01—Abstract
Summary
Summary of the 10-K filed February 21, 2017. Cited figures are marked; the original filing is the authoritative source.
Edison International (EIX) reported its fiscal year results on February 21, 2017.
The company's primary subsidiary, Southern California Edison (SCE), a major utility, experienced a significant increase in net income attributable to common shareholders, largely driven by an $378 milliona increase in SCE's earnings. This improvement was partially offset by increased costs at Edison International Parent and Other and lower income from discontinued operations. The company is investing heavily in its capital program, forecasting $19.3 billion in capital expenditures for 2017-2020, primarily focused on modernizing the electric grid and supporting the integration of distributed energy resources (DERs).
This includes significant investments in distribution and transmission infrastructure, as well as grid modernization initiatives. Edison International also announced a 13%b increase in its annual dividend rate, reflecting confidence in its financial outlook and a commitment to returning value to shareholders.
02—Key points
Key Highlights
- Edison International's net income attributable to common shareholders increased to $1.31 billion in 2016, up from $1.02 billion in 2015.
- Southern California Edison (SCE) saw its net income increase by $378 million, primarily due to higher authorized revenue from the 2015 GRC decision and lower O&M expenses, partially offset by increased financing costs and taxes.
- The company plans substantial capital investments of $19.3 billion from 2017-2020, focused on grid modernization and supporting distributed energy resources (DERs).
- Edison International declared a 13% increase in its annual dividend, raising it to $2.17 per share, with plans for higher-than-industry-average growth.
- San Onofre Nuclear Generating Station decommissioning costs continue to be managed, with $857 million remaining to be collected under the OII Settlement Agreement as of December 31, 2016.
- Edison Energy Group, the competitive business arm, is still not material to the consolidated results, with losses from continuing operations increasing due to operating and development costs.
- SCE's debt-to-capitalization ratio was 0.43:1 at year-end 2016, well within its debt covenant limits.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2016filed February 21, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $11.87B$11.52B | +3.0% |
| Operating Expenses | $9.81B$9.52B | +3.1% |
| Operating Income | $2.06B$2.01B | +2.7% |
| Interest Expense | $581.00M$555.00M | +4.7% |
| Net Income | $1.43B$1.12B | +27.6% |
| EPS (Basic) | $4.02$3.13 | +28.4% |
| EPS (Diluted) | $3.97$3.10 | +28.1% |
| Shares Outstanding (Basic) | 326.00M326.00M | 0.0% |
| Shares Outstanding (Diluted) | 330.00M329.00M | +0.3% |
05—Questions
Frequently Asked Questions
What was the main driver of Edison International's earnings growth in 2016?
The primary driver of Edison International's earnings growth in 2016 was the strong performance of its main subsidiary, Southern California Edison (SCE), which reported a significant increase in net income. This was largely attributed to higher authorized revenue from regulatory decisions and improved operational efficiencies, partially offset by higher financing costs and taxes.
What are Edison International's key capital investment priorities?
Edison International, through SCE, is prioritizing significant investments in modernizing its electric grid and integrating distributed energy resources (DERs). This includes substantial spending on transmission and distribution infrastructure upgrades, as well as technology to support grid reliability and customer choice in energy solutions.
How is Edison International addressing the San Onofre nuclear plant issue?
Edison International, via SCE, is managing the decommissioning of the San Onofre Nuclear Generating Station. While the permanent retirement of Units 2 and 3 occurred, the company has recorded a regulatory asset of $857 million as of December 31, 2016, representing expected recoveries under the San Onofre OII Settlement Agreement. The company is also involved in ongoing arbitration proceedings related to the steam generator issues.
What is the company's strategy regarding its competitive business segment, Edison Energy Group?
Edison Energy Group is Edison International's subsidiary focused on competitive energy services and distributed solar for commercial and industrial customers. While the company is investing in this segment, its activities were not material to the consolidated financial results in 2016, with reported losses from continuing operations increasing due to higher operating and development expenses.
06—Continue