10-KPeriod: FY2013

EDISON INTERNATIONAL Annual Report, Year Ended Dec 31, 2013

Filed February 25, 2014For Securities:EIX

Summary

Edison International (EIX) reported its 2013 fiscal year results, highlighting the permanent retirement of its San Onofre nuclear units and the ongoing restructuring related to its subsidiary, Edison Mission Energy (EME). The company's financial performance was significantly impacted by a $575 million impairment charge related to the San Onofre retirement. Southern California Edison (SCE), the primary utility subsidiary, navigated a complex regulatory environment, including proceedings on cost recovery for San Onofre and its 2015 General Rate Case. Operationally, SCE faced challenges and opportunities related to grid modernization, renewable energy integration, and evolving regulatory frameworks. The company's capital expenditures for infrastructure upgrades remain substantial. The EME bankruptcy settlement, expected to be approved in March 2014, aims to resolve significant claims against Edison International, though the full financial impact is still subject to definitive legal and regulatory outcomes. Investors should monitor the outcomes of the San Onofre cost recovery proceedings and the broader regulatory landscape impacting SCE's future rate adjustments and capital recovery.

Financial Highlights

44 data points
Beta

Revenue

$12.58B

Net Income

$1.01B

8.1% Net Margin

EPS (Diluted)

$2.78

Total Assets

$46.65B

Cash & Equivalents

$146.00M

Free Cash Flow

-$632.00M

Financial Statements
Beta
Revenue$12.58B
Operating Expenses$10.87B
Operating Income$1.72B
Interest Expense$544.00M
Net Income$1.01B
EPS (Basic)$2.81
EPS (Diluted)$2.78
Shares Outstanding (Basic)326.00M
Shares Outstanding (Diluted)329.00M

Key Highlights

  • 1Permanent retirement of San Onofre nuclear units resulted in a $575 million impairment charge.
  • 2Edison Mission Energy (EME) filed for Chapter 11 bankruptcy; a settlement agreement was reached in February 2014, subject to court approval.
  • 3Southern California Edison (SCE) has an undercollection in its ERRA balancing account of approximately $1 billion.
  • 4SCE is focused on significant capital expenditures for transmission and distribution system upgrades, forecasting $15.1-$17.2 billion for 2014-2017.
  • 5CPUC is reviewing cost recovery for San Onofre through an Order Instituting Investigation (OII), with proposed decisions expected in early 2014.
  • 6Edison International's cumulative total shareholder return lagged the S&P 500 Index and the Philadelphia Utility Index over a five-year period.
  • 7The company is subject to extensive regulatory oversight, with CPUC and FERC decisions significantly impacting its operations and financial performance.

Frequently Asked Questions

Edison International recorded a $575 million impairment charge in 2013 due to the permanent retirement of the San Onofre Units 2 and 3. SCE is seeking cost recovery for San Onofre-related expenses through CPUC proceedings, but the outcome, including potential disallowances or refunds, remains uncertain.

EME filed for Chapter 11 bankruptcy in December 2012. Edison International reached a settlement agreement in February 2014 to resolve claims against it, subject to Bankruptcy Court approval. The settlement aims to extinguish existing claims and will result in a significant financial settlement and retained tax benefits. Edison International anticipates recording approximately $130 million in income in Q1 2014 related to this settlement.

SCE is subject to significant regulatory oversight from the CPUC and FERC, which dictate rates, capital structure, and operational approvals. The company is undertaking substantial capital investments in its transmission and distribution infrastructure, and managing its energy procurement costs through regulatory balancing accounts like the ERRA, which currently has an undercollection of $1 billion. The company is also focusing on compliance with environmental regulations and the integration of renewable energy sources.

Edison International's liquidity is primarily dependent on dividends from SCE. At December 31, 2013, Edison International had $1.2 billion available under its credit facility. SCE also had significant liquidity available under its credit facility, totaling $2.46 billion. Both entities are focused on managing their debt-to-capitalization ratios, which were within required limits.