10-QPeriod: Q1 FY2014

EDISON INTERNATIONAL Quarterly Report for Q1 Ended Mar 31, 2014

Filed April 29, 2014For Securities:EIX

Summary

Edison International reported a net income of $202 million for the first quarter of 2014, a decrease from $298 million in the same period of the previous year. This decline was largely influenced by a significant non-core charge of $231 million related to the San Onofre Nuclear Generating Station settlement. Excluding these non-core items, core earnings increased year-over-year, driven by higher authorized revenue from rate base growth, lower operation and maintenance expenses due to workforce reductions, and income tax benefits. Southern California Edison (SCE) also experienced a decline in net income, though its core earnings improved. While the company faced challenges including increased purchased power costs and the ongoing San Onofre resolution, the underlying operational performance showed resilience. The company continued its substantial capital expenditure program, investing heavily in transmission and distribution infrastructure. Management is focused on cost control and regulatory recovery mechanisms to navigate the current financial landscape and support future investments.

Financial Statements
Beta
Revenue$2.93B
Operating Expenses$2.60B
Operating Income$331.00M
Interest Expense$141.00M
Net Income$202.00M
EPS (Basic)$0.54
EPS (Diluted)$0.54
Shares Outstanding (Basic)326.00M
Shares Outstanding (Diluted)329.00M

Key Highlights

  • 1Net income decreased to $202 million from $298 million year-over-year, primarily due to a $231 million charge related to the San Onofre settlement.
  • 2Core earnings, which exclude non-core items, increased by $42 million to $294 million, reflecting improved operational performance and cost management.
  • 3Southern California Edison (SCE) reported an increase in operating revenue to $2.92 billion, supported by higher authorized revenue and rate base growth.
  • 4Purchased power expenses increased significantly by $290 million due to higher power and gas prices.
  • 5SCE entered into a crucial settlement agreement regarding the San Onofre nuclear plant issues, which, if approved, will resolve regulatory disputes but resulted in a substantial charge in the current quarter.
  • 6The company continues to invest heavily in its capital program, with capital expenditures totaling $940 million for the quarter, focusing on reliability and renewable energy access.
  • 7Edison International's consolidated cash flows from operating activities were $498 million, while SCE's were $521 million, showing stable operational cash generation despite the net income decline.

Frequently Asked Questions

The primary reason for the decrease in net income from $298 million in Q1 2013 to $202 million in Q1 2014 was a significant non-core charge of $231 million related to the settlement agreement for the San Onofre Nuclear Generating Station issues.

The San Onofre settlement, while resolving regulatory disputes, resulted in a pre-tax charge of $231 million in the first quarter of 2014. This charge significantly reduced the reported net income. However, the settlement is expected to provide clarity on future cost recovery and potential third-party recoveries.

Core earnings increased due to several factors including higher authorized revenue from rate base growth, lower operation and maintenance expenses resulting from workforce reductions, and income tax benefits. These positive drivers helped offset other cost pressures.

Edison International and SCE continue to prioritize significant investments in their infrastructure. The company projects capital expenditures in the range of $3.6 billion to $4.1 billion for 2014, and forecasts a total of $15.1 billion to $17.2 billion for the period 2014-2017, focusing on maintaining reliability, expanding transmission for renewables, and system upgrades.