Edison International (NYSE: EIX) today reported first quarter
2020 net income of $183 million, or $0.50 per share, compared to
net income of $278 million, or $0.85 per share, in the first
quarter 2019. As adjusted, first quarter 2020 core earnings were
$228 million, or $0.63 per share, compared to core earnings of $206
million, or $0.63 per share, in the first quarter 2019.
Southern California Edison's (SCE) first quarter 2020 net income
of $219 million, or $0.60 per share, was lower compared to net
income of $293 million, or $0.90 per share, in the first quarter
2019. SCE's first quarter 2020 earnings per share (EPS) decreased
by $0.30 from the prior year period, consisting of $0.04 of higher
core EPS and $0.34 of higher non-core loss per share. Higher core
EPS was primarily due to timing of the receipt of the 2018 General
Rate Case (GRC) final decision in the second quarter of 2019 and
higher Federal Energy Regulatory Commission (FERC) revenue,
partially offset by the increase in shares outstanding and higher
operation and maintenance expenses, primarily from higher
vegetation management expenses.
SCE's higher non-core loss per share was mainly attributable to
the absence of $69 million, or $0.21 per share, of income tax
benefits recorded in the first quarter 2019 related to changes in
the allocation of deferred tax re-measurement between customers and
shareholders as a result of a CPUC resolution, and an after-tax
expense recorded in 2020 of $60 million, or $0.17 per share, from
the amortization of SCE's contributions to the Wildfire Insurance
Fund. These were partially offset by an income tax benefit of $18
million, or $0.05 per share, recorded in 2020 due to re-measurement
of uncertain tax positions related to the 2010-2012 California
state tax filings currently under audit.
Edison International Parent and Other's first quarter 2020 net
loss of $36 million, or $0.10 loss per share, was higher than a net
loss of $15 million, or $0.05 loss per share, reported in the first
quarter 2019. Edison International Parent and Other’s first quarter
2020 loss per share increased by $0.05 compared to first quarter
2019, consisting of $0.04 of higher core loss per share and $0.01
of higher non-core loss per share. Higher core loss per share was
primarily due to higher interest expense, partially offset by the
increase in shares outstanding. The higher non-core loss per share
was mainly related to income tax expense of $3 million, or $0.01
loss per share, recorded in 2020 due to re-measurement of uncertain
tax positions related to the 2010-2012 California state tax filings
currently under audit.
“Edison International remains focused on supporting our
customers and our communities impacted by COVID-19. We also are
focused on ensuring the safety and health of our employees and
providing them with the resources necessary to maintain critical
operations,” said Pedro J. Pizarro, president and chief executive
officer of Edison International. “We continue to perform critical
work related to public safety and reliability, while deferring
non-critical outages when our communities are staying at home.”
Pizarro added, “Additionally, SCE continues to make significant
progress to mitigate wildfire risk through hardening
infrastructure, bolstering situational awareness capabilities and
enhancing operational practices, while implementing enhanced data
analytics and technology. We are executing these programs as
expeditiously as possible as they are critical to ensuring the
safety of our communities and are viewed as essential by the
State.”
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 GAAP earnings.
2020 Earnings Guidance
The company reaffirmed its earnings guidance range for 2020 as
summarized in the following chart. See the presentation
accompanying the company’s conference call for further information
including key guidance assumptions.
2020 Earnings Guidance
2020 Earnings Guidance
2020 Earnings Guidance
as of February 27,
2020
as of April 30, 2020
Low
Mid
High
Low
High
EIX Basic EPS
$4.32
$4.47
$4.62
$4.19
$4.49
Less: Non-core Items*
-
-
-
(0.13)
(0.13)
EIX Core EPS
$4.32
$4.47
$4.62
$4.32
$4.62
* There were ($45) million, or ($0.13) per share of non-core
items recorded for the three months ended March 31, 2020,
calculated based on an assumed weighted average share count for
2020 which was originally provided on February 27, 2020.
First Quarter 2020 Earnings Conference
Call Materials
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.
Reminder: Edison
International Will Hold a Conference Call Today
When:
Thursday, April 30, 2020, 1:30 p.m.
(Pacific Time)
Telephone Numbers:
1-888-673-9780 (US) and 1-312-470-0178
(Int'l) - Passcode: Edison
Telephone Replay:
1-866-397-8265 (US) and 1-203-369-0540
(Int’l) - Passcode: 5284
Telephone replay available through May 15,
2020
Webcast:
www.edisoninvestor.com
About Edison International
Edison International (NYSE: EIX), through its subsidiaries, is a
distributor and generator of electric power, as well as a provider
of energy services and technologies, 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. Edison International is also the parent
company of Edison Energy, a portfolio of competitive businesses
that provide commercial and industrial customers with energy
management and procurement services. Edison Energy is independent
from Southern California Edison.
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,
including costs related to uninsured wildfire-related and
mudslide-related liabilities, costs incurred to mitigate the risk
of utility equipment causing future wildfires, costs incurred to
implement SCE's new customer service system and costs incurred as a
result of the COVID-19 pandemic;
- ability of SCE to implement its Wildfire Mitigation Plan,
including effectively implementing Public Safety Power Shut-Offs
when appropriate;
- ability to obtain sufficient insurance at a reasonable cost,
including insurance relating to SCE's nuclear facilities and
wildfire-related claims, and to recover the costs of such insurance
or, in the event liabilities exceed insured amounts, the ability to
recover uninsured losses from customers or other parties;
- risks associated with California Assembly Bill 1054 (“AB 1054”)
effectively mitigating the significant risk 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 SCE's ability to maintain a valid
safety certification, SCE's ability to recover uninsured
wildfire-related costs from the insurance fund established under AB
1054 (“Wildfire Insurance Fund”), the longevity of the Wildfire
Insurance Fund, and the CPUC's interpretation of and actions under
AB 1054, including their interpretation of the new prudency
standard established under AB 1054;
- decisions and other actions by the California Public Utilities
Commission, the Federal Energy Regulatory Commission, the Nuclear
Regulatory Commission and other regulatory and legislative
authorities, including decisions and actions related to
determinations of authorized rates of return or return on equity,
the recoverability of wildfire-related and mudslide-related costs,
issuance of SCE's wildfire safety certification, wildfire
mitigation efforts, and delays in regulatory and legislative
actions;
- 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 public opposition, permitting,
governmental approvals, on-site storage of spent nuclear fuel,
delays, contractual disputes, and cost overruns;
- pandemics, such as COVID-19, and other events that cause
regional, statewide, national or global disruption, which could
impact, among other things, Edison International's and SCE's
business, operations, cash flows, liquidity and/or financial
results;
- extreme weather-related incidents and other natural disasters
(including earthquakes and events caused, or exacerbated, by
climate change, such as wildfires), which could cause, among other
things, public safety issues, property damage and operational
issues;
- 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;
- 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 transmission and distribution
infrastructure investment program, including those related to
project site identification, public opposition, environmental
mitigation, construction, permitting, power curtailment costs
(payments due under power contracts in the event there is
insufficient transmission to enable acceptance of power delivery),
changes in the California Independent System Operator’s
transmission plans, and governmental approvals; and
- risks associated with the operation of transmission and
distribution assets and power generating facilities, including
public and employee 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.
Additional information about risks and uncertainties, including
more detail about the factors described in this report, is
contained throughout this report and in the 2019 Form 10-K,
including the "Risk Factors" section. Readers are urged to read
this entire report, including information incorporated by
reference, as well as the 2019 Form 10-K, 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 title
"Events and Presentations" 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,
2020
2019
Change
Earnings (loss) per share attributable to
Edison International
Continuing operations
SCE
$
0.60
$
0.90
$
(0.30
)
Edison International Parent and Other
(0.10
)
(0.05
)
(0.05
)
Edison International
0.50
0.85
(0.35
)
Less: Non-core items
SCE
(0.12
)
0.22
(0.34
)
Edison International Parent and Other
(0.01
)
—
(0.01
)
Total non-core items
(0.13
)
0.22
(0.35
)
Core earnings (losses)
SCE
0.72
0.68
0.04
Edison International Parent and Other
(0.09
)
(0.05
)
(0.04
)
Edison International
$
0.63
$
0.63
$
—
Note: Diluted earnings were $0.50 and
$0.85 per share for the three months ended March 31, 2020 and 2019,
respectively.
First Quarter Reconciliation
of Basic Earnings Per Share to Core Earnings (in millions)
Three months ended March 31,
(in millions)
2020
2019
Change
Net income (loss) attributable to Edison
International
Continuing operations
SCE
$
219
$
293
$
(74
)
Edison International Parent and Other
(36
)
(15
)
(21
)
Edison International
183
278
(95
)
Less: Non-core items
SCE1,2,3
(42
)
72
(114
)
Edison International Parent and Other2
(3
)
—
(3
)
Total non-core items
(45
)
72
(117
)
Core earnings (losses)
SCE
261
221
40
Edison International Parent and Other
(33
)
(15
)
(18
)
Edison International
$
228
$
206
$
22
1
Includes amortization of SCE’s Wildfire
Insurance Fund expenses of $84 million ($60 million after-tax) for
the quarter ended March 31, 2020.
2
Includes income tax benefit of $18 million
and income tax expense of $3 million recorded in 2020 for SCE and
Edison International Parent and Other, respectively, due to
re-measurement of uncertain tax positions related to the 2010 –
2012 California state tax filings currently under audit.
3
Includes income tax benefits of $69
million recorded in 2019 for SCE related to changes in the
allocation of deferred tax re-measurement between customers and
shareholders as a result of a CPUC resolution issued in February
2019. The resolution determined that customers are only entitled to
excess deferred taxes which were included when setting rates and
other deferred tax re-measurement belongs to shareholders.
Consolidated Statements of
Income
Edison International
Three months ended March 31,
(in millions, except per-share amounts,
unaudited)
2020
2019
Total operating revenue
$
2,790
$
2,824
Purchased power and fuel
928
1,005
Operation and maintenance
881
882
Wildfire Insurance Fund expense
84
—
Depreciation and amortization
484
480
Property and other taxes
111
110
Other operating income
—
(5
)
Total operating expenses
2,488
2,472
Operating income
302
352
Interest expense
(225
)
(194
)
Other income
52
38
Income before taxes
129
196
Income tax benefit
(84
)
(112
)
Net income
213
308
Preferred and preference stock dividend
requirements of SCE
30
30
Net income attributable to Edison
International common shareholders
$
183
$
278
Basic earnings per share:
Weighted average shares of common stock
outstanding
363
326
Basic earnings per common share
attributable to Edison International common
Shareholders
$
0.50
$
0.85
Diluted earnings per share:
Weighted average shares of common stock
outstanding, including effect of dilutive securities
364
327
Diluted earnings per common share
attributable to Edison International common shareholders
$
0.50
$
0.85
Consolidated Balance Sheets
Edison International
(in millions, unaudited)
March 31, 2020
December 31, 2019
ASSETS
Cash and cash equivalents
$
1,337
$
68
Receivables, less allowances of $60 and
$50 for uncollectible accounts at respective dates
795
788
Accrued unbilled revenue
409
488
Inventory
363
364
Income tax receivables
131
118
Prepaid expenses
158
214
Derivative assets
51
81
Regulatory assets
1,225
1,009
Wildfire Insurance Fund contributions
323
323
Other current assets
119
107
Total current assets
4,911
3,560
Nuclear decommissioning trusts
4,267
4,562
Other investments
74
64
Total investments
4,341
4,626
Utility property, plant and equipment,
less accumulated depreciation and amortization of $10,147 and
$9,958 at respective dates
44,733
44,198
Nonutility property, plant and equipment,
less accumulated depreciation of $88 and $86 at respective
dates
87
87
Total property, plant and
equipment
44,820
44,285
Regulatory assets
6,294
6,088
Wildfire Insurance Fund contributions
2,687
2,767
Operating lease right-of-use assets
683
693
Other long-term assets
2,290
2,363
Total long-term assets
11,954
11,911
Total assets
$
66,026
$
64,382
Consolidated Balance Sheets
Edison International
(in millions, except share amounts,
unaudited)
March 31, 2020
December 31, 2019
LIABILITIES AND EQUITY
Short-term debt
$
1,275
$
550
Current portion of long-term debt
901
479
Accounts payable
1,454
1,752
Customer deposits
298
302
Regulatory liabilities
764
972
Current portion of operating lease
liabilities
74
80
Other current liabilities
1,482
1,388
Total current liabilities
6,248
5,523
Long-term debt
19,125
17,864
Deferred income taxes and credits
5,173
5,078
Pensions and benefits
664
674
Asset retirement obligations
3,027
3,029
Regulatory liabilities
8,113
8,385
Operating lease liabilities
609
613
Wildfire-related claims
4,568
4,568
Other deferred credits and other long-term
liabilities
2,955
3,152
Total deferred credits and other
liabilities
25,109
25,499
Total liabilities
50,482
48,886
Commitments and contingencies
Common stock, no par value (800,000,000
shares authorized; 363,476,346 and 361,985,133 shares issued and
outstanding at respective dates)
5,085
4,990
Accumulated other comprehensive loss
(67
)
(69
)
Retained earnings
8,333
8,382
Total Edison International's common
shareholders' equity
13,351
13,303
Noncontrolling interests – preferred and
preference stock of SCE
2,193
2,193
Total equity
15,544
15,496
Total liabilities and equity
$
66,026
$
64,382
Consolidated Statements of Cash
Flows
Edison International
Three months ended March 31,
(in millions, unaudited)
2020
2019
Cash flows from operating
activities:
Net income
$
213
$
308
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization
501
498
Allowance for equity during
construction
(21
)
(17
)
Deferred income taxes
(58
)
(114
)
Wildfire Insurance Fund amortization
expense
84
—
Other
23
1
Nuclear decommissioning trusts
14
(73
)
Changes in operating assets and
liabilities:
Receivables
(30
)
9
Inventory
1
(30
)
Accounts payable
(129
)
31
Tax receivables and payables
31
82
Other current assets and
liabilities
41
(381
)
Regulatory assets and
liabilities, net
(372
)
(96
)
Wildfire-related insurance
receivable
58
—
Other noncurrent assets and
liabilities
(41
)
(8
)
Net cash provided by operating
activities
315
210
Cash flows from financing
activities:
Long-term debt issued, net of premium,
discount and issuance costs of $19 and $(13) for the respective
periods
1,719
1,087
Long-term debt repaid
(40
)
(40
)
Term loan issued
1,275
750
Common stock issued
74
—
Short-term debt financing, net
(550
)
(538
)
Payments for stock-based compensation
(3
)
(41
)
Receipts from stock option exercises
13
22
Dividends and distribution to
noncontrolling interests
(36
)
(36
)
Dividends paid
(226
)
(200
)
Other
5
5
Net cash provided by financing
activities
2,231
1,009
Cash flows from investing
activities:
Capital expenditures
(1,268
)
(1,074
)
Proceeds from sale of nuclear
decommissioning trust investments
1,407
1,208
Purchases of nuclear decommissioning trust
investments
(1,421
)
(1,135
)
Other
4
15
Net cash used in investing
activities
(1,278
)
(986
)
Net increase in cash, cash equivalents and
restricted cash
1,268
233
Cash, cash equivalents and restricted cash
at beginning of period
70
152
Cash, cash equivalents and restricted
cash at end of period
$
1,338
$
385
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200430005958/en/
Investor relations contact: Sam Ramraj, (626) 302-2540
Media relations contact: Ron Gales, (626) 302-7927
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