10-QPeriod: Q3 FY2014

EDISON INTERNATIONAL Quarterly Report for Q3 Ended Sep 30, 2014

Filed October 28, 2014For Securities:EIX

Summary

Edison International (EIX) reported solid financial results for the nine months ended September 30, 2014, with net income attributable to common shareholders increasing significantly to $1.192 billion, up from $614 million in the prior year period. This improvement was largely driven by Southern California Edison (SCE) which saw its net income available for common stock climb to $1.072 billion. The company experienced substantial growth in operating revenue, reaching $10.298 billion for the nine-month period, compared to $9.638 billion in the same period of 2013, reflecting higher authorized revenues from rate base growth and increased customer load. Despite increased operating expenses, particularly in purchased power, the company demonstrated strong operational performance and effective cost management. A significant event impacting the company was the proposed settlement agreement for the San Onofre nuclear plant issues, which, if approved by the CPUC, is expected to resolve significant regulatory and financial uncertainties. While this settlement includes certain disallowances and refunds, management anticipates that its implementation will not materially impact future net income. The company also continues to manage its balance sheet prudently, with a strong focus on capital expenditures for infrastructure upgrades and renewable energy integration, supported by available credit facilities and ongoing access to capital markets.

Financial Statements
Beta
Revenue$4.36B
Operating Expenses$3.48B
Operating Income$874.00M
Interest Expense$141.00M
Net Income$508.00M
EPS (Basic)$1.47
EPS (Diluted)$1.46
Shares Outstanding (Basic)326.00M
Shares Outstanding (Diluted)329.00M

Key Highlights

  • 1Net income attributable to Edison International common shareholders rose to $1.192 billion for the nine months ended September 30, 2014, a substantial increase from $614 million in the prior year.
  • 2Operating revenue for the nine-month period increased to $10.298 billion, up from $9.638 billion in the same period of 2013, driven by higher authorized revenues and increased customer load.
  • 3Southern California Edison (SCE) significantly increased its net income available for common stock to $1.072 billion for the nine months ended September 30, 2014.
  • 4A proposed settlement agreement for the San Onofre nuclear plant issues was reached, aiming to resolve associated financial and regulatory uncertainties, with a proposed decision from the Administrative Law Judges recommending approval.
  • 5Total capital expenditures for the first nine months of 2014 were $2.856 billion, primarily focused on reliability, transmission, and renewable energy integration.
  • 6Edison International maintains strong liquidity with $2.75 billion in revolving credit facilities available for SCE and $1.25 billion for Edison International Parent at September 30, 2014.

Frequently Asked Questions

The significant increase in net income for the nine months ended September 30, 2014, was primarily driven by strong performance at Southern California Edison (SCE), which benefited from higher authorized revenues due to rate base growth and increased customer load. Additionally, improved income tax benefits and lower severance costs contributed to the overall improvement.

Edison International has entered into an Amended and Restated Settlement Agreement regarding the San Onofre nuclear plant issues. A Proposed Decision from the Administrative Law Judges has recommended its approval. If approved by the CPUC, this settlement is expected to resolve significant regulatory and financial uncertainties by addressing cost recovery, disallowances, and refunds. While the settlement includes certain disallowances and refunds, management anticipates that its implementation will not materially impact future net income.

Edison International continued to invest in its infrastructure, with $2.856 billion in capital expenditures for the first nine months of 2014, focused on reliability, transmission, and renewable energy. The company maintains strong liquidity with significant availability under its revolving credit facilities, ensuring its ability to fund operations, capital expenditures, and meet financial obligations.

The San Onofre OII Amended Settlement Agreement is a key regulatory proceeding that, if approved, is expected to resolve significant uncertainties. Other ongoing matters include legal proceedings related to the Shaver Lake Dam Project and environmental matters concerning Four Corners. While the company believes the outcome of most other proceedings will not materially affect its financial condition, the San Onofre settlement's approval and the outcomes of third-party recovery efforts remain critical to watch.