10-QPeriod: Q3 FY2021

EDISON INTERNATIONAL Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 2, 2021For Securities:EIX

Summary

Edison International (EIX) and its subsidiary Southern California Edison (SCE) reported a consolidated net loss of $341 million for the third quarter of 2021, a widening from the $288 million loss in the same period of 2020. This deterioration was primarily driven by increased non-core items, particularly the significant wildfire-related claims and expenses, which totaled $1.27 billion for the quarter. Core earnings, a non-GAAP measure, showed improvement, with Edison International reporting core earnings of $644 million for the quarter, up from $632 million in the prior year's third quarter. The improvement in core earnings was largely attributed to higher revenues from the 2021 General Rate Case (GRC) final decision and increased FERC revenue for SCE. Despite the reported net loss, the company is making progress on its capital expenditure plans, including wildfire mitigation efforts like the Wildfire Covered Conductor Program, and has obtained a favorable 2021 GRC final decision which will increase authorized revenue requirements. The company also settled a significant portion of its wildfire-related claims, though ongoing litigation and the estimation of future losses remain a key area of focus. Management highlighted improved credit ratings outlooks and ongoing efforts to manage liquidity and capital structure effectively.

Financial Highlights

46 data points
Beta

Revenue

$5.30B

Net Income

-$297.00M

-5.6% Net Margin

EPS (Diluted)

$-0.90

Total Assets

$73.02B

Cash & Equivalents

$525.00M

Free Cash Flow

-$397.00M

Financial Statements
Beta
Revenue$5.30B
Operating Expenses$5.43B
Operating Income-$128.00M
Interest Expense$245.00M
Net Income-$297.00M
EPS (Basic)$-0.90
EPS (Diluted)$-0.90
Shares Outstanding (Basic)380.00M
Shares Outstanding (Diluted)380.00M

Key Highlights

  • 1Consolidated net loss widened to $341 million in Q3 2021 from $288 million in Q3 2020, largely due to increased wildfire-related expenses.
  • 2Core earnings improved to $644 million in Q3 2021 from $632 million in Q3 2020, driven by higher revenues from the 2021 GRC decision and FERC revenue.
  • 3The 2021 General Rate Case (GRC) final decision, effective January 1, 2021, authorized increased revenue requirements, positively impacting SCE's revenue.
  • 4Significant progress was made in resolving wildfire claims, with SCE entering into settlements with approximately 4,000 individual plaintiffs for $1.5 billion and executing an agreement with the SED for $550 million in costs.
  • 5SCE's capital expenditure forecast for 2021-2023 is substantial, totaling $16.8 billion, with a significant portion dedicated to wildfire mitigation.
  • 6The company is actively managing its liquidity, with Edison International Parent having $1.08 billion available under its credit facility and SCE having $3.1 billion available.
  • 7Credit rating agency outlooks for both Edison International Parent and SCE were revised to stable from negative, indicating improved investor confidence.

Frequently Asked Questions

The primary driver of the net loss in the third quarter of 2021 was the increase in non-core items, particularly wildfire-related claims and expenses. These events, stemming from past wildfires in SCE's service territory, continue to represent a significant financial impact.

The final decision on SCE's 2021 GRC, effective retroactively from January 1, 2021, authorized an increase in base rate revenue requirements. This is expected to positively impact Edison International's financial performance by allowing for greater cost recovery and supporting its revenue generation.

Edison International and SCE are actively managing wildfire-related liabilities through settlements with plaintiffs, cooperation with regulatory investigations (such as the SED agreement), and by seeking cost recovery through approved regulatory mechanisms. The company also continues to invest in wildfire mitigation efforts, such as the Wildfire Covered Conductor Program, to reduce future risks.

The company is undertaking significant capital expenditures, primarily related to wildfire mitigation and infrastructure upgrades, as outlined in its capital program. Liquidity is being managed through a combination of operating cash flows, capital market financings, and equity contributions from Edison International Parent. Credit facilities provide additional available liquidity.