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Edison International Reports Second Quarter 2023 Results

  • Second Quarter 2023 GAAP earnings per share of $0.92; Core EPS of $1.01

  • SCE has completed nearly 5,000 miles of covered conductor; now estimates it has reduced the probability of losses from catastrophic wildfires by 85%

  • Reaffirmed 2023 EPS guidance of $4.55-$4.85

  • Reiterated long-term core EPS growth rate target of 5%-7% for 2021-2025 and introduced core EPS growth rate target of 5%-7% for 2025-2028

ROSEMEAD, Calif., July 27, 2023--(BUSINESS WIRE)--Edison International (NYSE: EIX) today reported second-quarter net income of $354 million, or $0.92 per share, compared to net income of $241 million, or $0.63 per share, in the second quarter of last year. As adjusted, second-quarter core earnings were $388 million, or $1.01 per share, compared to core earnings of $357 million, or $0.94 per share, in the second quarter of last year.

Southern California Edison’s second-quarter core earnings per share (EPS) increased year over year, primarily due to revenue from the escalation mechanism set forth in the 2021 General Rate Case final decision and higher interest income on balancing account undercollections, partially offset by higher interest expense.

Edison International Parent and Other’s second-quarter core loss per share increased year over year, primarily due to higher interest expense.

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"SCE is strategically positioned to make substantial investments in the reliability, resiliency and readiness of the grid," said Pedro J. Pizarro, president and CEO of Edison International. "The utility is also well prepared for the wildfire season and has now replaced nearly 5,000 circuit miles of bare wire with covered conductor. SCE will continue to make substantial investments in wildfire mitigation to address the remaining wildfire risk on the system."

Pizarro added, "Driven by Edison International’s impressive performance through the first half of the year, we are confident in delivering on our 2023 core EPS guidance. Further, based on the strength of SCE’s investment opportunities, we are targeting 5% to 7% EPS growth for 2025 through 2028, which provides a path toward $7 EPS potential for 2028. Underpinning this is the rate base growth driven by the essential investments to advance California’s clean energy transition."

Edison International uses core earnings internally for financial planning and analysis of performance. Core earnings are also used when communicating with investors and analysts regarding Edison International’s earnings results to facilitate comparisons of the company’s performance from period to period. Please see the attached tables to reconcile core earnings to basic GAAP earnings.

Long-Term Core EPS Growth Rate Guidance

The company reiterated its long-term core EPS growth rate target of 5%-7% for 2021-2025. In addition, the company introduced a core EPS growth rate target of 5%-7% for 2025-2028, with a starting point of the midpoint of Edison International’s 2025 core EPS guidance of $5.50 to $5.90.

2023 Earnings Guidance

The company reaffirmed its earnings guidance range for 2023 as summarized in the following chart. See the presentation accompanying the company’s conference call for further information and assumptions.

2023 Earnings Guidance

2023 Earnings Guidance

as of May 2, 2023

as of July 27, 2023

Low

High

Low

High

EIX Basic EPS

$

4.27

$

4.57

$

4.18

$

4.48

Less: Non-core Items*

(0.28

)

(0.28

)

(0.37

)

(0.37

)

EIX Core EPS

$

4.55

$

4.85

$

4.55

$

4.85

* There were ($140) million, or ($0.37) per share of non-core items recorded for the six months ended June 30, 2023. Basic EIX EPS guidance only incorporates non-core items to June 30, 2023.

Second Quarter 2023 Earnings Conference Call and Webcast Details

When:

Thursday, July 27, 1:30-2:30 p.m. (PDT)

Telephone Numbers:

1-888-673-9780 (U.S.) and 1-312-470-0178 (Int'l) — Passcode: Edison

Telephone Replay:

1-800-813-5534 (U.S.) and 1-203-369-3348 (Int’l) — Passcode: 6544

Telephone replay available through Aug. 11 at 6 p.m. (PDT)

Webcast:

www.edisoninvestor.com

Edison International has posted its earnings conference call prepared remarks by the CEO and CFO, the teleconference presentation and Form 10-Q to the company’s investor relations website. These materials are available at www.edisoninvestor.com.

About Edison International

Edison International (NYSE: EIX) is one of the nation’s largest electric utility holding companies, providing clean and reliable energy and energy services through its independent companies. Headquartered in Rosemead, California, Edison International is the parent company of Southern California Edison Company, a utility that delivers electricity to 15 million people across Southern, Central and Coastal California. Edison International is also the parent company of Edison Energy LLC, a global energy advisory firm providing integrated sustainability and energy solutions to commercial, industrial and institutional customers.

Appendix

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 core earnings per share (EPS) internally for financial planning and for analysis of performance of Edison International and Southern California Edison. We also use core earnings and core EPS when communicating with analysts and investors regarding our earnings results to facilitate comparisons of the Company’s performance from period to period. Financial measures referred to as net income, basic EPS, core earnings, or core EPS also apply to the description of earnings or earnings per share.

Core earnings and core EPS are non-GAAP financial measures and may not be comparable to those of other companies. Core earnings and core EPS are defined as basic earnings and basic EPS excluding income or loss from discontinued operations and income or loss from significant discrete items that management does not consider representative of ongoing earnings. Basic earnings and losses refer to net income or losses attributable to Edison International shareholders. Core earnings are reconciled to basic earnings in the attached tables. The impact of participating securities (vested awards that earn dividend equivalents that may participate in undistributed earnings with common stock) for the principal operating subsidiary is not material to the principal operating subsidiary’s EPS and is therefore reflected in the results of the Edison International holding company, which is included in Edison International Parent and Other.

Safe Harbor Statement

Statements contained in this presentation about future performance, including, without limitation, operating results, capital expenditures, rate base growth, dividend policy, financial outlook, 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. These forward-looking statements represent our expectations only as of the date of this presentation, and Edison International assumes no duty to update them to reflect new information, events or circumstances. Important factors that could cause different results include, but are not limited to the:

  • ability of SCE to recover its costs through regulated rates, including uninsured wildfire-related and debris flow-related costs, costs incurred to mitigate the risk of utility equipment causing future wildfires, costs incurred as a result of the COVID-19 pandemic, and increased costs due to supply chain constraints, inflation, and rising interest rates;

  • ability of SCE to implement its Wildfire Mitigation Plan and capital program;

  • risks of regulatory or legislative restrictions that would limit SCE's ability to implement operational measures to mitigate wildfire risk, including Public Safety Power Shutoff ("PSPS") and fast curve settings, when conditions warrant or would otherwise limit SCE's operational practices relative to wildfire risk mitigation;

  • risks associated with SCE implementing PSPS, including regulatory fines and penalties, claims for damages and reputational harm;

  • ability of SCE to maintain a valid safety certification, which is required to benefit from certain provisions of California Assembly Bill 1054 ("AB 1054");

  • extreme weather-related incidents (including events caused, or exacerbated, by climate change, such as wildfires, debris flows, flooding, droughts, high wind events and extreme heat events) and other natural disasters (such as earthquakes), which could cause, among other things, public safety issues, property damage, rotating outages and other operational issues (such as issues due to damaged infrastructure), PSPS activations and unanticipated costs;

  • risk that AB 1054 does not effectively mitigate the significant exposure faced by California investor-owned utilities related to liability for damages arising from catastrophic wildfires where utility facilities are alleged to be a substantial cause, including the longevity of the Wildfire Insurance Fund and the CPUC's interpretation of and actions under AB 1054, including its interpretation of the prudency standard clarified by AB 1054;

  • ability of Edison International and SCE to effectively attract, manage, develop and retain a skilled workforce, including its contract workers;

  • decisions and other actions by the California Public Utilities Commission, the Office of Energy Infrastructure Safety of the California Natural Resources Agency, the Federal Energy Regulatory Commission, the Nuclear Regulatory Commission and other governmental authorities, including decisions and actions related to nationwide or statewide crisis, determinations of authorized rates of return or return on equity, issuance of SCE's wildfire safety certification, wildfire mitigation efforts, approval and implementation of electrification programs, and delays in executive, regulatory and legislative actions;

  • cost and availability of labor, equipment and materials, including as a result of supply chain constraints and inflation;

  • ability of Edison International or SCE to borrow funds and access bank and capital markets on reasonable terms;

  • risks associated with the decommissioning of San Onofre, including those related to worker and public safety, public opposition, permitting, governmental approvals, on-site storage of spent nuclear fuel and other radioactive material, delays, contractual disputes, contractor performance, and cost overruns;

  • ability of Edison International and SCE to obtain sufficient insurance at a reasonable cost or to maintain its customer funded self-insurance program, and to recover the costs of such insurance or, in the event liabilities exceed insured amounts, the ability to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) from customers or other parties;

  • pandemics, such as COVID-19, and other events that cause regional, statewide, national or global disruption, which could impact, among other things, Edison International's and SCE's business, operations, cash flows, liquidity and/or financial results and cause Edison International and SCE to incur unanticipated costs;

  • physical security of Edison International's and SCE's critical assets and personnel and the cybersecurity of Edison International's and SCE's critical information technology systems for grid control, and business, employee and customer data;

  • risks associated with cost allocation resulting in higher rates for utility bundled service customers because of possible customer bypass or departure for other electricity providers such as Community Choice Aggregators ("CCA," which are cities, counties, and certain other public agencies with the authority to generate and/or purchase electricity for their local residents and businesses) and Electric Service Providers (entities that offer electric power and ancillary services to retail customers, other than electrical corporations (like SCE) and CCAs);

  • risks inherent in SCE’s capital investment program, including those related to project site identification, public opposition, environmental mitigation, construction, permitting, contractor performance, availability of labor, equipment and materials, weather, changes in the California Independent System Operator’s transmission plans, and governmental approvals; and

  • risks associated with the operation of electrical facilities, including worker and public safety issues, the risk of utility assets causing or contributing to wildfires, failure, availability, efficiency, and output of equipment and facilities, and availability and cost of spare parts.

Additional information about risks and uncertainties is contained in Edison International and SCE’s most recent combined Annual Report on Form 10-K for the year ended December 31, 2022, and subsequent Quarterly Report(s) on Form 10-Q filed with the Securities and Exchange commission, including the "Risk Factors" sections. Readers are urged to read this entire release as well as the most recent Form 10-K and Form 10-Q (including information incorporated by reference), and carefully consider the risks, uncertainties, and other factors that affect Edison International's and SCE's businesses. Edison International and SCE post or provide direct links (i) to certain SCE and other parties' regulatory filings and documents with the CPUC and the FERC and certain agency rulings and notices in open proceedings in a section titled "SCE Regulatory Highlights," (ii) to certain documents and information related to Southern California wildfires which may be of interest to investors in a section titled "Southern California Wildfires," and (iii) to presentations, documents and other information that may be of interest to investors in a section titled "Presentations and Updates" at www.edisoninvestor.com in order to publicly disseminate such information.

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. Readers should review future reports filed by Edison International and SCE with the SEC.

Second Quarter Reconciliation of Basic Earnings Per Share to Core Earnings Per Share

Three months ended

Six months ended

June 30,

June 30,

2023

2022

Change

2023

2022

Change

Earnings (loss) per share attributable to Edison International

SCE

$

1.09

$

0.79

$

0.30

$

2.06

$

1.18

$

0.88

Edison International Parent and Other

(0.17

)

(0.16

)

(0.01

)

(0.33

)

(0.33

)

Edison International

0.92

0.63

0.29

1.73

0.85

0.88

Less: Non-core items

SCE

(0.14

)

(0.31

)

0.17

(0.46

)

(1.15

)

0.69

Edison International Parent and Other

0.05

0.05

0.09

0.09

Total non-core items

(0.09

)

(0.31

)

0.22

(0.37

)

(1.15

)

0.78

Core earnings (loss) per share

SCE

1.23

1.10

0.13

2.52

2.33

0.19

Edison International Parent and Other

(0.22

)

(0.16

)

(0.06

)

(0.42

)

(0.33

)

(0.09

)

Edison International

$

1.01

$

0.94

$

0.07

$

2.10

$

2.00

$

0.10

Note: Diluted earnings were $0.92 and $0.63 per share for the three months ended June 30, 2023 and 2022, respectively. Diluted earnings were $1.73 and $0.85 per share for the six months ended June 30, 2023 and 2022, respectively.

Second Quarter Reconciliation of Basic Earnings Per Share to Core Earnings (in millions)

Three months ended

Six months ended

June 30,

June 30,

(in millions)

2023

2022

Change

2023

2022

Change

Net income (loss) attributable to Edison International

SCE

$

420

$

302

$

118

$

790

$

449

$

341

Edison International Parent and Other

(66)

(61

)

(5

)

(126

)

(124

)

(2

)

Edison International

354

241

113

664

325

339

Less: Non-core items

SCE1,2,3,4,5,6,7

(51)

(116

)

65

(175

)

(439

)

264

Edison International Parent and Other8

17

17

35

35

Total non-core items

(34)

(116

)

82

(140

)

(439

)

299

Core earnings (losses)

SCE

471

418

53

965

888

77

Edison International Parent and Other

(83)

(61

)

(22

)

(161

)

(124

)

(37

)

Edison International

$

388

$

357

$

31

$

804

$

764

$

40

1

Includes amortization of SCE's Wildfire Insurance Fund expenses of $53 million ($38 million after-tax) for the three months ended June 30, 2023 and 2022 and $105 million ($76 million after-tax) and $106 million ($76 million after-tax) for the six months ended June 30, 2023 and 2022, respectively.

2

Includes charges for 2017/2018 Wildfire/Mudslide Events claims and expenses, net of recoveries of $12 million ($8 million after-tax) and $8 million ($6 million after-tax) for the three months ended June 30, 2023 and 2022 and $102 million ($73 million after-tax) and $404 million ($291 million after-tax) for the six months ended June 30, 2023 and 2022, respectively.

3

Includes a charge of probable disallowance related to the reasonableness review of recorded San Onofre Units 2 and 3 decommissioning costs in the 2021 NDCTP of $30 million ($21 million after-tax) for the six months ended June 30, 2023.

4

Includes a charge related to customer cancellations of certain ECS data services of $17 million ($12 million after-tax) for the three and six months ended June 30, 2023.

5

Includes an insurance recovery of $10 million ($7 million after-tax) and a charge of $23 million ($16 million after-tax) after net of estimated insurance recoveries related to settlement of an employment litigation matter for the three and six months ended June 30, 2023 and 2022, respectively.

6

Includes impairment charges of $64 million ($46 million after-tax) for the three and six months ended June 30, 2022, including $47 million ($34 million after-tax) related to SCE's CSRP settlement agreement and $17 million ($12 million after-tax) related to historical capital expenditures disallowed in SCE's track 3 of the 2021 GRC final decision.

7

Includes a charge related to organizational realignment services of $14 million ($10 million after-tax) for the three and six months ended June 30, 2022.

8

Includes customer revenues of $22 million ($17 million after-tax) and $44 million ($35 million after-tax) related to an EIS insurance contract for the three and six months ended June 30, 2023, respectively.

Consolidated Statements of Income

Edison International

Three months ended

Six months ended

June 30,

June 30,

(in millions, except per-share amounts)

2023

2022

2023

2022

Operating revenue

$

3,964

$

4,008

$

7,930

$

7,976

Purchased power and fuel

1,147

1,304

2,465

2,341

Operation and maintenance

1,241

1,361

2,325

2,848

Wildfire-related claims, net of insurance recoveries

2

96

427

Wildfire Insurance Fund expense

53

53

105

106

Depreciation and amortization

650

601

1,306

1,184

Property and other taxes

149

120

289

246

Impairment, net of other operating income

63

61

Total operating expenses

3,240

3,504

6,586

7,213

Operating income

724

504

1,344

763

Interest expense

(392

)

(271

)

(753

)

(517

)

Other income

128

66

247

134

Income before income taxes

460

299

838

380

Income tax expense (benefit)

51

7

64

(48

)

Net income

409

292

774

428

Preference stock dividend requirements of SCE

$

29

$

25

$

58

$

51

Preferred stock dividend requirement of Edison International

26

26

52

52

Net income attributable to Edison International common shareholders

$

354

$

241

$

664

$

325

Basic earnings per share:

Weighted average shares of common stock outstanding

383

381

383

381

Basic earnings per common share attributable to Edison International common shareholders

$

0.92

$

0.63

$

1.73

$

0.85

Diluted earnings per share:

Weighted average shares of common stock outstanding, including effect of dilutive securities

385

383

385

382

Diluted earnings per common share attributable to Edison International common shareholders

$

0.92

$

0.63

$

1.73

$

0.85

Consolidated Balance Sheets

Edison International

June 30,

December 31,

(in millions)

2023

2022

ASSETS

Cash and cash equivalents

$

195

$

914

Receivables, less allowances of $335 and $347 for uncollectible accounts at respective dates

1,717

1,695

Accrued unbilled revenue

756

641

Inventory

511

474

Prepaid expenses

88

248

Regulatory assets

3,656

2,497

Wildfire Insurance Fund contributions

204

204

Other current assets

289

397

Total current assets

7,416

7,070

Nuclear decommissioning trusts

4,126

3,948

Other investments

72

55

Total investments

4,198

4,003

Utility property, plant and equipment, less accumulated depreciation and amortization of $12,662 and $12,260 at respective dates

54,123

53,274

Nonutility property, plant and equipment, less accumulated depreciation of $111 and $106 at respective dates

203

212

Total property, plant and equipment

54,326

53,486

Regulatory assets (include $1,585 and $834 related to Variable Interest Entities "VIEs" at respective dates)

8,621

8,181

Wildfire Insurance Fund contributions

2,053

2,155

Operating lease right-of-use assets

1,231

1,442

Long-term insurance receivables

458

465

Other long-term assets

1,248

1,239

Total long-term assets

13,611

13,482

Total assets

$

79,551

$

78,041

Consolidated Balance Sheets

Edison International

June 30,

December 31,

(in millions, except share amounts)

2023

2022

LIABILITIES AND EQUITY

Short-term debt

$

1,161

$

2,015

Current portion of long-term debt

2,889

2,614

Accounts payable

1,790

2,359

Wildfire-related claims

71

121

Customer deposits

173

167

Regulatory liabilities

797

964

Current portion of operating lease liabilities

315

506

Other current liabilities

1,631

1,601

Total current liabilities

8,827

10,347

Long-term debt (include $1,539 and $809 related to VIEs at respective dates)

29,430

27,025

Deferred income taxes and credits

6,429

6,149

Pensions and benefits

409

422

Asset retirement obligations

2,709

2,754

Regulatory liabilities

8,735

8,211

Operating lease liabilities

916

936

Wildfire-related claims

1,309

1,687

Other deferred credits and other long-term liabilities

3,093

2,988

Total deferred credits and other liabilities

23,600

23,147

Total liabilities

61,857

60,519

Commitments and contingencies

Preferred stock (50,000,000 shares authorized; 1,250,000 shares of Series A and 750,000 shares of Series B issued and outstanding at respective dates)

1,978

1,978

Common stock, no par value (800,000,000 shares authorized; 383,248,837 and 382,208,498 shares issued and outstanding at respective dates)

6,270

6,200

Accumulated other comprehensive loss

(8

)

(11

)

Retained earnings

7,553

7,454

Total Edison International's shareholders' equity

15,793

15,621

Noncontrolling interests – preference stock of SCE

1,901

1,901

Total equity

17,694

17,522

Total liabilities and equity

$

79,551

$

78,041

Consolidated Statements of Cash Flows

Edison International

Six months ended

June 30,

(in millions)

2023

2022

Cash flows from operating activities:

Net income

$

774

$

428

Adjustments to reconcile to net cash provided by operating activities:

Depreciation and amortization

1,371

1,216

Allowance for equity during construction

(75

)

(61

)

Impairment

64

Deferred income taxes

63

(48

)

Wildfire Insurance Fund amortization expense

105

106

Other

30

40

Nuclear decommissioning trusts

(60

)

(65

)

Changes in operating assets and liabilities:

Receivables

(46

)

(81

)

Inventory

(44

)

(19

)

Accounts payable

(415

)

143

Tax receivables and payables

(7

)

58

Other current assets and liabilities

(100

)

(207

)

Derivative assets and liabilities, net

(151

)

(22

)

Regulatory assets and liabilities, net

(366

)

372

Wildfire-related insurance receivable

6

(139

)

Wildfire-related claims

(428

)

(609

)

Other noncurrent assets and liabilities

55

62

Net cash provided by operating activities

712

1,238

Cash flows from financing activities:

Long-term debt issued, net of discount and issuance costs of $43 and $34 for the respective periods

4,133

2,949

Long-term debt repaid

(1,466

)

(372

)

Short-term debt issued

675

600

Short-term debt repaid

(1,730

)

(993

)

Common stock issued

13

6

Commercial paper borrowing (repayments), net

198

(497

)

Dividends and distribution to noncontrolling interests

(58

)

(57

)

Common stock dividends paid

(555

)

(524

)

Preferred stock dividends paid

(52

)

(46

)

Other

61

53

Net cash provided by financing activities

1,219

1,119

Cash flows from investing activities:

Capital expenditures

(2,711

)

(2,708

)

Proceeds from sale of nuclear decommissioning trust investments

1,967

2,106

Purchases of nuclear decommissioning trust investments

(1,907

)

(2,041

)

Other

1

15

Net cash used in investing activities

(2,650

)

(2,628

)

Net decrease in cash, cash equivalents and restricted cash

(719

)

(271

)

Cash, cash equivalents and restricted cash at beginning of period

917

394

Cash, cash equivalents and restricted cash at end of period

$

198

$

123

View source version on businesswire.com: https://www.businesswire.com/news/home/20230727531714/en/

Contacts

Investor Relations: Sam Ramraj, (626) 302-2540
Media Contact: Jeff Monford, (626) 302-2255