10-QPeriod: Q1 FY2015

EDISON INTERNATIONAL Quarterly Report for Q1 Ended Mar 31, 2015

Filed April 28, 2015For Securities:EIX

Summary

Edison International (EIX) and its subsidiary Southern California Edison Company (SCE) reported solid financial results for the first quarter ended March 31, 2015. Net income attributable to Edison International increased significantly to $299 million, or $0.91-$0.92 per share, up from $176 million in the prior year period. This improvement was largely driven by Southern California Edison's (SCE) continuing operations, which saw net income rise to $305 million from $208 million, benefiting from higher FERC-related revenue and growth in the rate base, which offset lower income tax benefits. Key developments include the ongoing San Onofre proceedings, where a federal lawsuit challenging cost recovery was dismissed, but regulatory scrutiny over an ex parte communication remains. SCE also continues to manage its capital expenditures, with a reduced forecast for 2015-2017, and is advancing its labor contract negotiations. The company maintained a strong liquidity position with significant availability under its revolving credit facilities and a healthy debt-to-capitalization ratio.

Financial Highlights

41 data points
Beta

Revenue

$2.51B

Net Income

$318.00M

12.7% Net Margin

EPS (Diluted)

$0.91

Total Assets

$50.58B

Cash & Equivalents

$115.00M

Free Cash Flow

-$304.00M

Financial Statements
Beta
Revenue$2.51B
Operating Expenses$1.97B
Operating Income$538.00M
Interest Expense$143.00M
Net Income$318.00M
EPS (Basic)$0.92
EPS (Diluted)$0.91
Shares Outstanding (Basic)326.00M
Shares Outstanding (Diluted)329.00M

Key Highlights

  • 1Edison International reported a substantial increase in net income to $299 million for Q1 2015, compared to $176 million in Q1 2014.
  • 2Southern California Edison's (SCE) net income from continuing operations rose to $305 million, up from $208 million in the prior year, driven by regulatory rate base growth and higher FERC-related revenue.
  • 3Capital expenditures for SCE were $825 million in Q1 2015, and the company reduced its 2015-2017 capital expenditure forecast by approximately $325 million.
  • 4The federal lawsuit challenging the CPUC's authority to permit rate recovery for San Onofre costs was dismissed.
  • 5Labor contract negotiations with the International Brotherhood of Electrical Workers (IBEW) are ongoing, with agreements expiring on December 31, 2014.
  • 6SCE maintained a strong liquidity position, with $2.33 billion available under its revolving credit facility as of March 31, 2015, and a debt-to-total capitalization ratio of 0.45 to 1.
  • 7The company is actively managing its involvement in the San Onofre proceedings, including responding to orders related to an ex parte communication and potential penalties.

Frequently Asked Questions

The substantial increase in net income was primarily driven by Southern California Edison's (SCE) continuing operations. This improvement was due to higher FERC-related revenue from rate base growth and higher earnings on funds used during construction, which more than offset lower income tax benefits and the impact of the 2015 CPUC General Rate Case decision being delayed.

While a federal lawsuit challenging the CPUC's authority to permit rate recovery of San Onofre costs was dismissed, regulatory scrutiny continues regarding an ex parte communication. SCE has been ordered to produce documents related to this communication, and certain parties are requesting penalties. The San Onofre OII Settlement Agreement, which resolves most of the CPUC proceedings, is in place, but the outcome of the ex parte communication investigation is uncertain and could potentially impact the settlement, though no party has asked to reopen it as of the filing date.

Edison International, through SCE, has reduced its capital expenditure forecast for 2015-2017 by approximately $325 million, primarily due to changes in regulatory proceedings for certain transmission projects. The company also has strong liquidity, with substantial availability under its revolving credit facilities and a healthy debt-to-capitalization ratio, ensuring its ability to meet financial obligations.

Yes, the collective bargaining agreements for approximately 3,900 of SCE's full-time employees with the International Brotherhood of Electrical Workers (IBEW) expired on December 31, 2014, and are currently under negotiation. While the expired agreements remain in force during negotiations, there is no assurance an agreement will be reached.