Edison International Reports Second Quarter 2013 Results

Edison International (NYSE:EIX) today reported second quarter results, as summarized below.
             

Second Quarter and Year-to-Date Results Summary
 
Three Months Ended

June 30,
Six Months Ended

June 30,
Per Share       2013       2012       2013       2012
Basic earnings (loss) from continuing operations $ (0.33 )       $0.56 $ 0.47       $ 1.10
Basic earnings (loss) from discontinued operations         0.04         (0.33 )         0.07         (0.59 )
Basic earnings (loss)       $ (0.29 )       $0.23         $ 0.54       $ 0.51  
Core earnings       $ 0.79         $0.56         $ 1.57       $ 1.10  

Note: See Use of Non-GAAP Financial Measures in Appendix.

“As in the first quarter, strong operating results from Southern California Edison reflect higher authorized investment in our electric grid infrastructure, good cost management, and favorable tax benefits,” said Ted Craver, chairman and chief executive officer of Edison International. “These results are consistent with the updated Edison International earnings guidance that we provided in June and that we reaffirmed today.”

Second Quarter Earnings Detail

Southern California Edison's (SCE) second quarter 2013 basic losses were $(0.28) per share compared to earnings of $0.59 per share in the second quarter of 2012, and includes an impairment charge of $1.12 per share related to the early retirement of San Onofre Nuclear Generating Station (SONGS) Units 2 and 3.

SCE's second quarter 2013 core earnings, excluding the SONGS impairment charge, were $0.84 per share compared to $0.59 per share in the second quarter of 2012. The core earnings increase was primarily due to the timing of the 2012 General Rate Case (GRC) which was approved by the California Public Utilities Commission (CPUC) in November 2012, lower operating expenses, and tax benefits, offset by severance costs.

Edison International parent company and other reported second quarter 2013 basic and core losses from continuing operations of $(0.05) per share compared to $(0.03) per share in the second quarter of 2012. The decrease in core earnings was mainly due to consolidated taxes.

Year-to-Date Earnings Summary

Edison International reported basic earnings of $0.54 per share for the year-to-date period ending June 30, 2013, compared to $0.51 per share for the same period last year. Core earnings for the first six months of 2013 were $1.57 per share compared to $1.10 per share for the first half of 2012.

Year-to-Date Earnings Detail

SCE's year-to-date 2013 basic earnings were $0.51 per share, including the second quarter SONGS impairment charge of $1.12 per share, compared to $1.14 per share for the same period last year.

SCE's year-to-date core earnings were $1.63 per share compared to $1.14 per share for the same period last year. The core earnings increase was primarily due to the timing of finalizing SCE's 2012 General Rate Case, lower operating expenses, and tax benefits from incremental repair deductions, partially offset by severance costs. The increased return on rate base growth was offset by the lower authorized return on equity.

Edison International parent company and other reported year-to-date 2013 basic losses from continuing operations of $(0.04) per share compared to $(0.04) per share in the same period in 2012. Core losses from continuing operations in the year-to-date period of 2013 were $(0.06) per share compared to $(0.04) per share in the same period in 2012. The decrease in core earnings for the year-to-date period in 2013 was mainly due to consolidated taxes.

2013 Earnings Guidance

The company reaffirmed its 2013 core earnings guidance of $3.25 to $3.45 per share and updated its basic earnings guidance to $2.22 to $2.42 per share. See the risk disclosure statement in the Appendix and the presentation accompanying the company’s conference call for further information.
                     

Reconciliation of 2013 Core Earnings Guidance to

Basic Earnings Guidance
 
       

2013 Earnings Guidance

as of 6/7/13
               

2013 Earnings Guidance

as of 8/1/13
SCE       $3.50                 $3.50
EIX Parent & Other       (0.15)                 (0.15)
EIX Core EPS       $3.25 - $3.45                 $3.25 - $3.45
Non-core Items       (1.24) - (0.86)                 (1.03)
EIX Basic EPS       $2.01 - $2.59                 $2.22 - $2.42

Note: See Use of Non-GAAP Financial Measures in Appendix. Non-core items from year-to-date period only.

About Edison International

Edison International (NYSE:EIX), 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, Calif., Edison International is the parent company of Southern California Edison, one of the nation’s largest electric utilities.

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 stock options 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 EIX parent & 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 2012 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, August 1, 2013, 2:00 p.m. (Pacific Daylight Time)
Telephone Numbers: 1-800-369-2198 (US) and 1-773-756-4618 (Int'l) - Passcode: Edison
Telephone Replay: 1-800-925-1773 (US) and 1-402-220-3092 (Int’l) - Passcode: 468529
Telephone replay available through August 12, 2013
Webcast:

www.edisoninvestor.com
 

Summary Financial Schedules
                   

Second Quarter Basic Earnings (Loss) Per Share
 
Three Months Ended June 30,

Earnings (Loss) Per Share

Attributable to Edison International
     

2013
         

2012
         

Change
SCE $ (0.28 )           $ 0.59 $ (0.87 )
  EIX parent & other         (0.05 )             (0.03 )             (0.02 )
Earnings from continuing operations         (0.33 )             0.56             $ (0.89 )
Earnings (loss) from discontinued operations         0.04               (0.33 )           $ 0.37  
Basic earnings       $ (0.29 )           $ 0.23             $ (0.52 )
Diluted earnings       $ (0.29 )           $ 0.22             $ (0.51 )

Note: Results for Edison Mission Energy reported as non-core discontinued operations for both periods.
                   

Second Quarter Reconciliation of Core Earnings (Loss) Per Share

to Basic Earnings (Loss) Per Share
 
Three Months Ended June 30,

Earnings Per Share

Attributable to Edison International
     

2013
         

2012
         

Change
Core earnings (loss)          
SCE $0.84 $0.59 $0.25
  EIX parent & other       (0.05 )           (0.03 )           (0.02 )
Core earnings       0.79             0.56             0.23  
Non-core items
SCE - SONGS impairment (1.12 ) (1.12 )
EIX parent & other
Earnings (loss) from discontinued operations       0.04             (0.33 )           0.37  
Total non-core items       (1.08 )           (0.33 )           (0.75 )
Basic earnings       $(0.29 )           $0.23             $(0.52 )

Note: See Use of Non-GAAP Financial Measures in Appendix. Results for Edison Mission Energy reported as non-core discontinued operations for both periods.
                   

Second Quarter Basic Earnings (Loss)
 
Three Months Ended June 30,

Earnings (Loss) (in millions)

Attributable to Edison International
     

2013
         

2012
         

Change
SCE $ (91 )           $ 191 $ (282 )
  EIX parent & other         (15 )             (8 )             (7 )
Earnings from continuing operations         (106 )             183               (289 )
Earnings (loss) from discontinued operations         12               (109 )             121  
Basic earnings       $ (94 )           $ 74             $ (168 )

Note: Results for Edison Mission Energy reported as non-core discontinued operations for both periods.
                     

Second Quarter Reconciliation of Core Earnings (Loss) to Basic Earnings (Loss)
 
Three Months Ended June 30,

Earnings (in millions)

Attributable to Edison International
     

2013
         

2012
          Change
Core earnings (loss)          
SCE $ 274

$

191
$ 83
  EIX parent & other         (15 )             (8 )             (7 )
Core earnings         259               183               76  
Non-core items
SCE - SONGS impairment (365 ) (365 )
EIX parent & other

Earnings (loss) from discontinued operations
        12               (109 )             121  
Total non-core items         (353 )             (109 )             (244 )
Basic earnings       $ (94 )          

$

74
            $ (168 )

Note: See Use of Non-GAAP Financial Measures in Appendix. Results for Edison Mission Energy reported as non-core discontinued operations for both periods.
                   

Year-to-Date Basic Earnings Per Share
 
Six Months Ended June 30,

Earnings (Loss) Per Share

Attributable to Edison International
     

2013
         

2012
         

Change
SCE $ 0.51           $ 1.14 $ (0.63 )
  EIX parent & other         (0.04 )             (0.04 )             0.00  
Earnings from continuing operations         0.47               1.10             $ (0.63 )
Earnings (loss) from discontinued operations         0.07               (0.59 )           $ 0.66  
Basic earnings       $ 0.54             $ 0.51             $ 0.03  
Diluted earnings       $ 0.54             $ 0.50             $ 0.04  

Note: Results for Edison Mission Energy reported as non-core discontinued operations for both periods.
                     

Year-to-Date Reconciliation of Core Earnings Per Share

to Basic Earnings Per Share
 
Six Months Ended June 30,

Earnings Per Share

Attributable to Edison International
     

2013
         

2012
         

Change
Core earnings (loss)          
SCE $ 1.63

$

1.14
$ 0.49
  EIX parent & other         (0.06 )             (0.04 )             (0.02 )
Core earnings         1.57               1.10               0.47  
Non-core items
SCE - SONGS impairment (1.12 ) (1.12 )
EIX parent & other 0.02 0.02
Earnings (loss) from discontinued operations         0.07               (0.59 )             0.66  
Total non-core items         (1.03 )             (0.59 )             (0.44 )
Basic earnings       $ 0.54            

$

0.51
            $ 0.03  

Note: See Use of Non-GAAP Financial Measures in Appendix. Results for Edison Mission Energy reported as non-core discontinued operations for both periods.
                   

Year-to-Date Basic Earnings
 
Six Months Ended June 30,

Earnings (Loss) (in millions)

Attributable to Edison International
     

2013
         

2012
         

Change
SCE $ 165           $ 373 $ (208 )
  EIX parent & other         (13 )             (13 )             0  
Earnings from continuing operations         152               360               (208 )
Earnings (loss) from discontinued operations         24               (193 )             217  
Basic earnings       $ 176             $ 167             $ 9  

Note: Results for Edison Mission Energy reported as non-core discontinued operations for both periods.
                     

Year-to-Date Reconciliation of Core Earnings to Basic Earnings
 
Six Months Ended June 30,

Earnings (in millions)

Attributable to Edison International
     

2013
         

2012
          Change
Core earnings (loss)          
SCE $ 530

$

373
$ 157
  EIX parent & other         (20 )             (13 )             (7 )
Core earnings         510               360               150  
Non-core items
SCE - SONGS impairment (365 ) (365 )
EIX parent & other 7 7

Earnings (loss) from discontinued operations
        24               (193 )             217  
Total non-core items         (334 )             (193 )             (141 )
Basic earnings       $ 176            

$

167
            $ 9  

Note: See Use of Non-GAAP Financial Measures in Appendix. Results for Edison Mission Energy reported as non-core discontinued operations for both periods.
       

Consolidated Statements of Income
   

Edison International
     
Three months ended June 30, Six months ended June 30,
(in millions, except per-share amounts, unaudited)       2013       2012       2013       2012
Operating revenue $ 3,046         $ 2,653         $ 5,678         $ 5,068  
Fuel 81       61 154       138
Purchased power 1,076 822 1,855 1,437
Operation and maintenance 967 951 1,840 1,899
Depreciation, decommissioning and amortization 418 400 832 788
Asset impairment and other 575         (1 )       575          
Total operating expenses 3,117         2,233         5,256         4,262  
Operating income (loss) (71 ) 420 422 806
Interest and other income 34 40 63 73
Interest expense (133 ) (134 ) (265 ) (260 )
Other expenses (14 )       (19 )       (21 )       (26 )
Income (loss) from continuing operations before income taxes (184 ) 307 199 593
Income tax expense (benefit) (102 )       100         (4 )       192  
Income (loss) from continuing operations (82 ) 207 203 401
Income (loss) from discontinued operations, net of tax 12         (109 )       24         (193 )
Net income (loss) (70 ) 98 227 208
Dividends on preferred and preference stock of utility 24 23 51 41
Other noncontrolling interests         1                  
Net income (loss) attributable to Edison International common shareholders $ (94 )       $ 74         $ 176         $ 167  
Amounts attributable to Edison International common shareholders:
Income (loss) from continuing operations, net of tax $ (106 ) $ 183 $ 152 $ 360
Income (loss) from discontinued operations, net of tax 12         (109 )       24         (193 )
Net income (loss) attributable to Edison International common shareholders $ (94 )       $ 74         $ 176         $ 167  
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 $ (0.33 ) $ 0.56 $ 0.47 $ 1.10
Discontinued operations 0.04         (0.33 )       0.07         (0.59 )
Total $ (0.29 )       $ 0.23         $ 0.54         $ 0.51  
Diluted earnings (loss) per common share attributable to Edison International common shareholders:
Weighted-average shares of common stock outstanding, including effect of dilutive securities 326 334 329 333
Continuing operations $ (0.33 ) $ 0.55 $ 0.47 $ 1.08
Discontinued operations 0.04         (0.33 )       0.07         (0.58 )
Total $ (0.29 )       $ 0.22         $ 0.54         $ 0.50  
Dividends declared per common share       $ 0.3375         $ 0.325         $ 0.6750         $ 0.650  
 
 
         
Consolidated Balance Sheets Edison International
                     
(in millions, unaudited)      

June 30,

2013
                 

December 31,

2012
ASSETS
Cash and cash equivalents $ 148 $ 170
Receivables, less allowances of $66 and $75 for uncollectible accounts at respective dates 815 762
Accrued unbilled revenue 741 550
Inventory 267 340
Prepaid taxes 27 22
Derivative assets 91 129
Margin and collateral deposits 8 8
Regulatory assets 803 572
Other current assets 122                     119
Total current assets 3,022                     2,672
Nuclear decommissioning trusts 4,181 4,048
Investments in unconsolidated affiliates 2 2
Other investments 194                     184
Total investments 4,377                     4,234
Utility property, plant and equipment, less accumulated depreciation of $7,578 and $7,424 at respective dates 29,301 30,200
Nonutility property, plant and equipment, less accumulated depreciation of $69 and $123 at respective dates 75                     73
Total property, plant and equipment 29,376                     30,273
Derivative assets 73 85
Restricted deposits 4 4
Regulatory assets 7,494 6,422
Other long-term assets 681                     704
Total long-term assets 8,252                     7,215
Total assets       $ 45,027                     $ 44,394
 
 
         
Consolidated Balance Sheets       Edison International
               
(in millions, except share amounts, unaudited)      

June 30,

2013
               

December 31,

2012
LIABILITIES AND EQUITY
Short-term debt $ 853 $ 175
Current portion of long-term debt 800
Accounts payable 1,288 1,423
Accrued taxes 33 61
Accrued interest 199 176
Customer deposits 199 193
Derivative liabilities 140 126
Regulatory liabilities 493 536
Deferred income taxes 79 64
Other current liabilities 804                   990  
Total current liabilities 4,888                   3,744  
Long-term debt 8,830                   9,231  
Deferred income taxes 6,304 6,127
Deferred investment tax credits 102 104
Customer advances 134 149
Derivative liabilities 1,027 939
Pensions and benefits 2,234 2,614
Asset retirement obligations 3,322 2,782
Regulatory liabilities 4,836 5,214
Other deferred credits and other long-term liabilities 2,242                   2,299  
Total deferred credits and other liabilities 20,201                   20,228  
Total liabilities 33,919                   33,203  
Commitments and contingencies
Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at each date) 2,388 2,373
Accumulated other comprehensive loss (82 ) (87 )
Retained earnings 7,049                   7,146  
Total Edison International's common shareholders' equity 9,355                   9,432  
Preferred and preference stock of utility 1,753                   1,759  
Total noncontrolling interests 1,753                   1,759  
Total equity 11,108                   11,191  
Total liabilities and equity       $ 45,027                   $ 44,394  
 
 
         
Consolidated Statements of Cash Flows       Edison International
 
Six months ended June 30,
(in millions, unaudited)       2013                   2012
Cash flows from operating activities:                  
Net income $ 227 $ 208
Less: Income (loss) from discontinued operations 24                     (193 )
Income from continuing operations 203 401
Adjustments to reconcile to net cash provided by operating activities:
Depreciation, decommissioning and amortization 832 788
Regulatory impacts of net nuclear decommissioning trust earnings 161 114
Other amortization and other 33 34
Asset impairment 575
Stock-based compensation 12 16
Deferred income taxes and investment tax credits 85 11
Proceeds from U.S. treasury grants 29
Changes in operating assets and liabilities:
Receivables (47 ) 10
Inventory 73 15
Margin and collateral deposits, net of collateral received (67 ) (3 )
Prepaid taxes (5 ) 98
Other current assets (190 ) (204 )
Accounts payable 88 27
Accrued taxes (33 ) (15 )
Other current liabilities (98 ) (83 )
Derivative assets and liabilities, net 152 (79 )
Regulatory assets and liabilities, net (11 ) 252
Other assets (27 ) (19 )
Other liabilities (475 )                   122  
Operating cash flows from continuing operations 1,261 1,514
Operating cash flows from discontinued operations, net                     (354 )
Net cash provided by operating activities 1,261                     1,160  
Cash flows from financing activities:
Long-term debt issued 398 395
Long-term debt issuance costs (4 ) (4 )
Long-term debt repaid (3 ) (3 )
Bonds remarketed, net 195
Bonds purchased (196 )
Preference stock issued, net 387 805
Preference stock redeemed (400 ) (75 )
Short-term debt financing, net 678 (121 )
Settlements of stock-based compensation, net (37 ) (30 )
Dividends to noncontrolling interests (52 ) (29 )
Dividends paid (220 )                   (212 )
Financing cash flows from continuing operations 746 726
Financing cash flows from discontinued operations, net                     300  
Net cash provided by financing activities       $ 746                     $ 1,026  
 
 
         
Consolidated Statements of Cash Flows       Edison International
 
Six months ended June 30,
(in millions, unaudited)       2013                   2012
Cash flows from investing activities:                  
Capital expenditures $ (1,834 ) $ (2,125 )
Proceeds from sale of nuclear decommissioning trust investments 1,956 1,097
Purchases of nuclear decommissioning trust investments and other (2,128 ) (1,222 )
Customer advances for construction and other investments (23 )                   7  
Investing cash flows from continuing operations (2,029 ) (2,243 )
Investing cash flows from discontinued operations, net                     (237 )
Net cash used by investing activities (2,029 )                   (2,480 )
Net decrease in cash and cash equivalents (22 ) (294 )
Cash and cash equivalents at beginning of period 170                     1,469  
Cash and cash equivalents at end of period 148 1,175
Cash and cash equivalents from discontinued operations                     1,009  
Cash and cash equivalents from continuing operations       $ 148                     $ 166  

Copyright Business Wire 2010

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