EX-99.1 2 eix-sceexhibit99x1q120.htm EXHIBIT 99.1 EDISON INTERNATIONAL PRESS RELEASE DATED APRIL 30, 2020 Exhibit
Exhibit 99.1

ex9911q3image3a28.jpg
 
NEWS
 
 
 
FOR IMMEDIATE RELEASE        
Investor relations contact:
Sam Ramraj, (626) 302-2540
Media relations contact:
Ron Gales, (626) 302-7927
 

Edison International Reports First Quarter 2020 Results

ROSEMEAD, Calif., April 30, 2020 - Edison International (NYSE: EIX) today reported first quarter 2020 net income of $183 million, or $0.50 per share, compared to net income of $278 million, or $0.85 per share, in the first quarter 2019. As adjusted, first quarter 2020 core earnings were $228 million, or $0.63 per share, compared to core earnings of $206 million, or $0.63 per share, in the first quarter 2019.

Southern California Edison's (SCE) first quarter 2020 net income of $219 million, or $0.60 per share, was lower compared to net income of $293 million, or $0.90 per share, in the first quarter 2019. SCE's first quarter 2020 earnings per share (EPS) decreased by $0.30 from the prior year period, consisting of $0.04 of higher core EPS and $0.34 of higher non-core loss per share. Higher core EPS was primarily due to timing of the receipt of the 2018 General Rate Case (GRC) final decision in the second quarter of 2019 and higher Federal Energy Regulatory Commission (FERC) revenue, partially offset by the increase in shares outstanding and higher operation and maintenance expenses, primarily from higher vegetation management expenses.

SCE's higher non-core loss per share was mainly attributable to the absence of $69 million, or $0.21 per share, of income tax benefits recorded in the first quarter 2019 related to changes in the allocation of deferred tax re-measurement between customers and shareholders as a result of a CPUC resolution, and an after-tax expense recorded in 2020 of $60 million, or $0.17 per share, from the amortization of SCE's contributions to the Wildfire Insurance Fund. These were partially offset by an income tax benefit of $18 million, or $0.05 per share, recorded in 2020 due to re-measurement of uncertain tax positions related to the 2010-2012 California state tax filings currently under audit.

Edison International Parent and Other's first quarter 2020 net loss of $36 million, or $0.10 loss per share, was higher than a net loss of $15 million, or $0.05 loss per share, reported in the first quarter 2019. Edison International Parent and Other’s first quarter 2020 loss per share increased by $0.05 compared to first quarter 2019, consisting of $0.04 of higher core loss per share and $0.01 of higher non-core loss per share. Higher core loss per share was primarily due to higher interest expense, partially offset by the increase in shares outstanding. The higher non-core loss per share was mainly related to income tax expense of $3 million, or $0.01 loss per share, recorded in 2020 due to re-measurement of uncertain tax positions related to the 2010-2012 California state tax filings currently under audit.

“Edison International remains focused on supporting our customers and our communities impacted by COVID-19. We also are focused on ensuring the safety and health of our employees and providing them with the resources necessary to maintain critical operations,” said Pedro J. Pizarro, president and chief executive officer of Edison International. “We continue to perform critical work related to public safety and reliability, while deferring non-critical outages when our communities are staying at home.”

        


Edison International Reports First Quarter 2020 Financial Results
Page 2 of 10


Pizarro added, “Additionally, SCE continues to make significant progress to mitigate wildfire risk through hardening infrastructure, bolstering situational awareness capabilities and enhancing operational practices, while implementing enhanced data analytics and technology. We are executing these programs as expeditiously as possible as they are critical to ensuring the safety of our communities and are viewed as essential by the State.”

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.

2020 Earnings Guidance

The company reaffirmed its earnings guidance range for 2020 as summarized in the following chart. See the presentation accompanying the company’s conference call for further information including key guidance assumptions.

2020 Earnings Guidance
 
2020 Earnings Guidance
 
2020 Earnings Guidance
 
as of February 27, 2020
 
as of April 30, 2020
 
Low
Mid
High
 
Low
High
EIX Basic EPS
$4.32
$4.47
$4.62
 
$4.19
$4.49
Less: Non-core Items*
-
-
-
 
(0.13)
(0.13)
EIX Core EPS
$4.32
$4.47
$4.62
 
$4.32
$4.62
* There were ($45) million, or ($0.13) per share of non-core items recorded for the three months ended March 31, 2020, calculated based on an assumed weighted average share count for 2020 which was originally provided on February 27, 2020.

First Quarter 2020 Earnings Conference Call Materials
Edison International has posted its earnings conference call prepared remarks by the CEO and CFO, the teleconference presentation, and Form 10-Q to the company's investor relations website. These materials are available at www.edisoninvestor.com.

Reminder: Edison International Will Hold a Conference Call Today
When:            Thursday, April 30, 2020, 1:30 p.m. (Pacific Time)
Telephone Numbers:    1-888-673-9780 (US) and 1-312-470-0178 (Int'l) - Passcode: Edison
Telephone Replay:    1-866-397-8265 (US) and 1-203-369-0540 (Int’l) - Passcode: 5284
Telephone replay available through May 15, 2020
Webcast:     www.edisoninvestor.com

About Edison International

Edison International (NYSE: EIX), through its subsidiaries, is a distributor and generator of electric power, as well as a provider of energy services and technologies, including renewable energy. Headquartered in Rosemead, California, Edison International is the parent company of Southern California Edison, one of the nation’s largest electric utilities. Edison International is also the parent company of Edison Energy, a portfolio of competitive businesses that provide commercial and industrial customers with energy management and procurement services. Edison Energy is independent from Southern California Edison.


Edison International Reports First Quarter 2020 Financial Results
Page 3 of 10


Appendix

Use of Non-GAAP Financial Measures
Edison International’s earnings are prepared in accordance with generally accepted accounting principles 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 of Edison International and Southern California Edison. 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.
Safe Harbor Statement
Statements contained in this presentation about future performance, including, without limitation, operating results, capital expenditures, rate base growth, dividend policy, financial outlook, and other statements that are not purely historical, are forward-looking statements. These forward-looking statements reflect our current expectations; however, such statements involve risks and uncertainties. Actual results could differ materially from current expectations. These forward-looking statements represent our expectations only as of the date of this presentation, and Edison International assumes no duty to update them to reflect new information, events or circumstances. Important factors that could cause different results include, but are not limited to the:
•
ability of SCE to recover its costs through regulated rates, including costs related to uninsured wildfire-related and mudslide-related liabilities, costs incurred to mitigate the risk of utility equipment causing future wildfires, costs incurred to implement SCE's new customer service system and costs incurred as a result of the COVID-19 pandemic;
•
ability of SCE to implement its Wildfire Mitigation Plan, including effectively implementing Public Safety Power Shut-Offs when appropriate;
•
ability to obtain sufficient insurance at a reasonable cost, including insurance relating to SCE's nuclear facilities and wildfire-related claims, and to recover the costs of such insurance or, in the event liabilities exceed insured amounts, the ability to recover uninsured losses from customers or other parties;
•
risks associated with California Assembly Bill 1054 (“AB 1054”) effectively mitigating the significant risk faced by California investor-owned utilities related to liability for damages arising from catastrophic wildfires where utility facilities are alleged to be a substantial cause, including SCE's ability to maintain a valid safety certification, SCE's ability to recover uninsured wildfire-related costs from the insurance fund established under AB 1054 (“Wildfire Insurance Fund”), the longevity of the Wildfire Insurance Fund, and the CPUC's interpretation of and actions under AB 1054, including their interpretation of the new prudency standard established under AB 1054;
•
decisions and other actions by the California Public Utilities Commission, the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission and other regulatory and legislative authorities, including decisions and actions related to determinations of authorized rates of return or return on equity, the recoverability of wildfire-related and mudslide-related costs, issuance of SCE's wildfire safety certification, wildfire mitigation efforts, and delays in regulatory and legislative actions;


Edison International Reports First Quarter 2020 Financial Results
Page 4 of 10


•
ability of Edison International or SCE to borrow funds and access bank and capital markets on reasonable terms;
•
risks associated with the decommissioning of San Onofre, including those related to public opposition, permitting, governmental approvals, on-site storage of spent nuclear fuel, delays, contractual disputes, and cost overruns;
•
pandemics, such as COVID-19, and other events that cause regional, statewide, national or global disruption, which could impact, among other things, Edison International's and SCE's business, operations, cash flows, liquidity and/or financial results;
•
extreme weather-related incidents and other natural disasters (including earthquakes and events caused, or exacerbated, by climate change, such as wildfires), which could cause, among other things, public safety issues, property damage and operational issues;
•
physical security of Edison International's and SCE's critical assets and personnel and the cybersecurity of Edison International's and SCE's critical information technology systems for grid control, and business, employee and customer data;
•
risks associated with cost allocation resulting in higher rates for utility bundled service customers because of possible customer bypass or departure for other electricity providers such as Community Choice Aggregators (“CCA,” which are cities, counties, and certain other public agencies with the authority to generate and/or purchase electricity for their local residents and businesses) and Electric Service Providers (entities that offer electric power and ancillary services to retail customers, other than electrical corporations (like SCE) and CCAs);
•
risks inherent in SCE's transmission and distribution infrastructure investment program, including those related to project site identification, public opposition, environmental mitigation, construction, permitting, power curtailment costs (payments due under power contracts in the event there is insufficient transmission to enable acceptance of power delivery), changes in the California Independent System Operator’s transmission plans, and governmental approvals; and
•
risks associated with the operation of transmission and distribution assets and power generating facilities, including public and employee safety issues, the risk of utility assets causing or contributing to wildfires, failure, availability, efficiency, and output of equipment and facilities, and availability and cost of spare parts.

Additional information about risks and uncertainties, including more detail about the factors described in this report, is contained throughout this report and in the 2019 Form 10-K, including the "Risk Factors" section. Readers are urged to read this entire report, including information incorporated by reference, as well as the 2019 Form 10-K, and carefully consider the risks, uncertainties, and other factors that affect Edison International's and SCE's businesses. Edison International and SCE post or provide direct links (i) to certain SCE and other parties' regulatory filings and documents with the CPUC and the FERC and certain agency rulings and notices in open proceedings in a section titled "SCE Regulatory Highlights," (ii) to certain documents and information related to Southern California wildfires which may be of interest to investors in a section titled "Southern California Wildfires," and (iii) to presentations, documents and other information that may be of interest to investors in a section title "Events and Presentations" at www.edisoninvestor.com in order to publicly disseminate such information.
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. Readers should review future reports filed by Edison International and SCE with the SEC.



Edison International Reports First Quarter 2020 Financial Results
Page 5 of 10



First Quarter Reconciliation of Basic Earnings Per Share to Core Earnings Per Share
 
Three months ended March 31,
 
 
 
2020
 
2019
 
Change
Earnings (loss) per share attributable to Edison International
 
 
 
 
 
Continuing operations
 
 
 
 
 
SCE
$
0.60

 
$
0.90

 
$
(0.30
)
Edison International Parent and Other
(0.10
)
 
(0.05
)
 
(0.05
)
Edison International
0.50

 
0.85

 
(0.35
)
Less: Non-core items
 
 
 
 
 
     SCE
(0.12
)
 
0.22

 
(0.34
)
     Edison International Parent and Other
(0.01
)
 
—

 
(0.01
)
Total non-core items
(0.13
)
 
0.22

 
(0.35
)
Core earnings (losses)
 
 
 
 
 
SCE
0.72

 
0.68

 
0.04

Edison International Parent and Other
(0.09
)
 
(0.05
)
 
(0.04
)
Edison International
$
0.63

 
$
0.63

 
$
—

Note: Diluted earnings were $0.50 and $0.85 per share for the three months ended March 31, 2020 and 2019, respectively.

First Quarter Reconciliation of Basic Earnings Per Share to Core Earnings (in millions)
 
Three months ended March 31,
 
 
(in millions)
2020
 
2019
 
Change
Net income (loss) attributable to Edison International
 
 
 
 
 
Continuing operations
 
 
 
 
 
SCE
$
219

 
$
293

 
$
(74
)
Edison International Parent and Other
(36
)
 
(15
)
 
(21
)
Edison International
183

 
278

 
(95
)
Less: Non-core items
 
 
 
 
 
     SCE1,2,3
(42
)
 
72

 
(114
)
     Edison International Parent and Other2
(3
)
 
—

 
(3
)
Total non-core items
(45
)
 
72

 
(117
)
Core earnings (losses)
 
 
 
 
 
SCE
261

 
221

 
40

Edison International Parent and Other
(33
)
 
(15
)
 
(18
)
Edison International
$
228

 
$
206

 
$
22


1 
Includes amortization of SCE’s Wildfire Insurance Fund expenses of $84 million ($60 million after-tax) for the quarter ended March 31, 2020.
2 
Includes income tax benefit of $18 million and income tax expense of $3 million recorded in 2020 for SCE and Edison International Parent and Other, respectively, due to re-measurement of uncertain tax positions related to the 2010 – 2012 California state tax filings currently under audit.
3 
Includes income tax benefits of $69 million recorded in 2019 for SCE related to changes in the allocation of deferred tax re-measurement between customers and shareholders as a result of a CPUC resolution issued in February 2019. The resolution determined that customers are only entitled to excess deferred taxes which were included when setting rates and other deferred tax re-measurement belongs to shareholders.



Edison International Reports First Quarter 2020 Financial Results
Page 6 of 10



Consolidated Statements of Income
Edison International
 
 
 
 
 
 
Three months ended March 31,
(in millions, except per-share amounts, unaudited)
2020
 
2019
Total operating revenue
$
2,790

 
$
2,824

Purchased power and fuel
928

 
1,005

Operation and maintenance
881

 
882

Wildfire Insurance Fund expense
84

 
—

Depreciation and amortization
484

 
480

Property and other taxes
111

 
110

Other operating income
—

 
(5
)
Total operating expenses
2,488

 
2,472

Operating income
302

 
352

Interest expense
(225
)
 
(194
)
Other income
52

 
38

Income before taxes
129

 
196

Income tax benefit
(84
)
 
(112
)
Net income
213

 
308

Preferred and preference stock dividend requirements of SCE
30

 
30

Net income attributable to Edison International common shareholders
$
183

 
$
278

Basic earnings per share:
 
 
 
Weighted average shares of common stock outstanding
363

 
326

Basic earnings per common share attributable to Edison International common
   shareholders
$
0.50

 
$
0.85

Diluted earnings per share:
 
 
 
Weighted average shares of common stock outstanding, including effect of dilutive securities
364

 
327

Diluted earnings per common share attributable to Edison International common shareholders
$
0.50

 
$
0.85



Edison International Reports First Quarter 2020 Financial Results
Page 7 of 10


Consolidated Balance Sheets
Edison International
 
 
 
 
 
(in millions, unaudited)
March 31,
2020

December 31, 2019
ASSETS
 
 
 
Cash and cash equivalents
$
1,337

 
$
68

Receivables, less allowances of $60 and $50 for uncollectible accounts at respective dates
795

 
788

Accrued unbilled revenue
409

 
488

Inventory
363

 
364

Income tax receivables
131

 
118

Prepaid expenses
158

 
214

Derivative assets
51

 
81

Regulatory assets
1,225

 
1,009

Wildfire Insurance Fund contributions
323

 
323

Other current assets
119

 
107

Total current assets
4,911

 
3,560

Nuclear decommissioning trusts
4,267

 
4,562

Other investments
74

 
64

Total investments
4,341

 
4,626

Utility property, plant and equipment, less accumulated depreciation and amortization of $10,147 and $9,958 at respective dates
44,733

 
44,198

Nonutility property, plant and equipment, less accumulated depreciation of $88 and $86 at respective dates
87

 
87

Total property, plant and equipment
44,820

 
44,285

Regulatory assets
6,294

 
6,088

Wildfire Insurance Fund contributions
2,687

 
2,767

Operating lease right-of-use assets
683

 
693

Other long-term assets
2,290

 
2,363

Total long-term assets
11,954

 
11,911

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
66,026

 
$
64,382



Edison International Reports First Quarter 2020 Financial Results
Page 8 of 10


Consolidated Balance Sheets
Edison International
 
 
 
 
 
(in millions, except share amounts, unaudited)
March 31,
2020
 
December 31, 2019
LIABILITIES AND EQUITY
 
 
 
Short-term debt
$
1,275

 
$
550

Current portion of long-term debt
901

 
479

Accounts payable
1,454

 
1,752

Customer deposits
298

 
302

Regulatory liabilities
764

 
972

Current portion of operating lease liabilities
74

 
80

Other current liabilities
1,482

 
1,388

Total current liabilities
6,248

 
5,523

Long-term debt
19,125

 
17,864

Deferred income taxes and credits
5,173

 
5,078

Pensions and benefits
664

 
674

Asset retirement obligations
3,027

 
3,029

Regulatory liabilities
8,113

 
8,385

Operating lease liabilities
609

 
613

Wildfire-related claims
4,568

 
4,568

Other deferred credits and other long-term liabilities
2,955

 
3,152

Total deferred credits and other liabilities
25,109

 
25,499

Total liabilities
50,482

 
48,886

Commitments and contingencies


 
 

Common stock, no par value (800,000,000 shares authorized; 363,476,346 and 361,985,133 shares issued and outstanding at respective dates)
5,085

 
4,990

Accumulated other comprehensive loss
(67
)
 
(69
)
Retained earnings
8,333

 
8,382

Total Edison International's common shareholders' equity
13,351

 
13,303

Noncontrolling interests – preferred and preference stock of SCE
2,193

 
2,193

Total equity
15,544

 
15,496

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total liabilities and equity
$
66,026

 
$
64,382



Edison International Reports First Quarter 2020 Financial Results
Page 9 of 10


Consolidated Statements of Cash Flows
Edison International
 
 
 
 
Three months ended March 31,
(in millions, unaudited)
2020
 
2019
Cash flows from operating activities:
 
 
 
Net income
$
213

 
$
308

Adjustments to reconcile to net cash provided by operating activities:

 

Depreciation and amortization
501

 
498

Allowance for equity during construction
(21
)
 
(17
)
Deferred income taxes
(58
)
 
(114
)
Wildfire Insurance Fund amortization expense
84

 
—

Other
23

 
1

Nuclear decommissioning trusts
14

 
(73
)
Changes in operating assets and liabilities:
 
 
 
Receivables
(30
)
 
9

Inventory
1

 
(30
)
Accounts payable
(129
)
 
31

Tax receivables and payables
31

 
82

Other current assets and liabilities
41

 
(381
)
Regulatory assets and liabilities, net
(372
)
 
(96
)
Wildfire-related insurance receivable
58

 
—

Other noncurrent assets and liabilities
(41
)
 
(8
)
Net cash provided by operating activities
315

 
210

Cash flows from financing activities:

 

Long-term debt issued, net of premium, discount and issuance costs of $19 and $(13) for the respective periods
1,719

 
1,087

Long-term debt repaid
(40
)
 
(40
)
Term loan issued
1,275

 
750

Common stock issued
74

 
—

Short-term debt financing, net
(550
)
 
(538
)
Payments for stock-based compensation
(3
)
 
(41
)
Receipts from stock option exercises
13

 
22

Dividends and distribution to noncontrolling interests
(36
)
 
(36
)
Dividends paid
(226
)
 
(200
)
Other
5

 
5

Net cash provided by financing activities
2,231

 
1,009

Cash flows from investing activities:
 
 
 
Capital expenditures
(1,268
)
 
(1,074
)
Proceeds from sale of nuclear decommissioning trust investments
1,407

 
1,208

Purchases of nuclear decommissioning trust investments
(1,421
)
 
(1,135
)
Other
4

 
15

Net cash used in investing activities
(1,278
)
 
(986
)
Net increase in cash, cash equivalents and restricted cash
1,268

 
233

Cash, cash equivalents and restricted cash at beginning of period
70

 
152

Cash, cash equivalents and restricted cash at end of period
$
1,338

 
$
385