NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Summary of Significant Accounting Policies
Organization and Basis of Presentation
Edison International is the parent holding company of Southern California Edison Company ("SCE"). SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately
50,000
square mile area of southern California. Edison International is also the parent company of Edison Energy Group, a company that holds interests in subsidiaries that are engaged in competitive businesses focused on providing energy solutions to commercial and industrial customers, including distributed resources, engaging in competitive transmission opportunities, and exploring distributed water treatment and recycling. Such competitive business activities are currently not material to report as a separate business segment. These combined notes to the consolidated financial statements apply to both Edison International and SCE unless otherwise described. Edison International's consolidated financial statements include the accounts of Edison International, SCE and other wholly owned and controlled subsidiaries. References to Edison International refer to the consolidated group of Edison International and its subsidiaries. References to Edison International Parent and Other refer to Edison International Parent and its nonutility subsidiaries. SCE's consolidated financial statements include the accounts of SCE and its wholly owned and controlled subsidiaries. All intercompany transactions have been eliminated from the consolidated financial statements.
Edison International's and SCE's significant accounting policies were described in Note 1 of "Notes to Consolidated Financial Statements" included in the 2015 Form 10-K. This quarterly report should be read in conjunction with the financial statements and notes included in the 2015 Form 10-K.
In the opinion of management, all adjustments, consisting of recurring accruals, have been made that are necessary to fairly state the consolidated financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America for the periods covered by this quarterly report on Form 10-Q. The results of operations for the three- and six-month periods ended
June 30, 2016
are not necessarily indicative of the operating results for the full year.
The
December 31, 2015
financial statement data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Certain prior year amounts have been reclassified for consistency with the current period presentation.
Cash Equivalents
Cash equivalents included investments in money market funds. Generally, the carrying value of cash equivalents equals the fair value, as these investments have original maturities of three months or less. The cash equivalents were as follows:
|
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|
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|
|
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|
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|
|
|
|
Edison International
|
|
SCE
|
(in millions)
|
|
June 30,
2016
|
|
December 31, 2015
|
|
June 30,
2016
|
|
December 31, 2015
|
Money market funds
|
|
$
|
36
|
|
|
$
|
37
|
|
|
$
|
4
|
|
|
$
|
8
|
|
Cash is temporarily invested until required for check clearing. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period as follows:
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|
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|
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|
Edison International
|
|
SCE
|
(in millions)
|
|
June 30,
2016
|
|
December 31, 2015
|
|
June 30,
2016
|
|
December 31, 2015
|
Book balances reclassified to accounts payable
|
|
$
|
99
|
|
|
$
|
162
|
|
|
$
|
99
|
|
|
$
|
158
|
|
Inventory
Inventory is primarily composed of materials, supplies and spare parts, and stated at the lower of cost or market, cost being determined by the average cost method.
Revenue Recognition
Operating revenue is recognized when electricity is delivered and includes amounts for services rendered but unbilled at the
end of each reporting period. During the first six months of 2015, SCE recognized revenue from CPUC activities largely based on 2014 authorized base revenue requirements included in customer rates. In the fourth quarter of 2015, SCE implemented its 2015 GRC decision which allowed SCE to recover its revenue requirement retroactive to January 1, 2015.
Earnings Per Share
Edison International computes earnings per common share ("EPS") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards payable in common shares, including performance shares and restricted stock units, which earn dividend equivalents on an equal basis with common shares once the awards are vested. EPS attributable to Edison International common shareholders was computed as follows:
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|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions, except per-share amounts)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Basic earnings per share – continuing operations:
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to common shareholders
|
|
$
|
278
|
|
|
$
|
379
|
|
|
$
|
547
|
|
|
$
|
678
|
|
Participating securities dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income from continuing operations available to common shareholders
|
|
$
|
278
|
|
|
$
|
379
|
|
|
$
|
547
|
|
|
$
|
678
|
|
Weighted average common shares outstanding
|
|
326
|
|
|
326
|
|
|
326
|
|
|
326
|
|
Basic earnings per share – continuing operations
|
|
$
|
0.86
|
|
|
$
|
1.16
|
|
|
$
|
1.68
|
|
|
$
|
2.08
|
|
Diluted earnings per share – continuing operations:
|
|
|
|
|
|
|
|
|
Income from continuing operations available to common shareholders
|
|
$
|
278
|
|
|
$
|
379
|
|
|
$
|
547
|
|
|
$
|
678
|
|
Income impact of assumed conversions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income from continuing operations available to common shareholders and assumed conversions
|
|
$
|
278
|
|
|
$
|
379
|
|
|
$
|
547
|
|
|
$
|
678
|
|
Weighted average common shares outstanding
|
|
326
|
|
|
326
|
|
|
326
|
|
|
326
|
|
Incremental shares from assumed conversions
|
|
3
|
|
|
2
|
|
|
3
|
|
|
3
|
|
Adjusted weighted average shares – diluted
|
|
329
|
|
|
328
|
|
|
329
|
|
|
329
|
|
Diluted earnings per share – continuing operations
|
|
$
|
0.85
|
|
|
$
|
1.15
|
|
|
$
|
1.66
|
|
|
$
|
2.06
|
|
In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase
42,890
and
1,981,596
shares of common stock for the three months ended June 30, 2016 and
2015
, respectively, and
47,861
and
1,981,596
shares for the six months ended June 30, 2016 and 2015, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the exercise price of the awards was greater than the average market price of the common shares during the respective periods and, therefore, the effect would have been antidilutive.
New Accounting Guidance
Accounting Guidance Adopted
On April 7, 2015, the FASB issued an accounting standards update that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, consistent with debt discounts. Previously, accounting guidance required these costs to be presented as a deferred charge asset. Edison International and SCE adopted this guidance in the first quarter of 2016. At June 30, 2016, the amount of debt issuance costs that are reflected as a deduction of "Long-term debt" was
$75 million
for SCE and
$81 million
for Edison International. At December 31, 2015 the amount of debt issuance costs that have been reclassified from "Other long-term assets" to a deduction of "Long-term debt" was
$77 million
for SCE and
$81 million
for Edison International.
On April 15, 2015, the FASB issued an accounting standards update on fees paid by a customer for software licenses. This new standard provides guidance about whether a cloud computing arrangement includes a software license which may be capitalized in certain circumstances. If a cloud computing arrangement does not include a software license, then the arrangement should be accounted for as a service contract. Edison International and SCE adopted this guidance prospectively, effective January 1, 2016. The adoption of this standard did not have a material impact on Edison International's and SCE's consolidated financial statements.
Accounting Guidance Not Yet Adopted
On May 28, 2014, the FASB issued an accounting standards update on revenue recognition including enhanced disclosures and further amended the standard in 2016. Under the new standard, revenue is recognized when (or as) a good or service is transferred to the customer and the customer obtains control of the good or service. On July 9, 2015, the FASB approved a one-year deferral, updating the effective date to January 1, 2018.
Edison International and SCE are currently evaluating this guidance and cannot determine the impact of this standard at this time. Edison International and SCE anticipates adopting the standard using the modified retrospective application which means that Edison International and SCE would recognize the cumulative effect of initially applying the revenue standard as an adjustment to the opening balance of retained earnings in 2018.
On January 5, 2016, the FASB issued an accounting standards update that amends the guidance on the classification and measurement of financial instruments. The amendments require equity investments (excluding those accounted for under the equity method or those that result in consolidation) to be measured at fair value, with changes in fair value recognized in net income. It also amends certain disclosure requirements associated with the fair value of financial instruments. In addition, the new guidance requires financial assets and financial liabilities to be presented separately in the notes to the financial statements, grouped by measurement category and form of financial asset. Edison International and SCE will adopt this guidance effective January 1, 2018. The adoption of this standard is not expected to have a material impact on Edison International's and SCE's consolidated financial statements.
On February 25, 2016, the FASB issued an accounting standards update related to lease accounting including enhanced disclosures. Under the new standard, a lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. Lessees will classify leases with a term of more than one year as either operating or finance leases and will need to recognize a right-of-use asset and a lease liability. The liability will be equal to the present value of lease payments. The asset will be based on the liability, subject to adjustment, such as for initial direct costs. Operating leases will result in straight-line expense while finance leases will result in a front-loaded expense pattern. SCE, as a regulated entity, is permitted to continue to have straight-line expense for finance leases, assuming the rate recovery is based upon current payments. This guidance is effective January 1, 2019 but early adoption is permitted. Edison International and SCE are currently evaluating this new guidance and cannot determine the impact of this standard at this time.
On March 30, 2016, the FASB issued an accounting standards update to simplify the accounting for share-based payments. Under this new guidance, the tax effects related to share based payments will be recorded through the income statement. Currently, tax benefits in excess of compensation cost ("windfalls") are recorded in equity, and tax deficiencies ("shortfalls") are recorded in equity to the extent of previous windfalls, and then to the income statement. This guidance is effective January 1, 2017 but early adoption is permitted. The new standard also revised reporting on the statement of cash flows. Edison International and SCE are currently evaluating this new guidance.
On June 16, 2016, the FASB issued an accounting standards update to amend the guidance on the impairment of financial instruments. The new guidance adds an impairment model, known as the current expected credit loss model, which was based on expected losses rather than incurred losses. This guidance applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and loan commitments. However, available-for-sale debt securities are excluded from the model's scope. This guidance is effective on January 1, 2020, but early adoption no earlier than January 1, 2019 is permitted. Edison International and SCE are currently evaluating this new guidance.
Note 2. Consolidated Statements of Changes in Equity
The following table provides Edison International's changes in equity for the
six months ended June 30, 2016
:
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|
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|
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|
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Equity Attributable to Common Shareholders
|
|
Noncontrolling Interests
|
|
|
(in millions, except per-share amounts)
|
Common
Stock
|
|
Accumulated
Other
Comprehensive Loss
|
|
Retained
Earnings
|
|
Subtotal
|
|
Preferred
and
Preference
Stock
|
|
Total
Equity
|
Balance at December 31, 2015
|
$
|
2,484
|
|
|
$
|
(56
|
)
|
|
$
|
8,940
|
|
|
$
|
11,368
|
|
|
$
|
2,020
|
|
|
$
|
13,388
|
|
Net income
|
—
|
|
|
—
|
|
|
546
|
|
|
546
|
|
|
61
|
|
|
607
|
|
Other comprehensive income
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
Common stock dividends declared ($0.96 per share)
|
—
|
|
|
—
|
|
|
(313
|
)
|
|
(313
|
)
|
|
—
|
|
|
(313
|
)
|
Dividends to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
|
(61
|
)
|
Stock-based compensation
|
3
|
|
|
—
|
|
|
(60
|
)
|
|
(57
|
)
|
|
—
|
|
|
(57
|
)
|
Non-cash stock-based compensation
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
Issuance of preference stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
294
|
|
|
294
|
|
Redemption of preference stock
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(123
|
)
|
|
(125
|
)
|
Balance at June 30, 2016
|
$
|
2,499
|
|
|
$
|
(53
|
)
|
|
$
|
9,111
|
|
|
$
|
11,557
|
|
|
$
|
2,191
|
|
|
$
|
13,748
|
|
The following table provides Edison International's changes in equity for the
six months ended June 30, 2015
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Attributable to Common Shareholders
|
|
Noncontrolling Interests
|
|
|
(in millions, except per-share amounts)
|
Common
Stock
|
|
Accumulated
Other
Comprehensive Loss
|
|
Retained
Earnings
|
|
Subtotal
|
|
Preferred
and
Preference
Stock
|
|
Total
Equity
|
Balance at December 31, 2014
|
$
|
2,445
|
|
|
$
|
(58
|
)
|
|
$
|
8,573
|
|
|
$
|
10,960
|
|
|
$
|
2,022
|
|
|
$
|
12,982
|
|
Net income
|
—
|
|
|
—
|
|
|
678
|
|
|
678
|
|
|
56
|
|
|
734
|
|
Other comprehensive loss
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Common stock dividends declared ($0.835 per share)
|
—
|
|
|
—
|
|
|
(272
|
)
|
|
(272
|
)
|
|
—
|
|
|
(272
|
)
|
Dividends to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
(56
|
)
|
Stock-based compensation
|
15
|
|
|
—
|
|
|
(70
|
)
|
|
(55
|
)
|
|
—
|
|
|
(55
|
)
|
Non-cash stock-based compensation
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
—
|
|
|
12
|
|
Balance at June 30, 2015
|
$
|
2,472
|
|
|
$
|
(56
|
)
|
|
$
|
8,909
|
|
|
$
|
11,325
|
|
|
$
|
2,022
|
|
|
$
|
13,347
|
|
The following table provides SCE's changes in equity for the
six months ended June 30, 2016
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Attributable to Edison International
|
|
|
|
|
(in millions)
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive Loss
|
|
Retained
Earnings
|
|
Preferred
and
Preference
Stock
|
|
Total
Equity
|
Balance at December 31, 2015
|
$
|
2,168
|
|
|
$
|
652
|
|
|
$
|
(22
|
)
|
|
$
|
8,804
|
|
|
$
|
2,070
|
|
|
$
|
13,672
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
662
|
|
|
—
|
|
|
662
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Dividends declared on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(340
|
)
|
|
—
|
|
|
(340
|
)
|
Dividends declared on preferred and preference stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
|
—
|
|
|
(61
|
)
|
Stock-based compensation
|
—
|
|
|
2
|
|
|
—
|
|
|
(40
|
)
|
|
—
|
|
|
(38
|
)
|
Non-cash stock-based compensation
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
Issuance of preference stock
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
300
|
|
|
294
|
|
Redemption of preference stock
|
—
|
|
|
2
|
|
|
—
|
|
|
(2
|
)
|
|
(125
|
)
|
|
(125
|
)
|
Balance at June 30, 2016
|
$
|
2,168
|
|
|
$
|
656
|
|
|
$
|
(20
|
)
|
|
$
|
9,023
|
|
|
$
|
2,245
|
|
|
$
|
14,072
|
|
The following table provides SCE's changes in equity for the
six months ended June 30, 2015
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Attributable to Edison International
|
|
|
|
|
(in millions)
|
Common
Stock
|
|
Additional
Paid-in
Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Retained
Earnings
|
|
Preferred
and
Preference
Stock
|
|
Total
Equity
|
Balance at December 31, 2014
|
$
|
2,168
|
|
|
$
|
618
|
|
|
$
|
(28
|
)
|
|
$
|
8,454
|
|
|
$
|
2,070
|
|
|
$
|
13,282
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
745
|
|
|
—
|
|
|
745
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Dividends declared on common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(294
|
)
|
|
—
|
|
|
(294
|
)
|
Dividends declared on preferred and preference stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(56
|
)
|
|
—
|
|
|
(56
|
)
|
Stock-based compensation
|
—
|
|
|
6
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
(17
|
)
|
Non-cash stock-based compensation
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
Balance at June 30, 2015
|
$
|
2,168
|
|
|
$
|
630
|
|
|
$
|
(26
|
)
|
|
$
|
8,826
|
|
|
$
|
2,070
|
|
|
$
|
13,668
|
|
Note 3. Variable Interest Entities
A VIE is defined as a legal entity that meets one of two conditions: (1) the equity owners do not have sufficient equity at risk, or (2) the holders of the equity investment at risk, as a group, lack any of the following three characteristics: decision-making rights, the obligation to absorb losses, or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. A subsidiary of Edison International is the primary beneficiary of an entity that owns rooftop solar projects. Commercial and operating activities are generally the factors that most significantly impact the economic performance of such VIEs. Commercial and operating activities include construction, operation and maintenance, fuel procurement, dispatch and compliance with regulatory and contractual requirements.
Variable Interest in VIEs that are not Consolidated
Power Purchase Contracts
SCE has power purchase agreements ("PPAs") that are classified as variable interests in VIEs, including tolling agreements through which SCE provides the natural gas to fuel the plants and contracts with qualifying facilities ("QFs") that contain variable pricing provisions based on the price of natural gas. SCE has concluded that it is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of these entities. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants.
As of the balance sheet date, the carrying amount of assets and liabilities in SCE's consolidated balance sheet that relate to its involvement with VIEs result from amounts due under the PPAs or the fair value of those derivative contracts. Under these contracts, SCE recovers the costs incurred through demonstration of compliance with its CPUC-approved long-term power procurement plans. SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 11 of the 2015 Form 10-K. As a result, there is no significant potential exposure to loss to SCE from its variable interest in these VIEs. The aggregate contracted capacity dedicated to SCE from these VIE projects was
4,349
MW and
4,125
MW at
June 30, 2016
and
2015
, respectively, and the amounts that SCE paid to these projects were
$92 million
and
$78 million
for the three months ended June 30, 2016 and
2015
, respectively, and $
219 million
and $
181 million
for
six months ended June 30, 2016
and
2015
, respectively. These amounts are recoverable in customer rates, subject to reasonableness review.
Unconsolidated Trusts of SCE
SCE Trust I, Trust II, Trust III, Trust IV, and Trust V were formed in 2012, 2013, 2014, 2015 and 2016, respectively, for the exclusive purpose of issuing the
5.625%
,
5.10%
,
5.75%
,
5.375%
and
5.45%
trust preference securities, respectively ("trust securities"). The trusts are VIEs. SCE has concluded that it is not the primary beneficiary of these VIEs as it does not have the obligation to absorb the expected losses or the right to receive the expected residual returns of the trusts. SCE Trust I, Trust II, Trust III, Trust IV and Trust V issued to the public trust securities in the face amounts of
$475 million
,
$400 million
,
$275 million
,
$325 million
, and
$300 million
respectively, (cumulative, liquidation amounts of
$25
per share) and
$10,000
of common stock each to SCE. The trusts invested the proceeds of these trust securities in Series F, Series G, Series H, Series J, and Series K Preference Stock issued by SCE in the principal amounts of
$475 million
,
$400 million
,
$275 million
,
$325 million
and
$300 million
(cumulative,
$2,500
per share liquidation values), respectively, which have substantially the same payment terms as the respective trust securities.
The Series F, Series G, Series H, Series J and Series K Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series F, Series G, Series H, Series J or Series K Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust (see Note 12 for further information). The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities when and if the SCE board of directors declares and makes dividend payments on the related Preference Stock. The applicable trust will use any dividends it receives on the related Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to any of these trusts, SCE would be prohibited from paying dividends on its common stock. SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock.
The Trust I, Trust II, Trust III and Trust IV balance sheets as of
June 30, 2016
and
December 31, 2015
, consisted of investments of
$475 million
,
$400 million
,
$275 million
and
$325 million
in the Series F, Series G, Series H and Series J Preference Stock, respectively,
$475 million
,
$400 million
,
$275 million
and
$325 million
of trust securities, respectively, and
$10,000
each of common stock. The Trust V balance sheet as of June 30, 2016 consisted of investments of
$300 million
in the Series K Preference Stock,
$300 million
of trust securities, and
$10,000
of common stock.
The following table provides a summary of the trusts' income statements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
(in millions)
|
|
Trust I
|
|
Trust II
|
|
Trust III
|
|
Trust IV
|
|
Trust V
|
2016
|
|
|
|
|
|
|
|
|
|
|
Dividend income
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
5
|
|
|
$
|
4
|
|
Dividend distributions
|
|
6
|
|
|
5
|
|
|
4
|
|
|
5
|
|
|
4
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Dividend income
|
|
$
|
6
|
|
|
$
|
5
|
|
|
$
|
4
|
|
|
*
|
|
|
*
|
|
Dividend distributions
|
|
6
|
|
|
5
|
|
|
4
|
|
|
*
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30,
|
(in millions)
|
|
Trust I
|
|
Trust II
|
|
Trust III
|
|
Trust IV
|
|
Trust V
|
2016
|
|
|
|
|
|
|
|
|
|
|
Dividend income
|
|
$
|
13
|
|
|
$
|
10
|
|
|
$
|
8
|
|
|
$
|
9
|
|
|
$
|
5
|
|
Dividend distributions
|
|
13
|
|
|
10
|
|
|
8
|
|
|
9
|
|
|
5
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend income
|
|
$
|
13
|
|
|
$
|
10
|
|
|
$
|
8
|
|
|
*
|
|
|
*
|
|
Dividend distributions
|
|
13
|
|
|
10
|
|
|
8
|
|
|
*
|
|
|
*
|
|
* Not applicable.
Note 4. Fair Value Measurements
Recurring Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an "exit price"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of
June 30, 2016
and
December 31, 2015
, nonperformance risk was not material for Edison International and SCE.
Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value.
Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds and money market funds.
Level 2 – Edison International and SCE's Level 2 assets and liabilities include fixed income securities primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument.
The fair value of SCE's over-the-counter derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing models include forward published or posted clearing prices from exchanges (New York Mercantile Exchange and Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity.
Level 3 – The fair value of SCE's Level 3 assets and liabilities is determined using the income approach through various models and techniques that require significant unobservable inputs. This level includes tolling arrangements and derivative contracts that trade infrequently such as congestion revenue rights ("CRRs") and long-term power agreements. Edison International Parent and Other does not have any Level 3 assets and liabilities.
Assumptions are made in order to value derivative contracts in which observable inputs are not available. Changes in fair value are based on changes to forward market prices, including extrapolation of short-term observable inputs into forecasted
prices for illiquid forward periods. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of fair value of derivative instruments.
SCE
The following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016
|
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
and
Collateral
1
|
|
Total
|
Assets at fair value
|
|
|
|
|
|
|
|
|
|
Derivative contracts
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
125
|
|
|
$
|
—
|
|
|
$
|
134
|
|
Other
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
Stocks
2
|
1,488
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,488
|
|
Fixed Income
3
|
830
|
|
|
1,902
|
|
|
—
|
|
|
—
|
|
|
2,732
|
|
Short-term investments, primarily cash equivalents
|
57
|
|
|
117
|
|
|
—
|
|
|
—
|
|
|
174
|
|
Subtotal of nuclear decommissioning trusts
4
|
2,375
|
|
|
2,019
|
|
|
—
|
|
|
—
|
|
|
4,394
|
|
Total assets
|
2,393
|
|
|
2,028
|
|
|
125
|
|
|
—
|
|
|
4,546
|
|
Liabilities at fair value
|
|
|
|
|
|
|
|
|
|
Derivative contracts
|
—
|
|
|
—
|
|
|
1,295
|
|
|
—
|
|
|
1,295
|
|
Total liabilities
|
—
|
|
|
—
|
|
|
1,295
|
|
|
—
|
|
|
1,295
|
|
Net assets (liabilities)
|
$
|
2,393
|
|
|
$
|
2,028
|
|
|
$
|
(1,170
|
)
|
|
$
|
—
|
|
|
$
|
3,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
(in millions)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting
and
Collateral
1
|
|
Total
|
Assets at fair value
|
|
|
|
|
|
|
|
|
|
Derivative contracts
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
163
|
|
|
$
|
—
|
|
|
$
|
163
|
|
Other
|
28
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
Nuclear decommissioning trusts:
|
|
|
|
|
|
|
|
|
|
Stocks
2
|
1,460
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,460
|
|
Fixed Income
3
|
947
|
|
|
1,776
|
|
|
—
|
|
|
—
|
|
|
2,723
|
|
Short-term investments, primarily cash equivalents
|
91
|
|
|
81
|
|
|
—
|
|
|
—
|
|
|
172
|
|
Subtotal of nuclear decommissioning trusts
4
|
2,498
|
|
|
1,857
|
|
|
—
|
|
|
—
|
|
|
4,355
|
|
Total assets
|
2,526
|
|
|
1,857
|
|
|
163
|
|
|
—
|
|
|
4,546
|
|
Liabilities at fair value
|
|
|
|
|
|
|
|
|
|
Derivative contracts
|
—
|
|
|
22
|
|
|
1,311
|
|
|
(15
|
)
|
|
1,318
|
|
Total liabilities
|
—
|
|
|
22
|
|
|
1,311
|
|
|
(15
|
)
|
|
1,318
|
|
Net assets (liabilities)
|
$
|
2,526
|
|
|
$
|
1,835
|
|
|
$
|
(1,148
|
)
|
|
$
|
15
|
|
|
$
|
3,228
|
|
|
|
1
|
Represents the netting of assets and liabilities under master netting agreements and cash collateral across the levels of the fair value hierarchy. Netting among positions classified within the same level is included in that level.
|
|
|
2
|
Approximately
71%
and
70%
of SCE's equity investments were located in the United States at
June 30, 2016
and
December 31, 2015
, respectively.
|
|
|
3
|
Includes corporate bonds, which were diversified and included collateralized mortgage obligations and other asset backed securities of
$89 million
and
$111 million
at
June 30, 2016
and
December 31, 2015
, respectively.
|
|
|
4
|
Excludes net payables of
$50 million
and net payables of
$24 million
at
June 30, 2016
and
December 31, 2015
, which consist of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases.
|
Edison International Parent and Other
Edison International Parent and Other assets measured at fair value consisted of money market funds of $
33 million
and
$29 million
at
June 30, 2016
and
December 31, 2015
, respectively, classified as Level 1.
SCE Fair Value of Level 3
The following table sets forth a summary of changes in SCE's fair value of Level 3 net derivative assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Fair value of net liabilities at beginning of period
|
|
$
|
(1,213
|
)
|
|
$
|
(976
|
)
|
|
$
|
(1,148
|
)
|
|
$
|
(902
|
)
|
Total realized/unrealized gains (losses):
|
|
|
|
|
|
|
|
|
Included in regulatory assets and liabilities
1
|
|
43
|
|
|
(68
|
)
|
|
(22
|
)
|
|
(142
|
)
|
Fair value of net liabilities at end of period
|
|
$
|
(1,170
|
)
|
|
$
|
(1,044
|
)
|
|
$
|
(1,170
|
)
|
|
$
|
(1,044
|
)
|
Change during the period in unrealized gains and losses related to assets and liabilities held at the end of the period
|
|
$
|
19
|
|
|
$
|
(65
|
)
|
|
$
|
(54
|
)
|
|
$
|
(148
|
)
|
|
|
1
|
Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities.
|
Edison International and SCE recognize the fair value for transfers in and transfers out of each level at the end of each reporting period. There were no transfers between any levels during
2016
and
2015
.
Valuation Techniques Used to Determine Fair Value
The process of determining fair value is the responsibility of SCE's risk management department, which reports to SCE's chief financial officer. This department obtains observable and unobservable inputs through broker quotes, exchanges and internal valuation techniques that use both standard and proprietary models to determine fair value. Each reporting period, the risk and finance departments collaborate to determine the appropriate fair value methodologies and classifications for each derivative. Inputs are validated for reasonableness by comparison against prior prices, other broker quotes and volatility fluctuation thresholds. Inputs used and valuations are reviewed period-over-period and compared with market conditions to determine reasonableness.
The following table sets forth SCE's valuation techniques and significant unobservable inputs used to determine fair value for significant Level 3 assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value (in millions)
|
|
Significant
|
Range
|
|
Assets
|
|
Liabilities
|
Valuation Technique(s)
|
Unobservable Input
|
(Weighted Average)
|
Congestion revenue rights
|
|
|
|
|
|
June 30, 2016
|
$
|
119
|
|
|
$
|
—
|
|
Market simulation model and auction prices
|
Load forecast
|
6,289 MW - 24,349 MW
|
|
|
|
|
|
Power prices
1
|
$0 - $110.44
|
|
|
|
|
|
Gas prices
2
|
$1.98 - $5.72
|
December 31, 2015
|
152
|
|
|
—
|
|
Market simulation model and auction prices
|
Load forecast
|
6,289 MW - 24,349 MW
|
|
|
|
|
|
Power prices
1
|
$0 - $110.44
|
|
|
|
|
|
Gas prices
2
|
$1.98 - $5.72
|
Tolling
|
|
|
|
|
|
|
June 30, 2016
|
3
|
|
|
1,293
|
|
Option model
|
Volatility of gas prices
|
15% - 41% (20%)
|
|
|
|
|
|
Volatility of power prices
|
26% - 86% (30%)
|
|
|
|
|
|
Power prices
|
$25.77 - $50.38 ($37.50)
|
December 31, 2015
|
10
|
|
|
1,297
|
|
Option model
|
Volatility of gas prices
|
15% - 58% (20%)
|
|
|
|
|
|
Volatility of power prices
|
26% - 38% (30%)
|
|
|
|
|
|
Power prices
|
$24.15 - $46.93 ($34.80)
|
|
|
1
|
Prices are in dollars per megawatt-hour.
|
|
|
2
|
Prices are in dollars per million British thermal units.
|
Level 3 Fair Value Sensitivity
Congestion Revenue Rights
For CRRs, where SCE is the buyer, generally increases (decreases) in forecasted load in isolation would result in increases (decreases) to the fair value. In general, an increase (decrease) in electricity and gas prices at illiquid locations tends to result in increases (decreases) to fair value; however, changes in electricity and gas prices in opposite directions may have varying results on fair value.
Tolling Arrangements
The fair values of SCE's tolling arrangements contain intrinsic value and time value. Intrinsic value is the difference between the market price and strike price of the underlying commodity. Time value is made up of several components, including volatility, time to expiration, and interest rates. The option model for tolling arrangements reflects plant specific information such as operating and start-up costs.
For tolling arrangements where SCE is the buyer, increases in volatility of the underlying commodity prices would result in increases to fair value as it represents greater price movement risk. As power and gas prices increase, the fair value of tolling arrangements tends to increase. The valuation of tolling arrangements is also impacted by the correlation between gas and power prices. As the correlation increases, the fair value of tolling arrangements tends to decline.
Nuclear Decommissioning Trusts
SCE's nuclear decommissioning trust investments include equity securities, U.S. treasury securities and other fixed income securities. Equity and treasury securities are classified as Level 1 as fair value is determined by observable market prices in active or highly liquid and transparent markets. The remaining fixed income securities are classified as Level 2. The fair value of these financial instruments is based on evaluated prices that reflect significant observable market information such as reported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes, issuer spreads, bids, offers and relevant credit information.
Fair Value of Debt Recorded at Carrying Value
The carrying value and fair value of Edison International's and SCE's long-term debt (including current portion of long-term debt) are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
December 31, 2015
|
(in millions)
|
|
Carrying
Value
|
|
Fair
Value
|
|
Carrying
Value
|
|
Fair
Value
|
SCE
|
|
$
|
10,503
|
|
|
$
|
12,457
|
|
|
$
|
10,539
|
|
|
$
|
11,592
|
|
Edison International
|
|
11,541
|
|
|
13,521
|
|
|
11,178
|
|
|
12,252
|
|
The fair value of Edison International and SCE's short-term and long-term debt is classified as Level 2 and is based on evaluated prices that reflect significant observable market information such as reported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes of new issue prices and relevant credit information.
The carrying value of Edison International's and SCE's trade receivables and payables, other investments, and short-term debt approximates fair value.
Note 5. Debt and Credit Agreements
Long-Term Debt
During the first quarter of 2016, Edison International issued
$400 million
of
2.95%
senior notes due in 2023. The proceeds from these bonds were used to repay commercial paper borrowings and for general corporate purposes.
Credit Agreements and Short-Term Debt
SCE and Edison International Parent have multi-year revolving credit facilities of
$2.75 billion
and
$1.25 billion
, respectively. In July 2016, SCE and Edison International Parent extended the maturity dates to July 2021 for
$2.72 billion
and
$1.23 billion
of these facilities, respectively. The remaining
$34 million
and
$16 million
for the SCE and Edison International Parent credit facilities, respectively, will mature in July 2020. SCE's credit facility is generally used to support commercial paper borrowings and letters of credit issued for procurement-related collateral requirements, balancing account undercollections and for general corporate purposes, including working capital requirements to support operations and capital expenditures. Edison International Parent's credit facility is used to support commercial paper borrowings and for general corporate purposes.
At
June 30, 2016
, SCE's outstanding commercial paper, net of discount, was
$506 million
at a weighted-average interest rate of
0.60%
. At
June 30, 2016
, letters of credit issued under SCE's credit facility aggregated
$89 million
and are scheduled to expire in
twelve months
or less. At
December 31, 2015
, the outstanding commercial paper was $
49 million
at a weighted-average interest rate of
0.51%
.
At
June 30, 2016
, Edison International Parent's outstanding commercial paper, net of discount, was
$294 million
at a weighted-average interest rate of
0.69%
. At
December 31, 2015
, the outstanding commercial paper was $
646 million
at a weighted-average interest rate of
0.78%
.
Note 6. Derivative Instruments
Derivative financial instruments are used to manage exposure to commodity price risk. These risks are managed in part by entering into forward commodity transactions, including options, swaps and futures. To mitigate credit risk from counterparties in the event of nonperformance, master netting agreements are used whenever possible and counterparties may be required to pledge collateral depending on the creditworthiness of each counterparty and the risk associated with the transaction.
Commodity Price Risk
Commodity price risk represents the potential impact that can be caused by a change in the market value of a particular commodity. SCE's electricity price exposure arises from energy purchased from and sold to wholesale markets as a result of differences between SCE's load requirements and the amount of energy delivered from its generating facilities and power purchase agreements. SCE's natural gas price exposure arises from natural gas purchased for the Mountainview power plant and peaker plants, QF contracts where pricing is based on a monthly natural gas index and power purchase agreements in which SCE has agreed to provide the natural gas needed for generation, referred to as tolling arrangements.
Credit and Default Risk
Credit and default risk represent the potential impact that can be caused if a counterparty were to default on its contractual obligations and SCE would be exposed to spot markets for buying replacement power or selling excess power. In addition, SCE would be exposed to the risk of non-payment of accounts receivable, primarily related to the sales of excess power and realized gains on derivative instruments.
Certain power contracts contain master netting agreements or similar agreements, which generally allow counterparties subject to the agreement to setoff amounts when certain criteria are met, such as in the event of default. The objective of netting is to reduce credit exposure. Additionally, to reduce SCE's risk exposures counterparties may be required to pledge collateral depending on the creditworthiness of each counterparty and the risk associated with the transaction.
Certain power contracts contain a provision that requires SCE to maintain an investment grade rating from each of the major credit rating agencies, referred to as a credit-risk-related contingent feature. If SCE's credit rating were to fall below investment grade, SCE may be required to post additional collateral to cover derivative liabilities and the related outstanding payables. The net fair value of all derivative liabilities with these credit-risk-related contingent features was
$24 million
and
$38 million
as of
June 30, 2016
and
December 31, 2015
, respectively. SCE has posted
$12 million
collateral at
June 30, 2016
and
no
collateral at
December 31, 2015
to its counterparties at the respective dates for its derivative liabilities and related outstanding payables. If the credit-risk-related contingent features underlying these agreements were triggered on
June 30, 2016
, SCE would be required to post
$5 million
of additional collateral related to outstanding payables that are net of collateral already posted.
Fair Value of Derivative Instruments
SCE presents its derivative assets and liabilities on a net basis on its consolidated balance sheets when subject to master netting agreements or similar agreements. Derivative positions are offset against margin and cash collateral deposits. In addition, SCE has provided collateral in the form of letters of credit. Collateral requirements can vary depending upon the level of unsecured credit extended by counterparties, changes in market prices relative to contractual commitments and other factors. See Note 4 for a discussion of fair value of derivative instruments. The following table summarizes the gross and net fair values of SCE's commodity derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2016
|
|
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Net
Liability
|
(in millions)
|
|
Short-Term
|
|
Long-Term
|
|
Subtotal
|
|
Short-Term
|
|
Long-Term
|
|
Subtotal
|
|
Commodity derivative contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross amounts recognized
|
|
$
|
66
|
|
|
$
|
69
|
|
|
$
|
135
|
|
|
$
|
196
|
|
|
$
|
1,100
|
|
|
$
|
1,296
|
|
|
$
|
1,161
|
|
Gross amounts offset in the consolidated balance sheets
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
Cash collateral posted
1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net amounts presented in the consolidated balance sheets
|
|
$
|
65
|
|
|
$
|
69
|
|
|
$
|
134
|
|
|
$
|
195
|
|
|
$
|
1,100
|
|
|
$
|
1,295
|
|
|
$
|
1,161
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
|
Derivative Assets
|
|
Derivative Liabilities
|
|
Net
Liability
|
(in millions)
|
|
Short-Term
|
|
Long-Term
|
|
Subtotal
|
|
Short-Term
|
|
Long-Term
|
|
Subtotal
|
|
Commodity derivative contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross amounts recognized
|
|
$
|
81
|
|
|
$
|
84
|
|
|
$
|
165
|
|
|
$
|
235
|
|
|
$
|
1,100
|
|
|
$
|
1,335
|
|
|
$
|
1,170
|
|
Gross amounts offset in the consolidated balance sheets
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
Cash collateral posted
1
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|
(15
|
)
|
Net amounts presented in the consolidated balance sheets
|
|
$
|
79
|
|
|
$
|
84
|
|
|
$
|
163
|
|
|
$
|
218
|
|
|
$
|
1,100
|
|
|
$
|
1,318
|
|
|
$
|
1,155
|
|
|
|
1
|
In addition, at
June 30, 2016
, SCE received
$4 million
of collateral that is not offset against derivative assets and is reflected in "Other current liabilities" on the consolidated balance sheets. At
December 31, 2015
, SCE had posted
$31 million
of collateral that is not offset against derivative liabilities and is reflected in "Other current assets" on the consolidated balance sheets.
|
Income Statement Impact of Derivative Instruments
SCE recognizes realized gains and losses on derivative instruments as purchased power expense and expects that such gains or losses will be part of the purchase power costs recovered from customers. As a result, realized gains and losses do not affect earnings, but may temporarily affect cash flows. Due to expected future recovery from customers, unrealized gains and losses are recorded as regulatory assets and liabilities and therefore also do not affect earnings. The remaining effects of derivative activities and related regulatory offsets are recorded in cash flows from operating activities in the consolidated statements of cash flows.
The following table summarizes the components of SCE's economic hedging activity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Realized losses
|
|
$
|
(25
|
)
|
|
$
|
(39
|
)
|
|
$
|
(52
|
)
|
|
$
|
(75
|
)
|
Unrealized gains (losses)
|
|
72
|
|
|
(16
|
)
|
|
8
|
|
|
(85
|
)
|
Notional Volumes of Derivative Instruments
The following table summarizes the notional volumes of derivatives used for SCE hedging activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Economic Hedges
|
Commodity
|
|
Unit of Measure
|
|
June 30, 2016
|
|
December 31, 2015
|
Electricity options, swaps and forwards
|
|
GWh
|
|
4,980
|
|
|
6,221
|
Natural gas options, swaps and forwards
|
|
Bcf
|
|
4
|
|
|
32
|
Congestion revenue rights
|
|
GWh
|
|
80,094
|
|
|
109,740
|
Tolling arrangements
|
|
GWh
|
|
65,998
|
|
|
70,663
|
Note 7. Income Taxes
Effective Tax Rate
The table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to the income tax provision:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Edison International:
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
$
|
259
|
|
|
$
|
412
|
|
|
$
|
591
|
|
|
$
|
837
|
|
Provision for income tax at federal statutory rate of 35%
|
91
|
|
|
144
|
|
|
207
|
|
|
293
|
|
Increase in income tax from:
|
|
|
|
|
|
|
|
State tax, net of federal benefit
|
4
|
|
|
5
|
|
|
11
|
|
|
16
|
|
Property-related
1
|
(138
|
)
|
|
(69
|
)
|
|
(217
|
)
|
|
(129
|
)
|
Change related to uncertain tax positions
|
2
|
|
|
(77
|
)
|
|
1
|
|
|
(62
|
)
|
Other
|
(6
|
)
|
|
3
|
|
|
(11
|
)
|
|
(5
|
)
|
Total income tax (benefit) expense from continuing operations
|
$
|
(47
|
)
|
|
$
|
6
|
|
|
$
|
(9
|
)
|
|
$
|
113
|
|
Effective tax rate
|
(18.1
|
)%
|
|
1.5
|
%
|
|
(1.5
|
)%
|
|
13.5
|
%
|
SCE:
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes
|
$
|
317
|
|
|
$
|
419
|
|
|
$
|
683
|
|
|
$
|
860
|
|
Provision for income tax at federal statutory rate of 35%
|
111
|
|
|
147
|
|
|
239
|
|
|
301
|
|
Increase in income tax from:
|
|
|
|
|
|
|
|
State tax, net of federal benefit
|
6
|
|
|
2
|
|
|
15
|
|
|
16
|
|
Property-related
1
|
(138
|
)
|
|
(69
|
)
|
|
(217
|
)
|
|
(129
|
)
|
Change related to uncertain tax positions
|
(1
|
)
|
|
(75
|
)
|
|
(2
|
)
|
|
(65
|
)
|
Other
|
(7
|
)
|
|
2
|
|
|
(14
|
)
|
|
(8
|
)
|
Total income tax (benefit) expense from continuing operations
|
$
|
(29
|
)
|
|
$
|
7
|
|
|
$
|
21
|
|
|
$
|
115
|
|
Effective tax rate
|
(9.1
|
)%
|
|
1.7
|
%
|
|
3.1
|
%
|
|
13.4
|
%
|
|
|
1
|
During the second quarter of 2016, SCE recorded
$79 million
for 2012 – 2014 incremental tax benefits related to repair deductions, which were flowed-through to customers (
$133 million
pre-tax).
|
The CPUC requires flow-through ratemaking treatment for the current tax benefit arising from certain property-related and other temporary differences which reverse over time. Flow-through items reduce current authorized revenue requirements in SCE's rate cases and result in a regulatory asset for recovery of deferred income taxes in future periods. The difference between the authorized amounts as determined in SCE's rate cases, adjusted for balancing and memorandum account activities, and the recorded flow-through items also result in increases or decreases in regulatory assets with a corresponding impact on the effective tax rate to the extent that recorded deferred amounts are expected to be recovered in future rates.
Repair Deductions
Previously, SCE recognized earnings and a regulatory asset for deferred income taxes related to 2012 – 2014 tax repair deductions. As a result of the CPUC's rate base offset in the 2015 GRC decision, SCE wrote down this regulatory asset in full during 2015. The after-tax charge was reflected in "Income tax expense" on the consolidated statements of income. The amount of tax repair deductions the CPUC used to establish the rate base offset was based on SCE's forecast of 2012 – 2014 tax repair deductions from the Notice of Intent filed in the 2015 GRC. The amount of tax repair deductions included in the Notice of Intent was less than the actual tax repair deductions SCE reported on its 2012 through 2014 income tax returns. In April 2016, the CPUC granted SCE's request to reduce SCE's Base Revenue Requirement Balancing Account by
$234 million
during 2016 through 2020 subject to the outcome of audits that may be conducted by tax authorities. SCE refunded
$133 million
(
$79 million
after-tax) during the second quarter of 2016. The refunds result in flowing incremental tax benefits for 2012 – 2014 to customers through 2020. SCE did not record a gain or loss from this reduction. Regulatory assets recorded from flow through tax benefits are recovered through SCE's general rate case proceedings.
Tax Disputes
Tax Years 2007 – 2012
Edison International has reached a tentative settlement agreement with the IRS for the 2007
–
2012 tax years. The final agreement, when approved, is not expected to have a material impact on the financial statements.
During the second quarter of 2015, the Company received the IRS Revenue Agent Report for the 2010
–
2012 tax years. Edison International's and SCE's tax reserves were re-measured at that time and
$94 million
and
$100 million
, respectively, of income tax benefits were recorded in the comparable quarter for the prior year.
Tax years that remain open for examination by the IRS and the California Franchise Tax Board are 2007 – 2015 and 2003 – 2015, respectively.
Note 8. Compensation and Benefit Plans
Pension Plans
Edison International made contributions of
$47 million
during the six months ended June 30, 2016, which includes contributions of
$37 million
by SCE. Edison International expects to make contributions of
$73 million
during the remainder of
2016
, which includes
$58 million
from SCE. Annual contributions made by SCE to most of SCE's pension plans are anticipated to be recovered through CPUC-approved regulatory mechanisms. Annual contributions to these plans are expected to be, at a minimum, equal to the related annual expense.
Pension expense components for continuing operations are:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Edison International:
|
|
|
|
|
|
|
|
Service cost
|
$
|
39
|
|
|
$
|
35
|
|
|
$
|
78
|
|
|
$
|
70
|
|
Interest cost
|
44
|
|
|
42
|
|
|
88
|
|
|
83
|
|
Expected return on plan assets
|
(56
|
)
|
|
(57
|
)
|
|
(112
|
)
|
|
(114
|
)
|
Amortization of prior service cost
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
Amortization of net loss
1
|
9
|
|
|
9
|
|
|
18
|
|
|
18
|
|
Expense under accounting standards
|
$
|
37
|
|
|
$
|
30
|
|
|
$
|
74
|
|
|
$
|
59
|
|
Regulatory adjustment
|
(9
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|
(2
|
)
|
Total expense recognized
|
$
|
28
|
|
|
$
|
29
|
|
|
$
|
56
|
|
|
$
|
57
|
|
SCE:
|
|
|
|
|
|
|
|
Service cost
|
$
|
38
|
|
|
$
|
34
|
|
|
$
|
76
|
|
|
$
|
69
|
|
Interest cost
|
41
|
|
|
37
|
|
|
82
|
|
|
75
|
|
Expected return on plan assets
|
(53
|
)
|
|
(54
|
)
|
|
(106
|
)
|
|
(107
|
)
|
Amortization of prior service cost
|
1
|
|
|
2
|
|
|
2
|
|
|
3
|
|
Amortization of net loss
1
|
8
|
|
|
8
|
|
|
16
|
|
|
15
|
|
Expense under accounting standards
|
$
|
35
|
|
|
$
|
27
|
|
|
$
|
70
|
|
|
$
|
55
|
|
Regulatory adjustment
|
(9
|
)
|
|
(1
|
)
|
|
(18
|
)
|
|
(2
|
)
|
Total expense recognized
|
$
|
26
|
|
|
$
|
26
|
|
|
$
|
52
|
|
|
$
|
53
|
|
|
|
1
|
Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was
$3 million
and
$1 million
, respectively, for the three months ended June 30, 2016, and
$6 million
and
$3 million
, respectively, for the six months ended June 30, 2016. The amount reclassified for Edison International and SCE was
$4 million
and
$2 million
, respectively, for the three months ended June 30, 2015 and
$7 million
and
$4 million
, respectively, for the six months ended June 30, 2015.
|
Postretirement Benefits Other Than Pensions
Edison International made contributions of
$17 million
during the six months ended June 30, 2016 and expects to make contributions of
$16 million
during the remainder of
2016
, substantially all of which are expected to be made by SCE. Annual contributions made to SCE plans are anticipated to be recovered through CPUC-approved regulatory mechanisms and are expected to be, at a minimum, equal to the total annual expense for these plans. Benefits under these plans, with some exceptions, are generally unvested and subject to change. Under the terms of the Edison International Health and Welfare Plan ("PBOP Plan") each participating employer (Edison International or its participating subsidiaries) is responsible for the costs and expenses of all PBOP benefits with respect to its employees and former employees. A participating employer may terminate the PBOP benefits with respect to its employees and former employees, as may SCE (as Plan sponsor), and, accordingly, the participants' PBOP benefits are not vested benefits.
PBOP expense components for continuing operations are:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Edison International:
|
|
|
|
|
|
|
|
Service cost
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
20
|
|
|
$
|
24
|
|
Interest cost
|
26
|
|
|
28
|
|
|
52
|
|
|
57
|
|
Expected return on plan assets
|
(28
|
)
|
|
(29
|
)
|
|
(56
|
)
|
|
(57
|
)
|
Amortization of prior service cost
|
(1
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(6
|
)
|
Amortization of net loss
|
—
|
|
|
6
|
|
|
—
|
|
|
12
|
|
Total expense
|
$
|
7
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
30
|
|
SCE:
|
|
|
|
|
|
|
|
Service cost
|
$
|
10
|
|
|
$
|
12
|
|
|
$
|
20
|
|
|
$
|
24
|
|
Interest cost
|
26
|
|
|
28
|
|
|
52
|
|
|
56
|
|
Expected return on plan assets
|
(28
|
)
|
|
(28
|
)
|
|
(56
|
)
|
|
(56
|
)
|
Amortization of prior service cost
|
(1
|
)
|
|
(3
|
)
|
|
(2
|
)
|
|
(6
|
)
|
Amortization of net loss
|
—
|
|
|
5
|
|
|
—
|
|
|
11
|
|
Total expense
|
$
|
7
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
29
|
|
Workforce Reductions
SCE continues to focus on productivity improvements to mitigate rate pressure from its capital program, optimize its cost structure and improve operational efficiency, which is expected to result in further workforce reductions through 2016. During the six months ended June 30, 2016, SCE increased the estimated impact for approved workforce reductions.
The following table provides a summary of changes in the accrued severance liability associated with these reductions:
|
|
|
|
|
|
(in millions)
|
|
|
Balance at January 1, 2016
|
|
$
|
22
|
|
Additions
|
|
13
|
|
Payments
|
|
(23
|
)
|
Balance at June 30, 2016
|
|
$
|
12
|
|
The liability presented in the table above is reflected in "Other current liabilities" on the consolidated balance sheets. The severance costs are included in "Operation and maintenance" on the consolidated income statements.
Note 9. Investments
Nuclear Decommissioning Trusts
Future decommissioning costs related to SCE's nuclear assets are expected to be funded from independent decommissioning trusts.
The following table sets forth amortized cost and fair value of the trust investments (see Note 4 for a discussion of fair value of the trust investments):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Longest
Maturity
Dates
|
|
Amortized Cost
|
|
Fair Value
|
(in millions)
|
|
June 30,
2016
|
|
December 31,
2015
|
|
June 30,
2016
|
|
December 31, 2015
|
Stocks
|
—
|
|
$
|
329
|
|
|
$
|
304
|
|
|
$
|
1,488
|
|
|
$
|
1,460
|
|
Municipal bonds
|
2054
|
|
675
|
|
|
691
|
|
|
854
|
|
|
840
|
|
U.S. government and agency securities
|
2046
|
|
1,002
|
|
|
1,070
|
|
|
1,107
|
|
|
1,128
|
|
Corporate bonds
|
2057
|
|
683
|
|
|
708
|
|
|
771
|
|
|
755
|
|
Short-term investments and receivables/payables
1
|
One-year
|
|
121
|
|
|
144
|
|
|
124
|
|
|
148
|
|
Total
|
|
|
$
|
2,810
|
|
|
$
|
2,917
|
|
|
$
|
4,344
|
|
|
$
|
4,331
|
|
|
|
1
|
Short-term investments include
$85 million
and
$81 million
of repurchase agreements payable by financial institutions which earn interest, are fully secured by U.S. Treasury securities and matured by July 5, 2016 and January 5, 2016 as of
June 30, 2016
and
December 31, 2015
, respectively.
|
Trust fund earnings (based on specific identification) increase the trust fund balance and the ARO regulatory liability. Unrealized holding gains, net of losses, were
$1.5 billion
and
$1.4 billion
at
June 30, 2016
and
December 31, 2015
, respectively.
The following table sets forth a summary of changes in the fair value of the trust:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Balance at beginning of period
|
|
$
|
4,290
|
|
|
$
|
4,896
|
|
|
$
|
4,331
|
|
|
$
|
4,799
|
|
Gross realized gains
|
|
22
|
|
|
5
|
|
|
75
|
|
|
32
|
|
Gross realized losses
|
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
(5
|
)
|
Unrealized gains (losses), net
|
|
72
|
|
|
(71
|
)
|
|
113
|
|
|
(27
|
)
|
Other-than-temporary impairments
|
|
(8
|
)
|
|
(8
|
)
|
|
(33
|
)
|
|
(12
|
)
|
Interest and dividends
|
|
32
|
|
|
32
|
|
|
60
|
|
|
60
|
|
Contributions
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
Income taxes
|
|
(24
|
)
|
|
(14
|
)
|
|
(42
|
)
|
|
(14
|
)
|
Decommissioning disbursements
|
|
(38
|
)
|
|
—
|
|
|
(154
|
)
|
|
—
|
|
Administrative expenses and other
|
|
(1
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(4
|
)
|
Balance at end of period
|
|
$
|
4,344
|
|
|
$
|
4,836
|
|
|
$
|
4,344
|
|
|
$
|
4,836
|
|
Trust assets are used to pay income taxes as the Trust files separate income taxes returns from SCE. Deferred tax liabilities related to net unrealized gains at
June 30, 2016
were
$375 million
. Accordingly, the fair value of Trust assets available to pay future decommissioning costs, net of deferred income taxes, totaled
$4.0 billion
at
June 30, 2016
. Due to regulatory mechanisms, changes in assets of the trusts from income or loss items have no impact on operating revenue or earnings.
Note 10. Regulatory Assets and Liabilities
Regulatory Assets
SCE's regulatory assets included on the consolidated balance sheets are:
|
|
|
|
|
|
|
|
|
(in millions)
|
June 30,
2016
|
|
December 31,
2015
|
Current:
|
|
|
|
Regulatory balancing accounts
|
$
|
309
|
|
|
$
|
382
|
|
Energy derivatives
|
135
|
|
|
159
|
|
Other
|
34
|
|
|
19
|
|
Total current
|
478
|
|
|
560
|
|
Long-term:
|
|
|
|
Deferred income taxes, net
|
4,176
|
|
|
3,757
|
|
Pensions and other postretirement benefits
|
836
|
|
|
849
|
|
Energy derivatives
|
1,041
|
|
|
1,027
|
|
Unamortized investments, net
|
156
|
|
|
182
|
|
San Onofre
|
942
|
|
|
1,043
|
|
Unamortized loss on reacquired debt
|
193
|
|
|
201
|
|
Regulatory balancing accounts
|
49
|
|
|
36
|
|
Environmental remediation
|
128
|
|
|
129
|
|
Other
|
271
|
|
|
288
|
|
Total long-term
|
7,792
|
|
|
7,512
|
|
Total regulatory assets
|
$
|
8,270
|
|
|
$
|
8,072
|
|
Regulatory Liabilities
SCE's regulatory liabilities included on the consolidated balance sheets are:
|
|
|
|
|
|
|
|
|
(in millions)
|
June 30,
2016
|
|
December 31,
2015
|
Current:
|
|
|
|
Regulatory balancing accounts
|
$
|
1,050
|
|
|
$
|
1,106
|
|
Other
|
22
|
|
|
22
|
|
Total current
|
1,072
|
|
|
1,128
|
|
Long-term:
|
|
|
|
Costs of removal
|
2,825
|
|
|
2,781
|
|
Recoveries in excess of ARO liabilities
1
|
1,740
|
|
|
1,502
|
|
Regulatory balancing accounts
|
1,392
|
|
|
1,314
|
|
Other
|
60
|
|
|
79
|
|
Total long-term
|
6,017
|
|
|
5,676
|
|
Total regulatory liabilities
|
$
|
7,089
|
|
|
$
|
6,804
|
|
|
|
1
|
Represents the cumulative differences between ARO expenses and amounts collected in rates primarily for the decommissioning of the SCE's nuclear generation facilities. Decommissioning costs recovered through rates are primarily placed in nuclear decommissioning trusts. This regulatory liability also represents the deferral of realized and unrealized gains and losses on the nuclear decommissioning trust investments. See Note 9.
|
Net Regulatory Balancing Accounts
The following table summarizes the significant components of regulatory balancing accounts included in the above tables of regulatory assets and liabilities:
|
|
|
|
|
|
|
|
|
(in millions)
|
June 30,
2016
|
|
December 31,
2015
|
Asset (liability)
|
|
|
|
Energy resource recovery account
|
$
|
(252
|
)
|
|
$
|
(439
|
)
|
New system generation balancing account
|
(195
|
)
|
|
(171
|
)
|
Public purpose programs and energy efficiency programs
|
(828
|
)
|
|
(683
|
)
|
Tax accounting memorandum account and pole loading balancing account
|
(68
|
)
|
|
(248
|
)
|
Base rate recovery balancing account
|
(535
|
)
|
|
(319
|
)
|
Department of Energy litigation memorandum account
1
|
(122
|
)
|
|
—
|
|
Greenhouse gas auction revenue
|
(4
|
)
|
|
(75
|
)
|
FERC balancing accounts
|
40
|
|
|
74
|
|
Other
|
(120
|
)
|
|
(141
|
)
|
Liability
|
$
|
(2,084
|
)
|
|
$
|
(2,002
|
)
|
|
|
1
|
Represents a refund from the Department of Energy's failure to meet its obligation to begin accepting spent nuclear fuel from San Onofre. See "Note 11. Commitments and Contingencies—Contingencies—Spent Nuclear Fuel" for further discussion.
|
Note 11. Commitments and Contingencies
Indemnities
Edison International and SCE have various financial and performance guarantees and indemnity agreements, which are issued in the normal course of business.
Edison International and SCE have provided indemnifications through contracts entered into in the normal course of business. These are primarily indemnifications against adverse litigation outcomes in connection with underwriting agreements, and indemnities for specified environmental liabilities and income taxes with respect to assets sold. Edison International's and SCE's obligations under these agreements may or may not be limited in terms of time and/or amount, and in some instances Edison International and SCE may have recourse against third parties. Edison International and SCE have not recorded a liability related to these indemnities. The overall maximum amount of the obligations under these indemnifications cannot be reasonably estimated.
SCE has indemnified the City of Redlands, California in connection with Mountainview's California Energy Commission permit for cleanup or associated actions related to groundwater contaminated by perchlorate due to the disposal of filter cake at the City's solid waste landfill. The obligations under this agreement are not limited to a specific time period or subject to a maximum liability. SCE has not recorded a liability related to this indemnity.
Contingencies
In addition to the matters disclosed in these Notes, Edison International and SCE are involved in other legal, tax and regulatory proceedings before various courts and governmental agencies regarding matters arising in the ordinary course of business. Edison International and SCE believe the outcome of these other proceedings will not, individually or in the aggregate, materially affect its results of operations or liquidity.
San Onofre Related Matters
Replacement steam generators were installed at San Onofre in 2010 and 2011. On January 31, 2012, a leak suddenly occurred in
one
of the heat transfer tubes in San Onofre's Unit 3 steam generators. The Unit was safely taken off-line and subsequent inspections revealed excessive tube wear. Unit 2 was off-line for a planned outage when areas of unexpected tube wear were also discovered. On June 6, 2013, SCE decided to permanently retire Units 2 and 3.
San Onofre CPUC Proceedings
The San Onofre OII Settlement Agreement resolved the CPUC's investigation regarding the Steam Generator Replacement Project at San Onofre and the related outages and subsequent shutdown of San Onofre. In May 2016, and in consideration of the CPUC's December 2015 decision sanctioning SCE for failing to disclose
ex parte
communications relevant to the San Onofre OII, the Assigned Commissioner and ALJ issued a ruling to reopen the record upon which the CPUC had, in November 2014, approved the San Onofre OII Settlement Agreement among SCE, TURN, ORA, SDG&E, the Coalition of California Utility Employees, and Friends of the Earth. The ruling also established a ban on all
ex parte
communications in the proceeding. The ruling established a briefing schedule for parties to address whether, in light of the ex parte rules violations, the San Onofre OII Settlement Agreement remains reasonable, consistent with the law and in the public interest, which is the standard the CPUC applies in reviewing settlements submitted for approval. In comments filed with the CPUC in July 2016, SCE asserts that the San Onofre OII Settlement Agreement continues to meet this standard and therefore should not be disturbed. A number of parties, however, have asked the CPUC in their comments to either modify the San Onofre OII Settlement Agreement or vacate its previous approval of the settlement and reinstate the San Onofre OII for further proceedings. SCE is unable to predict the outcome of this matter. The San Onofre OII Settlement Agreement does not affect proceedings related to recoveries from third parties described below, but does describe how shareholders and customers will share any recoveries.
Challenges related to San Onofre CPUC Proceedings
A federal lawsuit challenging the CPUC's authority to permit rate recovery of San Onofre costs and an application to the CPUC for rehearing of its decision approving the San Onofre OII Settlement Agreement were filed in November and December 2014, respectively. In April 2015, the federal lawsuit was dismissed with prejudice and the plaintiffs in that case appealed the dismissal to the Ninth Circuit in May 2015. Both the appeal and the application for rehearing remain pending.
In April 2015, the Alliance for Nuclear Responsibility ("A4NR") filed a petition to modify the CPUC's decision approving the San Onofre OII Settlement Agreement based on SCE's alleged failures to disclose communications between SCE and CPUC decision-makers pertaining to issues in the San Onofre OII. The petition seeks the reversal of the decision approving the San Onofre OII Settlement Agreement and reopening of the OII proceeding. Subsequently, TURN and ORA filed responses supporting A4NR's petition to reopen the San Onofre OII proceeding. In August 2015, ORA filed its own petition to modify the CPUC's decision approving the San Onofre OII Settlement Agreement seeking to set aside the settlement and reopen the San Onofre OII proceeding. SCE and SDG&E responded to this petition in September 2015. Both petitions remain pending before the CPUC.
In July 2015, a purported securities class action lawsuit was filed in federal court against Edison International, its Chief Executive Officer and Chief Financial Officer and was later amended to include SCE's former President as a defendant. The lawsuit alleges that the defendants violated the securities laws by failing to disclose that Edison International had
ex parte
contacts with CPUC decision-makers regarding the San Onofre OII that were either unreported or more extensive than initially reported. The complaint purports to be filed on behalf of a class of persons who acquired Edison International common stock between March 21, 2014 and June 24, 2015.
Subsequently and also in July 2015, a federal shareholder derivative lawsuit was filed against members of the Edison International Board of Directors for breach of fiduciary duty and other claims. The federal derivative lawsuit is based on similar allegations to the federal class action securities lawsuit and seeks monetary damages, including punitive damages, and various corporate governance reforms. An additional federal shareholder derivative lawsuit making essentially the same allegations was filed in August and was subsequently consolidated with the July 2015 federal derivative lawsuit.
In October 2015, a shareholder derivative lawsuit was filed in California state court against members of the Edison International Board of Directors for breach of fiduciary duty and other claims, making similar allegations to those in the federal derivative lawsuits discussed above.
In November 2015, a purported securities class action lawsuit was filed in federal court against Edison International, its Chief Executive Officer and Treasurer by an Edison International employee, alleging claims under the Employee Retirement Income Security Act ("ERISA"). The complaint purports to be filed on behalf of a class of Edison International employees who were participants in the Edison 401(k) Savings Plan and invested in the Edison International Stock Fund between March 27, 2014 and June 24, 2015. The complaint alleges that defendants breached their fiduciary duties because they knew or should have known that investment in the Edison International Stock Fund was imprudent because the price of Edison International common stock was artificially inflated due to Edison International's alleged failure to disclose certain
ex parte
communications with CPUC decision-makers related to the San Onofre OII. In July 2016, the federal court granted the defendants' motion to dismiss the lawsuit with an opportunity for the plaintiffs to amend their complaint.
Edison International and SCE cannot predict the outcome of these proceedings.
MHI Claims
SCE is also pursuing claims against Mitsubishi Heavy Industries, Ltd. and a related company ("MHI"), which designed and supplied the replacement steam generators. MHI warranted the replacement steam generators for an initial period of
20
years from acceptance and is contractually obligated to repair or replace defective items with dispatch and to pay specified damages for certain repairs. MHI's stated liability under the purchase agreement is limited to
$138 million
and excludes consequential damages, defined to include "the cost of replacement power;" however, limitations in the contract are subject to applicable exceptions both in the contract and under law. SCE has advised MHI that it believes one or more of such exceptions apply and that MHI's liability is not limited to
$138 million
. MHI has advised SCE that it disagrees. In October 2013, SCE sent MHI a formal request for binding arbitration under the auspices of the International Chamber of Commerce in accordance with the purchase contract seeking damages for all losses. In the request for arbitration, SCE alleges contract and tort claims and seeks at least
$4 billion
in damages on behalf of itself and its customers and in its capacity as Operating Agent for San Onofre. MHI has denied any liability and has asserted counterclaims for
$41 million
, for which SCE has denied any liability. Each of the other San Onofre owners sued MHI, alleging claims arising from MHI's supplying the faulty steam generators. These litigation claims have been stayed pending the arbitration. The other co-owners (SDG&E and Riverside) have been added as additional claimants in the arbitration. The arbitration is being conducted pursuant to a confidentiality order issued by the arbitration panel. Hearings concluded on April 29, 2016. A decision may be issued by year-end 2016 but could be later.
SCE, on behalf of itself and the other San Onofre co-owners, has submitted
seven
invoices to MHI totaling
$149 million
for steam generator repair costs incurred through April 30, 2013. MHI paid the first invoice of
$45 million
, while reserving its right to challenge it and subsequently rejected a portion of the first invoice and has not paid further invoices, claiming further documentation is required, which SCE disputes. SCE recorded its share of the invoice paid (approximately
$35 million
) as a reduction of repair and inspection costs in 2012.
Under the San Onofre OII Settlement Agreement, recoveries from MHI (including amounts paid by MHI under the first invoice), if any, will first be applied to reimburse costs incurred in pursuing such recoveries, including litigation costs. To the extent SCE's share of recoveries from MHI exceed such costs, they will be allocated
50%
to customers and
50%
to SCE.
The first
$282 million
of SCE's customers' portion of such recoveries from MHI will be distributed to customers via a credit to a sub-account of SCE's Base Revenue Requirement Balancing Account ("BRRBA"), reducing revenue requirements from customers. Amounts in excess of the first
$282 million
distributable to SCE customers will reduce SCE's regulatory asset represented by the unamortized balance of investment in San Onofre base plant, reducing the revenue requirement needed to amortize such investment. The amortization period, however, will be unaffected. Any additional amounts received after the regulatory asset is recovered will be applied to the BRRBA.
The San Onofre OII Settlement Agreement provides the utilities with the discretion to resolve the MHI dispute without CPUC approval, but the utilities are obligated to use their best efforts to inform the CPUC of any settlement or other resolution of these disputes to the extent this is possible without compromising any aspect of the resolution. SCE and SDG&E have also agreed to allow the CPUC to review the documentation of any final resolution of the MHI dispute and the litigation costs incurred in pursuing claims against MHI to ensure they are not exorbitant in relation to the recovery obtained. There is no assurance that there will be any recovery from MHI or, if there is a recovery, that it will equal or exceed the litigation costs incurred to pursue the recovery.
Energy Efficiency Incentive Mechanism
In September 2015, the CPUC granted TURN and ORA requests for rehearing of prior CPUC decisions related to
$74.5 million
of incentive awards that SCE received for savings achieved by its 2006 – 2008 energy efficiency programs. In March 2016, ORA and TURN filed a joint proposal requesting that the CPUC recalculate SCE's 2006 – 2008 incentive awards and order SCE to refund
$39.9 million
to its customers. SCE disputes the assertion that SCE should be at risk to repay previously awarded incentives. SCE cannot predict the outcome of these petitions.
Long Beach Service Interruptions
In July 2015, SCE's customers who are served via the network portion of SCE's electric system in Long Beach, California experienced service interruptions due to multiple underground vault fires and underground cable failures. No personal injuries have been reported in connection with these events and, subject to applicable deductibles, SCE is generally insured against customer claims arising from these events. SCE instituted an internal investigation and commissioned an external
investigation of these events and their causes, which revealed that the main cause of the interruptions was a lack of adequate management oversight of the downtown network system. The investigations also revealed deficiencies in maintaining the knowledge base on the configuration and operation of the system, and a lack of sophisticated controls needed to more efficiently and effectively prevent and respond to the cascading events that occurred. On July 14, 2016, the CPUC initiated an investigation ("Long Beach OII") of these events and their causes based on an investigation by the CPUC's Safety and Enforcement Division ("SED"). The SED investigation, among other things, identified problems with maintenance, inspection, and management of SCE's Long Beach electrical system, and emergency response and communications capabilities. The Long Beach OII will consider whether SCE violated statutes, rules or regulations, maintained adequate, accurate, and complete records, and provided sufficient emergency response and communications to various parties during the power outages. SCE has been directed to show cause at hearings why the CPUC should not find it in violation of the relevant statutes, rules and regulations. The OII does not propose a penalty amount. The CPUC may impose penalties in the amount of
$500
to
$50,000
per day per violation, but SCE is unable to estimate a possible loss or range of loss associated with any penalties that may be imposed by the CPUC in the Long Beach OII.
Environmental Remediation
SCE records its environmental remediation liabilities when site assessments and/or remedial actions are probable and a range of reasonably likely cleanup costs can be estimated. SCE reviews its sites and measures the liability quarterly, by assessing a range of reasonably likely costs for each identified site using currently available information, including existing technology, presently enacted laws and regulations, experience gained at similar sites, and the probable level of involvement and financial condition of other potentially responsible parties. These estimates include costs for site investigations, remediation, operation and maintenance, monitoring and site closure. Unless there is a single probable amount, SCE records the lower end of this reasonably likely range of costs (reflected in "Other long-term liabilities") at undiscounted amounts as timing of cash flows is uncertain.
At
June 30, 2016
, SCE's recorded estimated minimum liability to remediate its
19
identified material sites (sites in which the upper end of the range of the costs is at least
$1 million
) was
$130 million
, including
$79 million
related to San Onofre. In addition to these sites, SCE also has
39
immaterial sites for which the total minimum recorded liability was
$4 million
. Of the
$134 million
total environmental remediation liability for SCE,
$128 million
has been recorded as a regulatory asset. SCE expects to recover
$46 million
through an incentive mechanism that allows SCE to recover
90%
of its environmental remediation costs at certain sites (SCE may request to include additional sites) and
$82 million
through a mechanism that allows SCE to recover
100%
of the costs incurred at certain sites through customer rates. SCE's identified sites include several sites for which there is a lack of currently available information, including the nature and magnitude of contamination, and the extent, if any, that SCE may be held responsible for contributing to any costs incurred for remediating these sites. Thus, no reasonable estimate of cleanup costs can be made for these sites.
The ultimate costs to clean up SCE's identified sites may vary from its recorded liability due to numerous uncertainties inherent in the estimation process, such as: the extent and nature of contamination; the scarcity of reliable data for identified sites; the varying costs of alternative cleanup methods; developments resulting from investigatory studies; the possibility of identifying additional sites; and the time periods over which site remediation is expected to occur. SCE believes that, due to these uncertainties, it is reasonably possible that cleanup costs at the identified material sites and immaterial sites could exceed its recorded liability by up to
$165 million
and
$7 million
, respectively. The upper limit of this range of costs was estimated using assumptions least favorable to SCE among a range of reasonably possible outcomes.
SCE expects to clean up and mitigate its identified sites over a period of up to
30
years. Remediation costs for each of the next
four
years are expected to range from
$7 million
to
$23 million
. Costs incurred for the six months ended June 30,
2016
and 2015 were
$1 million
and
$3 million
, respectively.
Based upon the CPUC's regulatory treatment of environmental remediation costs incurred at SCE, SCE believes that costs ultimately recorded will not materially affect its results of operations, financial position or cash flows. There can be no assurance, however, that future developments, including additional information about existing sites or the identification of new sites, will not require material revisions to estimates.
Nuclear Insurance
SCE is a member of NEIL, a mutual insurance company owned by entities with nuclear facilities. NEIL provides insurance for nuclear property damage, including damages caused by acts of terrorism up to specified limits, and for accidental outages for active facilities. The amount of nuclear property damage insurance purchased for San Onofre and Palo Verde exceeds the minimum federal requirement of
$1.06 billion
. If NEIL losses at any nuclear facility covered by the arrangement were to exceed the accumulated funds for these insurance programs, SCE could be assessed retrospective premium adjustments of up to approximately
$52 million
per year.
Federal law limits public offsite liability claims for bodily injury and property damage from a nuclear incident to the amount of available financial protection, which is currently approximately
$13.4 billion
. Based on its ownership interests, SCE could be required to pay a maximum of approximately
$255 million
per nuclear incident. However, it would have to pay no more than approximately
$38 million
per incident in any one year.
For more information on nuclear insurance coverage, see Note 11 in the 2015 Form 10-K.
Wildfire Insurance
Severe wildfires in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of the failure of electric and other utility equipment. Invoking a California Court of Appeal decision, plaintiffs pursuing these claims have relied on the doctrine of inverse condemnation, which can impose strict liability (including liability for a claimant's attorneys' fees) for property damage. Prolonged drought conditions in California have also increased the duration of the wildfire season and the risk of severe wildfire events. SCE has approximately
$910 million
of third party insurance coverage for wildfire liabilities for the period from July 2016 to May 2017. SCE's program includes approximately
$90 million
in self-insurance at various levels within the
$910 million
of third party insurance coverage, which combined, equals approximately
$1 billion
. In addition, SCE has a self-insured retention of
$10 million
per wildfire occurrence. SCE may experience coverage reductions and/or increased insurance costs in future years. No assurance can be given that future losses will not exceed the limits of SCE's insurance coverage.
Spent Nuclear Fuel
Under federal law, the Department of Energy ("DOE") is responsible for the selection and construction of a facility for the permanent disposal of spent nuclear fuel and high-level radioactive waste. The DOE has not met its contractual obligation to accept spent nuclear fuel. Extended delays by the DOE have led to the construction of costly alternatives and associated siting and environmental issues. Currently, both San Onofre and Palo Verde have interim storage for spent nuclear fuel on site sufficient for their current license period.
In June 2010, the United States Court of Federal Claims issued a decision granting SCE and the San Onofre co-owners damages of approximately
$142 million
(SCE share
$112 million
) to recover costs incurred through December 31, 2005 for the DOE's failure to meet its obligation to begin accepting spent nuclear fuel from San Onofre. SCE received payment from the federal government in the amount of the damage award. In April 2016, SCE, as operating agent, settled a lawsuit on behalf of the San Onofre owners against the DOE for
$162 million
, including reimbursement for legal costs (SCE share
$124 million
) to compensate for damages caused by the DOE's failure to meet its obligation to begin accepting spent nuclear fuel for the period from January 1, 2006 to December 31, 2013. The settlement also provides for a claim submission/audit process for expenses incurred from 2014 – 2016, where SCE will submit a claim for damages caused by the DOE failure to accept spent nuclear fuel each year, followed by a government audit and payment of the claim. This process will make additional legal action to recover damages incurred in 2014 – 2016 unnecessary. All damages recovered by SCE are subject to CPUC review as to how these amounts would be distributed among customers, shareholders, or to offset fuel decommissioning or storage costs.
Note 12. Preferred and Preference Stock of SCE
During the first quarter of 2016, SCE issued
$300 million
of
5.45%
Series K Preference Stock (
120,004
shares; cumulative,
$2,500
liquidation value) to SCE Trust V, a special purpose entity formed to issue trust securities as discussed in Note 3. The Series K Preference Stock may be redeemed at par, in whole, but not in part, at any time prior to March 15, 2026 if certain changes in tax or investment company laws occur. On or after March 15, 2026, SCE may redeem the Series K shares at par, in whole or in part and distributions will accrue and be payable at a floating rate. The shares are not subject to mandatory redemption. The proceeds were used to redeem
$125 million
of SCE's Series D Preference Stock and for general corporate purposes.
Note 13. Accumulated Other Comprehensive Loss
Edison International's accumulated other comprehensive loss, net of tax consist of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Beginning balance
|
$
|
(54
|
)
|
|
$
|
(59
|
)
|
|
$
|
(56
|
)
|
|
$
|
(58
|
)
|
Pension and PBOP – net loss:
|
|
|
|
|
|
|
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(4
|
)
|
Reclassified from accumulated other comprehensive loss
1
|
1
|
|
|
4
|
|
|
3
|
|
|
6
|
|
Change
|
1
|
|
|
3
|
|
|
3
|
|
|
2
|
|
Ending Balance
|
$
|
(53
|
)
|
|
$
|
(56
|
)
|
|
$
|
(53
|
)
|
|
$
|
(56
|
)
|
|
|
1
|
These items are included in the computation of net periodic pension and PBOP expense. See Note 8 for additional information.
|
SCE's accumulated other comprehensive loss, net of tax consist of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Beginning balance
|
$
|
(21
|
)
|
|
$
|
(27
|
)
|
|
$
|
(22
|
)
|
|
$
|
(28
|
)
|
Pension and PBOP – net loss:
|
|
|
|
|
|
|
|
Other comprehensive loss before reclassifications
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
Reclassified from accumulated other comprehensive loss
1
|
1
|
|
|
2
|
|
|
2
|
|
|
3
|
|
Change
|
1
|
|
|
1
|
|
|
2
|
|
|
2
|
|
Ending Balance
|
$
|
(20
|
)
|
|
$
|
(26
|
)
|
|
$
|
(20
|
)
|
|
$
|
(26
|
)
|
|
|
1
|
These items are included in the computation of net periodic pension and PBOP expense. See Note 8 for additional information.
|
Note 14. Interest and Other Income and Other Expenses
Interest and other income and other expenses are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
(in millions)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
SCE interest and other income:
|
|
|
|
|
|
|
|
|
Equity allowance for funds used during construction
|
|
$
|
19
|
|
|
$
|
21
|
|
|
$
|
42
|
|
|
$
|
42
|
|
Increase in cash surrender value of life insurance policies and life insurance benefits
|
|
11
|
|
|
7
|
|
|
17
|
|
|
17
|
|
Interest income
|
|
2
|
|
|
2
|
|
|
3
|
|
|
3
|
|
Other
|
|
1
|
|
|
1
|
|
|
3
|
|
|
2
|
|
Total SCE interest and other income
|
|
33
|
|
|
31
|
|
|
65
|
|
|
64
|
|
Other income of Edison International Parent and Other
1
|
|
—
|
|
|
12
|
|
|
—
|
|
|
18
|
|
Total Edison International interest and other income
|
|
$
|
33
|
|
|
$
|
43
|
|
|
$
|
65
|
|
|
$
|
82
|
|
SCE other expenses:
|
|
|
|
|
|
|
|
|
Civic, political and related activities and donations
|
|
8
|
|
|
9
|
|
|
$
|
12
|
|
|
$
|
14
|
|
Other
|
|
3
|
|
|
8
|
|
|
7
|
|
|
10
|
|
Total SCE other expenses
|
|
11
|
|
|
17
|
|
|
19
|
|
|
24
|
|
Total Edison International other expenses
|
|
$
|
11
|
|
|
$
|
17
|
|
|
$
|
19
|
|
|
$
|
24
|
|
|
|
1
|
Reflects Edison Capital's income related to the sale of affordable housing projects for the three and six months ended June 30, 2015.
|
Note 15. Supplemental Cash Flows Information
Supplemental cash flows information for continuing operations is:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edison International
|
|
SCE
|
|
Six months ended June 30,
|
(in millions)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Cash payments for interest and taxes:
|
|
|
|
|
|
|
|
Interest, net of amounts capitalized
|
$
|
228
|
|
|
$
|
230
|
|
|
$
|
221
|
|
|
$
|
222
|
|
Tax payments, net
|
12
|
|
|
3
|
|
|
32
|
|
|
125
|
|
Non-cash financing and investing activities:
|
|
|
|
|
|
|
|
Dividends declared but not paid:
|
|
|
|
|
|
|
|
Common stock
|
$
|
156
|
|
|
$
|
136
|
|
|
$
|
—
|
|
|
$
|
147
|
|
Preferred and preference stock
|
12
|
|
|
18
|
|
|
12
|
|
|
18
|
|
Details of debt exchange:
|
|
|
|
|
|
|
|
Pollution-control bonds redeemed (2.875%)
|
$
|
—
|
|
|
$
|
(203
|
)
|
|
$
|
—
|
|
|
$
|
(203
|
)
|
Pollution-control bonds issued (1.875%)
|
—
|
|
|
203
|
|
|
—
|
|
|
203
|
|
SCE's accrued capital expenditures at
June 30, 2016
and
2015
were
$338 million
and
$393 million
, respectively. Accrued capital expenditures will be included as an investing activity in the consolidated statements of cash flow in the period paid.
During the second quarter of 2015, SCE amended a power contract classified as a capital lease, which resulted in a reduction in the lease obligation and asset by $
147 million
.
CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
The management of Edison International and SCE, under the supervision and with the participation of Edison International's and SCE's respective Chief Executive Officers and Chief Financial Officers, have evaluated the effectiveness of Edison International's and SCE's disclosure controls and procedures (as that term is defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended), respectively, as of the end of the second quarter of 2016. Based on that evaluation, Edison International's and SCE's respective Chief Executive Officers and Chief Financial Officers have each concluded that, as of the end of the period, Edison International's and SCE's disclosure controls and procedures, respectively, were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in Edison International's or SCE's internal control over financial reporting, respectively, during the second quarter of 2016 that have materially affected, or are reasonably likely to materially affect, Edison International's or SCE's internal control over financial reporting.
Jointly Owned Plant
Edison International's and SCE's respective scope of evaluation of internal control over financial reporting includes their Jointly Owned SCE Projects as discussed in Note 2. Property, Plant and Equipment in the 2015 Form 10-K.
LEGAL PROCEEDINGS
The following proceeding was previously reported to comply with SEC regulations, which require disclosure of certain information about proceedings arising under federal, state or local environmental provisions if a company reasonably believes that such proceedings might result in monetary sanctions of $100,000 or more.
Shaver Lake Dam Project Administrative Civil Liability Complaint
In 2011, SCE installed a PVC plastic geomembrane liner on the Shaver Lake Dam to prevent water seepage. Before starting the project, SCE received the required regulatory permits and approvals. SCE and the California Department of Fish and Wildlife executed a Streambed Alteration Agreement in November 2011 that governed SCE's activities in Shaver Lake as required by state and federal law. SCE also obtained the required federal Clean Water Act Certification in November 2011 for the project's completion.
In February 2012, the California Department of Fish and Wildlife and the Central Valley Regional Water Quality control Board issued letters alleging that SCE had violated provisions of the Streambed Alteration Agreement and certain conditions of the federal Clean Water Act Certification, respectively. Both letters alleged that during the draining of Shaver Lake, SCE failed to prevent the discharge of sediment into an adjoining creek, causing the deaths of fish in the lake and creek. In October 2014, SCE received a pre-issuance draft of an Administrative Civil Liability Complaint from the Central Valley Regional Water Quality Control Board alleging violations of certain permit conditions relating to the Shaver Lake Dam Project. The Regional Water Quality Control Board is seeking $25 million in civil penalties for the violations. SCE disputes the allegations but is working with the regulatory agencies to resolve the matter.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Purchases of Equity Securities by Edison International and Affiliated Purchasers
The following table contains information about all purchases of Edison International Common Stock made by or on behalf of Edison International in the second quarter of 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
(a) Total
Number of Shares
(or Units)
Purchased
1
|
|
(b) Average
Price Paid per Share (or Unit)
1
|
|
(c) Total
Number of Shares
(or Units)
Purchased
as Part of
Publicly
Announced
Plans or
Programs
|
|
(d) Maximum
Number (or
Approximate
Dollar Value)
of Shares
(or Units) that May
Yet Be Purchased
Under the Plans or
Programs
|
April 1, 2016 to April 30, 2016
|
175,895
|
|
|
|
$
|
69.79
|
|
|
|
—
|
|
—
|
May 1, 2016 to May 31, 2016
|
311,408
|
|
|
|
70.99
|
|
|
|
—
|
|
—
|
June 1, 2016 to June 30, 2016
|
244,477
|
|
|
|
75.44
|
|
|
|
—
|
|
—
|
Total
|
731,780
|
|
|
|
$
|
72.19
|
|
|
|
—
|
|
—
|
|
|
1
|
The shares were purchased by agents acting on Edison International's behalf for delivery to plan participants to fulfill requirements in connection with Edison International's: (i) 401(k) Savings Plan; (ii) Dividend Reinvestment and Direct Stock Purchase Plan; and (iii) long-term incentive compensation plans. The shares were purchased in open-market transactions pursuant to plan terms or participant elections. The shares were never registered in Edison International's name and none of the shares purchased were retired as a result of the transactions.
|
EXHIBITS
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Edison International Bylaws, as amended effective September 30, 2016 (File No. 1-9936, filed as Exhibit 3.1 to Edison International's Form 8-K dated May 25, 2016 and filed May 25, 2016)*
|
|
|
|
3.2
|
|
Southern California Edison Company Bylaws, as amended effective June 1, 2016 (File No. 1-2313, filed as Exhibit 3.2 to Southern California Edison Company's Form 8-K dated May 25, 2016 and filed May 25, 2016)*
|
|
|
|
10.1**
|
|
Edison International 2007 Performance Incentive Plan, as amended and restated effective May 2, 2016 (File No. 1-9936, filed as Exhibit 10.1 to Edison International's Form 8-K dated April 28, 2016 and filed April 29, 2016)
|
|
|
|
|
|
|
31.1
|
|
Certifications of the Chief Executive Officer and Chief Financial Officer of Edison International pursuant to Section 302 of the Sarbanes-Oxley Act
|
|
|
|
31.2
|
|
Certifications of the Chief Executive Officer and Chief Financial Officer of Southern California Edison Company pursuant to Section 302 of the Sarbanes-Oxley Act
|
|
|
|
32.1
|
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of Edison International required by Section 906 of the Sarbanes-Oxley Act
|
|
|
|
32.2
|
|
Certifications of the Chief Executive Officer and the Chief Financial Officer of Southern California Edison Company required by Section 906 of the Sarbanes-Oxley Act
|
|
|
|
101.1
|
|
Financial statements from the quarterly report on Form 10-Q of Edison International for the quarter ended June 30, 2016, filed on July 28, 2016, formatted in XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements
|
|
|
|
101.2
|
|
Financial statements from the quarterly report on Form 10-Q of Southern California Edison Company for the quarter ended June 30, 2016, filed on July 28, 2016, formatted in XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements
|
________________________________________
|
|
*
|
Incorporated by reference pursuant to Rule 12b-32.
|
|
|
**
|
Indicates a management contract or compensatory plan or arrangement, as required by Item 15(a)(3) of Form 10-K.
|