Edison International (EIX)

EIX 
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Edison International (EIX)

Q3 2010 Earnings Call Transcript

October 29, 2010 11:00 am ET

Executives

Scott Cunningham – VP, IR and Interim Head, Corporate Communications

Ted Craver – Chairman, President and CEO

Jim Scilacci – EVP, CFO and Treasurer

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

Linda Sullivan – SVP and CFO, Southern California Edison

Analysts

Ashar Khan – Visium Asset Management

Michael Lapides – Goldman Sachs

Hugh Wynne – Sanford Bernstein

Leslie Rich – JPMC

Lasan Johong – RBC Capital Markets

Paul Patterson – Glenmark Associates

David Frank – Catapult

Ali Agha – SunTrust

Michael Goldenberg – Luminus Management

Jason Adler – MTR Securities

Brian Schinderle – Balyasny Asset Management

Presentation

Operator

Good morning. My name is Cheryl and I’ll be your conference operator today. At this time, I would like to welcome everyone to the Edison International Third Quarter 2010 Financial Teleconference. All lines have been placed on mute to prevent background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator instructions) Today’s call is being recorded.

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.

Scott Cunningham

Thank you, Cheryl, 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 the management team. The presentation that accompanies Jim’s financial review together with the earnings press release and our third quarter 10-Q filings are available on our Web site 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 10-Q 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 as many of you as possible an opportunity to ask a question.

With that, I’ll turn the call over to Ted Craver.

Ted Craver

Thank you, Scott and good morning. Today Edison International reported third quarter earnings of $1.56 per share, up 27%, while core earnings 34% to $1.46 per share. Both of our businesses delivered solid earnings growth in the quarter and have performed well throughout 2010. We also increased our 2010 core earnings guidance this morning to a range of $3.45 to $3.60 per share.

Our focus on our three primary operating principles of superior execution, financial discipline and innovative solutions contributed significantly to this strong performance, and to making important progress on a number of strategic business fronts.

I would like to highlight a few key milestones reached over the last quarter that will create value for our customers, the economies of our communities and our shareholders. A major event for our Company is the upcoming general rate case at Southern California Edison. We are on schedule to file SCE’s 2012 general rate case or GRC as we call it by the end of November.

Consistent with normal practices, we are updating our application from our notice of intent filing to take account of current market conditions and recent developments such as the additional euro bonus depreciation recently signed into law. Jim Scilacci will cover the bonus depreciation subject more in his remarks.

We continue to target a CPSC decision on our GRC late in 2011 to be implemented effective January 1, 2012. Next, we reached a significant permitting milestone on October 4, when the U.S Forest Service issued their final record of decision to allow Southern California Edison’s to hedge the renewable transmission project that reversed miles of National Forest System land.

This is the last key policy decision needed from the federal government to allow the final permits to be issued in the remaining stages of this project to proceed into construction.

Building the remaining sections of this project will require a $1.7 billion investment and will generate over 9000 jobs directly. Additionally, independent developers of renewable energy projects will be investing billions more and creating more jobs to connect thousands of megawatts of renewables to this transmission line.

Our other major SCE construction programs remain on schedule. We have installed over 1.6 million Edison SmartConnect advanced meters and the two replacement steam generators for Unit 3 are now onsite at our San Onofre nuclear plant and ready for installation.

The Unit 2 steam generator replacements were completed earlier this year. This work will add 1,000 temporary jobs to the region during this three month to four month outage.

Two weeks ago, SCE began construction of the state’s largest investor-owned utility photovoltaic power plant in Central California as part of its 250 megawatt solar rooftop program. This $6.7 megawatt ground-mounted project will create about 125 jobs in our service territory. These construction projects have the full support of California regulators and demonstrate both the environmental and economic benefits of constructive regulation.

Let me turn to Edison Mission Group now. In addition to posting good earnings this quarter, EMG made progress on some other important milestones. EMG settled its Mitsubishi Heavy Industries turbine litigation on terms that allow EMG to continue to evolve this wind generation business.

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