10-QPeriod: Q1 FY2010

EDISON INTERNATIONAL Quarterly Report for Q1 Ended Mar 31, 2010

Filed May 7, 2010For Securities:EIX

Summary

Edison International (EIX) reported total operating revenue of $2.81 billion for the first quarter of 2010, consistent with the same period in 2009. Net income attributable to common shareholders decreased slightly to $236 million ($0.72 per share) from $250 million ($0.76 per share) in the prior year. This decrease was influenced by higher operating expenses at Southern California Edison (SCE) and a non-cash charge related to federal healthcare legislation impacting tax benefits. However, Edison Mission Group (EMG) saw an increase in core earnings, driven by improved trading income and distributions from certain projects. The company's liquidity remains a key focus, with SCE holding approximately $2.7 billion in available liquidity, including cash and credit facilities. SCE's capital expenditure program remains substantial, with significant investments planned for transmission upgrades, solar facilities, and smart meter deployment. EMG is also advancing its renewable energy projects, though facing challenges such as a lawsuit related to wind turbine supply agreements.

Financial Highlights

44 data points
Beta

Revenue

$2.81B

Net Income

$249.00M

8.9% Net Margin

EPS (Diluted)

$0.72

Total Assets

$42.36B

Cash & Equivalents

$1.42B

Free Cash Flow

-$352.00M

Financial Statements
Beta
Revenue$2.81B
Operating Expenses$2.31B
Operating Income$498.00M
Interest Expense$168.00M
Net Income$249.00M
EPS (Basic)$0.72
EPS (Diluted)$0.72
Shares Outstanding (Basic)326.00M
Shares Outstanding (Diluted)328.00M

Key Highlights

  • 1Total operating revenue remained stable at $2.81 billion for the quarter ended March 31, 2010, compared to the same period in 2009.
  • 2Net income attributable to common shareholders decreased to $236 million ($0.72 EPS) from $250 million ($0.76 EPS) year-over-year.
  • 3SCE's capital expenditures were $640 million in Q1 2010, with significant investments planned for transmission, solar, and smart grid infrastructure.
  • 4EMG's core earnings increased due to higher energy trading income and distributions from specific natural gas facilities.
  • 5A non-cash charge of $39 million was recorded in Q1 2010 related to the reversal of federal tax benefits due to new healthcare legislation.
  • 6SCE maintained substantial liquidity with $2.7 billion in cash and available credit facilities.
  • 7Environmental compliance remains a significant area of focus, with ongoing plans and cost evaluations for emissions control technologies at Midwest Generation and Homer City.

Frequently Asked Questions

The decrease in net income was primarily driven by higher operating expenses at Southern California Edison (SCE), including increased transmission and distribution costs, as well as generation expenses related to maintenance outages. Additionally, a $39 million non-cash charge in the first quarter of 2010 to reverse previously recognized federal tax benefits due to new healthcare legislation also impacted net income.

SCE continues to invest heavily in its capital program, focusing on upgrading transmission lines, developing solar power generation, and deploying smart meters. The company projects capital investments between $3.3 billion and $4.0 billion for 2010. EMG is also progressing on its renewable energy projects, including wind farms, and plans to fund these expenditures through a combination of project financing, grants, cash flow, and existing credit facilities.

The company faces various risks including evolving environmental regulations and compliance costs, interest rate and commodity price volatility, regulatory actions by CPUC and FERC, operational risks at nuclear and other power generating facilities, and counterparty credit risks. Specifically, environmental developments such as policies on once-through cooling and greenhouse gas regulations, along with ongoing litigation, are significant areas of attention.

Edison International is actively engaged in permitting and planning for environmental compliance at its facilities. This includes evaluating and implementing technologies like SNCR and FGD for emissions control at Midwest Generation and Homer City. The company is also navigating California's Renewable Electricity Standard and new policies regarding once-through cooling, which may require significant capital expenditures.