10-QPeriod: Q1 FY2016

EDISON INTERNATIONAL Quarterly Report for Q1 Ended Mar 31, 2016

Filed May 2, 2016For Securities:EIX

Summary

Edison International's first quarter 2016 results show a slight decrease in net income attributable to common shareholders compared to the same period in the prior year, primarily driven by lower earnings from its regulated utility, Southern California Edison (SCE). SCE's net income decreased by $18 million due to factors including the timing of revenue recognition related to its 2015 General Rate Case (GRC) decision, higher operation and maintenance costs, and reduced incremental income tax benefits. The company's competitive businesses, consolidated under Edison International Parent and Other, reported increased core losses. Despite the slight dip in earnings, Edison International maintains a strong liquidity position, with significant availability under its revolving credit facilities for both the parent company and SCE. Capital expenditures for the quarter were $729 million, with SCE projecting approximately $4 billion for the full year 2016. The company is actively managing regulatory matters, including the extended cost of capital application deadline and ongoing proceedings related to San Onofre and energy efficiency incentives.

Financial Statements
Beta
Revenue$2.44B
Operating Expenses$1.99B
Operating Income$448.00M
Interest Expense$140.00M
Net Income$306.00M
EPS (Basic)$0.86
EPS (Diluted)$0.85
Shares Outstanding (Basic)326.00M
Shares Outstanding (Diluted)329.00M

Key Highlights

  • 1Net income attributable to Edison International common shareholders decreased by $28 million to $271 million for the three months ended March 31, 2016, compared to $299 million for the same period in 2015.
  • 2Southern California Edison (SCE) experienced a $18 million decrease in core earnings due to revenue recognition timing from its 2015 GRC decision, higher O&M costs, and lower income tax benefits.
  • 3Edison International Parent and Other saw an $8 million increase in core losses, primarily due to higher development and operating costs at Edison Energy Group.
  • 4Total capital expenditures for the first three months of 2016 were $729 million, with SCE projecting approximately $4 billion for the full year.
  • 5SCE maintained a strong liquidity position with approximately $2.56 billion available under its revolving credit facility as of March 31, 2016.
  • 6The company is actively managing regulatory proceedings, including the CPUC's decision to extend the filing deadline for cost of capital applications to April 20, 2017, keeping authorized rates of return unchanged through 2017.
  • 7Significant legal and regulatory contingencies remain, including ongoing proceedings related to the San Onofre nuclear facility and claims against Mitsubishi Heavy Industries (MHI).

Frequently Asked Questions

The primary reason for the decrease in net income attributable to Edison International common shareholders was a $18 million reduction in core earnings from Southern California Edison (SCE). This was mainly due to the timing of revenue recognition related to the 2015 General Rate Case decision, higher operation and maintenance costs, and a decrease in income tax benefits.

Edison International and its subsidiary SCE maintain robust liquidity with significant availability under their respective revolving credit facilities. SCE has approximately $2.56 billion available under its credit facility. For the full year 2016, SCE projects capital expenditures of approximately $4 billion, which will be funded through operating cash flows, tax benefits, and capital market financings.

A significant regulatory development is the CPUC's decision to extend the due date for SCE's next cost of capital application to April 20, 2017, meaning SCE's authorized rate of return and capital structure will remain unchanged through December 31, 2017. The company is also managing ongoing proceedings related to San Onofre nuclear facility costs and energy efficiency incentive mechanisms.

Yes, the report details several significant contingencies. These include ongoing legal challenges and shareholder derivative lawsuits related to the San Onofre nuclear facility, claims against Mitsubishi Heavy Industries for steam generator defects, and investigations by the CPUC concerning Long Beach service interruptions. The ultimate financial impact of these matters is uncertain but is being actively managed.