Edison International Reports Second-Quarter Financial Results and Increases Earnings Guidance for 2005

August 09, 2005

August 9, 2005

ROSEMEAD, Calif., August 9, 2005 –

  • Edison International (EIX) recorded earnings of 61 cents per common share in the second quarter of 2005 compared to a second-quarter loss of $1.15 per common share in 2004.  These comparisons include non-core items in both 2005 and 2004, including a large lease termination charge taken at an Illinois power station in 2004.
  • EIX had core earnings of 55 cents per share in the second quarter of 2005, an increase of 34 cents per share over the same period last year.1
  • Key factors contributing to 2005 second-quarter core earnings were lower net interest expense, improved results from the independent power business and higher revenue at the utility.
  • EIX is increasing its core earnings guidance for the full-year 2005 to a range of $2.53 to $2.63 from $2.14 per share.

Second Quarter 2005 Highlights:

  • Earnings per common share – $0.61               
  • Net Income – $201 million
  • Revenue – $2.6 billion
  • Assets – $33.5 billion
     

SECOND-QUARTER EARNINGS SUMMARY

EIX recorded consolidated earnings of 61 cents per share in the second quarter of 2005, compared to a loss of $1.15 per share for the same period last year.  Excluding non-core items, EIX’s second-quarter core earnings were 55 cents per share in 2005, an increase of 34 cents per share compared to 2004.1
    
“We achieved improved core earnings at each of our business segments in the second quarter.  The key factors were lower net interest expense, improved operating results at our independent power business and higher utility revenue.  On the strength of our performance to date, and outlook for the rest of the year, we expect core earnings for 2005 will be stronger than previously forecast,” commented John E. Bryson, Chairman, Edison International.

SECOND-QUARTER EARNINGS DETAIL

Earnings (Loss) from Continuing Operations

SCE’s earnings from continuing operations were 49 cents per share in the second quarter of 2005, compared with 74 cents per share in the second quarter of 2004.  SCE’s second-quarter 2004 results include net positive regulatory items of about 36 cents per share, primarily related to the implementation of SCE’s 2003 GRC decision.  Excluding these items, SCE’s core earnings were 49 cents per share, an increase of 11 cents per share compared to the second quarter of 2004.  This increase is primarily due to higher revenue at SCE associated with the timing of the 2003 GRC decision.  SCE received the decision last July, which resulted in a catch-up adjustment to core earnings in the third quarter for the amounts related to the first half of 2004, as well as an increase in earnings for the second half of 2004.  A comparison of the full year of 2005 versus 2004 is not expected to reflect a core earnings difference related to the 2003 GRC decision.  The favorable impact of higher revenue authorized by the California Public Utilities Commission (CPUC) for 2005, the resolution of certain tax issues and lower net interest costs were mostly offset by higher operating expense.

MEHC’s earnings from continuing operations were break-even in the second quarter of 2005 compared to a loss of $1.96 per share in the second quarter of 2004.  MEHC’s second-quarter 2004 results include a charge of $1.80 per share related to the termination of the Collins Station lease.  The Collins Station was deemed uneconomic and operations ceased effective September 30, 2004.  Excluding this charge, MEHC’s core earnings were break-even, an improvement of 16 cents per share over the second quarter of 2004.  This increase is primarily due to higher wholesale energy prices at the Illinois plants, lower net corporate interest expense, the resolution of a prior-year tax issue and higher income from Edison Mission Marketing & Trading (EMMT).  On an annual basis, MEHC's earnings are seasonal with higher earnings typically occurring during the summer months. 

Earnings in the second quarter of 2005 for Edison Capital were 8 cents per share compared to 4 cents per share in the second quarter of 2004.  This increase is primarily due to Edison Capital's share of income from its investment in the Emerging Europe Infrastructure Fund which recorded a gain resulting from an announced purchase of a wireless company held by the Fund.  The Fund has subsequently exited this investment and the related gain of about four cents per share has been realized. 

The loss for “EIX parent company and other” decreased by 3 cents per share primarily due to lower net interest expense.

Earnings from Discontinued Operations

EIX’s earnings from discontinued operations were 6 cents per share in the second quarter of 2005 compared to 8 cents per share in the same period last year.  The 2005 earnings resulted primarily from a settlement related to the Lakeland Power project.  The 2004 results include earnings from MEHC’s international assets that have been sold.  

 

Quarter Ended
June 30,

 

Earnings (Loss) Per Common Share (Unaudited)

2005

2004

Change



Southern California Edison Company

$0.49

$0.74

$(0.25)

Mission Energy Holding Company

(1.96)

1.96

Edison Capital

0.08

0.04

0.04

EIX parent company and other

(0.02)

(0.05)

0.03



EIX Consol. Earnings (Loss) from Continuing Ops.

0.55

(1.23)

1.78



Earnings from Discontinued Operations

0.06

0.08

(0.02)



Total EIX Consolidated Earnings (Loss)

$0.61

$(1.15)

$1.76



 


 

 Quarter Ended
June 30,

 

Earnings (Loss) (in millions) (Unaudited)

2005

2004

Change



   Southern California Edison Company

$161

$242

$(81)

   Mission Energy Holding Company

(636)

636

   Edison Capital

25

11

14

   EIX parent company and other

(6)

(17)

11



EIX Consol. Earnings (Loss) from Continuing Ops.

180

(400)

580



Earnings from Discontinued Operations

21

26

(5)



Total EIX Consolidated Earnings (Loss)

$201

$(374)

$575



 

 

Quarter Ended
June 30,

 

Core Earnings (Loss) Per Common Share (Unaudited)

2005

2004

Change



   Southern California Edison Company

$0.49

$0.38

$0.11

   Mission Energy Holding Company

(0.16)

0.16

   Edison Capital

0.08

0.04

0.04

   EIX parent company and other

(0.02)

(0.05)

0.03



EIX Consolidated Core Earnings

0.55

0.21

0.34



Non-core items

 

 

 

   SCE – Regulatory items

0.36

(0.36)

   MEHC – Collins lease termination

(1.80)

1.80

   MEHC – Earnings from discontinued operations

0.06

0.08

(0.02)



0.06

(1.36)

1.42



Total EIX Consolidated Earnings (Loss)

$0.61

$(1.15)

$1.76



 


 

Quarter Ended
June 30,

 

Core Earnings (Loss) (in millions) (Unaudited)

2005

2004

Change



   Southern California Edison Company

$161

$125

$36

   Mission Energy Holding Company

(50)

50

   Edison Capital

25

11

14

   EIX parent company and other

(6)

(17)

11



EIX Consolidated Core Earnings

180

69

111



Non-core items

 

 

 

   SCE – Regulatory items

117

(117)

   MEHC – Collins lease termination

(586)

586

   MEHC – Earnings from discontinued operations

21

26

(5)



21

(443)

464



Total EIX Consolidated Earnings (Loss)

$201

$(374)

$575



YEAR-TO-DATE EARNINGS SUMMARY

EIX recorded earnings of $1.23 per share for the six-month period ending June 30, 2005 compared to a loss of 85 cents per share for the same period last year.  The 2005 earnings include a charge at MEHC of 5 cents per share related to the early extinguishment of debt.  The 2004 results include a charge of $1.80 per share related to the termination of the Collins Station lease, a net gain of 8 cents per share at MEHC from the sale of the company’s interest in Four Star Oil and Gas and the Brooklyn Navy Yard project, and earnings of 36 cents per share at SCE from regulatory items related to its 2003 GRC decision.  Both years include earnings from discontinued operations related to MEHC’s international projects.  Excluding these items, core earnings increased 91 cents per share primarily from higher wholesale energy prices in Illinois, higher earnings at SCE associated with the 2003 GRC decision received in July 2004, lower net interest expense, earnings from Edison Capital’s interest in the Emerging Europe Infrastructure Fund and higher income from EMMT.

EIX had earnings from continuing operations of $1.15 per share for the six-month period ended June 30, 2005 compared with a loss from continuing operations of $1.07 per share for the same period last year.  Continuing operations exclude the impacts from changes in accounting principles and discontinued operations, as discussed below.

YEAR-TO-DATE EARNINGS DETAIL

Earnings (Loss) from Continuing Operations

SCE’s earnings from continuing operations in the first half of 2005 decreased by 16 cents per share, compared to the same period last year.  SCE’s results for the first half of 2004 include net positive regulatory items of about 36 cents per share primarily related to the implementation of SCE’s 2003 GRC decision.  Excluding these items, SCE’s core earnings were 89 cents per share, an increase of 20 cents per share compared to the same period last year.  This increase is primarily due to the favorable impact of higher revenue at SCE associated with the timing of the 2003 GRC decision reached in July 2004 as described in the second-quarter earnings detail section above.  Higher revenue authorized by the CPUC for 2005 and the resolution of certain tax issues were offset by higher operating expense.

MEHC had earnings from continuing operations of 8 cents per share for the six months ended June 30, 2005 compared to a loss of $2.07 per share in the same period last year.  MEHC’s earnings in 2005 include a five-cent-per-share charge related to the early retirement of debt.  MEHC’s 2004 results included a $1.80-per-share charge for the termination of the Collins Station lease and a net gain of 8 cents per share on the sale of its interest in Four Star Oil and Gas and the Brooklyn Navy Yard projects.  Excluding these items, MEHC’s core earnings were 13 cents per share, an increase of 48 cents per share.  This increase primarily reflects higher wholesale energy prices in Illinois, lower net interest expense, higher income from EMMT, and the resolution of a prior-year tax issue. 

Edison Capital’s earnings for the six months ended June 30, 2005 were 24 cents per share, up 17 cents per share from the same period last year.  This increase is primarily due to Edison Capital’s share of income from its investment in the Emerging Europe Infrastructure Fund. 

The loss for the six months ended June 30, 2005 for “EIX parent company and other” decreased by 6 cents per share compared to the results in the same period last year, mainly due to lower net interest expense partially offset by higher taxes.

Earnings from Discontinued Operations

EIX’s earnings from discontinued operations were 8 cents per share for the six-month period ending June 30, 2005 compared to 22 cents per share for the same period last year.  The 2005 earnings result primarily from a settlement related to the Lakeland Power project and gains on the sale of the CBK and Tri Energy projects.  The 2004 results include earnings from MEHC’s international assets that have been sold.  

Change in Accounting Principle
       
Edison Capital’s results for the six months ended June 30, 2004 include a $1 million charge for the cumulative effect of a change in accounting principle which reflects the impact of implementing an accounting standard that requires the consolidation of certain variable interest entities. 

 

Year-to-Date Ended
June 30,

 

Earnings (Loss) Per Common Share (Unaudited)

2005

2004

Change



   Southern California Edison Company

$0.89

$1.05

$(0.16)

   Mission Energy Holding Company

0.08

(2.07)

2.15

   Edison Capital

0.24

0.07

0.17

   EIX parent company and other

(0.06)

(0.12)

0.06



EIX Consol. Earnings (Loss) from Continuing Ops.

1.15

(1.07)

2.22



Earnings from Discontinued Operations

0.08

0.22

(0.14)



Total EIX Consolidated Earnings (Loss)

$1.23

$(0.85)

$2.08



 

Year-to-Date Ended
June 30,

 

Earnings (Loss) (in millions) (Unaudited)

2005

2004

Change



   Southern California Edison Company

$292

$341

$(49)

   Mission Energy Holding Company

25

(675)

700

   Edison Capital

77

22

55

   EIX parent company and other

(19)

(35)

16



EIX Consol. Earnings (Loss) from Continuing Ops.

375

(347)

722



Earnings from Discontinued Operations

28

72

(44)

Cumulative Effect of Accounting Change

(1)

1



Total EIX Consolidated Earnings (Loss)

$403

$(276)

$679



 

 Year-to-Date Ended
June 30,

 

Core Earnings (Loss) Per Common Share (Unaudited)

2005

2004

Change



   Southern California Edison Company

$0.89

$0.69

$0.20

   Mission Energy Holding Company

0.13

(0.35)

0.48

   Edison Capital

0.24

0.07

0.17

   EIX parent company and other

(0.06)

(0.12)

0.06



EIX Consolidated Core Earnings

1.20

0.29

0.91



Non-core items

 

 

 

   SCE – Regulatory items

0.36

(0.36)

   MEHC – Collins lease termination

(1.80)

1.80

   MEHC – Early retirement of debt

(0.05)

(0.05)

   MEHC – Sale of assets

0.08

(0.08)

   MEHC – Earnings from discontinued operations

0.08

0.22

(0.14)



0.03

(1.14)

1.17



Total EIX Consolidated Earnings (Loss)

$1.23

$(0.85)

$2.08



 

 

 

Year-to-Date Ended
June 30,

 

Core Earnings (Loss) (in millions) (Unaudited)

2005

2004

Change



   Southern California Edison Company

$292

$224

$68

   Mission Energy Holding Company

40

(116)

156

   Edison Capital

77

22

55

   EIX parent company and other

(19)

(35)

16



EIX Consolidated Core Earnings

390

95

295



Non-core items

 

 

 

   SCE – Regulatory items

117

(117)

   MEHC – Collins lease termination

(586)

586

   MEHC – Early retirement of debt

(15)

(15)

   MEHC – Sale of assets

27

(27)

   MEHC – Earnings from discontinued operations

28

72

(44)



13

(370)

383

Cumulative Effect of Accounting Change

(1)

1



Total EIX Consolidated Earnings (Loss)

$403

$(276)

$679



1 See the Core Earnings (Loss) Per Common Share table for the quarters ended June 30 for a reconciliation of core earnings to earnings calculated in accordance with accounting principles generally accepted in the United States.
2 See Appendix for reconciliation to reported EPS.   

Reminder:  EIX Will Hold a Conference Call Today

Today, EIX will hold a conference call to discuss its second-quarter 2005 financial results at 8:00 a.m. PDT.  Although two-way participation in the telephone call is limited to financial analysts and investors, all other interested parties are invited to participate in a “listen-only mode” through a simultaneous webcast on the company’s Web site at www.edisoninvestor.com.  Additional financial and other statistical information, if any, presented during the call will be available on the Web site.  The domestic call-in number is (800) 356-8584 and the ID# is 10400.  

Appendix

 
Prior
2005 Outlook1
 ..
Current
2005 Outlook2
 
 
 
  • SCE
$1.75
$1.80
 
  • MEHC
0.34
0.55-0.65
 
  • EC
0.08
0.28
 
  • EIX Holding Co.
(0.03)
(0.10)
 

Core EPS

$2.14
$2.53-2.63
 
 
 
Non-core items
 
  • SCE - Tax Settlement
$0.11
$0.11
 
  • MEHC - Debt Extinguishment
(0.05)
(0.05)
 
  • MEHC - Discontinued Ops.
--
0.28
 
 
Reported EPS
$2.20
$2.87-2.97
 

1. Given October 13, 2004.
2. Given August 9, 2005.
 

Risk Disclosure Statement

This release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements reflect Edison International’s current expectations and projections about future events based on Edison International’s knowledge of present facts and circumstances and assumptions about future events and include any statement that does not directly relate to a historical or current fact.  In this report and elsewhere, the words “expects,” “believes,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “probable,” “may,” “will,” “could,” “would,” “should,” and variations of such words and similar expressions, or discussions of strategy or of plans, are intended to identify forward-looking statements.  Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated.  Some of the risks, uncertainties and other important factors that could cause results to differ, or that otherwise could impact Edison International or its subsidiaries, include but are not limited to: 

  • the ability of Edison International to meet its financial obligations and to pay dividends on its common stock if its subsidiaries are unable to pay dividends;
  • the ability of Edison International to effectively execute its strategic plan;
  • the ability of SCE to recover its costs in a timely manner from its customers through regulated rates;
  • decisions and other actions by the CPUC and other regulatory authorities and delays in regulatory actions;
  • market risks affecting SCE’s energy procurement activities;
  • access to capital markets and the cost of capital;
  • changes in interest rates and rates of inflation;
  • governmental, statutory, regulatory or administrative changes or initiatives affecting the electricity industry, including environmental regulations that could require additional expenditures or otherwise affect the cost and manner of doing business;
  • risks associated with operating nuclear and other power generating facilities, including operating risks, equipment failure, availability, heat rate and output;
  • the ability to obtain sufficient insurance;
  • effects of legal proceedings, changes in tax laws, rates or policies, and changes in accounting standards;
  • supply and demand for electric capacity and energy, and the resulting prices and dispatch volumes, in the wholesale markets to which EME’s generating units have access;
  • EME’s and its subsidiaries’ ability to provide sufficient collateral in support of their forward sales of electricity and purchases of fuel;
  • competition from other power plants, including new plants and technologies that may be developed in the future;
  • the cost of and availability of fuel, fuel transportation services, electric transmission services and required emission credits or allowances;
  • weather conditions, natural disasters and other unforeseen events; and
  • changes in the fair value of investments accounted for using fair value accounting.

Additional information about risks and uncertainties, including more detail about the factors described above, is contained in Edison International’s reports filed with the Securities and Exchange Commission. Readers are urged to read such reports and carefully consider the risks, uncertainties and other factors that affect Edison International’s business.  Readers also should review future reports filed by Edison International with the Securities and Exchange Commission.  The information contained in this report is subject to change without notice. Forward-looking statements speak only as of the date they are made and Edison International is not obligated to publicly update or revise forward-looking statements. 

Additional Attachments:

# # #

Based in Rosemead, Calif., Edison International (NYSE: EIX) is the parent company of Southern California Edison, Edison Mission Energy and Edison Capital.