Edison International Reports Strong 2007 Operating Performance

February 27, 2008

February 27, 2008

  • 2007 GAAP earnings were $3.33 per share compared to $3.58 per share in 2006.
  • Excluding non-core items, 2007 core earnings increased 20 percent to $3.69 per share from $3.07 per share last year, reflecting strong operating performance at Southern California Edison (SCE) and Edison Mission Group (EMG).
  • EMG’s May 2007 $2.7 billion debt restructuring, which extended debt maturities at attractive pricing and terms, largely drove the 2007 non-core charge of $0.36 per share, resulting in the difference between GAAP and core earnings. Non-core items were a positive $0.51 per share in 2006.
  • Fourth quarter 2007 GAAP earnings were $0.64 per share versus $0.87 per share in the prior year. Core earnings were $0.65 per share in both periods, and exclude non-core items of $(0.01) per share in 2007 and $0.22 per share in 2006.
  • The company announced 2008 earnings guidance of $3.61 - $4.01 per share.

Edison International Fourth Quarter and 2007 Financial Highlights

 

Quarter Ended December 31,

Full Year

(In millions, except per share data)

2007

2006

Change

2007

2006

Change


GAAP earnings per share

$0.64

$0.87

$(0.23)

$3.33

$3.58

$(0.25)

Core earnings per share

$0.65

$0.65

--

$3.69

$3.07

$0.62

GAAP earnings

$211

$288

$(77)

$1,098

$1,181

$(83)

Core earnings

$214

$215

$(1)

$1,217

$1,015

$202


Note: GAAP earnings refers to net income and GAAP earnings per share refers 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.


ROSEMEAD, Calif., February 27, 2008 – Edison International (NYSE: EIX) today reported 2007 earnings of $3.33 per share.  Excluding non-core items, 2007 core earnings were $3.69 per share, up 20 percent compared with $3.07 per share last year.  This increase was driven mainly by higher energy margins at EMG and solid operating results at SCE.

“Edison International performed well in 2007, reflecting completion of record utility infrastructure improvements and strong performance in our competitive power generation business,” said John Bryson, chairman and CEO. “During the year, our team also significantly moved forward our leading national positions in advanced smart grid and meter technologies, energy efficiency, and renewable energy.”


FOURTH QUARTER EARNINGS DETAIL

Fourth quarter 2007 GAAP earnings were $0.64 per share, compared to $0.87 in the fourth quarter of 2006 as the result of non-core items in the fourth quarter of last year. Excluding non-core items, fourth quarter core earnings were $0.65 per share, unchanged from the same period a year ago, as higher earnings at SCE were offset by lower results at EMG.

Earnings from Continuing Operations

SCE fourth quarter 2007 earnings from continuing operations were $0.37 per share compared to earnings of $0.48 per share in the same period last year, primarily from the favorable resolution of a state tax issue in the 2006 period.  Excluding 2006 non-core benefits, SCE’s core earnings increased $0.05 per share to $0.37 per share. This increase was primarily due to settlement of a tariff dispute.

EMG fourth quarter 2007 earnings from continuing operations were $0.30 per share compared to $0.35 per share in the same period last year.  Excluding non-core items, EMG’s core earnings were $0.30 per share compared to $0.36 per share a year earlier.  The decrease was primarily due to lower earnings from Edison Capital and higher EMG corporate costs, partially offset by lower interest expense and higher trading margin.

Results of Discontinued Operations

Edison International’s loss from discontinued operations was $0.01 per share in the fourth quarter of 2007 compared to earnings of $0.07 per share in the fourth quarter of 2006. Discontinued operations relate to adjustments resulting from the sale of EMG’s former international projects.

 

Quarter Ended December 31,

 

Earnings(Loss) Per Share (Unaudited)

2007

 2006

Change


Southern California Edison Company

$0.37

$0.48

$(0.11)

Edison Mission Group

0.30

0.35

(0.05)

EIX parent company and other

(0.02)

(0.03)

0.01


EIX GAAP earnings per share from continuing operations

0.65

0.80

(0.15)


Earnings (loss) from discontinued operations

(0.01)

0.07

(0.08)


EIX GAAP earnings per share

$0.64

$0.87

$(0.23)


EIX diluted earnings per share

$0.64

$0.87

$(0.23)


 

 

Quarter Ended December 31,

 

Earnings (Loss) (in millions) (Unaudited)

2007

2006

Change


Southern California Edison Company

$120

$158

$(38)

Edison Mission Group

99

113

(14)

EIX parent company and other

(5)

(5)

--  


EIX income from continuing operations

214

266

(52)


Earnings (loss) from discontinued operations

(3)

22

(25)


EIX net income

$211

$288

$(77)



Fourth Quarter Reconciliation of Core Earnings to GAAP Earnings

Quarter Ended December 31,

 

Core Earnings1 (Loss) Per Share (Unaudited)

        2007

2006

Change


Southern California Edison Company

$0.37

$0.32

    $0.05

Edison Mission Group

0.30

0.36

(0.06)

EIX parent company and other

(0.02)

(0.03)

0.01


EIX core earnings per share

0.65

0.65

--


 

Non-core items

 

 

 

SCE – tax item

--

0.15

(0.15)

SCE – generator refund incentive

--

0.01

(0.01)

EMG – early debt extinguishment

--

(0.01)

0.01

Discontinued operations

(0.01)

0.07

(0.08)


Total non-core items

(0.01)

0.22

(0.23)


EIX GAAP earnings per share

$0.64

$0.87

$(0.23)



 

 

Quarter Ended December 31,

 

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

2007

2006

Change


Southern California Edison Company

$120

$105

$15

Edison Mission Group

99

115

(16)

EIX parent company and other

(5)

(5)

--


EIX core earnings

214

215

(1)


 

Non-core items

 

 

 

SCE – tax item

--

49

(49)

SCE – generator refund incentive

--

4

(4)

EMG – early debt extinguishment

--

(2)

2

Discontinued operations

(3)

22

(25)


Total non-core items

(3)

73

(76)


Total EIX net income

$211

$288

$(77)


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) and $(0.01) per share for the quarter ended December 31, 2007 and 2006, respectively.


FULL-YEAR EARNINGS DETAIL

Earnings from Continuing Operation

SCE’s earnings from continuing operations in 2007 were $2.17 per share compared with $2.38 per share a year ago. SCE’s 2007 results include a non-core tax benefit of $0.10 per share primarily related to the income tax treatment of certain costs associated with environmental remediation. SCE’s 2006 results include $0.49 per share in benefits related primarily to favorable resolution of tax and regulatory matters and generator settlements.  Excluding these non-core items, SCE’s core earnings in 2007 were $2.07 per share, compared with $1.89 per share in 2006. The increase is mainly due to higher operating margin, lower income taxes, and the tariff settlement, partially offset by higher net interest expense.   

EMG’s earnings from continuing operations in 2007 were $1.27 per share compared with $1.02 per share in 2006. Both 2007 and 2006 results were impacted by non-core early debt extinguishment costs.  Excluding non-core items, EMG’s core earnings in 2007 were $1.72 per share compared with $1.30 per share in 2006. This increase primarily reflects higher operating income at Midwest Generation and Homer City, lower interest expense, and higher project income and trading margin, partially offset by higher development and other corporate costs and lower earnings from Edison Capital.

Results of Discontinued Operations

Edison International’s loss per share from discontinued operations was $0.01 for 2007, compared with earnings per share from discontinued operations of $0.30 per share for 2006.  2006 results include distributions from EMG’s Lakeland project in administrative receivership in the United Kingdom.

 

Full Year

 

Earnings (Loss) Per Share (Unaudited)

 2007

2006

Change


Southern California Edison Company

$2.17

$2.38

$(0.21)

Edison Mission Group

1.27

1.02

0.25

EIX parent company and other

(0.10)

(0.12)

0.02


EIX GAAP earnings per share from continuing operations

3.34

3.28

0.06


Earnings/(Loss) from discontinued operations

(0.01)

0.30

(0.31)


EIX GAAP earnings per share

$3.33

$3.58

(0.25)


EIX diluted earnings per share

$3.31

$3.57

(0.26)


 

 

Full Year

 

Earnings (Loss) (in millions) (Unaudited)

2007

2006

Change


Southern California Edison Company

$707

$776

$(69)

Edison Mission Group

412

334

78

EIX parent company and other

(19)

(27)

8


EIX income from continuing operations

1,100

1,083

17


Income/(Loss) from discontinued operations

(2)

97

(99)


Cumulative effect of accounting change – net of tax

--

1

(1)


EIX net income

$1,098

$1,181

$(83)



Full Year Reconciliation of Core Earnings to GAAP Earnings

 

 

Full Year

 

Core Earnings1 (Loss) Per Share (Unaudited)

2007

2006

Change


Southern California Edison Company

$2.07

$1.89

$0.18

Edison Mission Group

1.72

1.30

0.42

EIX parent company and other

(0.10)

(0.12)

0.02


EIX core earnings per share

3.69

3.07

0.62


 

Non-core items

 

 

 

SCE – tax and regulatory items

0.10

0.40

(0.30)

SCE – generator settlement and refund incentive

--

0.09

(0.09)

EMG – early debt extinguishment

(0.45)

(0.28)

(0.17)

Discontinued operations

(0.01)

0.30

(0.31)


Total non-core items

(0.36)

0.51

(0.87)


EIX GAAP earnings per share

$3.33

$3.58

$(0.25)



 

Full Year

 

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

2007

2006

Change

 


Southern California Edison Company

$676

$618

$58

Edison Mission Group

560

424

136

EIX parent company and other

(19)

(27)

8


EIX core earnings

1,217

1,015

202


 

Non-core items

 

 

 

SCE – tax and regulatory items

31

130

(99)

SCE – generator settlement and refund incentive

--

28

(28)

EMG – early debt extinguishment

(148)

(90)

(58)

Discontinued operations

(2)

97

(99)


Total non-core items

(119)

165

(284)


Cumulative effect of accounting change – net of tax

--

1

(1)


Total EIX net income

$1,098

$1,181

$(83)


1 See Use of Non-GAAP Financial Measures below. The impact of participating securities is included in EIX parent company and other and was $(0.04) per share and $(0.05) per share for 2007 and 2006, respectively.

2008 EARNINGS GUIDANCE

The company announced 2008 earnings guidance of $3.61 - $4.01 per share for GAAP earnings and core earnings. 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


   Southern California Edison

$2.18 – 2.28

   Edison Mission Group

$1.57 – 1.87

   EIX parent company and other

$(0.14)


EIX core earnings per share

$3.61 – $4.01


    Non-core items


EIX GAAP earnings per share

$3.61 - $4.01



1 Guidance excludes discontinued operations and change in GAAP accounting rules. The expected impact of participating securities is ($0.05) per share and is included in EIX parent company and other.

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 fourth quarter 2007 financial results and 2008 earnings guidance at 8 a.m. (Pacific Standard 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 ID# is 11500.  In addition to the live simulcast, the webcast will remain posted at www.edisoninvestor.com and telephone replays will be available through Wednesday, March 5, 2008, at the following numbers:  (877) 693-4277 – for callers in the U.S.; and (402) 220-0042 – for international callers.  The ID# is 11501.

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 most recent Form 10-K and other reports filed with the Securities and Exchange Commission and are available on our website: 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.


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Media Relations: Charles Coleman, (626) 302-7982
www.edisonnews.com

Investor Relations: Scott Cunningham, (626) 302-2540
www.edisoninvestor.com

# # #

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.