10-QPeriod: Q2 FY2020

EDISON INTERNATIONAL Quarterly Report for Q2 Ended Jun 30, 2020

Filed July 28, 2020For Securities:EIX

Summary

Edison International (EIX) reported its second quarter 2020 results, showing a decrease in net income attributable to common shareholders compared to the prior year. This decline was primarily driven by lower earnings at Southern California Edison (SCE), influenced by the adoption of the 2018 General Rate Case decision and operational impacts of the COVID-19 pandemic. The company continues to navigate significant wildfire-related liabilities, with substantial amounts accrued and ongoing efforts to recover costs through insurance and regulatory mechanisms. Despite these challenges, SCE maintained its investment-grade credit ratings and sufficient liquidity through its credit facilities and prudent cash management. The company's outlook remains subject to regulatory decisions, particularly the ongoing 2021 General Rate Case, and the broader economic impacts of COVID-19. Management is focused on wildfire mitigation efforts, regulatory compliance, and maintaining operational stability while managing financial performance in a complex operating environment. Investors should monitor the progress of regulatory proceedings and the company's ability to recover wildfire-related costs.

Financial Highlights

46 data points
Beta

Revenue

$2.99B

Net Income

$348.00M

11.7% Net Margin

EPS (Diluted)

$0.85

Total Assets

$67.05B

Cash & Equivalents

$524.00M

Free Cash Flow

-$936.00M

Financial Statements
Beta
Revenue$2.99B
Operating Expenses$2.49B
Operating Income$500.00M
Interest Expense$229.00M
Net Income$348.00M
EPS (Basic)$0.85
EPS (Diluted)$0.85
Shares Outstanding (Basic)375.00M
Shares Outstanding (Diluted)376.00M

Key Highlights

  • 1Net income attributable to Edison International common shareholders decreased to $318 million ($0.85 per share) for the three months ended June 30, 2020, from $392 million ($1.20 per share) in the same period of 2019.
  • 2Southern California Edison (SCE) recorded $49 million in regulatory assets for incremental COVID-19 related costs, primarily due to customer uncollectibles, sequestering employees, and emergency response coordination.
  • 3Wildfire mitigation expenses and insurance costs remain significant, with SCE recognizing $549 million in regulatory assets for incremental wildfire mitigation expenses and $484 million for incremental wildfire insurance expenses as of June 30, 2020.
  • 4SCE continues to manage substantial wildfire-related liabilities, with accrued liabilities of $4.5 billion for the 2017/2018 Wildfire/Mudslide Events, partially offset by expected insurance recoveries of $1.6 billion.
  • 5The company's capital expenditures for the first six months of 2020 totaled $2.3 billion, with a forecast range of $19.4 billion to $21.2 billion for 2020-2023.
  • 6SCE has maintained investment-grade credit ratings (Baa2/BBB-/BBB with stable outlook) from Moody's, Fitch, and S&P, indicating continued financial stability.
  • 7Edison International Parent and Other reported increased losses, partly due to a $25 million goodwill impairment charge related to Edison Energy stemming from the economic impact of COVID-19.

Frequently Asked Questions

Edison International's net income attributable to common shareholders decreased to $318 million ($0.85 per share) for the three months ended June 30, 2020, down from $392 million ($1.20 per share) in the same period of 2019. This decline was primarily driven by lower earnings at Southern California Edison (SCE).

SCE has established memorandum accounts to track incremental costs associated with the pandemic, subject to regulatory review, and has recorded $49 million in regulatory assets for these costs. While decoupling mechanisms help insulate earnings from reduced electricity usage, the company faces potential impacts on operations, liquidity, and access to capital markets.

Edison International and SCE have accrued liabilities of $4.5 billion for the 2017/2018 Wildfire/Mudslide Events, with ongoing efforts to recover costs through insurance and regulatory mechanisms. As of June 30, 2020, expected insurance recoveries were $1.6 billion. Significant wildfire mitigation and insurance expenses are being tracked as regulatory assets. The company is also actively involved in wildfire mitigation efforts and complies with wildfire safety certification requirements under AB 1054.

The company is closely monitoring the ongoing 2021 General Rate Case proceeding, where intervenors have proposed significant reductions to SCE's requested revenue requirement. Additionally, the company is managing regulatory proceedings related to FERC formula rates and recent CPUC decisions on residential disconnections. Regulatory approvals are crucial for cost recovery and future revenue requirements.