01—Abstract
Summary
Summary of the 10-K filed February 24, 2022. Cited figures are marked; the original filing is the authoritative source.
Edison International (EIX) reported 2021 net income of $759 milliona, an increase of $20 million compared to 2020, primarily driven by improved core earnings at its subsidiary Southern California Edison (SCE).
SCE's core earnings rose due to higher authorized revenues from the 2021 General Rate Case decision and increased FERC revenue, partially offset by lower insurance benefits. The company faced significant non-core charges, most notably $919 millionb (after-tax) related to 2017/2018 wildfire and mudslide events claims and expenses, net of recoveries. SCE also recorded an impairment charge of $47 million for disallowed capital expenditures and a $155 million expense for its contribution to the Wildfire Insurance Fund.
SCE's capital expenditures totaled $5.4 billionc in 2021, with a projected $6.2 billion for 2022, focused on transmission, distribution, and wildfire mitigation. The company's capital structure and dividend payments are subject to CPUC regulation. Looking ahead, Edison International faces ongoing risks related to wildfire liabilities, regulatory decisions, and the energy transition, while also pursuing opportunities in clean energy and grid modernization.
02—Key points
Key Highlights
- Edison International reported 2021 net income of $759 million, up from $739 million in 2020, driven by improved core earnings at SCE.
- SCE's core earnings increased by $118 million due to higher authorized revenues from the 2021 General Rate Case and increased FERC revenue.
- Non-core items significantly impacted net income, including $919 million (after-tax) for 2017/2018 wildfire and mudslide events claims and expenses.
- SCE's capital expenditures were $5.4 billion in 2021, with plans for $6.2 billion in 2022, focusing on grid modernization and wildfire mitigation.
- The company is committed to California's decarbonization goals, with 42% of SCE's customer deliveries in 2021 coming from carbon-free resources.
- Wildfire-related liabilities remain a significant concern, with $1.6 billion in estimated losses for remaining claims related to the 2017/2018 events, subject to regulatory recovery approval.
- The company's credit ratings from Moody's, Fitch, and S&P are stable, but could be affected by regulatory outcomes and wildfire fund depletion.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 24, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $14.90B$13.58B | +9.8% |
| Operating Expenses | $13.43B$12.36B | +8.6% |
| Operating Income | $1.48B$1.22B | +21.4% |
| Interest Expense | $925.00M$902.00M | +2.5% |
| Net Income | $925.00M$871.00M | +6.2% |
| EPS (Basic) | $2.00$1.98 | +1.0% |
| EPS (Diluted) | $2.00$1.98 | +1.0% |
| Shares Outstanding (Basic) | 380.00M373.00M | +1.9% |
| Shares Outstanding (Diluted) | 380.00M374.00M | +1.6% |
05—Questions
Frequently Asked Questions
What were the main drivers of Edison International's 2021 financial performance?
Edison International's 2021 net income of $759 million, an increase from $739 million in 2020, was primarily driven by improved core earnings at its subsidiary, Southern California Edison (SCE). SCE benefited from higher authorized revenues resulting from the 2021 General Rate Case decision and increased FERC revenue, which were partially offset by lower insurance benefits and higher property taxes.
What significant non-core items impacted Edison International's financial results in 2021?
The company recorded substantial non-core charges in 2021, most notably $919 million (after-tax) related to claims and expenses from the 2017/2018 wildfire and mudslide events, net of expected recoveries. Additionally, an impairment charge of $47 million was recorded for disallowed historical capital expenditures in SCE's 2021 GRC decision, and SCE incurred $155 million in Wildfire Insurance Fund expense.
What is SCE's approach to wildfire mitigation and cost recovery?
SCE is actively implementing its Wildfire Mitigation Plan (WMP) which includes grid hardening, vegetation management, and Public Safety Power Shutoffs (PSPS). Costs associated with these efforts and wildfire insurance are tracked in various memorandum and balancing accounts and SCE seeks recovery through CPUC-jurisdictional rates, subject to reasonableness review. However, significant uncertainty remains regarding the recovery of uninsured wildfire-related costs for fires that occurred prior to July 12, 2019.
How is Edison International positioned for the energy transition and California's decarbonization goals?
Edison International and SCE are committed to California's decarbonization goals. In 2021, 42% of SCE's customer deliveries came from carbon-free resources, and the company is investing in utility-owned storage capacity, transportation electrification programs, and building electrification initiatives to support a clean energy future. Edison International aims to achieve net-zero GHG emissions by 2045.
06—Continue