8-KFinancial EventsRegulation FDOther Events+1

EDISON INTERNATIONAL 8-K Report, Material Impairment (Nov 9, 2015)

Filed November 9, 2015For Securities:EIX

Summary

Edison International (EIX) announced on November 9, 2015, that its subsidiary, Southern California Edison Company (SCE), received a final decision from the California Public Utilities Commission (CPUC) regarding its 2015 General Rate Case (GRC). The decision authorized a 2015 revenue requirement of $5.182 billion, which was a reduction of $330 million from SCE's request. This decision is retroactive to January 1, 2015. The CPUC also established a ratemaking methodology for 2016 and 2017, projecting revenue requirements of $5.391 billion and $5.663 billion, respectively. This methodology includes specific escalation factors for capital additions and operations and maintenance expenses. Separately, a material impairment charge of $382 million (after tax) is expected in the fourth quarter of 2015 due to a rate base offset related to forecasted tax repair deductions from 2012-2014, which will result in the write-off of a net regulatory asset.

Key Highlights

  • 1CPUC approved final decision for SCE's 2015 General Rate Case (GRC) on November 5, 2015.
  • 2Authorized 2015 revenue requirement of $5.182 billion for SCE, a decrease of $330 million from request.
  • 3Ratemaking methodology for 2016 and 2017 approved, with revenue requirements of $5.391 billion and $5.663 billion respectively.
  • 4The final decision is retroactive to January 1, 2015.
  • 5An after-tax impairment charge of $382 million will be recorded in Q4 2015.
  • 6The impairment charge relates to a rate base offset for forecasted tax repair deductions from 2012-2014.
  • 7Edison International management will use presentation materials in investor meetings, also posted on their investor website.

Frequently Asked Questions

The CPUC authorized a revenue requirement of $5.182 billion for 2015, which is $330 million less than what SCE had requested. This decision is retroactive to January 1, 2015.

The approved ratemaking methodology projects revenue requirements of $5.391 billion for 2016 and $5.663 billion for 2017, reflecting escalations in capital additions and operations and maintenance expenses.

SCE will record an after-tax impairment charge of $382 million in the fourth quarter of 2015. This is a result of the CPUC adopting a rate base offset related to forecasted tax repair deductions from 2012-2014, which necessitates writing off a net regulatory asset.

Edison International's management will use presentation materials related to this decision in investor meetings, and these materials will also be available on the company's investor relations website (www.edisoninvestor.com).