- First-quarter 2024 GAAP loss per share of $0.03; Core EPS of
$1.13
- Strong regulatory progress: Received CEMA proposed decision;
Submitted GRC rebuttal testimony
- Revised best estimate of expected losses for 2017/2018
Wildfire/Mudslide Events, resulting in net after-tax charge of $333
million; Woolsey application on track for Q3
- Affirms 2024 core EPS guidance of $4.75-$5.05
- Reiterates long-term core EPS growth rate targets of 5%-7% for
2021-2025 and 5%-7% for 2025-2028
Edison International (NYSE: EIX) today reported a first-quarter
net loss of $11 million, or $0.03 per share, compared to net income
of $310 million, or $0.81 per share, in the first quarter of last
year. As adjusted, first-quarter core earnings were $438 million,
or $1.13 per share, compared to core earnings of $416 million, or
$1.09 per share, in the first quarter of last year.
Southern California Edison’s first-quarter 2024 core earnings
per share (EPS) increased year over year, primarily due to higher
revenue authorized in Track 4 of SCE’s 2021 General Rate Case and
an increase in the authorized rate of return resulting from the
cost of capital adjustment mechanism. This was partially offset by
higher interest expense.
Edison International Parent and Other’s first-quarter 2024 core
loss per share was in line with the same period in the prior
year.
“We are pleased with our start to the year and are confident in
affirming our 2024 core EPS guidance range,” said Pedro J. Pizarro,
president and CEO of Edison International. “We also remain
confident in delivering on our long-term EPS growth targets. Our
conviction remains grounded in the drivers that continue to support
our outlook.”
As described below, as a result of management's first-quarter
review of loss estimates for the 2017/2018 Wildfire/Mudslide
Events, a $490 million increase in estimated losses was recorded.
The increase was primarily driven by information obtained during
the quarter related to the Woolsey Fire mediation program and from
settling claims through the quarter.
Pizarro noted, “With wildfires now a national issue, litigation
outcomes outside of California are impacting the costs to resolve
claims everywhere. SCE intends to seek full recovery of all
eligible costs and we remain confident about the case SCE has made
in TKM and will make for Woolsey. I reiterate that we strongly
believe that cost recovery is warranted and in the public interest,
and we conservatively have not reflected this significant potential
in our financial projections.”
Edison International uses core earnings internally for financial
planning and analysis of performance. Core earnings are also used
when communicating with investors and analysts regarding Edison
International’s earnings results to facilitate comparisons of the
company’s performance from period to period. Please see the
attached tables to reconcile core earnings to basic GAAP
earnings.
Revision to Best Estimate of Losses for
2017/2018 Wildfire/Mudslide Events
Management’s first-quarter 2024 review of its loss estimates for
remaining alleged and potential claims related to the 2017/2018
Wildfire/Mudslide Events included a review of information received
during the quarter about outstanding claims, including demands from
most of the individual plaintiffs who have opted into the Woolsey
Fire mediation program and from settling claims through the
quarter. As a result of management's review, a $490 million
increase in estimated losses for the 2017/2018 Wildfire/Mudslide
Events as of March 31, 2024, was recorded. SCE recorded expected
recoveries through Federal Energy Regulatory Commission electric
rates of $27 million against the charge. The resulting net charge
to earnings was $463 million ($333 million after-tax).
The increase was primarily driven by information obtained during
the quarter related to the Woolsey Fire mediation program, in which
plaintiffs who had previously opted-in to the program were required
to submit their demands by a deadline in February 2024. While a
limited number of plaintiffs received extensions, the demands
received prior to the deadline revealed that more plaintiffs intend
to continue to pursue claims than expected and that plaintiffs are
seeking higher damages than expected. Additionally, settlement
outcomes during the quarter exceeded previously estimated values.
Management believes that adverse jury verdicts in wildfire
litigation against utilities outside of California and increasingly
negative jury sentiments in general litigation combined with the
current procedural schedule in the underlying litigation
proceedings have led to more plaintiffs continuing to pursue claims
than expected and to plaintiffs demanding greater settlement
values.
2024 Earnings Guidance
The company affirmed its earnings guidance range for 2024 as
summarized in the following chart. See the presentation
accompanying the company’s conference call for further information
and assumptions.
2024 Earnings Guidance
2024 Earnings Guidance
as of Feb. 22, 2024
as of April 30, 2024
Low
High
Low
High
EIX Basic EPS
$
4.75
$
5.05
$
3.59
$
3.89
Less: Non-core Items*
–
–
(1.16
)
(1.16
)
EIX Core EPS
$
4.75
$
5.05
$
4.75
$
5.05
* There were ($449) million, or ($1.16) per share, of non-core
items recorded for the three months ended March 31, 2024. Basic EIX
EPS guidance only incorporates non-core items to March 31,
2024.
First-Quarter 2024 Earnings Conference
Call and Webcast Details
When:
Tuesday, April 30, 1:30-2:30 p.m.
(PDT)
Telephone Numbers:
1-888-673-9780 (U.S.) and 1-312-470-0178
(Int'l) — Passcode: Edison
Telephone Replay:
1-800-568-3942 (U.S.) and 1-203-369-3812
(Int’l) — Passcode: 3109
Telephone replay available through May 13
at 6 p.m. (PDT)
Webcast:
www.edisoninvestor.com
Edison International has posted its earnings conference call
prepared remarks by the CEO and CFO, the teleconference
presentation and Form 10-Q to the company’s investor relations
website. These materials are available at
www.edisoninvestor.com.
About Edison
International
Edison International (NYSE: EIX) is one of the nation’s largest
electric utility holding companies, focused on providing clean and
reliable energy and energy services through its independent
companies. Headquartered in Rosemead, California, Edison
International is the parent company of Southern California Edison
Company, a utility delivering electricity to 15 million people
across Southern, Central and Coastal California. Edison
International is also the parent company of Trio (formerly Edison
Energy), a portfolio of nonregulated competitive businesses
providing integrated sustainability and energy advisory services to
large commercial, industrial and institutional organizations in
North America and Europe.
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 of Edison International and Southern
California Edison. 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 as net income,
basic EPS, core earnings, or core EPS also apply 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.
Safe Harbor Statement
Statements contained in this presentation about future
performance, including, without limitation, operating results,
capital expenditures, rate base growth, dividend policy, financial
outlook, 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 include, but are not
limited to the:
- ability of SCE to recover its costs through regulated rates,
timely or at all, including uninsured wildfire-related and debris
flow-related costs (including amounts paid for self-insured
retention and co-insurance), costs incurred to mitigate the risk of
utility equipment causing future wildfires, costs incurred as a
result of the COVID-19 pandemic, and increased costs due to supply
chain constraints, inflation and rising interest rates;
- impact of affordability of customer rates on SCE's ability to
execute its strategy, including the impact of affordability on the
regulatory approval of operations and maintenance expenses, and
proposed capital investment projects;
- ability of SCE to implement its operational and strategic
plans, including its Wildfire Mitigation Plan and capital
program;
- risks of regulatory or legislative restrictions that would
limit SCE's ability to implement operational measures to mitigate
wildfire risk, including Public Safety Power Shutoff (“PSPS”) and
fast curve settings, when conditions warrant or would otherwise
limit SCE's operational practices relative to wildfire risk
mitigation;
- ability of SCE to obtain safety certifications from the Office
of Energy Infrastructure Safety of the California Natural Resources
Agency (“OEIS”);
- risk that California Assembly Bill 1054 (“AB 1054”) does not
effectively mitigate the significant exposure faced by California
investor-owned utilities related to liability for damages arising
from catastrophic wildfires where utility facilities are alleged to
be a substantial cause, including the longevity of the Wildfire
Insurance Fund and the California Public Utilities Commission
(“CPUC”) interpretation of and actions under AB 1054, including its
interpretation of the prudency standard clarified by AB 1054;
- risks associated with the operation of electrical facilities,
including worker and public safety issues, the risk of utility
assets causing or contributing to wildfires, failure, availability,
efficiency, and output of equipment and facilities, and
availability and cost of spare parts;
- physical security of Edison International’s and SCE’s critical
assets and personnel and the cybersecurity of Edison
International’s and SCE’s critical information technology systems
for grid control, and business, employee and customer data;
- ability of Edison International and SCE to effectively attract,
manage, develop and retain a skilled workforce, including its
contract workers;
- decisions and other actions by the CPUC, the Federal Energy
Regulatory Commission, and the United States Nuclear Regulatory
Commission and other governmental authorities, including decisions
and actions related to nationwide or statewide crisis,
determinations of authorized rates of return or return on equity,
the recoverability of wildfire-related and debris flow-related
costs, issuance of SCE's wildfire safety certification, wildfire
mitigation efforts, approval and implementation of electrification
programs, and delays in executive, regulatory and legislative
actions;
- potential for penalties or disallowances for non-compliance
with applicable laws and regulations, including fines, penalties
and disallowances related to wildfires where SCE's equipment is
alleged to be associated with ignition;
- extreme weather-related incidents (including events caused, or
exacerbated, by climate change, such as wildfires, debris flows,
flooding, droughts, high wind events and extreme heat events) and
other natural disasters (such as earthquakes), which could cause,
among other things, public safety issues, property damage, rotating
outages and other operational issues (such as issues due to damaged
infrastructure), PSPS activations and unanticipated costs;
- cost and availability of labor, equipment and materials,
including as a result of supply chain constraints and
inflation;
- ability of Edison International or SCE to borrow funds and
access bank and capital markets on reasonable terms;
- risks associated with the decommissioning of San Onofre,
including those related to worker and public safety, public
opposition, permitting, governmental approvals, on-site storage of
spent nuclear fuel and other radioactive material, delays,
contractual disputes, and cost overruns;
- risks associated with cost allocation resulting in higher rates
for utility bundled service customers because of possible customer
bypass or departure for other electricity providers such as
Community Choice Aggregators (“CCA,” which are cities, counties,
and certain other public agencies with the authority to generate
and/or purchase electricity for their local residents and
businesses) and Electric Service Providers (entities that offer
electric power and ancillary services to retail customers, other
than electrical corporations (like SCE) and CCAs);
- risks inherent in SCE’s capital investment program, including
those related to project site identification, public opposition,
environmental mitigation, construction, permitting, contractor
performance, changes in the California Independent System
Operator’s transmission plans, and governmental approvals; and
- actions by credit rating agencies to downgrade Edison
International or SCE’s credit ratings or to place those ratings on
negative watch or negative outlook.
Additional information about risks and uncertainties is
contained in Edison International and SCE’s most recent combined
Annual Report on Form 10-K for the year ended December 31, 2023,
and subsequent Quarterly Report(s) on Form 10-Q filed with the
Securities and Exchange commission, including the "Risk Factors"
sections. Readers are urged to read this entire release as well as
the most recent Form 10-K and Form 10-Q (including information
incorporated by reference), and carefully consider the risks,
uncertainties, and other factors that affect Edison International's
and SCE's businesses. Edison International and SCE post or provide
direct links (i) to certain SCE and other parties' regulatory
filings and documents with the CPUC and the FERC and certain agency
rulings and notices in open proceedings in a section titled "SCE
Regulatory Highlights," (ii) to certain documents and information
related to Southern California wildfires which may be of interest
to investors in a section titled "Southern California Wildfires,"
and (iii) to presentations, documents and other information that
may be of interest to investors in a section titled "Presentations
and Updates" at www.edisoninvestor.com in order to publicly
disseminate such information.
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. Readers should review future reports filed by
Edison International and SCE with the SEC.
First Quarter Reconciliation
of Basic Earnings Per Share to Core Earnings Per Share
Three months ended
March 31,
2024
2023
Change
Earnings (loss) per share available to
Edison International
SCE
$
0.17
$
0.97
$
(0.80
)
Edison International Parent and Other
(0.20
)
(0.16
)
(0.04
)
Edison International
(0.03
)
0.81
(0.84
)
Less: Non-core items
SCE
(1.16
)
(0.32
)
(0.84
)
Edison International Parent and Other
—
0.04
(0.04
)
Total non-core items
(1.16
)
(0.28
)
(0.88
)
Core earnings (loss) per share
SCE
1.33
1.29
0.04
Edison International Parent and Other
(0.20
)
(0.20
)
—
Edison International
$
1.13
$
1.09
$
0.04
Note: Diluted (loss) earnings were $(0.03) and $0.81 per share
for the three months ended March 31, 2024 and 2023,
respectively.
First Quarter Reconciliation
of Basic Earnings Per Share to Core Earnings (in millions)
Three months ended
March 31,
(in millions)
2024
2023
Change
Net income (loss) available to Edison
International
SCE
$
65
$
370
$
(305
)
Edison International Parent and Other
(76
)
(60
)
(16
)
Edison International
(11
)
310
(321
)
Less: Non-core items
SCE1,2,3,4
(448
)
(124
)
(324
)
Edison International Parent and Other5
(1
)
18
(19
)
Total non-core items
(449
)
(106
)
(343
)
Core earnings (loss)
SCE
513
494
19
Edison International Parent and Other
(75
)
(78
)
3
Edison International
$
438
$
416
$
22
1
Includes charges for 2017/2018
Wildfire/Mudslide Events claims and related legal expenses, net of
expected regulatory recoveries of $467 million ($336 million
after-tax) and $90 million ($65 million after-tax) for the three
months ended March 31, 2024 and 2023, respectively.
2
Includes charges for Other Wildfires
claims and related legal expenses, net of expected insurance and
expected regulatory recoveries of $119 million ($86 million
after-tax) for the three months ended March 31, 2024.
3
Includes amortization of SCE's Wildfire
Insurance Fund expenses of $36 million ($26 million after-tax) and
$52 million ($38 million after-tax) for the three months ended
March 31, 2024 and 2023, respectively.
4
Includes a charge $30 million ($21 million
after-tax) for a probable disallowance related to the
reasonableness review of recorded San Onofre Units 2 and 3
decommissioning costs in the 2021 NDCTP for the three months ended
March 31, 2023.
5
Includes expected wildfire claims of $1
million ($1 million after-tax) insured by EIS and customer revenues
of $22 million ($18 million after-tax) related to an EIS insurance
contract for the three months ended March 31, 2024 and 2023,
respectively.
Consolidated Statements of
Income
Edison International
Three months ended
March 31,
(in millions, except per-share
amounts)
2024
2023
Operating revenue
$
4,078
$
3,966
Purchased power and fuel
1,008
1,318
Operation and maintenance
1,317
1,084
Wildfire-related claims, net of insurance
recoveries
615
96
Wildfire Insurance Fund expense
36
52
Depreciation and amortization
702
656
Property and other taxes
155
140
Total operating expenses
3,833
3,346
Operating income
245
620
Interest expense
(444
)
(361
)
Other income, net
138
119
(Loss) income before income
taxes
(61
)
378
Income tax (benefit) expense
(113
)
13
Net income
52
365
Less: Net income attributable to
noncontrolling interests - preference stock of SCE
41
29
Preferred stock dividend requirements of
Edison International
22
26
Net (loss) income available to Edison
International common shareholders
$
(11
)
310
Basic (loss) earnings per
share:
Weighted average shares of common stock
outstanding
385
383
Basic (loss) earnings per common share
available to Edison International common shareholders
$
(0.03
)
$
0.81
Diluted (loss) earnings per
share:
Weighted average shares of common stock
outstanding, including effect of dilutive securities
385
384
Diluted (loss) earnings per common
share available to Edison International common shareholders
$
(0.03
)
$
0.81
Consolidated Balance Sheets
Edison International
March 31,
December 31,
(in millions)
2024
2023
ASSETS
Cash and cash equivalents
$
992
$
345
Receivables, less allowances of $342 and
$360 for uncollectible accounts at respective dates
1,890
2,016
Accrued unbilled revenue
777
742
Inventory
519
527
Prepaid expenses
244
112
Regulatory assets
2,989
2,524
Wildfire Insurance Fund contributions
138
204
Other current assets
329
341
Total current assets
7,878
6,811
Nuclear decommissioning trusts
4,288
4,173
Other investments
62
54
Total investments
4,350
4,227
Utility property, plant and equipment,
less accumulated depreciation and amortization of $13,227 and
$12,910 at respective dates
56,483
55,877
Nonutility property, plant and equipment,
less accumulated depreciation of $116 and $114 at respective
dates
205
207
Total property, plant and
equipment
56,688
56,084
Regulatory assets (include $1,547 and
$1,558 related to Variable Interest Entities "VIEs" at respective
dates)
8,806
8,897
Wildfire Insurance Fund contributions
1,982
1,951
Operating lease right-of-use assets
1,206
1,221
Long-term insurance receivables
499
501
Other long-term assets
2,190
2,066
Total long-term assets
14,683
14,636
Total assets
$
83,599
$
81,758
Consolidated Balance Sheets
Edison International
March 31,
December 31,
(in millions, except share amounts)
2024
2023
LIABILITIES AND EQUITY
Short-term debt
$
774
$
1,077
Current portion of long-term debt
2,097
2,697
Accounts payable
1,904
1,983
Wildfire-related claims
160
30
Customer deposits
440
390
Regulatory liabilities
988
763
Current portion of operating lease
liabilities
119
120
Other current liabilities
1,425
1,538
Total current liabilities
7,907
8,598
Long-term debt (include $1,516 and
$1,515 related to VIEs at respective dates)
32,576
30,316
Deferred income taxes and credits
6,669
6,672
Pensions and benefits
412
415
Asset retirement obligations
2,667
2,666
Regulatory liabilities
9,814
9,420
Operating lease liabilities
1,087
1,101
Wildfire-related claims
1,657
1,368
Other deferred credits and other long-term
liabilities
3,195
3,258
Total deferred credits and other
liabilities
25,501
24,900
Total liabilities
65,984
63,814
Preferred stock (50,000,000 shares
authorized; 1,159,317 and 1,159,317 shares of Series A and 512,454
and 532,454 shares of Series B issued and outstanding at respective
dates)
1,654
1,673
Common stock, no par value (800,000,000
shares authorized; 384,735,109 and 383,924,912 shares issued and
outstanding at respective dates)
6,361
6,338
Accumulated other comprehensive loss
(9
)
(9
)
Retained earnings
7,166
7,499
Total Edison International's
shareholders' equity
15,172
15,501
Noncontrolling interests – preference
stock of SCE
2,443
2,443
Total equity
17,615
17,944
Total liabilities and equity
$
83,599
$
81,758
Consolidated Statements of Cash
Flows
Edison International
Three months ended March 31,
(in millions)
2024
2023
Cash flows from operating
activities:
Net income
$
52
$
365
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization
707
676
Allowance for equity during
construction
(47
)
(36
)
Deferred income taxes
(114
)
12
Wildfire Insurance Fund amortization
expense
36
52
Other
13
8
Nuclear decommissioning trusts
(20
)
(19
)
Changes in operating assets and
liabilities:
Receivables
84
227
Inventory
5
(29
)
Accounts payable
(19
)
(508
)
Tax receivables and payables
(2
)
(9
)
Other current assets and liabilities
(300
)
(329
)
Derivative assets and liabilities, net
(17
)
(99
)
Regulatory assets and liabilities, net
250
(296
)
Wildfire-related claims
419
(133
)
Other noncurrent assets and
liabilities
(4
)
28
Net cash provided by (used in)
operating activities
1,043
(90
)
Cash flows from financing
activities:
Long-term debt issued, net of discount and
issuance costs of $24 and $19 for the respective periods
2,976
1,681
Long-term debt repaid
(601
)
(401
)
Short-term debt repaid
(390
)
(600
)
Common stock issued
12
10
Preferred stock repurchased
(19
)
—
Commercial paper (repayments) borrowing,
net
(622
)
960
Dividends and distribution to
noncontrolling interests
(43
)
(29
)
Common stock dividends paid
(295
)
(277
)
Preferred stock dividends paid
(44
)
(52
)
Other
14
24
Net cash provided by financing
activities
988
1,316
Cash flows from investing
activities:
Capital expenditures
(1,279
)
(1,324
)
Proceeds from sale of nuclear
decommissioning trust investments
1,258
951
Purchases of nuclear decommissioning trust
investments
(1,257
)
(932
)
Other
2
—
Net cash used in investing
activities
(1,276
)
(1,305
)
Net increase (decrease) in cash, cash
equivalents and restricted cash
755
(79
)
Cash, cash equivalents and restricted cash
at beginning of period
532
917
Cash, cash equivalents and restricted
cash at end of period
$
1,287
$
838
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240430265031/en/
Investor Relations: Sam Ramraj, (626) 302-2540 Media Relations:
(626) 302-2255 News@sce.com
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