XML 80 R15.htm IDEA: XBRL DOCUMENT v2.4.0.8
Compensation and Benefit Plans
 9 Months Ended
Sep. 30, 2013
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]  
Compensation and Benefit Plans
Compensation and Benefit Plans
Pension Plans
Edison International made contributions of $175 million during the nine months ended September 30, 2013, which includes contributions of $163 million by SCE. Edison International expects to make contributions of $13 million during the remainder of 2013, which includes $2 million from SCE. Annual contributions made 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.
Expense components for continuing operations are:
 
Three months ended September 30,
 
Nine months ended
September 30,
(in millions)
2013
 
2012
 
2013
 
2012
Edison International:
 
 
 
 
 
 
 
Service cost
$
38

 
$
44

 
$
114

 
$
121

Interest cost
42

 
46

 
126

 
137

Expected return on plan assets
(58
)
 
(53
)
 
(172
)
 
(164
)
Settlement costs1
24

 
1

 
73

 
4

Amortization of prior service cost
1

 
1

 
3

 
3

Amortization of net loss2
15

 
18

 
45

 
48

Expense under accounting standards
$
62

 
$
57

 
$
189

 
$
149

Regulatory adjustment (deferred)
(7
)
 
(57
)
 
(21
)
 
(3
)
Total expense recognized
$
55

 
$
—

 
$
168

 
$
146

SCE:
 
 
 
 
 
 
 
Service cost
$
37

 
$
46

 
$
111

 
$
120

Interest cost
41

 
45

 
123

 
135

Expected return on plan assets
(57
)
 
(52
)
 
(171
)
 
(162
)
Settlement costs
24

 
1

 
72

 
3

Amortization of prior service cost
1

 
1

 
3

 
3

Amortization of net loss2
14

 
14

 
42

 
42

Expense under accounting standards
$
60

 
$
55

 
$
180

 
$
141

Regulatory adjustment (deferred)
(7
)
 
(57
)
 
(21
)
 
(3
)
Total expense recognized
$
53

 
$
(2
)
 
$
159

 
$
138

1 
Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International was $2 million for the nine months ended September 30, 2013.
2 
Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was $4 million and $3 million for the three months ended September 30, 2013, respectively, and $11 million and $8 million for the nine months ended September 30, 2013, respectively.
Under generally accepted accounting principles (“GAAP”), a settlement is recorded when lump-sum payments exceed estimated annual service and interest costs. As of May 31, 2013 and August 31, 2013, lump-sum payments to employees retiring in 2013 from the SCE Retirement Plan (primarily due to workforce reductions described below) exceeded the estimated service and interest costs for the year. A settlement requires re-measurement of both the plan pension obligations and plan assets as of the date of the settlement. The re-measurement of the SCE Retirement Plan as of May 31, 2013 and August 31, 2013 resulted in total actuarial gains of $338 million, including $341 million for SCE. The actuarial gains are primarily due to an increase in the discount rate (from 3.75% at December 31, 2012 to 4.25% as of May 31, 2013 and 4.50% as of August 31, 2013) due to higher interest rates and performance of the plan assets.
After re-measurement, GAAP requires an acceleration of a portion of unrecognized net losses attributable to such lump-sum payments as additional pension expense as reflected in the above table. The additional pension expense related to SCE did not impact net income as such amounts are probable of recovery through future rates.
The projected benefit obligations exceeded the fair value of the SCE Retirement Plan assets by $739 million, including $701 million for SCE, at August 31, 2013 compared to $1.11 billion, including $1.07 billion for SCE, at December 31, 2012.
Postretirement Benefits Other Than Pensions
Edison International made contributions of $22 million during the nine months ended September 30, 2013 and expects to make contributions of $13 million during the remainder of 2013, 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.
Expense components for continuing operations are:
 
Three months ended September 30,
 
Nine months ended
September 30,
(in millions)
2013
 
2012
 
2013
 
2012
Edison International:
 
 
 
 
 
 
 
Service cost
$
14

 
$
13

 
$
42

 
$
37

Interest cost
26

 
28

 
78

 
85

Expected return on plan assets
(30
)
 
(27
)
 
(90
)
 
(81
)
Special termination benefits1
—

 
3

 
10

 
3

Amortization of prior service credit
(9
)
 
(9
)
 
(27
)
 
(27
)
Amortization of net loss2
7

 
12

 
21

 
35

Total expense
$
8

 
$
20

 
$
34

 
$
52

SCE:
 
 
 
 
 
 
 
Service cost
$
14

 
$
12

 
$
41

 
$
36

Interest cost
26

 
28

 
78

 
84

Expected return on plan assets
(30
)
 
(27
)
 
(90
)
 
(81
)
Special termination benefits1
—

 
3

 
10

 
3

Amortization of prior service credit
(9
)
 
(9
)
 
(27
)
 
(27
)
Amortization of net loss2
7

 
11

 
21

 
33

Total expense
$
8

 
$
18

 
$
33

 
$
48

1 
Due to the reduction in workforce, SCE has incurred costs for extended retiree health care coverage.
2 
Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was less than $1 million and zero for the three- and nine-months ended September 30, 2013, respectively.
Workforce Reductions
In 2012, SCE commenced multiple efforts to reduce its workforce, which were largely completed by the end of the second quarter of 2013, in order to reflect SCE's strategic direction to optimize its cost structure, moderate customer rate increases and align its cost structure with its peers. In addition, in June 2013, SCE announced plans to permanently retire San Onofre. This announcement will result in a further reduction of the San Onofre workforce by approximately 960 employees and support organizations by approximately 175 employees. The majority of such reductions occurred in 2013. See Note 9 for further details. The following table provides a summary of changes in the accrued severance liability associated with these reductions:
(in millions)
 
 
Balance at January 1, 2013
 
$
104

Additions
 
109

Payments
 
(132
)
Balance at September 30, 2013
 
$
81


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.