Edison International (EIX)

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Edison International (EIX)

Q1 2009 Earnings Call

May 8, 2009 11:00 am ET


Scott Cunningham – Vice President Investor Relations

Theodore Craver – Chairman, Chief Executive Officer

James Scilacci – Chief Financial Officer

Ron Litzinger – Chairman, President, CEO of Edison Mission Group

Alan Fohrer – Chairman, CEO Southern California Edison


Greg Gordon – Citi

Hugh Wynne – Sanford Bernstein

Jonathan Arnold – Merrill Lynch

Leslie Rich – Columbia Management

Lasan Johong – RBC Capital Markets

Ryan Mooney – Dusquense Capital

Clark Orsky – State Street Global

Kevin Fallon – Blenheim Capital Management

Ben Shuman – Pacific Crest Securities

Michael Goldenberg – [Luminess] Management

Raymond Lund – Goldman Sachs

Paul Patterson – Glenrock Associates

Jesse Lauden – Ben Lucas

Ivana Erglevick – [firm not specified]

Daniel Eggers – Credit Suisse

Michael Lapides – Goldman Sachs



I would like to welcome everyone to the Q1 2009 earnings conference call. (Operator Instructions) Mr. Cunningham, you may begin your conference.

Scott Cunningham

Good morning everyone. Our principal speakers today will be Ted Craver, our Chairman and CEO and Jim Scilacci, our Chief Financial Officer. Also with us to participate in the Q&A session are other members of the management team. The presentation of the company's financial review together with the earnings of the press release and our first quarter 10-Q filings are available on our website at www.edisoninvestor.com.

During this call we will make forward-looking statements about the financial outlook for Edison International and its subsidiaries and about other future events. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our 2008 10-K and our other SEC filings. We encourage you to read these carefully.

The presentation also includes additional information including certain outlook assumptions as well as reconciliation of non-GAAP measures to the nearest GAAP measure. With that, I'll turn the call over to Ted Craver.

Theodore Craver

Good morning everyone. This morning we reported first quarter earnings of $0.76 per share and core earnings of $0.97 per share. While our core earnings per share were 14% lower than last years first quarter, the results for this quarter are consistent with the full year core earnings outlook we provided in February.

We reached two significant milestones thus far this year that I want to comment on. First, the Southern California Edison General Rate Case and secondly, the global tax settlement we have now executed with the Internal Revenue Service.

On March 12, the California Public Utilities Commission approved the 2009 General Rate Case effective back to January 1 of this year. Even with the backdrop of the current difficult economic conditions, the Commission demonstrated support for our investment in California's electricity infrastructure.

The second important milestone reached was the completion of our global tax settlement with the Internal Revenue Service. This follows the Joint Committee on Taxation's review of the settlement and our determination of all the cross border leases. This is an important settlement, resolving over 100 issues going back to 1986 including a final resolution of the Edison Capital cross border leverage lease disputes with the IRS.

Jim's going to go into more detail but getting this issue behind us and on a cash positive basis is an important milestone. We also know it resolves the risk that has been an important concern for investors.

We are focused on three principal business priorities; financial discipline, superior execution and developing innovative approaches to our toughest challenges. Let me elaborate on these three focus areas starting with financial discipline.

We continue to maintain strong liquidity with over $3.5 billion of cash on hand and over $6.3 billion in total liquidity across the company. SCD is able to access the debt capital markets at rates well within our authorized levels while adding $500 million in new bank credit lines.

EMG is operating in a capital conservation mode we mentioned in earlier earnings calls which is providing important flexibility during the current downturn in the power markets. Our financial position remains strong. We see this as a competitive advantage and we want to protect and extend it through continued financial discipline.

Secondly, we continue to place great importance on superior execution for both our existing operations and our growth programs. We provide an essential public service through both our regulated utility and our competitive generation company and only through superior execution will we be reliable, successful and deserving of the public trust.

Looking forward, our ability to realize our growth potential rests principally on how we execute two initiatives. First is our five year approximately $20 billion capital investment plan at Southern California Edison. This is the largest such program in our history and among the largest in the industry.

Second is our ability to develop our pipeline of potential wind and solar energy projects at Edison Mission Group while meeting the environmental responsibilities of EMG's coal fleet. We continue to work on our 5,000 megawatt pipeline of potential wind projects and have early development activities underway at 30 potential solar sites in six different states.

Accessing the non recourse bank market for renewable project financing remains a key challenge in moving our renewable development program forward and we are hopeful that the bank market will be accessible to us this year so we can continue building out our development pipeline.

Let me turn to our third business priority, innovative approaches. An area that has been an important focus for our investors and that needs innovative approaches is how our coal fleet meets its environmental responsibilities.

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