Edison International Reports Higher 2006 Earnings

Edison International Reports Higher 2006 Earnings

Edison International (NYSE:EIX): — Edison International’s (NYSE:EIX) consolidated net income increased over 3% to $1.18 billion or $3.58 per share

– EIX’s core1 earnings of $3.07 per share were down 1.9% compared to 2005 earnings of $3.13 per share

— SCE recorded core earnings of $1.89 per share, up 3.8% on higher authorized net revenue and Mountainview operations

— EMG’s core earnings were down 8.5% to $1.30 per share from lower generation, wholesale power prices, and trading income

– Annual dividend increased 7.4% to $1.16 per share in December 2006

– Assets increased to over $36 billion

– 2007 earnings guidance of $3.05 – $3.45 per share affirmed

CHAIRMAN’S COMMENTARY

“2006 was a good year for Edison International,” said John E. Bryson, chairman and CEO, Edison International. “Our company continued to strengthen its foundation for large scale growth over the next five and ten years. Of particular significance were important advances in system reliability, renewable energy, advanced metering and energy efficiency.”

YEAR 2006 EARNINGS SUMMARY

Edison International recorded earnings of $3.58 per share for the year ending December 31, 2006, compared to $3.47 per share for the same period last year. The results included non-core adjustments detailed in Chart 1. Edison International’s core earnings were $3.07 per share for 2006, compared to $3.13 per share for the same period last year. This decrease primarily reflects lower wholesale energy margins at Midwest Generation, lower energy trading income at MEHC and higher income tax expense partially offset by higher authorized net revenue from SCE’s general rate case, Mountainview operations, lower net interest and favorable results from SFAS #133 adjustments.

YEAR 2006 EARNINGS DETAIL

Earnings (Loss) from Continuing Operations

SCE earnings from continuing operations were $776 million in 2006, compared with $725 million in 2005. SCE’s 2006 results included non-core items of $158 million, primarily from the resolution of several regulatory and tax issues, a generator settlement and generator refund incentives. SCE’s 2005 earnings included non-core items of $130 million. (See Chart 1 for details.) Excluding these non-core items, SCE’s core earnings in 2006 were $618 million, up $23 million over last year. This increase is due to higher net revenue authorized in the 2006 general rate case decision and earnings from Mountainview, partially offset by higher income tax expense.

EMG’s earnings from continuing operations in 2006 were $334 million compared to $414 million in 2005. Mission Energy Holding Company (MEHC) had earnings of $246 million in 2006 compared to $332 million in 2005. MEHC’s earnings from continuing operations included non-core charges of $90 million in 2006 and $49 million in 2005 reflecting the early extinguishment of debt and the impairment of an investment. (See Chart 1 for details.) Excluding these items, MEHC’s core earnings were $336 million, a decrease of $45 million from 2005. This decrease was primarily due to lower wholesale energy margins at Midwest Generation, lower energy trading income and an increase in income tax expense, partially offset by a favorable SFAS #133 net impact and lower net interest expense. SFAS #133 unrealized gains in 2006 were $39 million compared to unrealized losses of $35 million in 2005. Edison Capital’s 2006 earnings were $88 million, an increase of $6 million over last year primarily due to lower net corporate interest expense and overhead, and a gain on the sale of an affordable housing project, partially offset by lower gains from global infrastructure fund investments.