EX-99.1 2 ex991-3q2014earningspressr.htm EIX PRESS RELEASE DATED 10/28/14 ex991-3Q2014 EarningsPressRelease


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

Edison International Reports Third Quarter 2014 Results

ROSEMEAD, Calif., October 28, 2014 - Edison International (NYSE: EIX) today reported third quarter 2014 net income on a GAAP basis of $480 million, or $1.47 per share, compared to $438 million, or $1.34 per share, in the third quarter of 2013. On an adjusted basis, Edison International’s third quarter 2014 core earnings were $496 million, or $1.52 per share, compared to $463 million, or $1.42 per share, in the third quarter of 2013.

Southern California Edison’s (SCE) third quarter 2014 core earnings increased $26 million, or $0.08 per share, primarily due to higher authorized revenues from rate base growth partially offset by lower income tax benefits. Edison International Parent and Other’s third quarter core losses decreased $7 million, or $0.02 per share, primarily due to higher income from Edison Capital's investments in affordable housing projects and higher income tax benefits, partially offset by higher corporate and new business expenses.
    
Edison International's third quarter 2014 core earnings exclude losses of $16 million, or $0.05 per share, from discontinued operations. Edison International's third quarter 2013 core earnings exclude losses of $25 million, or $0.08 per share, from discontinued operations.
 
“Edison International has delivered another quarter of strong financial results, and we have increased our 2014 core earnings guidance to $4.25-$4.35 per share," said Ted Craver, chairman and chief executive officer of Edison International. "The increased guidance complements our continued efforts to reduce uncertainties and return our dividend to the targeted payout level, in steps over time."
Year-to-Date Earnings

For the nine months period ended September 30, 2014, Edison International reported net income on a GAAP basis of $1,192 million, or $3.66 per share, compared to $614 million, or $1.88 per share, during the same period in 2013. On an adjusted basis, Edison International’s core earnings were $1,142 million, or $3.50 per share, compared to $973 million, or $2.98 per share, in the year-to-date period in 2013.

SCE’s core earnings for the nine months ended September 30, 2014, increased $161 million, or $0.49 per share, from the nine months ended September 30, 2013, primarily due to higher authorized revenues from rate base growth, higher income tax benefits, lower severance costs, and other income. Edison International Parent and Other’s core losses for the nine month period ended September 30, 2014, decreased $8 million, or $0.03 per share, from the nine months ended September 30, 2013, primarily due to higher income tax benefits and higher income from Edison Capital's investments in affordable housing projects, partially offset by new business expenses.
    
Edison International's year-to-date 2014 core earnings exclude charges of $96 million, or $0.29 per share, related to SCE’s settlement agreement for San Onofre Nuclear Generating Station (SONGS) and $146 million, or $0.45 per share, of income from discontinued operations. Year-to-date 2013 core earnings exclude the $365 million, or $1.12 per share, SONGS charge, and $7 million, or $0.02 per share, of earnings from tax benefits related to the sale of a lease investment in 2012.

    
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Edison International Reports Third Quarter 2014 Financial Results
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

The company increased its 2014 core earnings guidance to $4.25 to $4.35 per share and its basic earnings guidance to $4.41 to $4.51 per share. See the risk disclosure statement in the Appendix and the presentation accompanying the company’s conference call for further information.

Reconciliation of 2014 Core Earnings Guidance to Basic Earnings Guidance

 
2014 Earnings Guidance
 
2014 Earnings Guidance
 
as of 4/29/14
 
as of 10/28/14
 
Low
Mid
High
 
Low
Mid
High
SCE
 
$3.85
 
 
 
$4.43
 
EIX Parent & Other
 
(0.15)
 
 
 
(0.13)
 
EIX Core EPS
$3.60
$3.70
$3.80
 
$4.25
$4.30
$4.35
Non-core Items*
(0.36)
(0.36)
(0.36)
 
0.16
0.16
0.16
EIX Basic EPS
$3.24
$3.34
$3.44
 
$4.41
$4.46
$4.51

*Represents non-core items recorded for the three months ended March 31, 2014, and nine months ended September 30, 2014, respectively.

About Edison International

Edison International (NYSE:EIX), through its subsidiaries, is a generator and distributor of electric power and an investor in energy services and technologies, including renewable energy. Headquartered in Rosemead, Calif., Edison International is the parent company of Southern California Edison, one of the nation’s largest electric utilities.
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Edison International Reports Third Quarter 2014 Financial Results
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:    Tuesday, October 28, 2014, 2:00 p.m. (Pacific Time)
Telephone Numbers:    1-800-369-2198 (US) and 1-773-756-4618 (Int'l) - Passcode: Edison
Telephone Replay:    1-866-443-2924 (US) and 1-203-369-1100 (Int’l) - Passcode: 254516
Telephone replay available through November 6, 2014
Webcast:     www.edisoninvestor.com


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



Third Quarter Reconciliation of
Core Earnings Per Share to Basic Earnings Per Share
 
Three months ended
September 30,
 
 
 
Nine months ended
September 30,
 
 
 
2014
 
2013
 
Change
 
2014
 
2013
 
Change
Earnings (loss) per share attributable to Edison International
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
 
 
 
 
 
 
 
 
 
 
SCE
$
1.54

 
$
1.46

 
$
0.08

 
$
3.29

 
$
1.97

 
$
1.32

Edison International Parent and Other
(0.02
)
 
(0.04
)
 
0.02

 
(0.08
)
 
(0.09
)
 
0.01

Discontinued operations
(0.05
)
 
(0.08
)
 
0.03

 
0.45

 
—

 
0.45

Edison International
1.47

 
1.34

 
0.13

 
3.66

 
1.88

 
1.78

Less: Non-core items
 
 
 
 
 
 
 
 
 
 
 
     SCE
—

 
—

 
—

 
(0.29
)
 
(1.12
)
 
0.83

     Edison International Parent and Other
—

 
—

 
—

 
—

 
0.02

 
(0.02
)
     Discontinued operations
(0.05
)
 
(0.08
)
 
0.03

 
0.45

 
—

 
0.45

Total non-core items
(0.05
)
 
(0.08
)
 
0.03

 
0.16

 
(1.10
)
 
1.26

Core earnings (losses)
 
 
 
 
 
 
 
 
 
 
 
SCE
1.54

 
1.46

 
0.08

 
3.58

 
3.09

 
0.49

Edison International Parent and Other
(0.02
)
 
(0.04
)
 
0.02

 
(0.08
)
 
(0.11
)
 
0.03

Edison International
$
1.52

 
$
1.42

 
$
0.10

 
$
3.50

 
$
2.98

 
$
0.52

Note: Diluted earnings were $1.46 and $1.34 per share for the three months ended September 30, 2014 and 2013, respectively, and $3.62 and $1.87 per share for the nine months ended September 30, 2014 and 2013, respectively.

Third Quarter Reconciliation of
Core Earnings to Basic Earnings (in millions)
 
Three months ended
September 30,
 
 
 
Nine months ended
September 30,
 
 
(in millions)
2014
 
2013
 
Change
 
2014
 
2013
 
Change
Net income (loss) attributable to Edison International
 
 
 
 
 
 
 
 
 
 
 
Continuing operations
 
 
 
 
 
 
 
 
 
 
 
SCE
$
503

 
$
477

 
$
26

 
$
1,072

 
$
642

 
$
430

Edison International Parent and Other
(7
)
 
(14
)
 
7

 
(26
)
 
(27
)
 
1

Discontinued operations
(16
)
 
(25
)
 
9

 
146

 
(1
)
 
147

Edison International
480

 
438

 
42

 
1,192

 
614

 
578

Less: Non-core items
 
 
 
 
 
 
 
 
 
 
 
     SCE
—

 
—

 
—

 
(96
)
 
(365
)
 
269

     Edison International Parent and Other
—

 
—

 
—

 
—

 
7

 
(7
)
     Discontinued operations
(16
)
 
(25
)
 
9

 
146

 
(1
)
 
147

Total non-core items
(16
)
 
(25
)
 
9

 
50

 
(359
)
 
409

Core earnings (losses)
 
 
 
 
 
 
 
 
 
 
 
SCE
503

 
477

 
26

 
1,168

 
1,007

 
161

Edison International Parent and Other
(7
)
 
(14
)
 
7

 
(26
)
 
(34
)
 
8

Edison International
$
496

 
$
463

 
$
33

 
$
1,142

 
$
973

 
$
169





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


Consolidated Statements of Income

Edison International
 





 

Three months ended
September 30,

Nine months ended
September 30,
(in millions, except per-share amounts, unaudited)

2014

2013

2014

2013
Operating revenue

$
4,356


$
3,960


$
10,298


$
9,638

Fuel

77


95


219


249

Purchased power

2,105


1,713


4,344


3,569

Operation and maintenance

879


971


2,480


2,809

Depreciation, decommissioning and amortization

424


392


1,248


1,224

Impairment and other charges

(3
)

—


228


575

Total operating expenses

3,482


3,171


8,519


8,426

Operating income

874


789


1,779


1,212

Interest and other income

40


28


109


91

Interest expense

(141
)

(137
)

(422
)

(402
)
Other expenses

(29
)

(15
)

(52
)

(38
)
Income from continuing operations before income taxes

744


665


1,414


863

Income tax expense

220


177


284


173

Income from continuing operations

524


488


1,130


690

Income (loss) from discontinued operations, net of tax

(16
)

(25
)

146


(1
)
Net income

508


463


1,276


689

Preferred and preference stock dividend requirements
of utility

28


25


84


75

Net income attributable to Edison International common shareholders

$
480


$
438


$
1,192


$
614

Amounts attributable to Edison International common shareholders:








Income from continuing operations, net of tax

$
496


$
463


$
1,046


$
615

Income (loss) from discontinued operations, net of tax

(16
)

(25
)

146


(1
)
Net income attributable to Edison International common shareholders

$
480


$
438


$
1,192


$
614

Basic earnings (loss) per common share attributable to Edison International common shareholders:








Weighted-average shares of common stock outstanding

326


326


326


326

Continuing operations

$
1.52


$
1.42


$
3.21


$
1.88

Discontinued operations

(0.05
)

(0.08
)

0.45


—

Total

$
1.47


$
1.34


$
3.66


$
1.88

Diluted earnings (loss) per common share attributable to Edison International common shareholders:








Weighted-average shares of common stock outstanding, including effect of dilutive securities

329


328


329


329

Continuing operations

$
1.51


$
1.41


$
3.18


$
1.87

Discontinued operations

(0.05
)

(0.07
)

0.44


—

Total

$
1.46


$
1.34


$
3.62


$
1.87

Dividends declared per common share

$
0.355


$
0.3375


$
1.065


$
1.0125



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


Consolidated Balance Sheets
Edison International
 






(in millions, unaudited)
September 30,
2014

December 31,
2013
ASSETS
 

 
Cash and cash equivalents
$
142


$
146

Receivables, less allowances of $70 and $66 for uncollectible accounts at respective dates
1,218


838

Accrued unbilled revenue
998


596

Inventory
275


256

Derivative assets
103


122

Regulatory assets
1,170


538

Deferred income taxes
125


421

Other current assets
467


395

Total current assets
4,498


3,312

Nuclear decommissioning trusts
4,741


4,494

Other investments
204


207

Total investments
4,945


4,701

Utility property, plant and equipment, less accumulated depreciation and amortization of $7,997 and $7,493 at respective dates
31,919


30,379

Nonutility property, plant and equipment, less accumulated depreciation of $74 at both dates
102


76

Total property, plant and equipment
32,021


30,455

Derivative assets
245


251

Regulatory assets
7,329


7,241

Other long-term assets
437


686

Total long-term assets
8,011


8,178



















Total assets
$
49,475


$
46,646



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


Consolidated Balance Sheets

Edison International
 


 

 
(in millions, except share amounts, unaudited)

September 30,
2014

December 31,
2013
LIABILITIES AND EQUITY

 

 
Short-term debt

$
1,349


$
209

Current portion of long-term debt

704


601

Accounts payable

1,455


1,407

Accrued taxes

191


358

Customer deposits

214


201

Derivative liabilities

154


152

Regulatory liabilities

794


767

Other current liabilities

988


1,186

Total current liabilities

5,849


4,881

Long-term debt

10,133


9,825

Deferred income taxes and credits

6,762


7,346

Derivative liabilities

947


1,042

Pensions and benefits

1,454


1,378

Asset retirement obligations

2,960


3,418

Regulatory liabilities

6,387


4,995

Other deferred credits and other long-term liabilities

2,225


2,070

Total deferred credits and other liabilities

20,735


20,249

Total liabilities

36,717


34,955

Commitments and contingencies






Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at respective dates)

2,445


2,403

Accumulated other comprehensive loss

(23
)

(13
)
Retained earnings

8,314


7,548

Total Edison International's common shareholders' equity

10,736


9,938

Preferred and preference stock of utility

2,022


1,753

Total noncontrolling interests

2,022


1,753

Total equity

12,758


11,691






















Total liabilities and equity

$
49,475


$
46,646



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


Consolidated Statements of Cash Flows

Edison International
 



 

Nine months ended
September 30,
(in millions, unaudited)

2014

2013
Cash flows from operating activities:

 

 
Net income

$
1,276


$
689

Less: Income (loss) from discontinued operations

146


(1
)
Income from continuing operations

1,130


690

Adjustments to reconcile to net cash provided by operating activities:



 
Depreciation, decommissioning and amortization

1,248


1,224

Regulatory impacts of net nuclear decommissioning trust earnings

100


82

Impairment and other charges

228


575

Deferred income taxes and investment tax credits

303


257

Other

70


70

EME settlement payments

(225
)

—

Changes in operating assets and liabilities:



 
Receivables

(369
)

(406
)
Inventory

(19
)

68

Accounts payable

211


155

Other current assets and liabilities

(497
)

(458
)
Derivative assets and liabilities, net

(68
)

207

Regulatory assets and liabilities, net

41


94

Other noncurrent assets and liabilities

(126
)

(488
)
Net cash provided by operating activities

2,027


2,070

Cash flows from financing activities:

 

 
Long-term debt issued, net of premium, discount, and issuance costs of $5 and $6 at respective dates

395


394

Long-term debt matured or repurchased

(405
)

(201
)
Bonds remarketed, net

—


195

Preference stock issued, net

269


387

Preference stock redeemed

—


(400
)
Short-term debt financing, net

1,138


1,352

Settlements of stock-based compensation, net

(57
)

(40
)
Dividends to noncontrolling interests

(88
)

(82
)
Dividends paid

(347
)

(330
)
Net cash provided by financing activities

905


1,275

Cash flows from investing activities:

 

 
Capital expenditures

(2,856
)

(2,761
)
Proceeds from sale of nuclear decommissioning trust investments

5,846


4,574

Purchases of nuclear decommissioning trust investments and other

(5,951
)

(4,674
)
Other

25


(44
)
Net cash used by investing activities

(2,936
)

(2,905
)
Net (decrease) increase in cash and cash equivalents

(4
)

440

Cash and cash equivalents at beginning of period

146


170

Cash and cash equivalents at end of period

$
142


$
610