Edison International (NYSE:EIX) today reported fourth quarter 2015 net loss on a GAAP basis of $79 million, or $0.24 per share, compared to net income of $420 million, or $1.29 per share, in the fourth quarter of 2014. On an adjusted basis, Edison International’s fourth quarter 2015 core earnings were $287 million, or $0.88 per share, compared to $355 million, or $1.08 per share, in the fourth quarter of 2014.

Southern California Edison's (SCE) fourth quarter 2015 core earnings decreased by $66 million, or $0.20 per share, from the fourth quarter 2014 primarily due to lower authorized California Public Utilities Commission (CPUC) revenue from implementation of the 2015 CPUC General Rate Case (GRC) decision and higher income taxes, partially offset by lower operation and maintenance costs. Edison International Parent and Other’s fourth quarter 2015 core loss increased by $2 million compared to fourth quarter 2014 core losses primarily due to income taxes and expenses.

Fourth quarter 2015 core earnings exclude losses of $366 million, or $1.12 per share, primarily related to the $382 million, or $1.18 per share, write-down of SCE regulatory assets previously recorded for recovery of deferred income taxes from 2012-2014 incremental tax repair deductions. Fourth quarter 2014 core earnings exclude SCE income of $24 million, or $0.08 per share, related to a revised estimated impact of the San Onofre Nuclear Generating Station (SONGS) Settlement Agreement, and income of $41 million, or $0.13 per share, primarily due to discontinued operations.

“Our results are well ahead of earnings guidance,” said Ted Craver, chairman and chief executive officer of Edison International, “and reflect SCE’s strong rate base growth and continued focus on operational excellence. With the potential for continued long-term growth and productivity improvements at SCE along with continued development of Edison Energy Group’s businesses, Edison International is well-positioned in a rapidly changing industry.”

Full-Year Earnings

For the year ended December 31, 2015, Edison International reported net income on a GAAP basis of $1.02 billion, or $3.13 per share, compared to $1.612 billion, or $4.95 per share, during 2014. On an adjusted basis, Edison International’s core earnings were $1.336 billion, or $4.10 per share, compared to $1.497 billion, or $4.59 per share, in 2014.

SCE’s core earnings for the year ended December 31, 2015 decreased $157 million, or $0.48 per share, from 2014, primarily due to lower CPUC-related revenue from implementation of the 2015 CPUC GRC decision and higher income taxes, partially offset by an increase in Federal Energy Regulatory Commission-related revenue from rate base growth, lower operation and maintenance costs and earnings on funds used during construction. Edison International Parent and Other’s 2015 core losses increased $4 million, or $0.01 per share, compared to 2014 primarily due to income taxes and expenses.

2015 core earnings exclude losses of $316 million, or $0.97 per share, primarily related to the $382 million, or $1.18 per share, write-down of SCE regulatory assets. 2014 core earnings exclude SCE net charges of $72 million, or $0.22 per share, related to the SONGS Settlement, and income of $187 million, or $0.58 per share, primarily due to discontinued operations.

Edison International uses core earnings, which is a non-GAAP financial measure that adjusts for significant discrete items that management does not consider representative of ongoing earnings. Edison International management believes that core earnings provide more meaningful comparisons of performance from period to period. Please see the attached tables for a reconciliation of core earnings to basic GAAP earnings.

2016 Earnings Guidance

The company announced core and basic earnings guidance of $3.81 to $4.01 per share for 2016. See the presentation accompanying the company’s conference call for further information, including key guidance assumptions.

         

2016 Core and Basic Earnings Guidance as of February 23, 2016

                         

Low

Midpoint

High

SCE

 

$4.09
EIX Parent & Other (0.18)
EIX Core EPS $3.81 $3.91 $4.01
Non-Core Items - - -
EIX Basic EPS $3.81 $3.91 $4.01
 

About Edison International

Edison International (NYSE:EIX), through its subsidiaries, is a generator and distributor of electric power and an investor in energy services and technologies, including renewable energy. Headquartered in Rosemead, Calif., Edison International is the parent company of Southern California Edison, one of the nation’s largest electric utilities.

Appendix

Use of Non-GAAP Financial Measures

Edison International’s earnings are prepared in accordance with generally accepted accounting principles (GAAP) used in the United States and represent the company’s earnings as reported to the Securities and Exchange Commission. Our management uses core earnings and core earnings per share (EPS) internally for financial planning and for analysis of performance. We also use core earnings and core EPS when communicating with analysts and investors regarding our earnings results to facilitate comparisons of the Company’s performance from period to period. Financial measures referred to as net income, basic EPS, core earnings, or core EPS also apply to the description of earnings or earnings per share.

Core earnings and core EPS are non-GAAP financial measures and may not be comparable to those of other companies. Core earnings and core EPS are defined as basic earnings and basic EPS excluding income or loss from discontinued operations and income or loss from significant discrete items that management does not consider representative of ongoing earnings. Basic earnings and losses refer to net income or losses attributable to Edison International shareholders. Core earnings are reconciled to basic earnings in the attached tables. The impact of participating securities (vested awards that earn dividend equivalents that may participate in undistributed earnings with common stock) for the principal operating subsidiary is not material to the principal operating subsidiary’s EPS and is therefore reflected in the results of the Edison International holding company, which is included in Edison International Parent and Other.

Risk Disclosure Statement

Forward-looking statements about the financial outlook for Edison International and its subsidiaries are included in this news release. These forward-looking statements reflect our current expectations; however, such statements involve risks and uncertainties. Actual results could differ materially from current expectations. Important factors that could cause different results are discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Edison International’s Form 10-K and other reports and presentations filed with the Securities and Exchange Commission which are available at: www.edisoninvestor.com. These forward-looking statements represent our expectations only as of the date of this news release, and Edison International assumes no duty to update them to reflect new information, events or circumstances.

Reminder: Edison International Will Hold a Conference Call Today

When:           Tuesday, February 23, 2016, 1:30 p.m. (Pacific Time)
Telephone Numbers:

1-800-369-2198 (US) and 1-773-756-4618 (Int'l) - Passcode: Edison

Telephone Replay:

1-888-568-0891 (US) and 1-402-998-1567 (Int'l) - Passcode: 22316

Telephone replay available through March 3, 2016
Webcast:

www.edisoninvestor.com

 
                       

Fourth Quarter and Full-Year Reconciliation of

Core Earnings Per Share to Basic Earnings Per Share

 
Three months ended
December 31,
Years ended
December 31,
        2015       2014       Change       2015       2014       Change
Earnings (loss) per share attributable to Edison International            
Continuing operations
SCE $ (0.25 ) $ 1.17 $ (1.42 ) $ 3.06 $ 4.46 $ (1.40 )
Edison International Parent and Other 0.03 0.03 (0.04 ) (0.08 ) 0.04
Discontinued operations (0.02 )       0.12         (0.14 )       0.11         0.57         (0.46 )
Edison International (0.24 )       1.29         (1.53 )       3.13         4.95         (1.82 )
Less: Non-core items
SCE (1.14 ) 0.08 (1.22 ) (1.14 ) (0.22 ) (0.92 )
Edison International Parent and Other 0.04 0.01 0.03 0.06 0.01 0.05
Discontinued operations (0.02 )       0.12         (0.14 )       0.11         0.57         (0.46 )
Total non-core items (1.12 )       0.21         (1.33 )       (0.97 )       0.36         (1.33 )
Core earnings (losses)
SCE 0.89 1.09 (0.20 ) 4.20 4.68 (0.48 )
Edison International Parent and Other (0.01 )       (0.01 )               (0.10 )       (0.09 )       (0.01 )
Edison International       $ 0.88         $ 1.08         $ (0.20 )       $ 4.10         $ 4.59         $ (0.49 )

Note: Diluted earnings were $(0.24) and $1.27 per share for the three months ended December 31, 2015 and 2014, respectively, and $3.10 and $4.89 per share for the years ended December 31, 2015 and 2014, respectively.

                       

Fourth Quarter and Full-Year Reconciliation of

Core Earnings to Basic Earnings (in millions)

 
Three months ended
December 31,
Years ended
December 31,
(in millions)       2015       2014       Change       2015       2014       Change
Net income (loss) attributable to Edison International      
Continuing operations      
SCE $ (80 ) $ 380 $ (460 ) $ 998 $ 1,453 $ (455 )
Edison International Parent and Other 9 1 8 (13 ) (26 ) 13
Discontinued operations (8 )       39         (47 )       35         185         (150 )
Edison International (79 )       420         (499 )       1,020         1,612         (592 )
Less: Non-core items
SCE (370 ) 24 (406 ) (370 ) (72 ) (310 )
Edison International Parent and Other 12 2 10 19 2 17
Discontinued operations (8 )       39         (47 )       35         185         (150 )
Total non-core items (366 )       65         (443 )       (316 )       115         (443 )
Core earnings (losses)
SCE 290 356 (66 ) 1,368 1,525 (157 )
Edison International Parent and Other (3 )       (1 )       (2 )       (32 )       (28 )       (4 )
Edison International       $ 287         $ 355         $ (68 )       $ 1,336         $ 1,497         $ (161 )
 
 
 
Consolidated Statements of Income       Edison International
 
Quarters ended December 31,       Years ended December 31,
(in millions, except per-share amounts)       2015       2014       2015       2014
Total operating revenue $ 2,341         $ 3,114         $ 11,524         $ 13,413  
Purchased power and fuel 618       1,029 4,266       5,593
Operation and maintenance 830 901 2,990 3,149
Depreciation, decommissioning and amortization 467 472 1,919 1,720
Property and other taxes 81 87 336 322
Impairment and other charges 5         (68 )       5         157  
Total operating expenses 2,001         2,421         9,516         10,941  
Operating income 340 693 2,008 2,472
Interest and other income 58 39 174 147
Interest expense (136 ) (138 ) (555 ) (560 )
Other expenses (18 )       (29 )       (59 )       (80 )
Income from continuing operations before income taxes 244 565 1,568 1,979
Income tax expense 291         159         486         443  
(Loss) Income from continuing operations (47 ) 406 1,082 1,536
(Loss) Income from discontinued operations, net of tax (8 )       39         35         185  
Net (loss) income (55 ) 445 1,117 1,721
Preferred and preference stock dividend requirements of utility 29 28 113 112
Other noncontrolling interests (5 )       (3 )       (16 )       (3 )
Net (loss) income attributable to Edison International common shareholders $ (79 )       $ 420         $ 1,020         $ 1,612  
Amounts attributable to Edison International common shareholders:
(Loss) Income from continuing operations, net of tax $ (71 ) $ 381 $ 985 $ 1,427
(Loss) Income from discontinued operations, net of tax (8 )       39         35         185  
Net (loss) income attributable to Edison International common shareholders $ (79 )       $ 420         $ 1,020         $ 1,612  
Basic (loss) earnings per common share attributable to Edison International common shareholders:
Weighted-average shares of common stock outstanding 326 326 326 326
Continuing operations $ (0.22 ) $ 1.17 $ 3.02 $ 4.38
Discontinued operations (0.02 )       0.12         0.11         0.57  
Total $ (0.24 )       $ 1.29         $ 3.13         $ 4.95  
Diluted (loss) earnings per common share attributable to Edison International common shareholders:
Weighted-average shares of common stock outstanding, including effect of dilutive securities 328 329 329 329
Continuing operations $ (0.22 ) $ 1.15 $ 2.99 $ 4.33
Discontinued operations (0.02 )       0.12         0.11         0.56  
Total $ (0.24 )       $ 1.27         $ 3.10         $ 4.89  
Dividends declared per common share       $ 0.4800         $ 0.4175         $ 1.7325         $ 1.4825  
 
 
 
Consolidated Balance Sheets Edison International
                   
December 31,
(in millions)       2015                 2014
ASSETS
Cash and cash equivalents $ 161 $ 132
Receivables, less allowances of $62 and $68 for uncollectible accounts at respective dates 771 790
Accrued unbilled revenue 565 632
Inventory 267 281
Derivative assets 79 102
Regulatory assets 560 1,254
Other current assets 251                   376
Total current assets 2,654                   3,567
Nuclear decommissioning trusts 4,331 4,799
Other investments 203                   207
Total investments 4,534                   5,006
Utility property, plant and equipment, less accumulated depreciation and amortization of $8,548 and $8,132 at respective dates 34,945 32,859
Nonutility property, plant and equipment, less accumulated depreciation of $85 and $76 at respective dates 140                   122
Total property, plant and equipment 35,085                   32,981
Derivative assets 84 219
Regulatory assets 7,512 7,612
Other long-term assets 441                   349
Total long-term assets 8,037                   8,180
 
Total assets       $ 50,310                   $ 49,734
 
 
 
Consolidated Balance Sheets Edison International
                   
December 31,
(in millions, except share amounts)       2015                 2014
LIABILITIES AND EQUITY
Short-term debt $ 695 $ 1,291
Current portion of long-term debt 295 504
Accounts payable 1,310 1,580
Accrued taxes 72 81
Customer deposits 242 221
Derivative liabilities 218 196
Regulatory liabilities 1,128 401
Other current liabilities 967                   1,205  
Total current liabilities 4,927                   5,479  
Long-term debt 10,964                   10,234  
Deferred income taxes and credits 7,480 6,861
Derivative liabilities 1,100 1,052
Pensions and benefits 1,759 2,155
Asset retirement obligations 2,764 2,821
Regulatory liabilities 5,676 5,889
Other deferred credits and other long-term liabilities 2,246                   2,255  
Total deferred credits and other liabilities 21,025                   21,033  
Total liabilities 36,916                   36,746  
Commitments and contingencies
Redeemable noncontrolling interest 6 6
Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at respective dates) 2,484 2,445
Accumulated other comprehensive loss (56 ) (58 )
Retained earnings 8,940                   8,573  
Total Edison International's common shareholders' equity 11,368                   10,960  
Noncontrolling interests preferred and preference stock of utility 2,020                   2,022  
Total equity 13,388                   12,982  
 
Total liabilities and equity       $ 50,310                   $ 49,734  
 
 
 
Consolidated Statements of Cash Flows Edison International
             
Years ended December 31,
(in millions)       2015           2014           2013
Cash flows from operating activities:          
Net income $ 1,117 $ 1,721 $ 1,015
Less: Income from discontinued operations 35             185             36  
Income from continuing operations 1,082 1,536 979
Adjustments to reconcile to net cash provided by operating activities:
Depreciation, decommissioning and amortization 2,005 1,815 1,696
Allowance for equity during construction (87 ) (65 ) (72 )
Impairment and other charges 5 157 571
Deferred income taxes and investment tax credits 449 522 345
Other (28 ) 20 18
Nuclear decommissioning trusts (428 ) 39 76
EME settlement insurance proceeds and settlement payments (176 ) (225 )
Changes in operating assets and liabilities:
Receivables 49 64 (56 )
Inventory 14 (25 ) 80
Accounts payable 8 14 45
Prepaid and accrued taxes (28 ) (100 ) (92 )
Other current assets and liabilities (24 ) (103 ) (155 )
Derivative assets and liabilities, net 45 (40 ) (30 )
Regulatory assets and liabilities, net 1,729 (358 ) (322 )
Other noncurrent assets and liabilities (106 )           (3 )           (116 )
Net cash provided by operating activities 4,509             3,248             2,967  
Cash flows from financing activities:
Long-term debt issued or remarketed, net of discount and issuance costs of $17, $6, and $19 at respective periods 1,420 494 2,168
Long-term debt matured or repurchased (762 ) (607 ) (1,017 )
Preference stock issued, net 319 269 387
Preference stock redeemed (325 ) (400 )
Short-term debt financing, net (572 ) 1,079 32
Cash contribution from redeemable noncontrolling interest 17 9
Dividends to noncontrolling interests (116 ) (111 ) (101 )
Dividends paid (544 ) (463 ) (440 )
Other (25 )           (25 )           (48 )
Net cash (used in) provided by financing activities (588 )           645             581  
Cash flows from investing activities:
Capital expenditures (4,225 ) (3,906 ) (3,599 )
Proceeds from sale of nuclear decommissioning trust investments 3,506 2,617 1,204
Purchases of nuclear decommissioning trust investments (3,132 ) (2,661 ) (1,302 )
Proceeds from sale of assets 47 6 181
Other (88 )           37             (56 )
Net cash used in investing activities (3,892 )           (3,907 )           (3,572 )
Net increase (decrease) in cash and cash equivalents 29 (14 ) (24 )
Cash and cash equivalents at beginning of year 132             146             170  
Cash and cash equivalents at end of year       $ 161             $ 132             $ 146