Edison International Reports Third Quarter 2009 Results
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ROSEMEAD, Calif.--(BUSINESS WIRE)-- Edison International (NYSE: EIX) today reported third quarter 2009 GAAP earnings of $1.23 per share, compared to $1.33 per share in the same quarter last year. Third quarter 2009 core earnings were $1.09 per share compared to $1.46 per share in the third quarter 2008. The decline is largely attributable to lower earnings at Edison Mission Group (EMG), partially offset by higher operating results at Southern California Edison (SCE). Core earnings exclude discontinued operations and other non-core items as discussed below.
"Edison International is on track to meet its financial objectives laid out for investors at the beginning of the year. Our strong focus on execution in managing our operations helped us to achieve a good quarter," said Theodore F. Craver, Jr., chairman and chief executive officer of Edison International.
Third Quarter Earnings Detail
SCE's third quarter 2009 GAAP earnings were $1.06 per share compared to $0.72 per share in the third quarter 2008. Core earnings were $0.92 per share compared to $0.87 per share in the same quarter last year. This increase was primarily due to higher operating income associated with the utility's 2009 General Rate Case (GRC) and lower nonoperating expenses, partially offset by higher income tax expense. SCE also recorded a non-core benefit in the third quarter 2009 of $0.14 per share to reflect the non-cash accounting benefit from the final regulatory approval to transfer its Mountainview power plant to utility rate base. SCE recorded a $0.15 per share non-core charge in the third quarter 2008 resulting from the California Public Utilities Commission (CPUC) performance-based ratemaking decision.
EMG's third quarter 2009 GAAP earnings were $0.19 per share compared to $0.66 per share in the third quarter 2008. Core earnings were $0.19 per share compared to $0.64 per share in the same quarter last year. Core earnings declined primarily from lower income at its coal- and gas-fired projects driven by lower energy prices and from lower trading income. Core results for the 2008 period included a $0.05 per share charge related to power contracts with Lehman Brothers and excluded $0.02 per share from discontinued operations.
Edison International parent company and other reported a third quarter 2009 loss of $0.02 per share compared to a $0.05 per share loss in the third quarter 2008.
Note: GAAP earnings and losses refer to net income or losses attributable to Edison International and GAAP earnings or losses per share refer to basic earnings or losses per common share 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 Guidance to GAAP Earnings Guidance.
Year-to-Date Earnings Summary
Edison International reported GAAP earnings of $1.94 per share for the nine-month period ending September 30, 2009, compared to $3.03 per share for the same period last year. Core earnings for the first nine months of 2009 were $2.66 per share compared to $3.18 per share for the same period in 2008. Non-core items included an $0.85 per share charge from the global tax settlement with the Internal Revenue Service and the associated termination of Edison Capital's cross-border, leveraged leases, SCE's third quarter non-core items discussed above and discontinued operations at EMG.
Year-to-Date Earnings Detail
SCE's GAAP earnings through September 30, 2009 were $3.23 per share compared to $1.66 per share in the same period last year. Core earnings for the first nine months of 2009 were $2.17 per share compared to $1.81 per share for the same period in 2008. The increase in core earnings reflects higher operating income related to the GRC decision and lower nonoperating expenses, partially offset by higher income tax expense. SCE's year-to-date core earnings exclude the impact of the global tax settlement, the impact from the transfer of the Mountainview power plant to utility rate base in 2009 and the CPUC's performance-based ratemaking decision in 2008.
EMG's GAAP loss through September 30, 2009 was $1.38 per share compared to GAAP earnings of $1.47 per share in the same period last year. Year-to-date core earnings for EMG were $0.55 per share compared to $1.47 per share in the same period last year. This decrease reflects lower income at its coal- and gas-fired projects driven by lower energy prices as well as lower trading income, lower earnings at Edison Capital and the favorable buy-out of a coal contract in 2008. EMG's year-to-date core earnings exclude the impacts of the global tax settlement together with discontinued operations.
Edison International parent company and other reported GAAP earnings through September 30, 2009 of $0.09 per share, compared to a loss of $0.10 per share in the same period last year. GAAP earnings include a $0.15 per share benefit in the first half of 2009 related to the global tax settlement.
2009 Earnings Guidance
The company narrowed its 2009 earnings guidance range to $2.23 to $2.43 per share on a GAAP basis and $2.95 to $3.15 per share on a core basis. See the risk disclosure statement in Appendix below and the presentation accompanying the company's conference call for further information.
Reconciliation of Core Earnings Guidance to GAAP Earnings Guidance1
2009 Earnings 2009 Earnings Guidance
Core Earnings Per Guidance
Share1 as of November 6, 2009
as of August 7, 2009
EIX core earnings $2.90 - $3.20 $2.95 - $3.15
Non-core items:
Global tax (0.85)
settlement:
SCE $0.92
EMG (1.92)
EIX parent company 0.15
and other
SCE - regulatory item 0.14
EMG - Discontinued (0.01)
Operations
Total Non-Core Items (0.72) (0.72)
EIX GAAP earnings $2.18 - $2.48 $2.23 - $2.43
Midpoint of 2009 core
guidance by business
element:
SCE $2.49 $2.55
EMG 0.70 0.60
EIX parent company (0.14) (0.10)
and other
Total $3.05 $3.05
1 See Use of Non-GAAP Financial Measures in Appendix below. GAAP earnings per
share refer to basic earnings per common share attributable to Edison
International common shareholders. The expected impact of participating
securities is $(0.02) per share and is included in EIX parent company and
other.
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 nation's largest electric utilities, and Edison Mission Group, a competitive power generation business and parent company to Edison Mission Energy and Edison Capital.
Appendix
Use of Non-GAAP Financial Measures, Conference Call Information, Risk Disclosure Statement and Financial Schedules
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 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 as primary performance measurements when communicating with analysts and investors regarding our earnings results and outlook, as it allows us to more accurately compare the company's ongoing performance across periods.
Core earnings exclude discontinued operations and other non-core items and are reconciled to GAAP earnings. Earnings per share (EPS) by principal operating subsidiary is based on the principal operating subsidiary net income attributable to the common shareholders of each operating subsidiary, respectively, and Edison International's 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 subsidiary's 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 GAAP EPS.
Reminder: Edison International Will Hold a Conference Call Today
Today, Edison International will hold a conference call to discuss its third quarter 2009 financial results at 8 a.m. (Pacific Standard 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 management's comments on the conference call will be available on the web site as well at www.edisoninvestor.com. The domestic call-in number is (888) 889-2168 and the number for international callers is (773) 681-5951. The ID is "Edison." In addition to the live simulcast, the webcast will remain posted at www.edisoninvestor.com and telephone replays will be available through Nov. 13, 2009 at the following numbers: (800) 283-6499 for callers in the United States and (402) 220-9734 for international callers. The replay passcode is 80709.
Risk Disclosure Statement
Statements contained in this news release about future performance, including, without limitation, earnings guidance, 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 "Management's Discussion and Analysis" in Edison International's 2008 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.
Summary Financial Schedules
Third Quarter GAAP Earnings Per Share
Quarter Ended September 30,
Earnings (Loss) Per Common Share
2009 2008 Change
Attributable to Edison International
(Unaudited)
SCE $ 1.06 $ 0.72 $ 0.34
EMG 0.19 0.64 (0.45 )
EIX parent company and other (0.02 ) (0.05 ) 0.03
EIX earnings from continuing operations 1.23 1.31 (0.08 )
EIX earnings from discontinued operations -- 0.02 (0.02 )
EIX GAAP earnings1 $ 1.23 $ 1.33 $ (0.10 )
EIX diluted earnings $ 1.22 $ 1.33 $ (0.11 )
1 The impact of participating securities on the per share amounts is included
in EIX parent company and other and was $(0.01) per share for the quarter ended
September 30, 2009 and $(0.02) per share for the quarter ended September 30,
2008.
Third Quarter Reconciliation of Core Earnings Per Share to GAAP Earnings
Per Share
Quarter Ended September 30,
Earnings (Loss) Per Common Share
2009 2008 Change
Attributable to Edison International
(Unaudited)
Core Earnings1
SCE $ 0.92 $ 0.87 $ 0.05
EMG 0.19 0.64 (0.45 )
EIX parent company and other (0.02 ) (0.05 ) 0.03
EIX core earnings 1.09 1.46 (0.37 )
Non-core items
SCE - regulatory items 0.14 (0.15 ) 0.29
EMG - discontinued operations -- 0.02 (0.02 )
Total non-core items 0.14 (0.13 ) 0.27
EIX GAAP earnings1 $ 1.23 $ 1.33 $ (0.10 )
1 See Use of Non-GAAP Financial Measures in Appendix above. The impact of
participating securities on the per share amounts is included in EIX parent
company and other and was $(0.01) per share for the quarter ended September
30, 2009 and $(0.02) per share for the quarter ended September 30, 2008.
Third Quarter GAAP Earnings
Quarter Ended September 30,
Earnings (Loss) (in millions)
2009 2008 Change
Attributable to Edison International
(Unaudited)
SCE $ 346 $ 235 $ 111
EMG 61 208 (147 )
EIX parent company and other (3 ) (10 ) 7
EIX earnings from continuing operations 404 433 (29 )
EIX earnings from discontinued operations (1 ) 6 (7 )
EIX GAAP earnings $ 403 $ 439 $ (36 )
Third Quarter Reconciliation of Core Earnings to GAAP Earnings
Quarter Ended September 30,
Earnings (Loss) (in millions)
2009 2008 Change
Attributable to Edison International
(Unaudited)
Core Earnings1
SCE $ 300 $ 284 $ 16
EMG 61 208 (147 )
EIX parent company and other (3 ) (10 ) 7
EIX core earnings 358 482 (124 )
Non-core items
SCE - regulatory items 46 (49 ) 95
EMG - discontinued operations (1 ) 6 (7 )
Total non-core items 45 (43 ) 88
EIX GAAP earnings $ 403 $ 439 $ (36 )
1 See Use of Non-GAAP Financial Measures in Appendix above.
Year-to-Date GAAP Earnings Per Share
Year-to-Date September 30,
Earnings (Loss) Per Common Share
2009 2008 Change
Attributable to Edison International
(Unaudited)
SCE $ 3.23 $ 1.66 $ 1.57
EMG (1.37 ) 1.47 (2.84 )
EIX parent company and other 0.09 (0.10 ) 0.19
EIX earnings from continuing operations 1.95 3.03 (1.08 )
EIX loss from discontinued operations (0.01 ) -- (0.01 )
EIX GAAP earnings1 $ 1.94 $ 3.03 $ (1.09 )
EIX diluted earnings $ 1.94 $ 3.02 $ (1.08 )
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, 2009 and $(0.04) per share for the year-to-date period ended
September 30, 2008.
Year-to-Date Reconciliation of Core Earnings Per Share to GAAP Earnings Per
Share
Year-to-date September 30,
Earnings (Loss) Per Common Share
2009 2008 Change
Attributable to Edison International
(Unaudited)
Core Earnings1
SCE $ 2.17 $ 1.81 $ 0.36
EMG 0.55 1.47 (0.92 )
EIX parent company and other (0.06 ) (0.10 ) 0.04
EIX core earnings 2.66 3.18 (0.52 )
Non-core items
SCE - regulatory items 0.14 (0.15 ) 0.29
Global tax settlement (0.85 ) -- (0.85 )
SCE $ 0.92
EMG (1.92 )
EIX parent company and 0.15
other
EMG - discontinued operations (0.01 ) -- (0.01 )
Total non-core items (0.72 ) (0.15 ) (0.57 )
EIX GAAP earnings1 $ 1.94 $ 3.03 $ (1.09 )
1 See Use of Non-GAAP Financial Measures in Appendix above. 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, 2009 and $
(0.04) per share for year-to-date period ended September 30, 2008.
Year-to-Date GAAP Earnings
Year-to-Date September 30,
Earnings (Loss) (in millions)
2009 2008 Change
Attributable to Edison International
(Unaudited)
SCE $ 1,053 $ 542 $ 511
EMG (445 ) 479 (924 )
EIX parent company and other 34 (22 ) 56
EIX earnings from continuing operations 642 999 (357 )
EIX loss from discontinued operations (5 ) -- (5 )
EIX GAAP earnings $ 637 $ 999 $ (362 )
Year-to-Date Reconciliation of Core Earnings to GAAP Earnings
Year-to-Date September 30,
Earnings (Loss) (in millions)
2009 2008 Change
Attributable to Edison International
(Unaudited)
Core Earnings1
SCE $ 707 $ 591 $ 116
EMG 179 479 (300 )
EIX parent company and other (16 ) (22 ) 6
EIX core earnings 870 1,048 (178 )
Non-core items
SCE - regulatory items 46 (49 ) 95
Global tax settlement (274 ) -- (274 )
SCE $ 300
EMG (624 )
EIX parent company and 50
other
EMG - discontinued operations (5 ) -- (5 )
Total non-core items (233 ) (49 ) (184 )
EIX GAAP earnings $ 637 $ 999 $ (362 )
1 See Use of Non-GAAP Financial Measures in Appendix above.
Edison International
Consolidated Statements of Income
Three Months Nine Months
Ended Ended
September 30, September 30,
In millions, except per-share 2009 2008 2009 2008
amounts
(Unaudited)
Electric utility $ 3,065 $ 3,467 $ 7,526 $ 8,696
Competitive power generation 592 813 1,759 2,143
Financial services and other 7 14 25 45
Total operating revenue 3,664 4,294 9,310 10,884
Fuel 406 635 1,120 1,725
Purchased power 1,032 1,333 2,155 3,053
Other operation and maintenance 1,093 1,035 3,136 3,110
Depreciation, decommissioning and 365 327 1,053 972
amortization
Lease terminations and other -- (1 ) 888 (75 )
Total operating expenses 2,896 3,329 8,352 8,785
Operating income 768 965 958 2,099
Interest and dividend income 2 9 29 44
Equity in income from partnerships
and unconsolidated subsidiaries - 35 31 34 40
net
Other nonoperating income 74 23 131 78
Interest expense - net of amounts (187 ) (176 ) (556 ) (511 )
capitalized
Other nonoperating deductions (16 ) (82 ) (41 ) (115 )
Income from continuing operations 676 770 555 1,635
before income taxes
Income tax expense (benefit) 232 277 (169 ) 521
Income from continuing operations 444 493 724 1,114
Income (loss) from discontinued (1 ) 6 (5 ) --
operations - net of tax
Net income 443 499 719 1,114
Less: Net income attributable to 40 60 82 115
noncontrolling interests
Net income attributable to Edison $ 403 $ 439 $ 637 $ 999
International common shareholders
Amounts attributable to Edison
International common shareholders:
Income from continuing operations, $ 404 $ 433 $ 642 $ 999
net of tax
Income (loss) from discontinued (1 ) 6 (5 ) --
operations, net of tax
Net income attributable to Edison $ 403 $ 439 $ 637 $ 999
International common shareholders
Weighted-average shares of common 326 326 326 326
stock outstanding
Basic earnings per common share
attributable to Edison
International common shareholders:
Continuing operations $ 1.23 $ 1.31 $ 1.95 $ 3.03
Discontinued operations -- 0.02 (0.01 ) --
Total $ 1.23 $ 1.33 $ 1.94 $ 3.03
Weighted-average shares of common
stock outstanding, including effect 329 328 328 329
of dilutive securities
Diluted earnings per common share
attributable to Edison
International common shareholders:
Continuing operations $ 1.22 $ 1.31 $ 1.95 $ 3.02
Discontinued operations -- 0.02 (0.01 ) --
Total $ 1.22 $ 1.33 $ 1.94 $ 3.02
Dividends declared per common share $ 0.310 $ 0.305 $ 0.930 $ 0.915
Edison International
Consolidated Balance Sheets
September 30, December 31,
In millions 2009 2008
(Unaudited)
ASSETS
Cash and equivalents $ 2,411 $ 3,916
Short-term investments 5 7
Receivables, less allowances of $47 and $39 for 1,158 1,006
uncollectible accounts at respective dates
Accrued unbilled revenue 583 328
Inventory 549 553
Derivative assets 403 327
Restricted cash 148 3
Margin and collateral deposits 222 105
Regulatory assets 57 605
Deferred income taxes - net 28 104
Other current assets 204 399
Total current assets 5,768 7,353
Nonutility property - less accumulated depreciation 4,718 5,374
of $2,157 and $2,019 at respective dates
Nuclear decommissioning trusts 3,025 2,524
Investments in partnerships and unconsolidated 238 229
subsidiaries
Investments in leveraged leases 164 2,467
Other investments 93 89
Total investments and other assets 8,238 10,683
Utility plant, at original cost:
Transmission and distribution 21,035 20,006
Generation 2,633 1,819
Accumulated depreciation (5,757 ) (5,570 )
Construction work in progress 2,688 2,454
Nuclear fuel, at amortized cost 277 260
Total utility plant 20,876 18,969
Derivative assets 344 244
Restricted deposits 43 43
Rent payments in excess of levelized rent expense 1,039 878
under plant operating leases
Regulatory assets 5,084 5,414
Other long-term assets 1,380 1,031
Total long-term assets 7,890 7,610
Total assets $ 42,772 $ 44,615
Edison International
Consolidated Balance Sheets
September 30, December 31,
In millions, except share amounts 2009 2008
(Unaudited)
LIABILITIES AND EQUITY
Short-term debt $ 85 $ 2,143
Current portion of long-term debt 842 174
Accounts payable 966 1,031
Accrued taxes 271 590
Accrued interest 207 187
Customer deposits 241 228
Book overdrafts 260 224
Derivative liabilities 108 178
Regulatory liabilities 1,176 1,111
Other current liabilities 803 831
Total current liabilities 4,959 6,697
Long-term debt 10,448 10,950
Deferred income taxes - net 4,414 5,717
Deferred investment tax credits 198 109
Customer advances 123 137
Derivative liabilities 674 776
Pensions and benefits 3,000 2,860
Asset retirement obligations 3,179 3,042
Regulatory liabilities 2,848 2,481
Other deferred credits and other long-term 1,924 1,137
liabilities
Total deferred credits and other liabilities 16,360 16,259
Total liabilities 31,767 33,906
Common stock, no par value (325,811,206 shares 2,294 2,272
outstanding at each date)
Accumulated other comprehensive income 128 167
Retained earnings 7,401 7,078
Total Edison International's common shareholders' 9,823 9,517
equity
Noncontrolling interests - other 275 285
Preferred and preference stock of utility not 907 907
subject to mandatory redemption
Total equity 11,005 10,709
Total liabilities and equity $ 42,772 $ 44,615
Edison International
Consolidated Statements of Cash Flows
Nine Months Ended
September 30,
In millions 2009 2008
(Unaudited)
Cash flows from operating activities:
Net income $ 719 $ 1,114
Loss from discontinued operations 5 --
Income from continuing operations 724 1,114
Adjustments to reconcile to net cash provided by
operating activities:
Depreciation, decommissioning and amortization 1,053 972
Regulatory impacts of net nuclear decommissioning trust 133 42
earnings (reflected in accumulated depreciation)
Other amortization 95 80
Lease terminations and other 888 (75 )
Stock-based compensation 17 25
Equity in income from partnerships and unconsolidated (34 ) (40 )
subsidiaries - net
Distributions and dividends from unconsolidated entities 5 9
Deferred income taxes and investment tax credits (1,322 ) 69
Rent payments in excess of levelized rent expense (161 ) (162 )
Income from leveraged leases (13 ) (39 )
Long-term regulatory assets and liabilities - net 338 (28 )
Long-term derivative assets and liabilities - net (176 ) 29
Other assets (136 ) (71 )
Other liabilities 835 (13 )
Changes in working capital:
Margin and collateral deposits - net of collateral (99 ) (70 )
received
Receivables and accrued unbilled revenue (409 ) (378 )
Inventory 4 (75 )
Restricted cash (148 ) --
Other current assets 190 93
Book overdrafts 41 90
Accrued taxes (318 ) 128
Current regulatory assets and liabilities - net 613 (97 )
Current derivative assets and liabilities - net (238 ) (3 )
Accounts payable and other current liabilities 235 35
Operating cash flows from discontinued operations (5 ) --
Net cash provided by operating activities 2,112 1,635
Cash flows from financing activities:
Long-term debt issued 939 2,132
Long-term debt issuance costs (25 ) (15 )
Long-term debt repaid (566 ) (246 )
Bonds repurchased (219 ) (212 )
Preferred stock redeemed -- (7 )
Short-term debt financing - net (2,058 ) 1,308
Cash contributions from noncontrolling interests 2 --
Stock-based compensation - net 4 (22 )
Dividends and distributions to noncontrolling interests (88 ) (116 )
Dividends paid (303 ) (298 )
Net cash provided (used) by financing activities $ (2,314 ) $ 2,524
Edison International
Consolidated Statements of Cash Flows
Nine Months Ended
September 30,
In millions 2009 2008
(Unaudited)
Cash flows from investing activities:
Capital expenditures $ (2,287 ) $ (1,959 )
Purchase of interest in acquired companies (7 ) (11 )
Proceeds from termination of leases 1,420 --
Proceeds from sale of property and interests in projects 1 113
Proceeds from nuclear decommissioning trust sales 1,814 2,279
Purchases of nuclear decommissioning trust investments (1,977 ) (2,329 )
and other
Proceeds from partnerships and unconsolidated 10 35
subsidiaries, net of investment
Maturities and sales of short-term investments 3 80
Purchase of short-term investments (1 ) (22 )
Customer advances for construction and other investments (279 ) (322 )
Net cash used by investing activities (1,303 ) (2,136 )
Net increase (decrease) in cash and equivalents (1,505 ) 2,023
Cash and equivalents, beginning of period 3,916 1,441
Cash and equivalents, end of period $ 2,411 $ 3,464
Source: Edison International
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