News Releases

October 19, 2001

Edison International today reported a loss of $413 million, or $1.27 per share, for the third quarter of 2001.  The results include a one-time item reflecting a write-down at Edison Mission Energy (EME), the company’s independent power producer, of $1.15 billion after-tax, or $3.54 per share, related to the decision to sell two coal stations in the United Kingdom (U.K.). 

On October 8, 2001, EME announced the sale of its two U.K.-based coal stations, Fiddler’s Ferry and Ferrybridge (FFF), to two wholly owned subsidiaries of American Electric Power for an aggregate price of 650 million pounds sterling.  The sale is expected to close before the end of the year.  The plants were acquired in 1999 for 1.3 billion pounds sterling.  As a result of the transaction, EME recorded a one-time, after-tax write-down of $1.15 billion in the third quarter.
    
As previously reported, on October 2, 2001, Southern California Edison (SCE) and the California Public Utilities Commission (CPUC) entered into a settlement agreement of a lawsuit over uncollected procurement-related obligations. On October 5, 2001, a U.S. District Court judge approved the settlement.  Under the settlement agreement, SCE shall recover in rates procurement-related obligations of $3.3 billion.  SCE believes the settlement provides a workable plan for the utility to become creditworthy once again and pay its obligations, and to remove the State of California from the power-purchasing business.  A decision regarding the accounting treatment of the settlement and the related Procurement Related Obligations Account (PROACT) is expected to be completed in the fourth quarter of 2001.

Excluding the one-time item related to the sale of the plants in the U.K., Edison International reported operating earnings of $741 million for the third quarter of 2001.

THIRD QUARTER EARNINGS DETAIL

SCE’s reported earnings in the third quarter decreased by $39 million, excluding the recovery of previously incurred generation-related costs of $518 million after tax.  The decrease was primarily attributable to higher interest expense and lower kilowatt-hour sales.

Excluding the one-time item reflecting the asset write-down associated with FFF, the $64-million decrease in operating earnings at EME is primarily due to lower pool prices and capacity payments in the U.K., and the non-recurring earnings associated with the stock plan expense adjustment in 2000, partially offset by higher energy prices for EME’s U.S. projects and increased earnings from oil and natural gas activities.

Edison Capital’s decrease of $21 million in reported earnings was due to lower revenues from leveraged leases and affordable housing projects and the termination of FFF mezzanine financing.  The decrease was partially offset by a net gain on asset sales and lower general and administrative expenses. 

The decrease of $24 million at Mission Energy Holding Company (parent only) reflects the issuance of new debt.  The $11-million improvement at the parent company and Edison Enterprises was primarily the result of lower operating expenses at the parent company.

YEAR-TO-DATE EARNINGS SUMMARY

Edison International reported a year-to-date loss of $1.13 billion or $3.47 per share.  These results include SCE’s net unrecovered generation-related costs for the period totaling $205 million.  EME incurred a one-time item of $1.15 billion reflecting the write-down of FFF, and Edison Enterprises’ incurred a one-time item of $117 million reflecting the decision to sell Edison Select and substantially all of the assets of Edison Source.  Excluding one-time items, Edison International recorded year-to-date operating earnings of $140 million compared with earnings of $607 million for the same period last year.

YEAR-TO-DATE EARNINGS DETAIL

SCE’s reported earnings for the first nine months of 2001 decreased by $360 million for the same period last year.  The decrease was primarily due to a loss of $205 million for net unrecovered generation-related costs, an outage at San Onofre Nuclear Generating Station (SONGS) Unit 3, higher interest expense and lower kilowatt-hour sales, partially offset by lower operating and maintenance costs.

Excluding the one-time write-down for FFF, EME’s operating earnings decreased by $24 million, and earnings from Edison Capital decreased by $63 million.  The explanations for the variations in earnings are consistent with the descriptions provided in the quarterly analysis above.

The decrease of $24 million at Mission Energy Holding Company (parent only) reflects the issuance of new debt.  Excluding the one-time item of $117 million, the parent company’s and Edison Enterprises’ loss decreased by $4 million.  The improvement is primarily the result of lower operating expenses at Edison Enterprises.

12 MONTHS ENDED EARNINGS SUMMARY
  
For the 12 months ended September 30, 2001, Edison International recorded an operating loss, excluding one-time items, of $2.4 billion compared to operating earnings of $711 million in the same period last year.  On a reported basis, including one-time items, the company recorded a loss of $3.7 billion for the 12-month period ending September 30, 2001, compared to earnings of $703 million in the same period last year.  These results include a write-off at SCE of $2.5 billion of generation-related regulatory assets in the fourth quarter of 2000 and the operating losses for SCE’s net unrecovered generation-related costs totaling $205 million for the first nine months of 2001.  Results on a reported basis also include the one-time write-down of FFF, the one-time item at Edison Enterprises related to the decision to sell Edison Select and substantially all of the assets of Edison Source for $117 million, and the one-time items in the prior period for a tax benefit at SCE and the closing of five Edison Enterprises businesses in 1999. 

12 MONTHS ENDED EARNINGS DETAIL

SCE incurred a loss of $2.4 billion for the 12 months ended September 30, 2001, compared with operating earnings of $567 million for the same period ended September 30, 2000, excluding the one-time tax benefit in December 1999.  The decrease of $3.0 billion primarily reflects a write-off of $2.5 billion of generation-related regulatory assets in the fourth quarter of 2000, net unrecovered generation-related costs of $205 million in 2001, higher interest expense, lower kilowatt-hour sales, and the outage at SONGS Unit 3, partially offset by lower operating and maintenance costs.

Excluding the one-time write-down of FFF, EME reported operating earnings of $101 million for the 12 month period, compared to $154 million in the same period last year.  The decrease was primarily due to lower power pool prices in the United Kingdom, and certain tax benefits related to the sale of a portion of EME's interest in Four Star Oil & Gas, partially offset by higher energy prices from U.S. projects, and stock plan expense adjustments.  

Edison Capital contributed $72 million for the 12 month period compared to reported earnings of $134 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 FFF financing, partially offset by the net gain on asset sales.

The decrease of $24 million at Mission Energy Holding Company (parent only) reflects the issuance of new debt.  Excluding the one-time items at Edison Enterprises for the decision to sell Edison Select and Edison Source in 2001 and the closing of five businesses in December 1999, the parent company and Edison Enterprises recorded a $150 million loss on an operating basis for the 12 months ended September 30, 2001, compared to a $144 million loss in the same period last year.  Increased interest expense at the parent company was partially offset by improved operating performance at Edison Enterprises.

Additional Attachments:

• Click here to view the Edison International Summary Of Consolidated Earnings (Loss)
• Click here to view the Financial Overview, September 30, 2001
• Click here to view the Kwh Sales (In Thousands)