July 30, 2004
ROSEMEAD, Calif., July 30, 2004 -- Edison International (NYSE: EIX) recorded a second quarter loss of $1.15 per share in 2004, compared to earnings of seven cents per share in the same period last year. The decrease is primarily due to a 2004 lease termination partially offset by a 2003 asset impairment and the net effect of regulatory adjustments that occurred in 2003 and 2004.
Excluding these items, EIX’s second quarter 2004 earnings were 32 cents per share, compared to earnings of 37 cents per share for the same period last year. The decrease primarily reflects the expiration of the San Onofre Nuclear Generating Station (SONGS) incentive mechanism at Southern California Edison (SCE) partially offset by improved operating results at Edison Mission Energy’s (EME) projects.
“With the July 8 Rate Case decision for SCE and with a total $3 billion in executed sales agreements for our EME international power stations, we have taken critical steps forward. We can now look forward to making the substantial capital investments necessary over the next five years to serve well our utility customers, and to earnings and dividend growth for our shareholders,” commented John E. Bryson, Chairman, Edison International.
Beginning in the second quarter of 2004, the results of Mission Energy Holding Company–parent only and its wholly owned subsidiary, EME, are presented on a consolidated basis as Mission Energy Holding Company consolidated (MEHC). This change is due primarily to the elimination of restrictions on dividends that EME may pay to its parent company resulting from the removal of the ring-fencing provisions in the second quarter of 2004.
The 2004 results include a charge of $1.80 per share at MEHC related to the termination of the Collins Facility lease and earnings of 33 cents per share at SCE from regulatory adjustments related to the implementation of SCE’s 2003 General Rate Case (GRC) decision. The 2003 results include a charge of 46 cents per share at MEHC related to the impairment of eight small peaking plants in Illinois and earnings of 16 cents per share at SCE from various positive regulatory adjustments.
SECOND-QUARTER EARNINGS DETAIL
Earnings (Loss) from Continuing Operations
SCE earnings from continuing operations were $242 million in the second quarter of 2004, compared with $223 million in the second quarter of 2003. The expiration of the incremental cost incentive pricing (ICIP) mechanism at SONGS resulted in a decrease in earnings of $47 million. This decrease was more than offset by a quarter-over-quarter benefit in regulatory adjustments of $55 million and improved operating results. The earnings impacts of these positive regulatory items in the second quarter of 2004 ($107 million) from the implementation of the 2003 GRC decision were partially offset by positive regulatory items that occurred in the second quarter of 2003 ($52 million) which included the tax impacts of a Federal Energy Regulatory Commission (FERC) rate case and prior-period Palo Verde incentive awards.
MEHC, on a consolidated basis with EME, had a loss from continuing operations of $1.88 per share compared to a loss of 58 cents per share in the second quarter of 2003. MEHC’s parent-only results for the second quarter of 2004 were substantially unchanged from the results in the same period last year. EME’s loss from continuing operations was $585 million in the second quarter of 2004 compared to a loss from continuing operations of $165 million in the second quarter of 2003. The increase in EME’s loss was primarily due to the $586 million charge related to the termination of the lease of the 2,698-MW gas-fired Collins Station held by Midwest Generation. The decrease in earnings also reflects higher corporate interest expense from $800 million in new debt at Mission Energy Holdings International and the absence of earnings from the Four Star Oil & Gas project as compared to the second quarter of 2003 due to the sale of EME’s interest in that project in the first quarter of 2004. The decrease in earnings was partially offset by the 2003 charge of $150 million related to the impairment of Midwest Generation’s small peaking plants and improved operating results at ISAB, Contact Energy, First Hydro and Homer City. On an annual basis, EME's earnings are seasonal with higher earnings expected during the summer months.
Earnings in the second quarter of 2004 for Edison Capital were substantially unchanged from the results in the same period last year.
The loss for “EIX parent company and other” decreased by $5 million primarily due to lower net interest expense.
Earnings (Loss) from Discontinued Operations
The second-quarter 2003 financial results include earnings from discontinued operations of $2 million from SCE’s fuel oil pipeline and storage business which was sold in the third quarter of 2003, offset by a $2 million loss from adjustments related to the sale of MEHC’s Fiddler’s Ferry and Ferrybridge (FFF) and Lakeland projects.
|
Quarter Ended June 30, |
|||
| Earnings (Loss) Per Share (Unaudited) |
2004 |
2003 |
Change |
|
| |||
| Southern California Edison |
$0.74 |
$0.68 |
$0.06 |
| Mission Energy Holding Company (consolidated) |
(1.88) |
(0.58) |
(1.30) |
| MEHC parent |
(0.08) |
(0.08) |
-- |
| Edison Mission Energy |
(1.80) |
(0.50) |
(1.30) |
| Edison Capital |
0.04 |
0.04 |
-- |
| EIX parent company and other |
(0.05) |
(0.07) |
0.02 |
|
| |||
| EIX Consol. Earnings (Loss) from Continuing Ops. |
(1.15) |
0.07 |
(1.22) |
|
|
|||
| Earnings from Discontinued Ops. - SCE |
-- |
0.01 |
(0.01) |
| Loss from Discontinued Ops. - EME |
-- |
(0.01) |
0.01 |
|
| |||
| Total EIX Consolidated Earnings (Loss) |
$(1.15) |
$0.07 |
$(1.22) |
|
| |||
|
Quarter Ended June 30, |
|||
| Earnings (Loss) (in millions) (Unaudited) |
2004 |
2003 |
Change |
|
| |||
| Southern California Edison |
$242 |
$223 |
$19 |
| Mission Energy Holding Company (consolidated) |
(610) |
(189) |
(421) |
| MEHC parent |
(25) |
(24) |
(1) |
| Edison Mission Energy |
(585) |
(165) |
(420) |
| Edison Capital |
11 |
12 |
(1) |
| EIX parent company and other |
(17) |
(22) |
5 |
|
| |||
| EIX Consol. Earnings (Loss) from Continuing Ops. |
(374) |
24 |
(398) |
|
|
|||
| Earnings from Discontinued Ops. - SCE |
-- |
2 |
(2) |
| Loss from Discontinued Ops. - EME |
-- |
(2) |
2 |
|
| |||
| Total EIX Consolidated Earnings (Loss) |
$(374) |
$24 |
$(398) |
|
| |||
YEAR-TO-DATE EARNINGS SUMMARY
EIX recorded a loss of 85 cents per share for the six-month period ending June 30, 2004, compared to earnings of 25 cents per share for the same period last year. The 2004 results include a charge of $1.80 per share related to the termination of the Collins Facility lease and the net benefit of the sale of the company’s interest in Four Star Oil and Gas of two cents at MEHC and earnings of 33 cents per share at SCE from regulatory adjustments related to its 2003 GRC decision. The 2003 results include a charge of 46 cents per share at MEHC related to the impairment of eight small peaking plants in Illinois and earnings of 16 cents per share at SCE from various positive regulatory adjustments. Excluding these charges, earnings increased five cents per share primarily from favorable operating results at several of EME’s operating plants, offset by lower earnings at SCE primarily from the expiration of the SONGS incentive mechanism.
EIX had a loss from continuing operations of $275 million for the six-month period ended June 30, 2004, compared with earnings from continuing operations of $85 million for the same period last year. Continuing operations exclude the impacts from changes in accounting principles and discontinued operations, as discussed below.
YEAR-TO-DATE EARNINGS DETAIL
Earnings (Loss) from Continuing Operations
SCE’s earnings from continuing operations in the first half of 2004 increased by $20 million, compared to the same period last year. The reasons for the increase in SCE’s year-to-date earnings from continuing operations are the same as those discussed in the detailed description of the second quarter above.
MEHC, on a consolidated basis, had a loss from continuing operations of $603 million compared to a loss of $222 million in the same period last year. MEHC’s parent-only results for the six-month period ending June 30, 2004 were substantially unchanged from the results in the same period last year. EME’s loss from continuing operations for the six-month period ending June 30, 2004, increased by $381 million compared to the same period last year primarily due to the $586 million charge for the termination of the Collins lease, partially offset by the 2003 asset impairment charge of $150 million. EME’s results were favorably impacted by higher energy prices and increased generation at the Illinois plants, the gain on the sale of EME’s interest in the Four Star Oil & Gas project, and improved operating results at First Hydro, Contact Energy, and ISAB. Partially offsetting these favorable items were a reduction in revenue resulting from sale of EME’s interest in the Four Star Oil & Gas investment, higher interest expense and outages in 2004 at the Homer City project.
Edison Capital’s earnings for the six-months ended June 30, 2004 were $22 million, down $5 million from the same period last year. This decrease is primarily due to a maturing lease portfolio which produces lower income.
The loss for the six months ended June 30, 2004 for “EIX parent company and other” decreased by $6 million compared to the results in the same period last year mainly due to lower net interest expense.
Earnings (Loss) from Discontinued Operations
The financial results for the six months ended June 30, 2003 include earnings from discontinued operations of $6 million from SCE’s fuel oil pipeline and storage business which was sold in the third quarter of 2003, offset by a $2 million loss from adjustments related to the sale of MEHC’s Fiddler’s Ferry and Ferrybridge (FFF) and Lakeland projects.
Change in Accounting Principle
Edison Capital’s 2004 results for the six months ended June 30, 2004 include a $1 million charge for the cumulative effect of a change in accounting principle reflecting the impact of Edison Capital’s implementation of an accounting standard that requires the consolidation of certain variable interest entities. MEHC’s consolidated results for the six-month period ending June 30, 2003 include a three-cent, or $9 million, charge for the cumulative effect of a change in accounting principle for asset retirement obligations adopted in 2003. As SCE follows accounting principles for rate-regulated enterprises, implementation of this new standard did not affect its earnings.
|
Year-To-Date Ended June 30, |
|||
| Earnings (Loss) Per Share (Unaudited) |
2004 |
2003 |
Change |
|
| |||
| Southern California Edison |
$1.05 |
$0.98 |
$0.07 |
| Mission Energy Holding Company (consolidated) |
(1.85) |
(0.67) |
(1.18) |
| MEHC parent |
(0.15) |
(0.15) |
-- |
| Edison Mission Energy |
(1.70) |
(0.52) |
(1.18) |
| Edison Capital |
0.07 |
0.08 |
(0.01) |
| EIX parent company and other |
(0.12) |
(0.12) |
-- |
|
| |||
| EIX Consol. Earnings (Loss) from Continuing Ops. |
(0.85) |
0.27 |
(1.12) |
|
|
|||
| Earnings from Discontinued Ops. |
-- |
0.01 |
(0.01) |
| Cumulative Effect of Accounting Change |
-- |
(0.03) |
0.03 |
|
| |||
| Total EIX Consolidated Earnings (Loss) |
$(0.85) |
$0.25 |
$(1.10) |
|
| |||
|
Year-To-Date Ended June 30, |
|||
| Earnings (Loss) (in millions) (Unaudited) |
2004 |
2003 |
Change |
|
| |||
| Southern California Edison |
$341 |
$321 |
$20 |
| Mission Energy Holding Company (consolidated) |
(603) |
(222) |
(381) |
| MEHC parent |
(49) |
(49) |
-- |
| Edison Mission Energy |
(554) |
(173) |
(381) |
| Edison Capital |
22 |
27 |
(5) |
| EIX parent company and other |
(35) |
(41) |
6 |
|
| |||
| EIX Consol. Earnings (Loss) from Continuing Ops. |
(275) |
85 |
(360) |
|
|
|||
| Earnings from Discontinued Ops. |
-- |
4 |
(4) |
| Cumulative Effect of Accounting Change |
(1) |
(9) |
8 |
|
| |||
| Total EIX Consolidated Earnings (Loss) |
$(276) |
$80 |
$(356) |
|
| |||
Additional Attachments:
- Click here to view the Edison International Summary Of Consolidated Earnings
- Click here to view the Financial Overview
- Click here to view the Kwh Sales (In Thousands)
