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Edison International (EIX)
Q1 2011 Earnings Call
May 02, 2011 11:00 am ET
Ronald Litzinger - President of Southern California Edison Company
Theodore Craver - Chairman, Chief Executive Officer and President
Linda Sullivan -
Pedro Pizarro - President of Edison Mission Group Inc and President of Edison Mission Energy
W. Scilacci - Chief Financial Officer, Executive Vice President and Treasurer
Scott Cunningham - Interim Head of Corporate Communications and Vice President of Investor Relations
Michael Lapides - Goldman Sachs Group Inc.
Terran Miller - UBS
Paul Patterson - Glenrock Associates
Jonathan Arnold - Deutsche Bank AG
Ashar Khan - SAC Capital
Brian Taddeo - Broadpoint Capital
Justin McCann - S&P Equity Research
James Dobson - Wunderlich Securities Inc.
Leslie Rich - Columbia Management
Ali Agha - SunTrust Robinson Humphrey, Inc.
Unknown Analyst -
Raymond Leung - Goldman Sachs Group Inc.
Ivana Ergovic - Jefferies & Co
Brian Chin - Citigroup Inc
Steven Fleishman - BofA Merrill Lynch
Hugh Wynne - Sanford C. Bernstein & Co., Inc.
Previous Statements by EIX
» Edison International's CEO Discusses Q4 2010 Results - Earnings Call Transcript
» Edison International Q1 2010 Earnings Call Transcript
» Edison International Q4 2009 Earnings Call Transcript
Thank you, 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 10-Q filings, are available on our website at www.edisoninvestor.com. This afternoon, we'll be posting on our website our quarterly business update presentation and we use these slides in the regular order for our ongoing investor discussions.
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 SEC filings. We encourage you to read these carefully.
The presentation includes certain outlook assumptions, as well as reconciliation of non-GAAP measures to the nearest GAAP measure.
[Operator Instructions] With that, I'll turn the call over to Ted Craver.
Thank you, Scott, and good morning, everyone. Our first quarter results are fully consistent with our 2011 outlook. Core earnings were $0.62 per share compared to $0.82 per share last year due to the expected loss of Edison Mission Group.
Southern California Edison delivered a 10% increase in earnings to $0.68 per share, reflecting continued growth in rate base as SCE implements its multibillion dollar capital program. We are also reaffirming our core earnings guidance for 2011 of $2.60 to $2.90 per share, with a midpoint of $2.75 per share. Jim will provide some additional detail on our financial results in his remarks.
I would like to review a few key developments that have occurred thus far this year, starting with SCE's 2012 to 2014 General Rate Case. In early March, the CPUC approved the timeline for the rate case, which still calls for a commission decision by year-end. As with our last rate case, should the case carry over into the next year, we have received CPUC approval to make any rate case decision retroactive to January 1, 2012. We will shortly be moving into a phase in the case involving intervenor testimony and responses along with public hearings. Last week, SCE made an important procedural filing to reduce its revenue request, primarily to reflect last year's tax law change on bonus depreciation.
Tragic events in Japan have increased the public's focus on nuclear power generation, including at our San Onofre Nuclear Generating Station. SONGS continues to operate normally and safely. We are assessing events in Japan and beginning a thorough process of evaluating the causes of the nuclear part of the disaster.
We, and the entire U.S. nuclear industry are working to glean every insight we can from the Japanese experience and then make any necessary improvements to equipment, procedures and emergency preparedness planning. The SONGS' design basis, including seismic and tsunami events, is conservative and of course meets all NRC requirements. San Onofre's reactor cores are housed in 4 to 8-foot thick reinforced concrete and steel-lined containment structures. Similarly, the spent fuel storage pools are housed in seismically-designed concrete structures.
In an emergency, regardless of the cause, it's critical that the plant can shut down safely, contain any radiological release and keep the nuclear fuel cool. To accomplish this, the plant has multiple redundant backup systems that can operate even in the event of a loss of electric power for an extended period of time. Additionally, multiple emergency measures have been introduced over the years especially after 9/11. Seismic analyses, updated in 1995 and again in 2009, have reconfirmed the design basis of the plant. This research also determined that the maximum credible tsunami at San Onofre is 23 feet. Our tsunami wall is 30-feet high.
However, not wanting to leave any stone unturned, on April 15, SCE filed a previously planned request with the CPUC to authorize funding for additional seismic research using the latest 2-dimensional and 3-dimensional technologies. This work will also provide support to any future capital required at SONGS for its continued safe operation and any request we may seek in the future for license renewal beyond 2022. We continue to recover through rates all of our investment in SONGS such as the previously completed steam generator replacements, based on the current expiration of the license in 2022.