Edison International Accounting Analysis

EDISON INTERNATIONAL

By the Finance Four

History

Edison history traces back to the 1880s, when several California companies began generating and distributing electricity. By 1886, electricity was being brought throughout Southern and Central California. In 1894, Edison organized West Side Lighting to provide electricity in Los Angeles, also demand grew and these companies merged with Los Angeles Edison Electric Company, which owned the rights to the Edison name and patents in the region. In the same year, Edison began installing infrastructure throughout California, for example: they installed the first DC-power underground conduits, hydroelectric plants, steam generation plants and also power lines.

Edison’s gross revenue continued to grow throughout 1920s&1930s. By the end of 1930, revenues had reached $41 million, and the balance Edison had achieved between hydroelectric and steam generation helped protect the company against fluctuating earnings due to weather problems or fuel-price hikes. In addition, Industrial use of steam plants began to decline, but residential electrical use drastically increased. More households during this period were beginning to use electric appliances such as washers, refrigerators, space heaters, and water heaters.

By the early 1950s Edison was the fifth-largest investor-owned power company in the United States. The company's customers numbered more than one million .Of the power sales in its territory, 25 percent was to industrial concerns, 34 percent to residential, 10 percent to agricultural, and 21 percent to commercial.

From the end of World War II through 1953, Edison spent $500 million on construction. Most of the postwar expansion focused on steam generating which, while more expensive than hydroelectricity, was not hampered by water shortages. Half of the company power came from its steam plants in the Los Angeles area; 35 percent came from its own hydroelectric properties fed by the...