10-QPeriod: Q1 FY2021

EDISON INTERNATIONAL Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 27, 2021For Securities:EIX

Summary

Edison International (EIX) reported a net income of $259 million for the first quarter of 2021, a significant increase from $183 million in the same period last year. This growth was primarily driven by Southern California Edison's (SCE) improved core earnings, which benefited from lower wildfire mitigation and employee benefit expenses, as well as higher income from allowance for funds used during construction (AFUDC). The company's proactive approach to wildfire risk mitigation, including the implementation of its Wildfire Mitigation Plan (WMP) and the use of Public Safety Power Shutoffs (PSPS), continues to be a focus, despite potential regulatory adjustments to revenue related to PSPS events. While the company has made significant progress in settling wildfire claims, the ongoing legal and financial implications of past wildfire events remain a key area for investor attention. The balance sheet shows robust liquidity, with substantial cash on hand and available credit facilities. SCE's credit rating remains investment grade, though subject to regulatory and wildfire-related factors. The company is actively managing its capital expenditures and financing, including securitization of certain costs. Investors should monitor regulatory decisions impacting rate recovery and wildfire cost allocation, as well as the company's ongoing efforts to manage wildfire risks and associated liabilities.

Financial Highlights

46 data points
Beta

Revenue

$2.96B

Net Income

$290.00M

9.8% Net Margin

EPS (Diluted)

$0.68

Total Assets

$70.50B

Cash & Equivalents

$390.00M

Free Cash Flow

-$1.29B

Financial Statements
Beta
Revenue$2.96B
Operating Expenses$2.56B
Operating Income$399.00M
Interest Expense$217.00M
Net Income$290.00M
EPS (Basic)$0.68
EPS (Diluted)$0.68
Shares Outstanding (Basic)379.00M
Shares Outstanding (Diluted)380.00M

Key Highlights

  • 1Net income attributable to Edison International common shareholders increased to $259 million in Q1 2021, up from $183 million in Q1 2020, reflecting improved operational performance.
  • 2Southern California Edison's (SCE) core earnings saw a notable increase of $77 million year-over-year, primarily due to reduced wildfire mitigation and employee benefit expenses.
  • 3The company continues to implement its Wildfire Mitigation Plan (WMP) and utilizes Public Safety Power Shutoffs (PSPS) to manage wildfire risks, though potential regulatory changes could impact revenue from PSPS events.
  • 4EIX and SCE have made substantial progress in settling wildfire claims, with significant payments and accruals for past events, though ongoing litigation and potential future claims remain a factor.
  • 5SCE's liquidity remains strong, supported by significant cash on hand and substantial availability under its credit facilities, enabling it to meet its financial obligations.
  • 6The company is actively pursuing securitization of certain capital expenditures and wildfire-related costs to manage financing and maintain its capital structure.
  • 7Credit ratings for both Edison International and SCE remain investment grade, with stable outlooks from Moody's and Fitch, though subject to wildfire-related and regulatory developments.

Frequently Asked Questions

The increase in net income was primarily driven by Southern California Edison's (SCE) improved core earnings, which benefited from lower expenses related to wildfire mitigation activities and employee benefits, as well as higher income from the equity portion of allowance for funds used during construction (AFUDC).

Edison International and SCE have incurred significant losses related to past wildfire events and have made substantial progress in settling claims. As of March 31, 2021, they had paid $2.4 billion in settlements and had $1.8 billion to be paid under executed settlements for the 2017/2018 Wildfire/Mudslide Events. They continue to explore settlement opportunities for remaining claims, but ongoing litigation and potential future liabilities remain a critical area of focus.

SCE maintains strong liquidity through operating cash flows, capital market financings, and equity contributions from Edison International. They have significant availability under credit facilities and are actively using securitization to finance certain capital expenditures and wildfire-related costs, ensuring they can meet obligations and maintain their capital structure.

Investors should monitor regulatory decisions, particularly from the California Public Utilities Commission (CPUC). Key areas include potential revenue adjustments related to Public Safety Power Shutoffs (PSPS), the prudency standard for wildfire cost recovery under AB 1054, and the ongoing General Rate Case (GRC) which impacts future revenue requirements. The CPUC's decisions on cost recovery for wildfire events and capital expenditures are crucial for future financial performance.