Investor relations contact: Sam Ramraj, (626) 302-2540
Media relations contact: Charles Coleman, (626) 302-7982
ROSEMEAD, Calif., February 28, 2019 - Edison International (NYSE: EIX) today reported fourth quarter 2018 net loss of $1.4 billion, or $4.39 loss per share, compared to net loss of $545 million, or $1.67 loss per share, in the fourth quarter 2017. As adjusted, fourth quarter 2018 core earnings were $305 million, or $0.94 per share, compared to core earnings of $357 million, or $1.10 per share, in the fourth quarter 2017.
Southern California Edison (SCE) is awaiting a proposed decision from the California Public Utilities Commission (CPUC) on its 2018 General Rate Case (GRC). Consequently, during the fourth quarter 2018, SCE recognized revenue from CPUC activities largely based on 2017 authorized base revenue requirements included in customer rates 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 fourth quarter 2018 earnings decreased by $1.3 billion, or $4.05 per share, from the fourth quarter 2017, consisting of $44 million, or $0.14 per share, of lower core earnings and $1.3 billion, or $3.91 per share, of higher non-core losses. The reduction in core earnings was due to the impact of the July 2017 cost of capital decision on GRC revenue, higher operation and maintenance expenses related to vegetation management and higher net financing costs. The higher non-core losses for the fourth quarter 2018 were mainly related to the $1.8 billion, or $5.60 per share, after-tax charge recorded at SCE related to wildfire-related claims, net of recoveries, partially offset by the absence of the $448 million, or $1.38 per share, after-tax impairment and other charges related to the Revised San Onofre Settlement Agreement recorded in the fourth quarter 2017.
Edison International Parent and Other’s fourth quarter 2018 losses from continuing operations decreased by $401 million, or $1.23 per share, compared to fourth quarter 2017, consisting of $8 million, or $0.02 per share, of higher core losses and $409 million, or $1.25 per share, of lower non-core losses. The increase in core losses was primarily due to a $13 million, or $0.04 per share, after-tax goodwill impairment charge on the Edison Energy reporting unit, partially offset by income of $11 million, or $0.03 per share, related to a California tax audit settlement. The lower non-core losses for the fourth quarter 2018 were primarily related to the absence of a $433 million, or $1.33 per share, write-down from the re-measurement of deferred taxes as a result of Tax Reform recorded in 2017.
Additionally, Edison International recorded $34 million of income, or $0.10 per share, from discontinued operations in the fourth quarter 2018.
“Edison International’s performance in 2018 was negatively impacted by wildfires in our service territory and a charge for liabilities related to the Southern California wildfires and mudslides,” said Pedro Pizarro, president and chief executive officer of Edison International. “Devastating wildfires have become a regular occurrence in California and mitigating this threat continues to be our top priority. We are working closely with State, county and municipal leaders, as well as the business community, to develop responsible, regional and statewide solutions to address the ongoing wildfire risk.”
Mr. Pizarro adds, “SCE has proposed multiple programs to enhance operational practices and increase grid hardening which we have already started implementing. In addition, we continue to make substantial investments to support California’s climate change policies. All of these illustrate California’s need for financially healthy utilities and therefore the need for sustainable wildfire risk management policies.”
Full-Year Earnings
For 2018, Edison International reported net loss of $423 million, or $1.30 loss per share, compared to net income of $565 million, or $1.73 per share, for 2017. As adjusted, Edison International’s core earnings were $1.4 billion, or $4.15 per share, compared to core earnings of $1.5 billion, or $4.50 per share, in 2017.
SCE is awaiting a proposed decision from the CPUC on its 2018 GRC. Consequently, during 2018, SCE recognized revenue from CPUC activities largely based on 2017 authorized base revenue requirements included in customer rates with reserves taken for known items, including the July 2017 cost of capital decision and Tax Reform.
SCE's 2018 earnings decreased by $1.3 billion, or $4.05 per share, from 2017, consisting of $53 million, or $0.16 per share, of lower core earnings and $1.3 billion, or $3.89 per share, of higher non-core losses. The reduction in core earnings was due to the impact of the July 2017 cost of capital decision on GRC revenue, higher operation and maintenance expenses related to wildfire insurance premiums and vegetation management, and higher net financing costs, partially offset by higher income tax benefits. The higher non-core losses for 2018 were mainly related to the $1.8 billion, or $5.60 per share, after-tax charge recorded in the fourth quarter at SCE related to wildfire-related claims, net of recoveries, partially offset by the absence of the $448 million, or $1.38 per share, after-tax impairment and other charges related to the Revised San Onofre Settlement Agreement recorded in the fourth quarter 2017.
Edison International Parent and Other’s 2018 losses from continuing operations decreased by $300 million, or $0.92 per share, compared to 2017, consisting of $62 million, or $0.19 per share, of higher core losses and $362 million, or $1.11 per share, of lower non-core losses. The increase in core losses was primarily due to higher income tax benefits recorded in 2017 compared to 2018 and the impact of Tax Reform on pre-tax losses in 2018, partially offset by the absence of SoCore Energy losses due to its sale in April 2018 and income of $11 million, or $0.03 per share, related to a California tax audit settlement. The lower non-core losses for the fourth quarter 2018 were primarily related to the absence of a $433 million, or $1.33 per share, write-down from the re-measurement of deferred taxes as a result of Tax Reform recorded in 2017.
Additionally, Edison International recorded $34 million of income, or $0.10 per share, from discontinued operations in 2018.
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 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.
Edison International and Southern California Edison Declare Dividends
Today, the Board of Directors of Edison International declared a quarterly common stock dividend of $0.6125 per share, payable on April 30, 2019, to shareholders of record on March 29, 2019. Additionally, the Board of Directors of Southern California Edison Company today declared dividends on preference and preferred stock. For more information, please see the related press release at www.edisoninvestor.com.
About Edison International
Edison International (NYSE:EIX), through its subsidiaries, is a generator and distributor 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.
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Appendix and Summary Financial Schedules
Edison International Reports Fourth Quarter and Full-Year 2018 Results
