Edison International Reports Second Quarter 2008 Earnings

August 08, 2008

August 8, 2008

EIX Financial Highlights

 

 

Quarter Ended June 30

Year-to-Date    June 30,

(In millions, except per    share data)

2008

2007

2008

2007


GAAP earnings per share

$0.79

$0.29

$1.70

$1.29

Core earnings per share

$0.79

$0.73

$1.72

$1.63

GAAP earnings

$ 261

$   93

$ 559

$ 426

Core earnings

$ 262

$ 239

$ 565

$ 538


Note: GAAP earnings refer to net income and GAAP earnings per share refer to basic earnings per share throughout this release. Core earnings is a non-GAAP financial measure; see reconciliation of core earnings to GAAP earnings and reconciliation of core earnings guidance to GAAP earnings guidance.
  • Second quarter GAAP earnings were $0.79 per share compared to $0.29 per share in the same quarter last year.
  • GAAP earnings in the second quarter of 2007 were adversely impacted from early debt extinguishment charges.
  • The core earnings increase was mainly due to higher gross margin at Edison Mission Group’s (EMG) Midwest plants and lower taxes at Southern California Edison (SCE).  Core earnings exclude non-core items and discontinued operations. 
  • Edison International’s 2008 core EPS guidance range of $3.61 to $4.01 per share is reaffirmed.

ROSEMEAD, Calif., Aug. 8, 2008 – Edison International (NYSE: EIX) today reported second quarter 2008 core earnings of $0.79 per share, up 8 percent from the second quarter of 2007.

“Our second quarter results are consistent with meeting our earnings guidance for the year,” said Theodore F. Craver, Jr., chairman and chief executive officer of Edison International.  “Our focus remains executing well to realize our full potential meeting customer needs and producing solid returns for our shareholders.”

Earnings from Continuing Operations

SCE’s second-quarter 2008 earnings from continuing operations and core earnings were $0.48 per share, compared to $0.44 per share in the same quarter last year.  This increase was primarily due to lower taxes and interest, partially offset by lower operating income.  Lower operating income is consistent with electric utility revenue being higher during the third quarter of each year due to seasonality and the company’s rate design, while operating expenses are recognized more evenly throughout the year.

EMG’s second-quarter 2008 earnings from continuing operations were $0.34 per share, compared to a loss of $0.15 per share in the same quarter last year. This increase was primarily due to a non-core after-tax charge in the second quarter of 2007 associated with early debt extinguishment.  Excluding non-core items, EMG’s core earnings in the second quarter increased $0.04 per share, compared to the same quarter last year.  This increase was primarily due to higher gross margin at Midwest Generation from higher generation and average realized energy prices and capacity prices.  Also contributing to the increase was the gain on sale of Edison Capital’s Beaver Valley lease, partially offset by lower operating revenues and higher plant maintenance expense at Homer City. 

Quarter Ended June 30,

Earnings (Loss) Per Share (Unaudited)

2008

   2007

 Change


  SCE

$0.48 

$0.44 

$0.04 

  EMG

0.34 

(0.15)

0.49 

  EIX parent company and other

(0.03)

(0.01)

(0.02)


EIX GAAP earnings from continuing
operations

0.79 

0.28 

0.51 


EIX GAAP earnings from discontinued operations

--  

0.01 

(0.01)


EIX GAAP earnings 

$0.79 

$0.29 

$0.50 


EIX diluted earnings

$0.79 

$0.28 

$0.51 


 

Second Quarter Reconciliation of Core Earnings to GAAP Earnings

 

Quarter Ended June 30,

 

Core Earnings1 (Loss) Per Share (Unaudited)

2008

2007

 Change


  SCE

$0.48 

$0.44 

$0.04 

  EMG

0.34 

0.30 

0.04 

  EIX parent company and other

(0.03)

(0.01)

(0.02)


EIX core earnings

0.79 

0.73 

0.06 


Non-core items

 

 

 

     EMG – early debt retirement

--  

(0.45)

0.45 

     EMG – earnings from discontinued operations

--  

0.01 

(0.01)


        Total non-core items    

--  

(0.44)

0.44 


EIX GAAP earnings

$0.79 

$0.29 

$0.50 


1  See Use of Non-GAAP Financial Measures below.  The impact of participating securities is included in EIX parent company and other and was $(0.01) per share in the second quarter of 2008 and zero for the second quarter of 2007.

YEAR-TO-DATE EARNINGS SUMMARY

Edison International reported earnings of $1.70 per share for the six-month period ending June 30, 2008, compared to $1.29 per share for the same period last year.  Edison International had earnings from continuing operations of $1.72 per share for the six-month period ended June 30, 2008, compared with $1.28 per share for the same period last year.  Excluding earnings from discontinued operations and other non-core items, Edison International’s core earnings for the six-month period in 2008 were $1.72 per share, compared to $1.63 per share in the same period in 2007.   

YEAR-TO-DATE EARNINGS DETAIL

SCE’s earnings from continuing operations in the first half of 2008 were $0.94 per share, a decrease of $0.06 per share compared to the same period last year.  SCE’s 2007 results include income tax benefits of $0.10 per share related to certain environmental remediation costs.  Excluding this non-core item, SCE’s year-to-date core earnings were $0.94 per share, compared to $0.90 per share in the same period last year.  This increase is primarily from lower interest and taxes, partially offset by lower operating income.  Lower operating income is consistent with electric utility revenue being higher during the third quarter of each year due to seasonality and the company’s rate design, while operating expenses are recognized more evenly throughout the year.

EMG’s earnings from continuing operations for the first six months of 2008 were $0.84 per share, up $0.51 per share from the same period last year.  EMG’s GAAP results include a $0.02 loss and a $0.01 gain from discontinued operations in 2008 and 2007, respectively, and a $0.45 charge for early debt retirement in 2007.  Excluding these non-core items, EMG’s core earnings were $0.84 per share, an increase of $0.06 per share.  This increase primarily reflects higher gross margin at Midwest Generation from higher generation, average realized energy prices and capacity prices, and higher trading income at EMMT, partially offset by lower operating revenues and higher plant maintenance expense at Homer City.

 

Year-to-Date June 30,

 

Earnings (Loss) Per Share (Unaudited)

2008

2007

 Change


  SCE

$0.94 

$1.00 

$(0.06)

  EMG

0.84 

0.33 

0.51 

  EIX parent company and other

(0.06)

(0.05)

(0.01)


EIX GAAP earnings from continuing operations

1.72 

1.28 

0.44 


EIX GAAP earnings/(loss) from discontinued operations

(0.02)

0.01 

(0.03)


EIX GAAP earnings 

$1.70 

$1.29 

$0.41 


EIX diluted earnings

$1.69 

$1.29 

$0.40 


Year-to-Date Reconciliation of Core Earnings to GAAP Earnings

Year-to-date June 30,

 

Core Earnings1 (Loss) Per Share (Unaudited)

2008

   2007

 Change


  SCE

  $0.94 

$0.90 

$0.04 

  EMG

0.84 

0.78 

0.06 

  EIX parent company and other

(0.06)

(0.05)

(0.01)


EIX core earnings

1.72 

1.63 

0.09 


 

 

 

 

Non-core items

 

 

 

     SCE – regulatory/tax items

--  

0.10 

(0.10)

     EMG – early debt retirement

--  

(0.45)

0.45 

     EMG – earnings/(loss) from discontinued operations

(0.02)

0.01 

(0.03)


     Total non-core items    

(0.02)

(0.34)

0.32 


EIX GAAP earnings 

$1.70 

$1.29 

$0.41 


1  See Use of Non-GAAP Financial Measures below.  The impact of participating securities is included in EIX parent company and other and was $(0.02) per share for both 2008 and 2007.

2008 EARNINGS GUIDANCE

The company reaffirmed its previously announced 2008 earnings guidance of $3.61 to $4.01 per share.  See the risk disclosure statement below and the presentation accompanying the company’s conference call for further information.

Reconciliation of Core Earnings Guidance to GAAP Earnings Guidance

Core Earnings Per Share1

2008 Guidance
Reaffirmed as of August 8, 2008


   SCE

$2.18 - $2.28

   EMG

$1.57 - $1.87

   EIX parent company and other

$(0.14)


EIX core earnings

$3.61 - $4.01


    Non-core items


EIX GAAP earnings

$3.61 - $4.01


1  Guidance excludes discontinued operations and non-core items.  The expected impact of participating securities is ($0.05) per share and is included in EIX parent company and other.
Note:  Earnings Guidance also excludes the potential impact of IRS issues, and the possible impairment of up to $48 million for NOx allowances purchased by EMG for the CAIR compliance program.

Use of Non-GAAP Financial Measures

Edison International’s earnings are prepared in accordance with generally accepted accounting principles used in the United States and represent the company’s earnings as reported to the Securities and Exchange Commission. Our management uses core earnings and EPS by principal operating subsidiary internally for financial planning and for analysis of performance. We also use core earnings and EPS by principal operating subsidiary as primary performance measurements when communicating with analysts and investors regarding our earnings results and outlook, as it allows us to more accurately compare the company’s ongoing performance across periods. Core earnings exclude discontinued operations and other non-core items and are reconciled to GAAP earnings per share.

EPS by principal operating subsidiary is based on the principal operating subsidiary net income and Edison International's weighted average outstanding common shares. The impact of participating securities (vested stock options that earn dividend equivalents that may participate in undistributed earnings with common stock) for each principal operating subsidiary is not material to each principal operating subsidiary’s EPS and is therefore reflected in the results of the Edison International holding company, which we refer to as EIX parent company. EPS and core EPS by principal operating subsidiary are reconciled to GAAP earnings per share.

Reminder:  Edison International Will Hold a Conference Call Today

Today, Edison International will hold a conference call to discuss its second quarter 2008 financial results at 8 a.m. (Pacific Daylight Time). Two-way participation in the telephone call is limited to financial analysts and investors, while all other interested parties are invited to participate in a simultaneous webcast at www.edisoninvestor.com. A presentation accompanying management’s comments on the conference call will be available on the web site as well at www.edisoninvestor.com. The domestic call-in number is (800) 356-8584 and the number for international callers is (850) 429-1225. The ID# is 11700. In addition to the live simulcast, the webcast will remain posted at www.edisoninvestor.com and telephone replays will be available through Friday, August 15, 2008, at the following numbers:  (877) 693-4277 for callers in the United States and (402) 220-0042 for international callers. The ID# is 11701.

Risk Disclosure Statement

Statements contained in this news release about future performance, including, without limitation, earnings, asset and rate base growth, load growth, capital investments and other statements that are not purely historical, are forward-looking statements. These forward-looking statements reflect our current expectations; however, such statements involve risks and uncertainties. Actual results could differ materially from current expectations. Important factors that could cause different results are discussed under the headings “Risk Factors” and “Management’s Discussion and Analysis” in Edison International’s 2007 Form 10-K and other reports filed with the Securities and Exchange Commission and are available on our Web site at www.edisoninvestor.com. These forward-looking statements represent our expectations only as of the date of this news release, and Edison International assumes no duty to update them to reflect new information, events or circumstances.

About Edison International

Edison International, through its subsidiaries, is a generator and distributor of electric power and an investor in infrastructure and energy assets, including renewable energy.  Headquartered in Rosemead, California, Edison International is the parent company of Southern California Edison, the largest electric utility in California, and Edison Mission Group, a competitive power generation business and parent company to Edison Mission Energy and Edison Capital.

 

Second Quarter GAAP Earnings

Quarter Ended June 30,

 

Earnings (Loss) (in millions) (Unaudited)     

    2008

  2007

 Change


  SCE

$157 

$144 

$  13 

  EMG

112 

(49)

161 

  EIX parent company and other

(7)

(4)

(3)


EIX income from continuing operations

262 

91 

171 


EIX income (loss) from discontinued operations

(1)

(3)


EIX net income

$261 

$93 

  $168 


 

Second Quarter Reconciliation of Core Earnings to GAAP Earnings

Quarter Ended June 30,

 

Core Earnings1 (Loss) (in millions) (Unaudited)

    2008

2007

 Change

  SCE

$157 

$144 

$  13 

  EMG

112 

99 

 13 

  EIX parent company and other

(7)

(4) 

(3)


EIX core earnings

 262 

  239 

23 


  

 

Non-core items

 

 

 

     EMG – early debt retirement

--  

(148)

 148 

     EMG – earnings/(loss) from discontinued operations

(1)

(3)


        Total non-core items

(1)

(146)

145 


Total EIX net income

$261 

$ 93 

$168 


1  See Use of Non-GAAP Financial Measures above.  The impact of participating securities is included in EIX parent company and other and was $(0.01) per share in the second quarter of 2008 and zero for the second quarter of 2007.

 

Year-to-Date GAAP Earnings

Year-to-Date June 30,

 

Earnings (Loss) (in millions) (Unaudited)

  2008

  2007

 Change


  SCE

$307 

$325 

$(18)

  EMG

271 

106 

165 

  EIX parent company and other

(13)

(10)

(3)


EIX income from continuing operations

565 

421 

144 


EIX income/(loss) from discontinued operations

(6)

(11)


EIX net income

$559 

$426 

 $133 


 

Year-to-Date Reconciliation of Core Earnings to GAAP Earnings

Year-to-Date June 30,

 

Core Earnings1 (Loss) (in millions) (Unaudited)

2008

  2007

 Change


  SCE

$307 

   $294

$  13 

  EMG

271 

      254

17 

  EIX parent company and other

(13)

(10)

(3)


EIX core earnings

   565 

   538 

   27 


 

 

 

 

Non-core items

 

 

 

     SCE – regulatory/tax items

--  

31 

(31) 

     EMG – early debt retirement

--  

(148)

148 

     EMG – income/(loss) from discontinued operations

(6)

(11)


     Total non-core items

(6)

(112) 

  106 


Total EIX net income

$559 

$426 

$133 


1  See Use of Non-GAAP Financial Measures above.  The impact of participating securities is included in EIX parent company and other and was $(0.02) per share for both 2008 and 2007.

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Media relations contact: Charles Coleman, (626) 302-7982
Investor relations contact: Scott Cunningham, (626) 302-2540