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Edison International (EIX)
Q4 2009 Earnings Call Transcript
March 1, 2010 11:00 am ET
Scott Cunningham – VP, IR
Ted Craver – Chairman, President and CEO
Jim Scilacci – EVP, CFO and Treasurer
Ron Litzinger – Chairman, EMG
Al Fohrer – Chairman and CEO, Southern California Edison
Dan Eggers – Credit Suisse
Ali Agha – SunTrust Robinson Humphrey
Jonathan Arnold – Deutsche Bank Securities
Hugh Wynne – Sanford Bernstein
Michael Lapides – Goldman Sachs
Greg Gordon – Morgan Stanley
Andrew Weisel [ph]
Steven Fleishman – Catapult Capital Management
Terran Miller – Knight Libertas
Lasan Johong – RBC Capital Markets
Paul Patterson – Glenrock Associates
Jay Dobson – Wunderlich Securities
Previous Statements by EIX
» Edison International Q3 2009 Earnings Call Transcript
» Edison International Q2 2009 Earnings Call Transcript
» Edison International Q1 2009 Earnings Call Transcript
I would now like to turn the call over to Mr. Scott Cunningham, Vice President of Investor Relations. Thank you Mr. Cunningham, you may begin your conference.
Thanks very much, and good morning everyone. Our principal speakers today will be Chairman and CEO, Ted Craver and Chief Financial Officer, Jim Scilacci. Also with us are other members of management team. The presentation that accompanies Jim's review together with the earnings press release and our 2009 10-K 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 the 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 10-K and 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. When we get to Q&A, please limit yourself to one question and one follow-up. If you have further questions, please return to the queue. We would like to give you as many of you an opportunity to ask a question as possible.
With that, I'll turn the call over to Ted Craver.
Thank you, Scott. Good morning, everyone. All-in-all, Edison International performed well in 2009. We started the year with some significant uncertainties including a major one with the IRS. We were successful in reaching a global tax settlement with the IRS covering over 100 disputed items, including Edison Capital's crossborder leases which were terminated. The global settlement generated significant cash benefits of 400 million over time. It did, however produce net non-core charges totaling $0.78 per share resulting in reported earnings of $2.59 per share for the year, $1.10 below 2008 results. Core earnings which exclude these tax related charges and other non-core items were $3.25 per share, exceeding the high-end of our 2009 guidance range.
This morning, we also introduced guidance for our 2010 core earnings of $3.15 to $3.45 per share for Edison International. Our 2010 outlook for Southern California Edison is for modest growth over our stronger than expected 2009 core earnings. We expect Edison Mission Group to be flat to slightly down from last year's core earnings. The reason for the $0.30 range is mostly due to the unpredictability of commodity prices and their effect on our competitive generation. Jim Scilacci will review our financial results and 2010 guidance and detail in his remarks. The rest of my comments focus on a few highlights of the past year and are major areas of focus in 2010.
In addition to the global tax settlement already mentioned, another area of significant progress in 2009 was on the regulatory front for Southern California Edison. Key rate case decisions from the California Public Utilities Commission and the Federal Energy Regulatory Commission as well as the approval of our 250-megawatt rooftop solar program provide meaningful certainty about our growth prospects. Moreover, regulatory decisions in the fourth quarter set the stage for additional growth. These included CPUC approval of both the remaining segments of Tehachapi renewable transmission project, segments 4/11 and the Devers, Colorado River transmission project. These and the other elements of our investment program will be implemented under a CPUC approved extension through 2012 of the cost of capital mechanism.
Lastly, the CPUC decision on our energy efficiency program yielded earnings of $0.05 per share in the fourth quarter and an additional $0.05 per share in 2010 subject to a CPUC final audit.
SCE's 2009 capital spending was a record $2.9 billion. Once the rate case was finalized last March, we ramped-up spending to improve the reliability of the distribution system. By year-end, SCE had completed the first three segments of the Tehachapi renewable transmission project and had installed the first 150,000 of over 5 million advanced smart connect meters. Our investment efforts will accelerate in 2010 as we move more transmission projects into construction, accelerate the pace of smart connect installations, move the rooftop solar program into full gear and undertake the many reliability enhancing investments in the distribution system. The 2010 capital program as well as SCE's five year, 21 plus billion investment program will require superior execution to manage this unprecedented growth.
Equally, our basic daily operations require superior execution. We have several goals for the year to accomplish this including focusing on improving our operations at the center offer to San Onofre Nuclear Station, strengthening the companies disaster recovery preparedness and overall industrial safety.