Edison International Reports Financial Results for the Second Quarter of 2001

July 20, 2001

July 20, 2001

ROSEMEAD, Calif., July 20, 2001 -- Today, Edison International (NYSE:EIX)  reported a loss of $102 million, or 31 cents per share, for the second quarter of 2001.  These results include an after-tax operating loss of $63 million, or 19 cents per share, reflecting unrecovered generation-related costs at the company's regulated utility, Southern California Edison (SCE), and a one-time adjustment at Edison Enterprises (EE), the company's retail subsidiary. 

In the second quarter of 2001, Edison Enterprises incurred a one-time, after-tax adjustment against earnings of $117 million, or 36 cents per share, reflecting the anticipated sales of Edison Select and Edison Source.  Edison Enterprises has entered into an agreement to sell Edison Select to ADT Security Services.  This transaction is expected to close in August 2001.  Edison Source has signed a letter of intent to sell substantially all of its assets to the current management of Edison Source.

On an operating basis, excluding the one-time adjustment against earnings at Edison Enterprises, earnings at Edison International were $16 million, or five cents per share, for the second quarter of 2001.

SECOND QUARTER EARNINGS DETAIL

Quarter Ended June 30,

Earnings ($000)

       2001     

     2000    

  Change   

Operating Basis
     SCE excluding
     unrecovered power costs

$91,287

$156,362

$(65,075)

     SCE unrecovered
     power costs

       (63,111)

              --

      (63,111)

SCE including unrecovered power costs

28,176

156,362

(128,186)

Edison Mission Energy

284

(18,524)

18,808

Edison Capital

           23,622

       39,129

       (15,507)

52,082

176,967

(124,885)

Edison Enterprises & parent co.

        (36,449)

     (39,800)

           3,351

Edison International – consolidated

      $15,633

 $137,167

$(121,534)

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

One-time Adjustment

 

 

EE – discontinued operations

  $(117,176)

             --

 $(117,176)

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

Reported Basis (after one-time charge)

$28,176

$156,362

$(128,186)

Edison Mission Energy  

284 

(18,524) 

18,808

Edison Capital  

          23,622 

      39,129 

       (15,507)

52,082 

176,967 

(124,885)

Edison Enterprises & parent co. 

      (153,625) 

    (39,800) 

      (113,825)

Edison International – consolidated 

$(101,543)

$137,167

$(238,710)

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

SCE's earnings in the second quarter decreased by $128 million.  The decrease was primarily attributable to $63 million of unrecovered generation-related power costs from SCE-owned generation and qualifying facilities (QF) contracts, an outage at San Onofre Nuclear Generating Station (SONGS) Unit 3 and lower kilowatt-hour sales.

The $19 million increase at Edison Mission Energy reflects higher energy prices for EME's U.S. projects and increased earnings from oil and gas activities, partially offset by lower power pool prices in the United Kingdom and higher interest expense.

Edison Capital's decrease of $16 million was due to lower revenues from leveraged leases and affordable housing and the impact of the termination of the Fiddler's Ferry/Ferrybridge financing.  The decrease was partially offset by a net gain on asset sales.

Excluding the one-time adjustment reflecting the anticipated sales of Edison Select and Edison Source, the increase of $3 million at Edison Enterprises and the parent company was primarily the result of improved operating performance at Edison Enterprises, partially offset by higher interest expense at the parent company.   

YEAR-TO-DATE EARNINGS SUMMARY

Edison International recorded a loss of $719 million on a reported basis, year-to-date.  The loss for the six-month period includes SCE's unrecovered generation-related power costs in the first half of 2001 totaling $724 million, and Edison Enterprises' one-time adjustment of $117 million reflecting the anticipated sales of Edison Select and Edison Source.  Excluding the one-time adjustment at Edison Enterprises, Edison International incurred a loss of $602 million for the six-month period ended June 30, 2001, compared with earnings of $247 million for the same period last year. 

YEAR-TO-DATE EARNINGS DETAIL

Year-To-Date Ended June 30,

Earnings ($000)

      2001       

     2000   

   Change  

Operating Basis
     SCE excluding
     unrecovered power costs 

$153,754

$269,673

$(115,919)

     SCE unrecovered
     power costs 

    (723,752)

             --

   (723,752)

SCE including unrecovered power costs 

(569,998)

269,673

(839,671)

Edison Mission Energy 

8,751

(30,995)

39,746

Edison Capital 

        35,670

    77,118

      (41,448)

(525,577)

315,796

(841,373)

Edison Enterprises & parent co.

        (76,090)

   (69,087)

       (7,003)

Edison International - consolidated

$(601,667)

$246,709

$(848,376)

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

One-time Adjustment
EE - discontinued operations

$(117,176)

--

$(117,176)

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

Reported Basis (after one-time charge)
SCE 

$(569,998)

$269,673

$(839,671)

Edison Mission Energy 

8,751

(30,995)

39,746

Edison Capital 

           35,670

      77,118

      (41,448)

(525,577)

315,796

(841,373)

Edison Enterprises & parent co.

     (193,266)

   (69,087)

    (124,179)

Edison International - consolidated 

$(718,843)

$246,709

$(965,552)

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

Compared to the same period in the prior year, SCE's earnings in the first half of 2001 decreased by $840 million, including a loss of $724 million for unrecovered generation-related costs, earnings from Edison Mission Energy increased by $40 million and earnings from Edison Capital decreased by $41 million.  Explanations for variations in earnings are consistent with the descriptions provided in the quarterly analysis above.

Excluding Edison Enterprises' one-time adjustment, the decrease of $7 million for Edison Enterprises and the parent company was primarily 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 at Edison Enterprises.

TWELVE MONTHS ENDED EARNINGS SUMMARY
 
For the twelve months ended June 30, 2001, Edison International recorded a loss of $2.9 billion on a reported basis.  The net loss for the twelve-month period included a write-off at SCE of $2.5 billion of generation-related regulatory assets in the fourth quarter of 2000, the operating losses for SCE's unrecovered generation-related costs totaling $724 million in the first half of 2001, and the one-time adjustment at Edison Enterprises regarding the anticipated sales of Edison Select and Edison Source for $117 million.  Excluding these items and the one-time adjustments in the prior period for a tax benefit at SCE and the closing of five Edison Enterprises businesses in 1999, Edison International earned $454 million for the twelve months ended June 30, 2001, compared with earnings of $606 million for the same period last year.

TWELVE MONTHS ENDED EARNINGS DETAIL

Twelve Months Ended June 30,

Earnings ($000)

     2001     

    2000    

    Change    

Operating Basis (before one-time charges)
     SCE excluding
     power costs

$355,500

$555,560 

$(200,060)

     SCE unrecovered
     costs*

  (3,244,958)

           --

   (3,244,958)

SCE including unrecovered power costs 

(2,889,458)

555,560

(3,445,018)

Edison Mission Energy 

164,998

49,711

115,287

Edison Capital 

        93,878

   132,344

         (38,466)

(2,630,582)

737,615

(3,368,197)

Edison Enterprises & parent co.

     (160,591)

 (131,402)

         (29,189)

Edison International - consolidated

$(2,791,173)

$606,213

$(3,397,386)

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

One-time Adjustments
SCE - tax benefit

--

$14,913

$(14,913)

EE - re-focus the business

--

(23,020)

23,020

EE - discontinued operations 

     (117,176)

             --

       (117,176)

$(117,176)

$(8,107)

$(109,069)

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

Reported Basis (after one-time charge)  

 

SCE 

$(2,889,458)

$570,473

$(3,459,931)

Edison Mission Energy 

164,998

49,711

115,287

Edison Capital 

        93,878

   132,344

        (38,466)

(2,630,582)

752,528

(3,383,110)

Edison Enterprises & parent co.

    (277,767)

 (154,422)

      (123,345)

Edison International - consolidated 

$(2,908,349)

$598,106

$(3,506,455)

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

*Includes a write-off of $2.5 billion of generation-related regulatory assets in the fourth quarter of 2000.

Excluding the one-time tax benefit in December 1999, SCE incurred a loss of $2.9 billion for the twelve months ended June 30, 2001, compared with $556 million for the same period ended June 30, 2000.  The decrease of $3.4 billion primarily reflects a write-off of $2.5 of generation- related regulatory assets in the fourth quarter of 2000, unrecovered generation-related costs of $724 million, higher interest expense and the outage at SONGS 3, partially offset by lower operating and maintenance costs.

EME reported earnings of $165 million for the twelve-month period, up $115 million from the same period last year.  The increase was primarily due to higher energy prices from U.S. projects and phantom stock option plan adjustments.  The increase was partially offset by lower power pool prices in the United Kingdom, certain tax benefits related to the sale of a portion of EME's interest in Four Star Oil & Gas and higher interest expense. 

Edison Capital contributed $94 million for the twelve-month period compared to $132 million from the same period last year.  The decrease was mainly the result of lower earnings from leveraged leases and affordable housing, combined with the impact of the termination of the Fiddler's Ferry/Ferrybridge financing and higher net interest expense, partially offset by the net gain on asset sales.

Excluding the one-time adjustments at Edison Enterprises for the anticipated sales of Edison Select and Edison Source in 2001 and the closing of five businesses in December 1999, Edison Enterprises and the parent company recorded a $161 million loss for the twelve months ended June 30, 2001, compared to a $131 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 were partially offset by improved operating performance at Edison Enterprises.

Quarter Ended June 30,

Reported Earnings Per Share  

     2001   

    2000   

   Change   

Southern California Edison 

$0.09

$0.47

$(0.38)

Edison Mission Energy

--

(0.06)

0.06

Edison Capital 

0.08

0.12

(0.04)

Edison Enterprises & parent company

     (0.48)

    (0.12)

         (0.36)

Edison International - consolidated

$(0.31)

$0.41

$(0.72)

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


Year-to-Date Ended June 30,

Reported Earnings Per Share  

    2001    

   2000   

  Change  

Southern California Edison 

$(1.75)

$0.80

$(2.55)

Edison Mission Energy

0.03

(0.09)

0.12

Edison Capital 

0.11

0.23

(0.12)

Edison Enterprises & parent company

     (0.60)

   (0.21)

       (0.39)

Edison International - consolidated

$(2.21)

$0.73

$(2.94)

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

Twelve Months Ended June 30,

Reported Earnings Per Share

   2001   

   2000   

   Change  

Southern California Edison 

$(8.87)

$1.67

$(10.54)

Edison Mission Energy

0.50

0.14

0.36

Edison Capital 

0.29

0.39

(0.10)

Edison Enterprises & parent company

    (0.85)

   (0.45)

         (0.40)

Edison International - consolidated

$(8.93)

$1.75

$(10.68)

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


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