
Bonds remarketed, net
 
—

 
195

Preference stock issued, net
 
269

 
387

Preference stock redeemed
 
—

 
(400
)
Short-term debt financing, net
 
1,043

 
678

Settlements of stock-based compensation, net
 
(51
)
 
(37
)
Dividends to noncontrolling interests
 
(54
)
 
(52
)
Dividends paid
 
(231
)
 
(220
)
Net cash provided by financing activities
 
1,368

 
746

Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(1,856
)
 
(1,834
)
Proceeds from sale of nuclear decommissioning trust investments
 
3,750

 
1,956

Purchases of nuclear decommissioning trust investments and other
 
(3,833
)
 
(2,128
)
Other
 
12

 
(23
)
Net cash used by investing activities
 
(1,927
)
 
(2,029
)
Net increase (decrease) in cash and cash equivalents
 
44

 
(22
)
Cash and cash equivalents at beginning of period
 
146

 
170

Cash and cash equivalents at end of period
 
$
190

 
$
148