May 14, 2001

Edison International today reported a loss of $617 million or $1.89 per share for the first quarter of 2001 – reflecting the effect of a charge against earnings.  The company’s regulated utility, Southern California Edison (SCE), reported an after-tax earnings charge of $661 million, or $2.03 per share, in the first quarter of 2001, reflecting the amount of purchased power costs which exceeded the company’s revenues.  Assuming the Memorandum of Understanding (MOU) announced by Governor Davis and SCE is implemented or, alternatively, courts uphold Edison’s legal claims to recover its undercollected costs, this charge against earnings could later be reversed.   
         
“Today’s financial charge simply recognizes the threatening reality of SCE’s continuing buildup of unreimbursed costs for procuring power on behalf of its customers,” said John Bryson, chairman and chief executive officer of Edison International.  “We are committed to recovering those costs, restoring our financial health and serving well the 11 million people and 550,000 businesses who depend on us.”

FIRST QUARTER EARNINGS SUMMARY

Excluding the unreimbursed purchased power costs at SCE, for the quarter ending March 31, Edison International reported 2001 earnings of $43 million, compared with $110 million in 2000, and SCE earned $62 million in 2001, compared with $113 million in the same quarter last year.  Edison Mission Energy (EME) earned $8 million in the first quarter of 2001, compared with a loss of $12 million in 2000.  Edison Capital earned $12 million in the first three months of 2001, compared with $38 million in the same period of 2000. 

 Edison Enterprises and the parent company incurred losses of $40 million in the first quarter of 2001, compared with losses of $29 million in the same quarter last year. 

FIRST QUARTER EARNINGS DETAIL

Quarter Ended March 31,

Earnings ($000)

    2001   

    2000  

  Change  

Reported Basis
    SCE excluding charge*

62,466

113,311

(50,845)

    SCE charge*

  (660,641)

           --

  (660,641)

SCE including charge*

(598,175)

113,311

(711,486)

Edison Mission Energy

8,467

(12,471)

20,938

Edison Capital

     12,048

   37,989

    (25,941)

(577,660)

138,829

(716,489)

Edison Enterprises & parent co. 

   (39,641)

  (29,288)

    (10,353)

Edison International - consolidated  

$(617,301)

$109,541

$(726,842)

 

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* Unreimbursed purchased power costs
 
Excluding the charge for the unreimbursed purchased power costs, SCE’s earnings in the quarter decreased by $51 million.  The decrease was primarily attributable to an outage at San Onofre Nuclear Generating Station (SONGS) Unit 3 and higher interest expense.
 
The $21 million increase at Edison Mission Energy reflects increased generation and higher energy prices for EME’s U.S. projects, partially offset by lower power pool prices in the United Kingdom. 
 
Edison Capital’s decrease of $26 million was due to lower revenues from leveraged leases, the tax impact related to the termination of the Fiddler’s Ferry/Ferrybridge (FFF) mezzanine financing, and higher interest expense. 
 
Edison Enterprises and the parent company’s decrease of $10 million was mostly the result of higher interest expense at the parent company and a gain on the sale of marketable securities in the first quarter of 2000, partially offset by improved operating performance, principally lower expenses, at Edison Enterprises.
 
Quarter Ended March 31,
 

 2001 

 2000

 Change

Reported Earnings Per Share
Southern California Edison  

$(1.84)

$0.33

$(2.17)

Edison Mission Energy 

0.03

(0.03)

0.06

Edison Capital  

0.04

0.11

(0.07)

Edison Enterprises & parent company 

   (0.12)

 (0.09)

    (0.03)

Edison International - consolidated 

$(1.89)

$0.32

$(2.21)

==========================


TWELVE MONTHS ENDED EARNINGS SUMMARY

For the twelve months ended March 31, 2001, Edison International recorded a loss of $2.7 billion.  The net loss for the twelve-month period included charges totaling $3.2 billion (after tax), or $9.71 per share, which are comprised of the write-off at SCE of generation-related regulatory assets in the fourth quarter of 2000 and the charge for SCE’s unreimbursed purchase power costs in the first quarter of 2001.  Excluding the charges at SCE, Edison International earned $512 million for the twelve months ended March 31, 2001, compared with earnings of $589 million for the same period last year. 

TWELVE MONTHS ENDED EARNINGS DETAIL

Twelve Months Ended
March 31,

Earnings ($000)

      2001     

   2000   

    Change   

Reported Basis
     SCE excluding charges        

420,575

520,348 

(99,773)

     SCE charges       

 (3,181,847)

           --

 (3,181,847)

SCE including charges       

(2,761,272)

520,348

(3,281,620)

Edison Mission Energy        

146,190

73,710

72,480

Edison Capital       

      109,385

  127,161

      (17,776)

(2,505,697)

721,219

(3,226,916)

Edison Enterprises & parent co.       

    (163,942)

 (131,858)

      (32,084)

Edison International - consolidated        

$(2,669,639)

$589,361

$(3,259,000)

 

=================================
Excluding the charges, SCE earned $421 million for the twelve months ended March 31, 2001, compared with $520 million for the same period ended March 31, 2000.  The decrease of $100 million primarily reflects increased interest expense, and adjustments to reflect potential regulatory refunds partially offset by lower operating and maintenance costs. 
 
EME reported earnings of $146 million for the twelve-month period, up $72 million from the same period last year.  The increase was primarily due to increased generation and higher energy prices from U.S. projects and stock plan expense adjustments.  In addition, the increase includes earnings from projects acquired in July and December of 1999.  The increase was partially offset by higher interest expense, lower power pool prices for FFF, and certain tax benefits including an after-tax gain during the fourth quarter of 1999 from the sale of a portion of EME's interest in Four Star Oil & Gas. 

Edison Capital contributed $109 million for the twelve-month period compared to $127 million from the same period last year.  The decrease was mainly the result of declining revenue from leveraged leases and higher interest expense.  The decrease was partially offset by lower operating expenses, higher earnings from affordable housing projects and earnings from the FFF mezzanine financing transaction.

Edison Enterprises and the parent company recorded a $164 million loss for the twelve months ended March 31, 2001, compared to a $132 million loss in the same period last year.  Increased interest expense at the parent company and a first quarter 2000 gain on sale of marketable securities was partially offset by improved operating performance at Edison Enterprises.

Twelve Months Ended
March 31,

  2001  

  2000 

Change

Reported Earnings Per Share
Southern California Edison 

$(8.43)

$1.50

$(9.93)

Edison Mission Energy  

0.45

0.21

0.24

Edison Capital  

0.33

0.37

(0.04)

Edison Enterprises & parent company 

  (0.50)

  (0.38)

   (0.12)

Edison International - consolidated 

$(8.15)

$1.70

$(9.85)

 

==========================
This release contains forward-looking statements about the impact of the recently signed Memorandum of Understanding (MOU) on the assets, earnings, and financial condition of SCE.  These statements involve risks and uncertainties.  Actual results could differ materially as a result of factors such as failure by the California Public Utilities Commission, California Legislature, or other governmental entities to implement the MOU; other regulatory, legislative and governmental actions; actions by creditors, including possible filing of involuntary bankruptcy petitions; possible initiatives or referenda challenging the actions contemplated by the MOU; and other factors described in Edison International’s Annual Report on Form 10-K for the year ended December 31, 2000, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2001.
 

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Based in Rosemead, Calif., Edison International is a premier international electric power generator, distributor and structured finance provider. With assets of $36 billion and a portfolio of approximately 28,000 MW, Edison International is an industry leader in privatized, deregulated and incentive-regulated markets and power generation. It is the parent company of Southern California Edison, Edison Mission Energy, Edison Capital, Edison O&M Services, and Edison Enterprises.