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ROSEMEAD, Calif., April 30, 2019 - Edison International (NYSE: EIX) today reported first quarter 2019 net income of $278 million, or $0.85 per share, compared to net income of $218 million, or $0.67 per share, in the first quarter 2018. As adjusted, first quarter 2019 core earnings were $206 million, or $0.63 per share, compared to core earnings of $262 million, or $0.80 per share, in the first quarter 2018.
Southern California Edison (SCE) received its proposed decision from the California Public Utilities Commission (CPUC) on its 2018 General Rate Case (GRC) on April 12, 2019. However, it is SCE's policy to account for regulatory decisions in the period in which they were received. Consequently, during the first quarter 2019, SCE recognized revenue from CPUC activities largely based on 2017 authorized base revenue requirements with reserves taken for known items, including the July 2017 cost of capital decision and the Tax Cuts and Jobs Act (Tax Reform). The revenue requirement ultimately adopted by the CPUC will be retroactive to January 1, 2018.
SCE's first quarter 2019 earnings increased by $7 million, or $0.02 per share, from the first quarter 2018, consisting of $72 million, or $0.22 per share, of higher non-core earnings and $65 million, or $0.20 per share, of lower core earnings. The decrease in core earnings was primarily due to wildfire mitigation expenses and higher net financing costs, partially offset by a 2018 refund to customers for prior overcollections. The higher non-core earnings for the first quarter 2019 were mainly related to the $69 million, or $0.21 per share, of income tax benefits 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.
Edison International Parent and Other’s first quarter 2019 loss from continuing operations decreased by $53 million, or $0.16 per share, compared to first quarter 2018, consisting of $9 million, or $0.03 per share, of lower core losses and $44 million, or $0.13 per share, of lower non-core losses. The decrease in core losses was mainly due to lower corporate expenses and decreased losses at the competitive businesses under Edison Energy Group. The lower non-core losses for the first quarter 2019 were primarily related to the absence of a $48 million, or $0.15 per share, after-tax impairment charge recorded in 2018 resulting from an agreement to sell SoCore Energy.
“We remain focused on mitigating increased wildfire risk and its related financial impacts on our communities and the health of the state’s electric utilities,” said Pedro Pizarro, president and chief executive officer of Edison International. “Additionally, we are focused on recent significant regulatory and policy developments, including the strike force proposal led by Governor Newsom’s administration, the issuance of our 2018 GRC proposed decision, and the filing of both our CPUC cost of capital and FERC transmission rate cases.”
Pizarro added, “To address significant rate base growth opportunities and the capital structure changes requested in SCE’s cost of capital proceeding, we announced a financing plan with a balanced approach to issuing equity and debt. These opportunities will enable us to continue supporting California’s clean energy future.”
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.
2019 Financing Plan
Edison International has evaluated a range of potential funding options to efficiently finance future investments at SCE. In the next 12 months, Edison International expects to fund its net cash requirements through capital market and bank financings, including issuing additional debt and equity, as needed.
In April 2019, Edison International registered additional shares of its common stock with the SEC. Edison International anticipates issuing up to $1.5 billion of registered shares of common stock, including through designated broker-dealers at prevailing market prices (an at-the-market offering) and through its existing 401(k), executive compensation and dividend reinvestment plans, and anticipates using the proceeds for equity contributions to SCE and for general corporate and working capital purposes. Additionally, in April 2019, Edison International entered into a $1.0 billion term loan. Of the proceeds of the term loan, $750 million was contributed to SCE and the remainder of the proceeds will be used for general corporate and working capital purposes.
2019 Earnings Guidance
Edison International will provide 2019 earnings guidance after a final decision has been issued by the CPUC on the Southern California Edison 2018 GRC. This is consistent with the company's practice of not providing earnings guidance prior to a decision on its GRC. See the presentation accompanying the company’s conference call for further information.
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.
Appendix and Summary Financial Schedules