Edison International (NYSE:EIX) Q4 2018 Earnings Conference Call Transcript

Feb 28, 2019 • 04:30 pm ET

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Edison International (NYSE:EIX) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, and welcome to the Edison International Fourth Quarter 2018 Financial Teleconference. My name is Karen and I will be your operator today.

(Operator Instructions) Today's call is being recorded.

I would now like to turn the call over to Sam Ramraj, Vice President of Investor Relations. Mr. Ramraj, you may begin your conference.

Executive
Sam Ramraj

Thank you, Karen, and welcome everyone. Our speakers today are our President and Chief Executive Officer, Pedro Pizarro; and Executive Vice President and Chief Financial Officer, Maria Rigatti. Also here are other members of the management team.

Materials supporting today's call are available at www.edisoninvestor.com. These include our Form 10-K, prepared remarks from Pedro and Maria and the teleconference presentation. Tomorrow, we will distribute our regular business update presentation.

During this call, we will make forward-looking statements about the outlook for Edison International and its subsidiaries. Actual results could differ materially from current expectations. Important factors that could cause different results are set forth in our SEC filings. Please read these carefully. The presentation includes certain outlook assumption, as well as, reconciliation of non-GAAP measures to the nearest GAAP measure.

During the question-and-answer session, please limit yourself to one question and one follow-up.

I will now turn the call over to Pedro.

Executive
Pedro J. Pizarro

Thanks, Sam, and good afternoon, everyone. As we review the results for 2018, I would like to reiterate that our thoughts are with all those across the state who are affected by the wildfire crisis. Our Company's number one priority continues to be the safety of our public, our customers and our employees, and we remain committed to supporting our communities affected by these events.

Turning to our financial results, Edison International's core earnings for 2018 were $4.15 per share compared to $4.50 a year ago. As I have mentioned before, comparison of year-over-year results is not particularly meaningful because SCE has not received a decision in its 2018 General Rate Case.

For the fourth quarter, EIX reported core earnings of $0.94 per share. This excludes non-core items; mainly a $1.8 billion after-tax charge related to existing and expected claims arising from the wildfire and mudslide events that occurred in SCE's service territory in 2017 and 2018. I will explain the accounting rationale for this later in my comments, and Maria will cover our overall financial performance in more detail in her remarks.

Today, the Board of Directors of Edison International declared its first quarter 2019 common stock dividend of $0.6125 per share. In making its decision to declare the dividend, the Board, again, evaluated a broad range of potential negative outcomes pertaining to the wildfires in 2017 and 2018, and the mudslides in Montecito in 2018 and determined that the California law requirements for the declaration were met.

The Board's evaluation took into consideration a broad range of potentially unrecovered wildfire-related costs and financing scenarios, including potential outcomes worse than what are reflected in the charge accrued as of the fourth quarter 2018. Mitigating increased wildfire risk and its related financial impacts continues