10-QPeriod: Q2 FY2009

EDISON INTERNATIONAL Quarterly Report for Q2 Ended Jun 30, 2009

Filed August 7, 2009For Securities:EIX

Summary

Edison International reported a net loss of $16 million, or $0.05 per share, for the second quarter of 2009, a significant decrease from a net income of $261 million, or $0.79 per share, in the same period of 2008. This decline was primarily driven by a substantial loss of $628 million (after-tax) attributed to Edison Capital's cross-border lease terminations and the Global Settlement with the IRS. Despite this significant quarterly loss, Edison International's core electric utility segment, Southern California Edison (SCE), showed improved performance, with net income increasing to $499 million from $157 million in the prior year's quarter. This improvement was bolstered by a $300 million after-tax benefit from the Global Settlement related to tax timing differences. In contrast, Edison Mission Group (EMG), which includes competitive power generation and financial services, incurred a loss of $551 million in the quarter, compared to earnings of $112 million in the prior year. This segment's performance was heavily impacted by the aforementioned Global Settlement-related losses at Edison Capital and lower earnings from Midwest Generation and other gas-fired projects due to decreased energy prices and demand. While the parent company reported a net loss, the operational performance of its regulated utility, SCE, demonstrated resilience, highlighting the impact of the Global Settlement on the consolidated results.

Financial Highlights

44 data points
Beta

Revenue

$2.83B

Net Income

-$16.00M

-0.6% Net Margin

EPS (Diluted)

$-0.05

Total Assets

$41.88B

Cash & Equivalents

$2.70B

Free Cash Flow

-$558.00M

Financial Statements
Beta
Revenue$2.83B
Operating Expenses$3.20B
Operating Income-$364.00M
Interest Expense$182.00M
Net Income-$16.00M
EPS (Basic)$-0.05
EPS (Diluted)$-0.05
Shares Outstanding (Basic)326.00M
Shares Outstanding (Diluted)327.00M

Key Highlights

  • 1Edison International reported a net loss of $16 million ($0.05/share) for Q2 2009, a significant drop from a net income of $261 million ($0.79/share) in Q2 2008.
  • 2The net loss was primarily driven by a $628 million after-tax loss related to Edison Capital's cross-border lease terminations and the Global Settlement with the IRS.
  • 3Southern California Edison (SCE), the electric utility segment, reported a strong increase in net income to $499 million from $157 million in Q2 2008, benefiting from a $300 million after-tax gain related to the Global Settlement and improved operating income.
  • 4Edison Mission Group (EMG), encompassing competitive power generation and financial services, incurred a significant loss of $551 million in Q2 2009, compared to earnings of $112 million in Q2 2008, impacted by Edison Capital's lease termination losses and lower energy prices affecting generation assets.
  • 5Total operating revenue decreased to $2.83 billion from $3.48 billion year-over-year, with the electric utility segment revenue declining due to lower purchased power costs and energy prices.
  • 6SCE's capital expenditure plan for 2009-2013 was revised to a range of $16.8 billion to $20.4 billion, focusing on transmission, distribution, and renewable energy projects.
  • 7The company finalized its Global Settlement with the IRS, resolving federal tax disputes through 2002, which resulted in a significant charge for Edison Capital and a benefit for SCE.

Frequently Asked Questions

The substantial decrease in net income from $261 million in the second quarter of 2008 to a net loss of $16 million in the second quarter of 2009 was primarily due to a $628 million after-tax loss resulting from Edison Capital's termination of its interests in cross-border leases and the finalization of the Global Settlement with the IRS. This settlement resolved federal tax disputes and had a significant financial impact on Edison Capital.

Southern California Edison (SCE) demonstrated strong operational performance, with net income increasing significantly to $499 million in the second quarter of 2009, up from $157 million in the same period of 2008. This improvement was driven by a $300 million after-tax benefit related to the Global Settlement, coupled with higher operating income authorized by the 2009 General Rate Case (GRC) decision and lower operating expenses.

The Global Settlement significantly impacted Edison International's consolidated results. For Edison Capital, it led to a $628 million after-tax loss. Conversely, SCE benefited from the settlement, recording a $300 million after-tax gain primarily from tax timing differences on affirmative claims, which boosted its quarterly earnings. The settlement resolved federal tax disputes related to cross-border leases and other claims through 2002.

Edison Mission Group (EMG), which includes competitive power generation and financial services, experienced a substantial loss of $551 million in the second quarter of 2009, a sharp reversal from earnings of $112 million in the prior year's quarter. This performance was heavily influenced by the aforementioned losses at Edison Capital and also by lower earnings from Midwest Generation and other gas-fired projects. These were driven by lower energy and natural gas prices, reduced electricity demand, and lower trading income.