Edison International(EIX) - 2024 Q1 - Quarterly Report

FORM 10-Q General Information Identifies Edison International and SCE as Form 10-Q registrants, detailing their filing status, addresses, and common stock outstanding Registrant Information Identifies Edison International and SCE as Form 10-Q registrants, detailing their filing status, addresses, and common stock outstanding for Q1 2024 - Edison International and Southern California Edison Company (SCE) are filing this Form 10-Q for the quarter ended March 31, 2024[1] Registrant Details | Registrant | File Number | Incorporation State | IRS Employer ID | Trading Symbol | Exchange | Filer Status | | :----------------------------- | :---------- | :------------------ | :-------------- | :------------- | :------- | :------------- | | EDISON INTERNATIONAL | 1-9936 | California | 95-4137452 | EIX | NYSE LLC | Large Accelerated | | SOUTHERN CALIFORNIA EDISON COMPANY | 1-2313 | California | 95-1240335 | None | N/A | Non-accelerated | Common Stock Outstanding (as of April 23, 2024) | Registrant | Shares Outstanding | | :----------------------------- | :----------------- | | Edison International | 384,753,060 | | Southern California Edison Company | 434,888,104 | GLOSSARY Provides definitions for key terms used throughout the report FORWARD-LOOKING STATEMENTS Outlines cautionary statements regarding future expectations and potential risks MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Analyzes Edison International's and SCE's financial performance, liquidity, capital resources, and key operational developments MANAGEMENT OVERVIEW Summarizes Edison International's and SCE's business, operating results, and key developments, including the 2025 GRC and wildfire updates - Edison International's first quarter 2024 earnings decreased $321 million from the first quarter of 2023, driven by a $305 million decrease in SCE's earnings and a $16 million increase in Edison International Parent and Other's loss[26] Edison International Net Income (Loss) and Core Earnings (in millions) | (in millions) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | Change | | :------------------------------------------ | :---------------------------------- | :---------------------------------- | :----- | | Net income (loss) available to Edison International | | | | | SCE | $65 | $370 | $(305) | | Edison International Parent and Other | (76) | (60) | (16) | | Edison International | (11) | 310 | (321) | | Less: Non-core items | | | | | SCE | | | | | 2017/2018 Wildfire/Mudslide Events claims and expenses, net of recoveries | (467) | (90) | (377) | | Other Wildfires claims and expenses, net of recoveries | (119) | — | (119) | | Wildfire Insurance Fund expense | (36) | (52) | 16 | | 2021 NDCTP probable disallowance | — | (30) | 30 | | Income tax benefit | 174 | 48 | 126 | | Edison International Parent and Other | | | | | Customer revenues for EIS insurance contract, net of (claims) | (1) | 22 | (23) | | Income tax expense | — | (4) | 4 | | Total non-core items | (449) | (106) | (343) | | Core earnings (loss) | | | | | SCE | 513 | 494 | 19 | | Edison International Parent and Other | (75) | (78) | 3 | | Edison International | $438 | $416 | $22 | Highlights of Operating Results Summarizes key financial performance metrics and significant changes in core and non-core earnings for the period - SCE's core earnings increased by $19 million, primarily due to higher authorized revenue from Track 4 and an increased authorized rate of return, partially offset by higher interest expense[27] - Edison International Parent and Other's core loss decreased by $3 million, mainly due to lower preferred dividends and operating expenses, partially offset by higher interest expense[28] - Non-core items included significant charges for 2017/2018 Wildfire/Mudslide Events claims ($467 million in 2024 vs. $90 million in 2023) and Other Wildfires claims ($119 million in 2024)[28] 2025 General Rate Case Details SCE's 2025 General Rate Case application, proposed revenue requirements, and intervenor positions - SCE filed its 2025 GRC application requesting a test year 2025 revenue requirement of approximately $10.3 billion, a 23% increase over the 2024 requirement[31] - Intervenors (Cal Advocates and TURN) proposed lower revenue requirements, with Cal Advocates suggesting $9.3 billion (11% increase) and TURN's proposals estimated at a 12% increase[32][33] - SCE's rebuttal testimony updated its test year 2025 revenue requirement to approximately $10.1 billion (21% increase) and proposed further increases for 2026-2028[34] Capital Program Outlines total capital expenditures and projected weighted average annual rate base for SCE Total Capital Expenditures (in billions) | Period | Amount (in billions) | | :------------------------------------ | :------------------- | | Three months ended March 31, 2024 | $1.2 | | Three months ended March 31, 2023 | $1.3 | | Forecast for 2024 – 2028 | $32.2 to $37.5 | - Weighted average annual rate base is projected to range from $43.0 billion to $60.6 billion for 2024 – 2028[35] Southern California Wildfires and Mudslides Provides updates on estimated losses, financial summaries, and recovery efforts related to the 2017/2018 Wildfire/Mudslide Events - Management recorded a $490 million increase in estimated losses for the 2017/2018 Wildfire/Mudslide Events as of March 31, 2024, primarily due to higher than expected demands and settlement values in the Woolsey Fire mediation program[37] 2017/2018 Wildfire/Mudslide Events Financial Summary (through March 31, 2024) | Item | Amount (in billions) | | :------------------------------------ | :------------------- | | Accrued Estimated Losses | $9.9 | | Recoveries from Insurance | $2.0 | | Expected Recoveries through FERC rates | $0.44 | | After-tax Net Charges to Earnings | $5.4 | | Paid under Executed Settlements | $8.8 | | To be Paid under Executed Settlements | $0.2 | | Best Estimate of Expected Losses for Remaining Claims | $0.831 | - SCE expects to seek CPUC-jurisdictional rate recovery of approximately $6.9 billion of uninsured claims for the 2017/2018 Wildfire/Mudslide Events, with the first application for $2.4 billion filed in August 2023[42] - Substantial uncertainty remains regarding CPUC's interpretation and application of the prudency standard for cost recovery of pre-AB 1054 wildfire claims[42] RESULTS OF OPERATIONS Details SCE and Edison International Parent and Other financial performance, categorizing results into earning and cost-recovery activities, noting significant income decreases SCE Consolidated Results of Operations (in millions) | (in millions) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------ | :-------------------------------- | :-------------------------------- | | Operating revenue | $4,064 | $3,950 | | Total operating expenses | $3,803 | $3,342 | | Operating income (loss) | $261 | $608 | | Interest expense | $(374) | $(300) | | Other income, net | $135 | $120 | | Income before income taxes | $22 | $428 | | Income tax (benefit) expense | $(84) | $29 | | Net income | $106 | $399 | | Net income available to common stock | $65 | $370 | - SCE's net income decreased by $293 million, primarily due to a $518 million increase in wildfire-related claims (net of recoveries) and a $74 million increase in interest expense, partially offset by a $114 million increase in operating revenue[46][47][50] - Edison International Parent and Other's net loss attributable to common shareholders increased by $16 million, mainly due to a lack of earnings from an EIS insurance contract and higher interest expense[53] Southern California Edison Company Analyzes SCE's financial performance, distinguishing between earning and cost-recovery activities, and detailing changes in revenue, expenses, and income taxes - SCE's operations are categorized into Earning Activities (revenue to recover costs and earn return on investment) and Cost-Recovery Activities (balancing accounts for specific project/program costs, no return earned)[44][191] Three months ended March 31, 2024 versus March 31, 2023 Compares SCE's consolidated results of operations for the three months ended March 31, 2024, against the prior year, broken down by earning and cost-recovery activities SCE Results of Operations by Activity (in millions) | (in millions) | Earning Activities 2024 | Cost-Recovery Activities 2024 | Total Consolidated 2024 | Earning Activities 2023 | Cost-Recovery Activities 2023 | Total Consolidated 2023 | | :------------------------ | :---------------------- | :---------------------------- | :---------------------- | :---------------------- | :---------------------------- | :---------------------- | | Operating revenue | $2,449 | $1,615 | $4,064 | $2,233 | $1,717 | $3,950 | | Purchased power and fuel | — | 1,008 | 1,008 | — | 1,318 | 1,318 | | Operation and maintenance | 690 | 601 | 1,291 | 670 | 411 | 1,081 | | Wildfire-related claims, net of insurance recoveries | 614 | — | 614 | 96 | — | 96 | | Wildfire Insurance Fund expense | 36 | — | 36 | 52 | — | 52 | | Depreciation and amortization | 690 | 11 | 701 | 649 | 7 | 656 | | Property and other taxes | 149 | 4 | 153 | 137 | 2 | 139 | | Total operating expenses | 2,179 | 1,624 | 3,803 | 1,604 | 1,738 | 3,342 | | Operating income (loss) | 270 | (9) | 261 | 629 | (21) | 608 | | Interest expense | (360) | (14) | (374) | (295) | (5) | (300) | | Other income, net | 112 | 23 | 135 | 94 | 26 | 120 | | Income before income taxes | 22 | — | 22 | 428 | — | 428 | | Income tax (benefit) expense | (84) | — | (84) | 29 | — | 29 | | Net income | 106 | — | 106 | 399 | — | 399 | | Less: Preference stock dividend requirements | 41 | — | 41 | 29 | — | 29 | | Net income available to common stock | $65 | $— | $65 | $370 | $— | $370 | Earning Activities Details the drivers of changes in SCE's operating revenue, operation and maintenance expenses, wildfire-related claims, and interest expense from earning activities - Higher operating revenue of $216 million was primarily due to increased CPUC-related revenue ($173 million from Track 4 and cost of capital adjustment, $63 million from wildfire mitigation expenses) and FERC-related revenue ($28 million from wildfire claims/expenses), partially offset by lower CSRP revenue ($37 million)[47] - Operation and maintenance expenses increased by $20 million, mainly due to higher wildfire mitigation expenses ($45 million) and inspections/maintenance ($35 million), offset by lower CSRP expenses ($30 million)[47] - Wildfire-related claims, net of insurance recoveries, increased significantly to $614 million in 2024 from $96 million in 2023[50] - Interest expense increased by $65 million due to higher interest rates on long-term debt and balancing account overcollections, and increased long-term borrowings[50] Cost-Recovery Activities Explains changes in SCE's purchased power and fuel costs and operation and maintenance costs within cost-recovery activities - Purchased power and fuel costs decreased by $310 million, mainly due to lower purchased power and gas prices and volumes, partially offset by hedging activities[50] - Operation and maintenance costs increased by $190 million, driven by recognition of previously deferred wildfire mitigation expenses ($229 million) and higher uncollectible expenses ($38 million), partially offset by lower insurance costs due to expanded self-insurance ($97 million)[50] Supplemental Operating Revenue Information Clarifies that SCE's revenues are not impacted by changes in retail electricity sales volume due to decoupling - SCE's revenues are not affected by changes in retail electricity sales volume due to the CPUC-authorized decoupling mechanism[49] Income Taxes Analyzes SCE's income tax benefit and effective tax rate, explaining the impact of pre-tax income and flow-through ratemaking - SCE's income tax benefit increased by $113 million, primarily due to a decrease in pre-tax income[50] SCE Effective Tax Rates | Period | Effective Tax Rate | | :-------------------------- | :----------------- | | Three months ended March 31, 2024 | (381.8)% | | Three months ended March 31, 2023 | 6.8% | - The effective tax rate is below the federal statutory rate of 21% due to the CPUC's flow-through ratemaking treatment for current tax benefits from certain temporary differences, leading to regulatory assets/liabilities[50] Edison International Parent and Other Examines the net loss from operations for Edison International Parent and Other, detailing the contributing factors Loss from Operations Details the increase in net loss attributable to common shareholders for Edison International Parent and Other Edison International Parent and Other Net Loss (in millions) | (in millions) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Edison International Parent and Other net loss | $(54) | $(34) | | Less: Preferred stock dividend requirements | 22 | 26 | | Edison International Parent and Other net loss attributable to common shareholders | $(76) | $(60) | - The net loss attributable to common shareholders increased by $16 million, primarily due to the absence of earnings from an EIS insurance contract and higher interest expense, partially offset by lower preferred dividends and operating expenses[53] LIQUIDITY AND CAPITAL RESOURCES Outlines liquidity and capital management for SCE and Edison International, covering funding, credit ratings, regulatory proceedings, and capital plans - SCE expects to fund its cash requirements through operating cash flows, capital market and bank financings, and its credit facility[55] - Edison International Parent and Other expects to fund net cash requirements through cash on hand, dividends from SCE, and capital market and bank financings[74] - Credit ratings for both entities are sensitive to successful implementation of AB 1054 and the longevity of the Wildfire Insurance Fund[57][80] Southern California Edison Company Details SCE's liquidity, capital structure, debt issuances, regulatory proceedings, and capital investment plans - SCE issued $3.0 billion in first and refunding mortgage bonds in Q1 2024 to fund wildfire claims, refinance debt, and for general corporate purposes[56][172] - The cost of capital adjustment mechanism triggered an increase of $201 million to SCE's 2024 GRC-related revenue requirement[58] Available Liquidity Summarizes SCE's cash on hand, available credit facility, and unused standby letters of credit as of March 31, 2024 SCE Available Liquidity (as of March 31, 2024) | Item | Amount (in millions) | | :---------------------------------- | :------------------- | | Cash on hand | $850 | | Available on $3.4 billion revolving credit facility | $2,800 | | Unused standby letters of credit | $525 | - SCE's debt to total capitalization ratio was 0.58 to 1 at March 31, 2024, in compliance with covenants[61] Regulatory Proceedings Outlines recent CPUC decisions and SCE's filings regarding wildfire mitigation and emergency restoration cost recovery - CPUC fully authorized SCE's requested revenue requirement of approximately $327 million for 2021 wildfire mitigation and vegetation management costs in March 2024[63] - A proposed CPUC decision in April 2024 would approve recovery of $312 million in capital and $200 million in O&M expenses for 2020 emergency wildfire restoration[64] - SCE filed its Multi-year Wildfire Mitigation and Catastrophic Events (WMCE) filing in April 2024, seeking to recover $320 million in incremental O&M and $702 million in incremental capital expenditures for 2019-2023[65] Capital Investment Plan Provides updates on key capital projects, including the Riverside Transmission Reliability Project, Eldorado-Lugo-Mohave Upgrade, and energy storage projects - The CPUC denied a petition to modify the Riverside Transmission Reliability Project for full undergrounding[66] - The Eldorado-Lugo-Mohave Upgrade Project is expected to be in service in 2025, with additional work required for natural gas transmission line mitigation[67] - All three utility-owned energy storage projects (537.5 MW aggregate capacity) are expected to be in-service before the end of July 2024[68] Decommissioning of San Onofre Notes SCE's accrued probable disallowance of $30 million related to San Onofre decommissioning costs - SCE accrued for a probable disallowance of approximately $30 million related to the 2021 NDCTP for San Onofre decommissioning costs[69] Margin and Collateral Deposits Details SCE's collateral requirements and the potential impact of a credit rating downgrade on additional collateral needs SCE Collateral Requirements (as of March 31, 2024, in millions) | Item | Amount (in millions) | | :---------------------------------------------------------------------- | :------------------- | | Collateral posted | $266 | | Incremental collateral for purchased power and fuel contracts (downgrade to below investment grade) | $53 | | Incremental collateral for financial hedging activities (adverse market price movement) | $123 | | Posted and potential collateral requirements | $442 | - A credit rating downgrade below investment grade could require SCE to post additional collateral for power procurement contracts and environmental remediation obligations[57][72] Edison International Parent and Other Outlines Edison International Parent and Other's available liquidity, debt to capitalization ratio, and income tax expectations Edison International Parent and Other Available Liquidity (as of March 31, 2024) | Item | Amount (in millions) | | :---------------------------------- | :------------------- | | Cash on hand | $142 | | Available on $1.5 billion revolving credit facility | $1,200 | - Edison International's consolidated debt to total capitalization ratio was 0.64 to 1 at March 31, 2024, in compliance with covenants[79] Edison International Income taxes Discusses the expected impact of the Corporate Alternative Minimum Tax and the Inflation Reduction Act on Edison International and SCE - Edison International expects to be subject to the 15% Corporate Alternative Minimum Tax (CAMT) on its consolidated federal tax returns beginning in 2026, and SCE beginning in 2025[81] - The Inflation Reduction Act of 2022 (IRA) is expected to generate investment tax credits for SCE's utility-owned storage projects, benefiting customers[82] Historical Cash Flows Presents a historical overview of cash flows from operating, financing, and investing activities for both SCE and Edison International Parent and Other Southern California Edison Company Details SCE's historical cash flows, highlighting significant changes in operating and financing activities SCE Historical Cash Flows (in millions) | (in millions) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $1,086 | $(20) | | Net cash provided by financing activities | $934 | $1,249 | | Net cash used in investing activities | $(1,276) | $(1,305) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $744 | $(76) | - Net cash provided by operating activities significantly increased by $1,106 million, from a $20 million outflow in 2023 to a $1,086 million inflow in 2024, primarily due to changes in regulatory assets/liabilities and wildfire-related claims[86] - Net cash provided by financing activities decreased by $315 million, mainly due to lower commercial paper borrowings and higher short-term debt repayments, despite increased long-term debt issuances[91] - Cash flows used in investing activities remained stable at approximately $1.3 billion, primarily for capital expenditures[92] Edison International Parent and Other Summarizes Edison International Parent and Other's historical cash flows, noting changes in operating and financing activities Edison International Parent and Other Historical Cash Flows (in millions) | (in millions) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(43) | $(70) | | Net cash provided by financing activities | $54 | $67 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $11 | $(3) | - Net cash used in operating activities decreased by $27 million, primarily due to lower payments relating to interest and operating costs[96] - Net cash provided by financing activities decreased by $13 million, mainly due to lower long-term debt issuance and higher short-term debt repayments in 2024 compared to 2023[96] MARKET RISK EXPOSURES Primary market risks for Edison International and SCE, including commodity price and credit risk, remain consistent with the 2023 Form 10-K - No material changes in primary market risks (commodity price risk and credit risk) were reported for the three months ended March 31, 2024, compared to the 2023 Form 10-K[97] CRITICAL ACCOUNTING ESTIMATES AND POLICIES Refers to Edison International's and SCE's critical accounting policies as detailed in the 2023 MD&A, with no new estimates or policies this period - Critical accounting policies are consistent with those discussed in the 2023 MD&A[98] NEW ACCOUNTING GUIDANCE Outlines recently issued or adopted accounting standards, noting no material changes for 2024, and highlights new FASB guidance under evaluation - No material accounting standards were adopted in 2024[138] - New FASB guidance effective January 1, 2025, will enhance disclosures for public entities' reportable segments and income taxes, which Edison International and SCE are currently evaluating[139][140] QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk disclosures are incorporated by reference from the 'Market Risk Exposures' section within the MD&A - Market risk disclosures are incorporated by reference from the 'Market Risk Exposures' section of the MD&A[100] FINANCIAL STATEMENTS Presents the consolidated financial statements, including statements of income, comprehensive income, balance sheets, and cash flows for Edison International and SCE Edison International Consolidated Statements of Income Edison International reported a $11 million net loss for Q1 2024, a significant decrease from prior year, driven by wildfire claims and interest expense Edison International Consolidated Statements of Income (in millions, except per-share amounts) | (in millions, except per-share amounts) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :-------------------------------------- | :---------------------------------- | :---------------------------------- | | Operating revenue | $4,078 | $3,966 | | Total operating expenses | $3,833 | $3,346 | | Operating income | $245 | $620 | | Interest expense | $(444) | $(361) | | Other income, net | $138 | $119 | | (Loss) income before income taxes | $(61) | $378 | | Income tax (benefit) expense | $(113) | $13 | | Net income | $52 | $365 | | Net (loss) income available to Edison International common shareholders | $(11) | $310 | | Basic (loss) earnings per common share | $(0.03) | $0.81 | | Diluted (loss) earnings per common share | $(0.03) | $0.81 | Edison International Consolidated Statements of Comprehensive Income Edison International's comprehensive income attributable to common shareholders decreased to $11 million for Q1 2024, reflecting lower net income Edison International Consolidated Statements of Comprehensive Income (in millions) | (in millions, unaudited) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :----------------------- | :-------------------------------- | :-------------------------------- | | Net income | $52 | $365 | | Other comprehensive income, net of tax | — | $2 | | Comprehensive income | $52 | $367 | | Less: Comprehensive income attributable to noncontrolling interests | $41 | $29 | | Comprehensive income attributable to Edison International | $11 | $338 | Edison International Consolidated Balance Sheets Edison International's total assets increased to $83.6 billion and liabilities to $66.0 billion due to cash, regulatory assets, debt, and wildfire claims Edison International Consolidated Balance Sheets (in millions) | (in millions, unaudited) | March 31, 2024 | December 31, 2023 | | :----------------------- | :------------- | :---------------- | | ASSETS | | | | Cash and cash equivalents | $992 | $345 | | Total current assets | $7,878 | $6,811 | | Total investments | $4,350 | $4,227 | | Total property, plant and equipment | $56,688 | $56,084 | | Total other assets | $14,683 | $14,636 | | Total assets | $83,599 | $81,758 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $7,907 | $8,598 | | Long-term debt | $32,576 | $30,316 | | Wildfire-related claims (long-term) | $1,657 | $1,368 | | Total deferred credits and other liabilities | $25,501 | $24,900 | | Total liabilities | $65,984 | $63,814 | | Total equity | $17,615 | $17,944 | Edison International Consolidated Statements of Cash Flows Edison International's net cash from operating activities significantly improved to $1,043 million in Q1 2024, driven by wildfire claims and regulatory assets Edison International Consolidated Statements of Cash Flows (in millions) | (in millions, unaudited) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :----------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $1,043 | $(90) | | Net cash provided by financing activities | $988 | $1,316 | | Net cash used in investing activities | $(1,276) | $(1,305) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $755 | $(79) | | Cash, cash equivalents and restricted cash at end of period | $1,287 | $838 | SCE Consolidated Statements of Income SCE reported a net income of $106 million for Q1 2024, a substantial decrease from prior year, due to increased wildfire claims and interest expense SCE Consolidated Statements of Income (in millions) | (in millions, unaudited) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :----------------------- | :-------------------------------- | :-------------------------------- | | Operating revenue | $4,064 | $3,950 | | Total operating expenses | $3,803 | $3,342 | | Operating income | $261 | $608 | | Interest expense | $(374) | $(300) | | Other income, net | $135 | $120 | | Income before income taxes | $22 | $428 | | Income tax (benefit) expense | $(84) | $29 | | Net income | $106 | $399 | | Net income available to common stock | $65 | $370 | SCE Consolidated Statements of Comprehensive Income SCE's comprehensive income decreased to $107 million for Q1 2024 from $399 million in prior year, reflecting lower net income SCE Consolidated Statements of Comprehensive Income (in millions) | (in millions, unaudited) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :----------------------- | :-------------------------------- | :-------------------------------- | | Net income | $106 | $399 | | Other comprehensive income, net of tax | $1 | — | | Comprehensive income | $107 | $399 | SCE Consolidated Balance Sheets SCE's total assets increased to $83.3 billion and liabilities to $62.2 billion due to cash, regulatory assets, debt, and wildfire claims SCE Consolidated Balance Sheets (in millions) | (in millions, unaudited) | March 31, 2024 | December 31, 2023 | | :----------------------- | :------------- | :---------------- | | ASSETS | | | | Cash and cash equivalents | $850 | $214 | | Total current assets | $7,711 | $6,633 | | Total investments | $4,334 | $4,211 | | Total property, plant and equipment | $56,682 | $56,078 | | Total other assets | $14,607 | $14,561 | | Total assets | $83,334 | $81,483 | | LIABILITIES AND EQUITY | | | | Total current liabilities | $7,065 | $7,795 | | Long-term debt | $28,555 | $26,297 | | Wildfire-related claims (long-term) | $1,657 | $1,368 | | Total deferred credits and other liabilities | $26,617 | $25,987 | | Total liabilities | $62,237 | $60,079 | | Total equity | $21,097 | $21,404 | SCE Consolidated Statements of Cash Flows SCE's net cash from operating activities significantly improved to $1,086 million in Q1 2024, driven by wildfire claims and regulatory assets SCE Consolidated Statements of Cash Flows (in millions) | (in millions, unaudited) | Three months ended March 31, 2024 | Three months ended March 31, 2023 | | :----------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by (used in) operating activities | $1,086 | $(20) | | Net cash provided by financing activities | $934 | $1,249 | | Net cash used in investing activities | $(1,276) | $(1,305) | | Net increase (decrease) in cash, cash equivalents and restricted cash | $744 | $(76) | | Cash, cash equivalents and restricted cash at end of period | $1,142 | $690 | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Provides detailed explanations and disclosures supporting the consolidated financial statements, covering accounting policies, equity, debt, and contingencies Note 1. Summary of Significant Accounting Policies Outlines Edison International's and SCE's organizational structure, basis of presentation, and key accounting policies, including wildfire insurance fund amortization - Edison International is the parent company of SCE and Edison Energy, LLC (Trio). SCE is an investor-owned public utility, while Trio is a global energy advisory firm[119] - The estimated life of the Wildfire Insurance Fund increased from 15 to 20 years in Q1 2024, reducing wildfire insurance fund expense from $52 million in Q1 2023 to $36 million in Q1 2024[130] SCE Allowance for Uncollectible Accounts (in millions) | (in millions) | March 31, 2024 | March 31, 2023 | | :------------------------ | :------------- | :------------- | | Beginning balance | $364 | $354 | | Current period provision | $61 | $20 | | Write-offs, net of recoveries | $(62) | $(30) | | Ending balance | $363 | $344 | - SCE's 2024 annual transmission revenue requirement update with FERC reflects a $1.1 billion requirement for 2024, a $290 million (20%) decrease from 2023, due to returning an overcollection and lower wildfire-related claims[135][137] Note 2. Consolidated Statements of Changes in Equity Details changes in equity for Edison International and SCE, noting decreases in total equity for both entities due to net loss and dividends Edison International Changes in Equity (in millions) | (in millions) | Dec 31, 2023 Balance | Net Income | Common Stock Issued | Common Stock Dividends | Preferred Stock Dividend | Dividends to Noncontrolling Interests | Noncash Stock-based Compensation | Preferred Stock Repurchased | Mar 31, 2024 Balance | | :------------------------ | :------------------- | :--------- | :------------------ | :--------------------- | :----------------------- | :------------------------------------ | :------------------------------- | :-------------------------- | :------------------- | | Preferred Stock | $1,673 | — | — | — | — | — | — | $(19) | $1,654 | | Common Stock | $6,338 | — | $11 | — | — | — | $12 | — | $6,361 | | Accumulated Other Comprehensive Loss | $(9) | — | — | — | — | — | — | — | $(9) | | Retained Earnings | $7,499 | $11 | — | $(300) | $(44) | — | — | — | $7,166 | | Subtotal | $15,501 | $11 | $11 | $(300) | $(44) | — | $12 | $(19) | $15,172 | | Noncontrolling Interests Preference Stock | $2,443 | $41 | — | — | — | $(41) | — | — | $2,443 | | Total Equity | $17,944 | $52 | $11 | $(300) | $(44) | $(41) | $12 | $(19) | $17,615 | SCE Changes in Equity (in millions) | (in millions) | Dec 31, 2023 Balance | Net Income | Other Comprehensive Income | Common Stock Dividends | Preference Stock Dividends | Stock-based Compensation | Noncash Stock-based Compensation | Mar 31, 2024 Balance | | :------------------------ | :------------------- | :--------- | :------------------------- | :--------------------- | :------------------------- | :----------------------- | :------------------------------- | :------------------- | | Preference Stock | $2,495 | — | — | — | — | — | — | $2,495 | | Common Stock | $2,168 | — | — | — | — | — | — | $2,168 | | Additional Paid-in Capital | $8,446 | — | — | — | — | $(20) | $7 | $8,433 | | Accumulated Other Comprehensive Loss | $(12) | — | $1 | — | — | — | — | $(11) | | Retained Earnings | $8,307 | $106 | — | $(360) | $(41) | — | — | $8,012 | | Total Equity | $21,404 | $106 | $1 | $(360) | $(41) | $(20) | $7 | $21,097 | Note 3. Variable Interest Entities Defines VIEs and details SCE's involvement, including consolidation of SCE Recovery Funding LLC and variable interests in unconsolidated PPAs and trusts - SCE consolidates SCE Recovery Funding LLC, a VIE that issued $1.6 billion in securitized bonds for AB 1054 Excluded Capital Expenditures, with bondholders having no recourse to SCE[146][147] - SCE has variable interests in unconsolidated Power Purchase Agreements (PPAs) and trusts (SCE Trust II-VII) that issue preference securities, but is not the primary beneficiary as it does not control their commercial and operating activities[150][153] Impact of SCE Recovery Funding LLC on SCE's Consolidated Balance Sheets (in millions) | (in millions) | March 31, 2024 | December 31, 2023 | | :------------------------ | :------------- | :---------------- | | Other current assets | $77 | $53 | | Regulatory assets: non-current | $1,547 | $1,558 | | Regulatory liabilities: current | $32 | $34 | | Current portion of long-term debt | $47 | $47 | | Other current liabilities | $20 | $6 | | Long-term debt | $1,516 | $1,515 | Note 4. Fair Value Measurements Defines fair value, categorizes assets and liabilities into a three-level hierarchy, and details SCE's recurring fair value measurements and debt valuation - Fair value is categorized into Level 1 (unadjusted quoted prices in active markets), Level 2 (observable inputs for similar assets/liabilities), and Level 3 (significant unobservable inputs like CAISO CRR auction prices)[158][159][161] SCE Assets and Liabilities at Fair Value (as of March 31, 2024, in millions) | (in millions) | Level 1 | Level 2 | Level 3 | Netting and Collateral | Total | | :------------------------ | :------ | :------ | :------ | :--------------------- | :---- | | Assets at fair value | | | | | | | Derivative contracts | $— | $3 | $80 | $(3) | $80 | | Money market funds and other | $— | $22 | $— | $— | $22 | | Nuclear decommissioning trusts | $2,918 | $1,538 | $— | $— | $4,456 | | Total assets | $2,918 | $1,563 | $80 | $(3) | $4,558 | | Liabilities at fair value | | | | | | | Derivative contracts | $— | $94 | $— | $(94) | $— | | Total liabilities | $— | $94 | $— | $(94) | $— | Fair Value of Long-Term Debt (in millions) | (in millions) | March 31, 2024 Carrying Value | March 31, 2024 Fair Value | Dec 31, 2023 Carrying Value | Dec 31, 2023 Fair Value | | :------------------------ | :---------------------------- | :------------------------ | :-------------------------- | :---------------------- | | Edison International | $34,673 | $32,472 | $33,013 | $31,315 | | SCE | $30,152 | $27,881 | $28,494 | $26,712 | Note 5. Debt and Credit Agreements Details SCE's long-term debt issuances and the status of credit agreements for Edison International and SCE, including $3.0 billion in Q1 2024 mortgage bonds SCE Long-Term Debt Issuances (Three months ended March 31, 2024) | Description | Month of Issuance | Rate | Maturity Date | Amount (in millions) | | :---------- | :---------------- | :----- | :------------ | :------------------- | | Series 2024A | January 2024 | 4.875% | 2027 | $500 | | Series 2024B | January 2024 | 5.20% | 2034 | $900 | | Series 2024C | March 2024 | 5.35% | 2026 | $600 | | Series 2024D | March 2024 | 5.15% | 2029 | $600 | | Series 2024E | March 2024 | 5.75% | 2054 | $400 | Credit Facilities Status (as of March 31, 2024, in millions) | Borrower | Commitment | Outstanding Borrowings | Outstanding Letters of Credit | Amount Available | | :------------------------ | :--------- | :--------------------- | :---------------------------- | :--------------- | | Edison International Parent | $1,500 | $263 | $— | $1,237 | | SCE | $3,350 | $512 | $17 | $2,821 | | Total | $4,850 | $775 | $17 | $4,058 | - SCE had $525 million in unused capacity under uncommitted standby letters of credit[174] Note 6. Derivative Instruments Describes SCE's use of derivative financial instruments to manage commodity price and credit risk, detailing their fair value, financial statement impact, and notional volumes - SCE uses derivative financial instruments (options, swaps, futures) to manage exposure to commodity price risk for electricity and natural gas[175][176] - Realized gains and losses on derivative instruments are recognized as purchased power expense and are expected to be recovered from customers, while unrealized gains and losses are recorded as regulatory assets and liabilities, neither affecting earnings[183] SCE Notional Volumes of Derivative Instruments (as of March 31, 2024) | Commodity | Unit of Measure | Notional Volume | | :-------------------------------- | :-------------- | :-------------- | | Electricity options, swaps and forwards | Gigawatt hours | 5,533 | | Natural gas options, swaps and forwards | Billion cubic feet | 22 | | Congestion revenue rights | Gigawatt hours | 27,612 | Note 7. Revenue Disaggregates SCE's revenue into earning and cost-recovery activities, providing a summary table and details on deferred revenue from a transmission line sale - SCE's revenue is disaggregated into Earning Activities (revenue to recover costs and earn return on investment) and Cost-Recovery Activities (balancing accounts for specific project/program costs, no return earned)[191] SCE Operating Revenue by Activity (in millions) | (in millions) | Earning Activities 2024 | Cost-Recovery Activities 2024 | Total Consolidated 2024 | Earning Activities 2023 | Cost-Recovery Activities 2023 | Total Consolidated 2023 | | :------------------------ | :---------------------- | :---------------------------- | :---------------------- | :---------------------- | :---------------------------- | :---------------------- | | Revenue from contracts with customers | $2,175 | $1,595 | $3,770 | $2,076 | $1,660 | $3,736 | | Alternative revenue programs and other operating revenue | $274 | $20 | $294 | $157 | $57 | $214 | | Total operating revenue | $2,449 | $1,615 | $4,064 | $2,233 | $1,717 | $3,950 | - As of March 31, 2024, SCE had $364 million in deferred revenue related to a 2021 transmission line use sale, amortized over 30 years[189] Note 8. Income Taxes Provides income tax reconciliation for Edison International and SCE, highlighting flow-through ratemaking impact and SCE's negative effective tax rate in Q1 2024 Income Tax Reconciliation (in millions) | (in millions) | Edison International 2024 | Edison International 2023 | SCE 2024 | SCE 2023 | | :------------------------ | :------------------------ | :------------------------ | :------- | :------- | | (Loss) income from operations before income taxes | $(61) | $378 | $22 | $428 | | Provision for income tax at federal statutory rate of 21% | $(13) | $79 | $5 | $90 | | (Decrease) increase in income tax from: | | | | | | State tax, net of federal income tax effect | $(37) | $(1) | $(31) | $3 | | Property-related | $(55) | $(58) | $(55) | $(58) | | Other | $(8) | $(7) | $(3) | $(6) | | Total income tax (benefit) expense | $(113) | $13 | $(84) | $29 | | Effective tax rate | 185.2% | 3.4% | (381.8)% | 6.8% | - The CPUC's flow-through ratemaking treatment for certain property-related and other temporary differences reduces current authorized revenue requirements and results in regulatory assets for deferred income taxes[192] - Tax years 2020–2022 for IRS and 2013–2022 for California Franchise Tax Board remain open for examination[193] Note 9. Compensation and Benefit Plans Details net periodic pension and PBOP expense components for Edison International and SCE, with total pension expense of $5 million for Q1 2024 Net Periodic Pension Expense Components (in millions) | (in millions) | Edison International 2024 | Edison International 2023 | SCE 2024 | SCE 2023 | | :------------------------ | :------------------------ | :------------------------ | :------- | :------- | | Service cost | $24 | $25 | $24 | $24 | | Non-service cost (benefit) | $(19) | $(20) | $(19) | $(21) | | Total expense | $5 | $5 | $5 | $3 | Net Periodic PBOP Expense Components (in millions) | (in millions) | 2024 | 2023 | | :------------------------ | :--- | :--- | | Service cost | $3 | $5 | | Non-service cost (benefit) | $(3) | $(5) | | Total expense | $— | $— | - Non-service cost (benefit) for both pension and PBOP plans is included in 'Other Income, net'[196][197] Note 10. Investments Details investments in nuclear decommissioning trusts and strategic equity holdings by Edison International Parent and Other in electric technologies - Future decommissioning costs for SCE's nuclear assets are expected to be funded from independent decommissioning trusts[198] Nuclear Decommissioning Trust Investments (in millions) | (in millions) | March 31, 2024 Fair Value | December 31, 2023 Fair Value | | :------------------------ | :------------------------ | :--------------------------- | | Municipal bonds | $760 | $757 | | Government and agency securities | $1,137 | $1,186 | | Corporate bonds | $463 | $401 | | Short-term investments and receivables/payables | $178 | $171 | | Equity securities | $1,750 | $1,658 | | Total | $4,288 | $4,173 | - Edison International Parent and Other holds strategic equity investments in companies developing electric technologies and services, totaling $13 million in equity investments without readily determinable fair values as of March 31, 2024[202] Note 11. Regulatory Assets and Liabilities Details SCE's regulatory assets and liabilities, which increased to $11.8 billion and $10.8 billion, covering energy procurement, GRC, and wildfire risk mitigation SCE Regulatory Assets (in millions) | (in millions) | March 31, 2024 | December 31, 2023 | | :------------------------ | :------------- | :---------------- | | Current regulatory assets | $2,989 | $2,524 | | Long-term regulatory assets | $8,806 | $8,897 | | Total regulatory assets | $11,795 | $11,421 | SCE Regulatory Liabilities (in millions) | (in millions) | March 31, 2024 | December 31, 2023 | | :------------------------ | :------------- | :---------------- | | Current regulatory liabilities | $988 | $763 | | Long-term regulatory liabilities | $9,814 | $9,420 | | Total regulatory liabilities | $10,802 | $10,183 | Net Regulatory Balancing and Memorandum Accounts (in millions) | (in millions) | March 31, 2024 | December 31, 2023 | | :------------------------ | :------------- | :---------------- | | Energy procurement related costs | $(79) | $397 | | Public purpose and energy efficiency | $(1,815) | $(1,736) | | GRC related balancing accounts | $1,738 | $1,361 | | Wildfire risk mitigation and insurance | $834 | $1,169 | | Wildfire and drought restoration | $423 | $417 | | Other | $295 | $52 | | Assets, net of liabilities | $1,396 | $1,660 | Note 12. Commitments and Contingencies Details Edison International's and SCE's commitments and contingencies, focusing on Southern California wildfires, litigation, settlements, and environmental liabilities - Edison International and SCE are involved in numerous lawsuits related to the 2017/2018 Wildfire/Mudslide Events and Other Wildfires, with significant accrued losses and ongoing settlement processes[211][215] - For 2017/2018 Wildfire/Mudslide Events, a $490 million increase in estimated losses was recorded in Q1 2024, driven by higher demands in the Woolsey Fire mediation program[219] Wildfire-Related Claims Charges (Three months ended March 31, 2024, in millions) | (in millions) | 2017/2018 Wildfire/Mudslide Events | Other Wildfires | | :--------------------------------- | :--------------------------------- | :-------------- | | Charge for wildfire-related claims | $490 | $180 | | Expected recoveries | $(27) | $(63) | | Total pre-tax charge | $463 | $117 | | Income tax benefit | $(130) | $(33) | | Total after-tax charge | $333 | $84 | - SCE established an expanded customer-funded wildfire self-insurance program beginning July 1, 2023, with up to $1.0 billion coverage per policy year, subject to a shareholder contribution[278] - SCE's estimated minimum environmental remediation liability was $247 million as of March 31, 2024, with $227 million recorded as a regulatory asset, expected to be recovered through customer rates[284] Note 13. Equity Details changes in Edison International's common and preferred stock, including issuances for compensation and dividends, and the repurchase of $19 million Series B Preferred Stock - Edison International did not issue shares through its $500 million 'at-the-market' (ATM) program in Q1 2024[291] - In Q1 2024, Edison International issued 661,530 common shares for stock compensation, 70,246 shares for dividend payments, 43,300 shares for 401(k) plan, and 31,112 shares for Employee Stock Purchase Plan[292] - Edison International repurchased 20,000 shares of Series B Preferred Stock for $19 million in March 2024, recognizing a $1 million net gain[293] Note 14. Accumulated Other Comprehensive Loss Presents changes in accumulated other comprehensive loss (AOCL) for Edison International and SCE, noting slight improvement for SCE due to reclassification Changes in Accumulated Other Comprehensive Loss (in millions) | (in millions) | Edison International 2024 | Edison International 2023 | SCE 2024 | SCE 2023 | | :------------------------ | :------------------------ | :------------------------ | :------- | :------- | | Beginning balance | $(9) | $(11) | $(12) | $(8) | | Reclassified from accumulated other comprehensive loss (Pension and PBOP) | — | — | $1 | — | | Foreign currency translation adjustments | — | $2 | — | — | | Change | — | $2 | $1 | — | | Ending Balance | $(9) | $(9) | $(11) | $(8) | Note 15. Other Income Details components of 'Other income, net' for SCE and Edison International Parent and Other, with SCE's other income increasing to $135 million in Q1 2024 Other Income, Net (in millions) | (in millions) | 2024 | 2023 | | :------------------------ | :--- | :--- | | SCE other income (expense): | | | | Equity allowance for funds used during construction | $47 | $36 | | Increase in cash surrender value of life insurance policies and life insurance benefits | $12 | $11 | | Interest income | $64 | $60 | | Net periodic benefit income – non-service components | $22 | $26 | | Civic, political and related activities and donations | $(7) | $(9) | | Other | $(3) | $(4) | | Total SCE other income, net | $135 | $120 | | Other income (expense) of Edison International Parent and Other: | | | | Net (losses) gains on equity securities | $— | $(3) | | Interest income and other | $3 | $2 | | Total Edison International other income, net | $138 | $119 | Note 16. Supplemental Cash Flows Information Provides supplemental cash flow information, including cash payments for interest and non-cash activities, noting SCE's $620 million accrued capital expenditures Supplemental Cash Flows Information (in millions) | (in millions) | Edison International 2024 | Edison International 2023 | SCE 2024 | SCE 2023 | | :------------------------ | :------------------------ | :------------------------ | :------- | :------- | | Cash payments (receipts): | | | | | | Interest, net of amounts capitalized | $348 | $326 | $322 | $292 | | Income taxes, net | $— | $— | $— | $— | | Non-cash financing and investing activities: | | | | | | Dividends declared but not paid: | | | | | | Common stock | $300 | $282 | $360 | $350 | | Preference stock of SCE | $9 | $8 | $9 | $8 | - SCE's accrued capital expenditures were $620 million at March 31, 2024, which will be included as an investing activity when paid[297] Note 17. Related-Party Transactions Details related-party transactions, specifically SCE's wildfire liability insurance purchases from EIS and the transition to a customer-funded self-insurance program - SCE purchased wildfire liability insurance from EIS (a wholly-owned subsidiary of Edison International) for $273 million for the period to June 30, 2023[298] - SCE did not renew wildfire liability insurance from EIS after June 30, 2023, instead implementing a customer-funded wildfire self-insurance program[298] - Expected insurance recoveries from EIS included in SCE's consolidated balance sheets were $365 million at March 31, 2024[298] CONTROLS AND PROCEDURES Assesses the effectiveness of disclosure controls and internal control over financial reporting for Edison International and SCE Disclosure Controls and Procedures Edison International and SCE management concluded their disclosure controls and procedures were effective as of Q1 2024 - Edison International's and SCE's disclosure controls and procedures were effective as of March 31, 2024[300] Changes in Internal Control Over Financial Reporting No material changes in internal control over financial reporting were reported for Edison International or SCE during Q1 2024 - No material changes in internal control over financial reporting occurred during Q1 2024[301] Jointly Owned Utility Plant The evaluation of internal control over financial reporting for Edison International and SCE includes Jointly Owned Utility Projects - The evaluation of internal control over financial reporting includes Jointly Owned Utility Projects[302] LEGAL PROCEEDINGS Details ongoing legal actions and potential liabilities, primarily related to Southern California wildfires and environmental matters 2017/2018 Wildfire/Mudslide Events Updates ongoing legal proceedings for 2017/2018 Wildfire/Mudslide Events, including multiple lawsuits and scheduled trials, with resolution expected to take years - Multiple lawsuits related to the 2017/2018 Wildfire/Mudslide Events (Thomas, Koenigstein, Woolsey Fires) are ongoing against SCE and Edison International, involving individual, subrogation, and public entity plaintiffs[303] - As of April 23, 2024, approximately 1,300 individual plaintiff claims remain outstanding, in addition to claims from public entities like CAL OES and CAL FIRE[303] - A liability trial for CAL OES in the Woolsey Fire litigation is set for August 2024, and individual plaintiff damages trials are scheduled between December 2024 and April 2025[306] Environmental Proceedings Edison International and SCE disclose environmental proceedings expected to result in monetary sanctions of $1,000,000 or more - Environmental proceedings are disclosed if monetary sanctions are expected to be $1,000,000 or more[308] UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Reports on the repurchase of equity securities by Edison International and affiliated purchasers Purchases of Equity Securities by Edison International and Affiliated Purchasers Edison International repurchased 20,000 shares of Series B Preferred Stock in March 2024 at an average price of $952.08 per share Purchases of Equity Securities by Edison International (Q1 2024) | Series | Period | Total Number of Shares Purchased | Average Price Paid per Share | Purchased as Part of Publicly Announced Plans or Programs | | :---------------- | :------------------------- | :------------------------------- | :--------------------------- | :-------------------------------------------------------- | | Series B Preferred Stock | March 1, 2024 to March 31, 2024 | 20,000 | $952.08 | - | OTHER INFORMATION Provides additional disclosures, including information on trading plans of directors and officers Trading Plans No director or Section 16 officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024 - No director or Section 16 officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024[311] EXHIBITS Lists all exhibits filed as part of the Form 10-Q SIGNATURES Contains the required signatures for the Form 10-Q filing