10-QPeriod: Q1 FY2017

EDISON INTERNATIONAL Quarterly Report for Q1 Ended Mar 31, 2017

Filed May 1, 2017For Securities:EIX

Summary

Edison International (EIX) reported an increase in net income for the first quarter of 2017 compared to the same period in 2016, driven by improved performance at Southern California Edison (SCE). SCE's earnings benefited from higher revenues due to rate escalation mechanisms and lower operation and maintenance expenses. The company also recorded a tax deduction related to the San Onofre nuclear plant's permanent retirement, which positively impacted net income. While Edison International Parent and Other saw an increase in earnings primarily due to tax benefits from stock option exercises, its competitive business segment, Edison Energy Group, continues to operate at a loss. Capital expenditures remain significant, though projected full-year spending for SCE has been slightly reduced due to regulatory delays regarding grid modernization funding. Regulatory proceedings, particularly the 2018 General Rate Case, are ongoing, with potential revenue reductions proposed by the Office of Ratepayer Advocates. The company is also managing potential liabilities and recoveries related to the San Onofre nuclear plant, including a settlement with Mitsubishi Heavy Industries. Liquidity remains strong with significant availability under revolving credit facilities for both SCE and Edison International.

Financial Highlights

44 data points
Beta

Revenue

$2.46B

Net Income

$392.00M

15.9% Net Margin

EPS (Diluted)

$1.10

Total Assets

$51.74B

Cash & Equivalents

$150.00M

Free Cash Flow

-$60.00M

Financial Statements
Beta
Revenue$2.46B
Operating Expenses$1.99B
Operating Income$471.00M
Interest Expense$152.00M
Net Income$392.00M
EPS (Basic)$1.11
EPS (Diluted)$1.10
Shares Outstanding (Basic)326.00M
Shares Outstanding (Diluted)329.00M

Key Highlights

  • 1Net income attributable to Edison International increased by $81 million to $362 million for the three months ended March 31, 2017, compared to $281 million in the prior year period.
  • 2Southern California Edison (SCE) experienced a $54 million increase in earnings, attributed to higher revenues from rate escalation, lower O&M expenses, and higher income tax benefits.
  • 3A significant tax deduction related to the San Onofre plant abandonment positively impacted income tax expense.
  • 4Projected full-year 2017 capital expenditures for SCE were revised to $4.0 billion from $4.2 billion, primarily due to the CPUC's non-approval of a grid modernization memorandum account and minor project delays.
  • 5SCE received a net recovery of $47 million from an arbitration decision against Mitsubishi Heavy Industries related to San Onofre steam generators, which was recorded as a regulatory liability.
  • 6Liquidity is strong, with SCE reporting approximately $2.66 billion available under its credit facility and Edison International Parent having $955 million available.
  • 7The company is actively engaged in regulatory proceedings, including the 2018 General Rate Case, where proposed revenue requirement reductions have been recommended by ORA.

Frequently Asked Questions

The primary driver was improved performance at Southern California Edison (SCE), which saw higher revenues due to rate escalation mechanisms and lower operation and maintenance expenses. Additionally, a tax deduction related to the San Onofre nuclear plant's permanent retirement significantly reduced income tax expense.

Yes, the 2018 General Rate Case is a key regulatory proceeding. The Office of Ratepayer Advocates (ORA) has recommended a decrease in SCE's requested revenue requirement, particularly by proposing to reduce or capture grid modernization spending in a memorandum account for future review. The outcome of this case could impact future revenue streams.

SCE received a net recovery of $47 million from an arbitration award against Mitsubishi Heavy Industries (MHI) concerning the faulty steam generators. This amount has been recorded as a regulatory liability due to uncertainty in its allocation. The San Onofre OII Settlement Agreement is also under review by the CPUC due to previous ex parte communication issues, with parties agreeing to mediation. SCE continues to assess the San Onofre regulatory asset as probable of recovery.

Projected capital expenditures for SCE in 2017 were slightly reduced to $4.0 billion due to regulatory delays concerning grid modernization funding. Both SCE and Edison International maintain strong liquidity positions with substantial availability under their respective revolving credit facilities, supported by ongoing access to capital markets.