Media Relations Contact: Charles Coleman, (626) 302-7982
Investor Relations Contact: Scott Cunningham, (626) 302-2540
ROSEMEAD, Calif., July 28, 2016 - Edison International (NYSE: EIX) today reported second quarter 2016 net income of $276 million, or $0.85 per share, compared to $379 million, or $1.16 per share, in the second quarter of 2015. On an adjusted basis, Edison International’s second quarter 2016 core earnings were $276 million, or $0.85 per share, compared to $378 million, or $1.16 per share, in the second quarter of 2015. Comparisons to second quarter and year-to-date 2015 results are not meaningful primarily because of the delay in receiving Southern California Edison's (SCE) 2015 General Rate Case (GRC) decision and the impact of taxes.
SCE's second quarter 2016 net income decreased by $69 million, or $0.21 per share, from the second quarter 2015 primarily due to $100 million, or $0.31 per share, of income tax benefits from revisions to liabilities for uncertain tax positions recorded in the second quarter of 2015, partially offset by the implementation of the 2015 GRC decision and 2016 incremental return on the pole loading rate base.
SCE's 2015 earnings were impacted by the timing of the 2015 GRC decision. During the second quarter of 2015, pending the outcome of the 2015 GRC decision, SCE recognized GRC-related revenue largely based on the 2014 authorized revenue requirement. During the third and fourth quarters of 2015, SCE recorded revenue refunds to customers to reflect the final decision in the 2015 GRC. The estimated amount of the refund to customers attributable to the second quarter 2015, but subsequently recorded in 2015, was approximately $35 million ($21 million after-tax), or $0.06 per share. In addition, second quarter 2016 earnings included an increase in revenue of approximately $50 million ($30 million after-tax), or $0.09 per share, from the revenue escalation mechanism in the 2015 GRC decision.
Edison International Parent and Other’s second quarter 2016 losses from continuing operations increased by $32 million, or $0.09 per share, compared to second quarter 2015. The higher losses included an after-tax charge of $13 million, or $0.04 per share, related to the buy-out of an earn-out provision with the former shareholders of a company acquired by Edison Energy at the end of 2015. The buy-out was completed, together with modification to employment contracts, in order to align long-term incentive compensation. In addition, losses included higher operating and development costs and lower revenue and gross margin from the sale of solar systems at Edison Energy Group. Results during 2015 included income of $8 million, or $0.02 per share, from Edison Capital's investments in affordable housing projects which were sold at the end of 2015.
Edison International Parent and Other's second quarter 2016 non-core items included income of $2 million, or $0.01 per share, compared to income of $1 million for the same period in 2015 related to losses (net of distributions) allocated to tax equity investors under the hypothetical liquidation at book value (HLBV) accounting method. Additionally, during the second quarter 2016, Edison International recorded $2 million, or $0.01 per share, of losses from discontinued operations.
“Today, we reaffirmed our full-year earnings guidance based on second quarter results and more favorable SCE earnings expected for the balance of the year,” said Ted Craver, chairman and chief executive officer of Edison International.
Year-to-Date Earnings
For the six months ended June 30, 2016, Edison International reported net income of $546 million, or $1.68 per share, compared to $678 million, or $2.08 per share, during the same period in 2015. On an adjusted basis, Edison International’s core earnings were $543 million, or $1.67 per share, compared to $672 million, or $2.06 per share, in the year-to-date period in 2015.
SCE’s net income for the six months ended June 30, 2016 decreased $88 million, or $0.27 per share, from the same period in 2015, primarily due to $100 million, or $0.31 per share, of income tax benefits from revisions to liabilities for uncertain tax positions recorded in the second quarter of 2015 and higher operation and maintenance costs, partially offset by the implementation of the 2015 GRC decision and 2016 incremental return on the pole loading rate base.
SCE's 2015 year-to-date earnings were similarly impacted by the timing of the 2015 GRC decision. The estimated amount of the refund to customers attributable to the year-to-date period in 2015, but subsequently recorded in 2015, was approximately $70 million ($42 million after-tax), or $0.12 per share. In addition, earnings for the six months ended June 30, 2016 included an increase in revenue of approximately $96 million ($57 million after-tax), or $0.17 per share, from the revenue escalation mechanism in the 2015 GRC decision.
Edison International Parent and Other’s losses from continuing operations from the six months ended June 30, 2016 increased by $43 million, or $0.13 per share, compared to same period 2015. The increase includes the earn-out provision buyout discussed above. The increased losses also reflect higher operating and development costs and lower revenue and gross margin from the sale of solar systems at Edison Energy Group, and income in 2015 of $12 million, or $0.04 per share, from Edison Capital's investments in affordable housing projects.
Edison International's non-core items for the six months ended June 30, 2016 included income of $4 million, or $0.01 per share, compared to income of $6 million, or $0.02 per share, for the same period in 2015 related to losses (net of distributions) allocated to tax equity investors under the HLBV accounting method. Additionally, during the six months ended June 30, 2016, Edison International recorded $1 million of losses from discontinued operations.
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.
2016 Earnings Guidance Reaffirmed
The company reaffirmed its earnings guidance for 2016 as summarized in the following chart. See the presentation accompanying the company’s conference call for further information including key guidance assumptions.
| 2016 Earnings Guidance | ||||||||
|---|---|---|---|---|---|---|---|---|
|
2016 Earnings Guidance
as of May 2, 2016 |
2016 Earnings Guidance |
|||||||
|
Low
|
Mid
|
High
|
Low
|
Mid
|
High
|
|||
| EIX Basic EPS |
$3.82
|
$3.92
|
$4.02
|
|
$3.82
|
$3.92
|
$4.02
|
|
| Less: Non-core Items* |
0.01
|
0.01
|
0.01
|
|
0.01
|
0.01
|
0.01
|
|
| EIX Core EPS |
$3.81
|
$3.91
|
$4.01
|
|
$3.81
|
$3.91
|
$4.01
|
|
| * Non-core items recorded for the six months ended June 30, 2016. | ||||||||
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, Calif., 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 Group, a portfolio of competitive businesses that provide commercial and industrial customers with energy management and procurement services and distributed solar generation. Edison Energy Group companies are independent from Southern California Edison.
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Appendix and Summary Financial Schedules
Edison International Reports Second Quarter 2016 Results; Reaffirms 2016 Earnings Guidance
