XML 54 R38.htm IDEA: XBRL DOCUMENT

Compensation and Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2022

Pension and Other Postretirement Benefits

Employee Savings Plan Employer Contributions


	Edison
	International		SCE

(in millions)	Years ended December 31,
2022	$	103	$	101
2021		97		96
2020		93		92

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The following table summarizes total expense and tax benefits associated with stock-based compensation:


	Edison International						SCE

	Years ended December 31,
(in millions)	2022		2021		2020		2022		2021		2020
Stock-based compensation expense¹:
Stock options	$	13	$	16	$	15	$	7	$	8	$	7
Performance shares		13		9		5		6		4		2
Restricted stock units		14		12		8		9		8		4
Other		2		2		1		—		—		—
Total stock-based compensation expense	$	42	$	39	$	29	$	22	$	20	$	13
Income tax benefits related to stock-based compensation expense	$	9	$	4	$	4	$	5	$	3	$	3

1	Reflected in "Operation and maintenance" on Edison International's and SCE's consolidated statements of income.

Black-Sholes Option-Pricing Model Assumptions


	Years ended December 31,
	2022	2021	2020
Expected terms (in years)	5.0	5.4	5.2
Risk-free interest rate	1.6% - 4.1%	1.1% - 1.3%	0.4% - 0.6%
Expected dividend yield	4.0% - 5.0%	4.1% - 4.8%	4.2% - 5.0%
Weighted average expected dividend yield	4.0%	4.5%	4.7%
Expected volatility	27.8% - 28.6%	26.9% - 27.1%	24.9% - 26.9%
Weighted average volatility	27.8%	26.9%	25.0%

Summary of Stock Options Activity

The following is a summary of the status of Edison International's stock options:


		Weighted Average
				Remaining	Aggregate
		Exercise		Contractual	Intrinsic Value
	Shares	Price		Term (years)	(in millions)
Edison International:
Outstanding at December 31, 2021	12,354,826	$	62.78
Granted	909,504		63.67
Forfeited or expired	(223,836)		64.89
Exercised¹	(1,156,938)		54.16
Outstanding at December 31, 2022	11,883,556		63.64	5.43
Vested and expected to vest at December 31, 2022	11,538,210		63.73	5.35	$	30
Exercisable at December 31, 2022	8,074,165	$	64.94	4.31	$	17
SCE:
Outstanding at December 31, 2021	6,180,154	$	62.03
Granted	470,852		63.51
Forfeited or expired	(143,235)		64.83
Exercised¹	(810,294)		53.78
Affiliate transfers, net	100,155		66.09
Outstanding at December 31, 2022	5,797,632		63.31	5.45
Vested and expected to vest at December 31, 2022	5,620,440		63.40	5.38	$	17
Exercisable at December 31, 2022	3,849,057	$	64.64	4.28	$	9

1	Edison International and SCE recognized tax benefits of $5 million and $3 million, respectively, from stock options exercised in 2022.

Schedule of Unrecognized Compensation Expense

At December 31, 2022, total unrecognized compensation cost related to stock options and the weighted average period the cost is expected to be recognized are as follows:

Supplemental Data on Stock-based Compensation

The following is a summary of supplemental data on stock options:


	Edison International						SCE

	Years ended December 31,
(in millions, except per award amounts)	2022		2021		2020		2022		2021		2020
Weighted average grant date fair value per option granted	$	9.92	$	7.26	$	8.18	$	9.92	$	7.30	$	8.16
Fair value of options vested		8		3		2		5		3		2
Value of options exercised		17		8		9		12		6		7

Summary of Nonvested Share Activity

The following is a summary of the status of Edison International's nonvested performance shares:


	Equity Awards
		Weighted Average
	Shares	Fair Value
Edison International:
Nonvested at December 31, 2021	262,808	$	61.92
Granted	265,916		67.88
Forfeited	(17,643)		64.68
Vested	(108,251)		67.55
Nonvested at December 31, 2022	402,830	$	64.22
SCE:
Nonvested at December 31, 2021	137,807	$	61.50
Granted	138,254		67.74
Forfeited	(12,565)		65.60
Vested	(54,487)		67.37
Affiliate transfers, net	1,064		59.25
Nonvested at December 31, 2022	210,073	$	63.93

Summary of Nonvested Restricted Stock Units Activity

The following is a summary of the status of Edison International's nonvested restricted stock units:


	Edison International			SCE
		Weighted Average			Weighted Average
		Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value
Nonvested at December 31, 2021	546,155	$	59.44	344,932	$	58.45
Granted	298,558		63.58	218,721		63.58
Forfeited	(24,780)		60.42	(19,073)		60.37
Vested	(121,751)		62.76	(62,034)		62.91
Affiliate transfers, net	—		—	5,789		57.64
Nonvested at December 31, 2022	698,182	$	60.60	488,335	$	60.13

Pension Plans

Pension and Other Postretirement Benefits

Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan

Information on pension plan assets and benefit obligations for continuing and discontinued operations is shown below.


	Edison International						SCE

	Years ended December 31,
(in millions)	2022			2021			2022			2021
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	4,171		$	4,476		$	3,694		$	3,984
Service cost		120			130			115			126
Interest cost		111			103			97			92
Actuarial gain		(589)			(245)			(503)			(246)
Benefits paid		(289)			(293)			(244)			(262)
Projected benefit obligation at end of year	$	3,524		$	4,171		$	3,159		$	3,694
Change in plan assets
Fair value of plan assets at beginning of year	$	4,296		$	4,171		$	4,061		$	3,940
Actual return on plan assets		(575)			368			(544)			348
Employer contributions		30			50			2			35
Benefits paid		(289)			(293)			(244)			(262)
Fair value of plan assets at end of year		3,462			4,296			3,275			4,061
Funded status at end of year	$	(62)		$	125		$	116		$	367
Amounts recognized in the consolidated balance sheets consist of ¹:
Long-term assets	$	139		$	384		$	128		$	384
Current liabilities		(26)			(26)			(2)			(2)
Long-term liabilities		(175)			(233)			(10)			(15)
	$	(62)		$	125		$	116		$	367
Amounts recognized in accumulated other comprehensive loss consist of:
Net loss¹	$	17			74			8			12
Amounts recognized as a regulatory liability		(139)			(395)			(139)			(395)
Accumulated benefit obligation at end of year	$	3,401		$	3,947		$	3,049		$	3,491
Pension plans with plan assets in excess of an accumulated benefit obligation:
Projected benefit obligation		3,524			4,171			3,159			3,694
Accumulated benefit obligation		3,401			3,947			3,049			3,491
Fair value of plan assets		3,462			4,296			3,275			4,061
Weighted average assumptions used to determine obligations at end of year:
Discount rate		5.36	%		2.75	%		5.36	%		2.75	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%		4.00	%

The SCE liability excludes a long-term payable due to Edison International Parent of $93 million and $132 million at December 31, 2022 and 2021, respectively, related to certain SCE postretirement benefit obligations transferred to Edison International Parent. SCE's accumulated other comprehensive loss of $8 million and $12 million at December 31, 2022 and 2021, excludes net losses of $3 million and $32 million related to these benefits, respectively.

Expense Components for Plans

Net periodic pension expense components are:


	Edison International						SCE

	Years ended December 31,
(in millions)	2022		2021		2020		2022		2021		2020
Service cost	$	120	$	130	$	121	$	118	$	127	$	119
Non-service cost (benefit)
Interest cost		111		103		124		101		95		114
Expected return on plan assets		(227)		(222)		(215)		(215)		(211)		(203)
Settlement costs		4		—		—		4		—		—
Amortization of prior service cost		—		1		2		—		1		1
Amortization of net loss		5		11		10		2		7		7
Regulatory adjustment		6		25		16		6		25		16
Total non-service benefit¹		(101)		(82)		(63)		(102)		(83)		(65)
Total expense recognized	$	19	$	48	$	58	$	16	$	44	$	54

1	Included in "Other income" on Edison International's and SCE's consolidated income statements. For further details, see Note 16.

Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income

Other changes in pension plan assets and benefit obligations recognized in other comprehensive income:


	Edison International						SCE

	Years ended December 31,
(in millions)	2022		2021		2020		2022		2021		2020
Net (gain) loss	$	(45)	$	(10)	$	11	$	(24)	$	(5)	$	9
Settlement charges		(4)		—		—		(4)		—		—
Amortization of net loss		(8)		(11)		(10)		(5)		(7)		(7)
Total (gain) loss recognized in other comprehensive income		(57)		(21)		1		(33)		(12)		2
Total recognized in expense and other comprehensive income	$	(38)	$	27	$	59	$	(17)	$	32	$	56

Schedule of Assumptions Used

Edison International and SCE used the following weighted average assumptions to determine pension expense:


	Years ended December 31,
	2022		2021		2020
Discount rate	2.75	%	2.38	%	3.11	%
Rate of compensation increase	4.00	%	4.00	%	4.10	%
Expected long-term return on plan assets	5.50	%	5.50	%	6.00	%
Interest crediting rate for cash balance account
Starting rate	3.12	%	3.03	%	3.61	%
Ultimate rate	4.50	%	4.50	%	5.00	%
Year ultimate rate is reached	2026		2025		2025

Schedule of Expected Benefit Payments

The following benefit payments, which reflect service rendered and expected future service, are expected to be paid:


	Edison
(in millions)	International		SCE
2023	$	310	$	269
2024		314		274
2025		313		276
2026		321		282
2027		308		276
2028 – 2032		1,428		1,291

Schedule of Pension Plan Assets by Hierarchy Levels


	December 31, 2022
(in millions)	Level 1		Level 2		NAV¹		Total
U.S. government and agency securities²	$	281	$	293	$	—	$	574
Corporate stocks³		227		3		—		230
Corporate bonds⁴		—		973		—		973
Common/collective funds⁵		—		—		658		658
Partnerships/joint ventures⁶		—		—		613		613
Other investment entities⁷		—		—		63		63
Registered investment companies⁸		206		—		159		365
Interest-bearing cash		14		—		—		14
Other		—		48		7		55
Total	$	728	$	1,317	$	1,500	$	3,545
Receivables and payables, net								(83)
Combined net plan assets available for benefits								3,462
SCE's share of net plan assets							$	3,275


	December 31, 2021
(in millions)	Level 1		Level 2		NAV¹		Total
U.S. government and agency securities²	$	217	$	918	$	—	$	1,135
Corporate stocks³		466		4		—		470
Corporate bonds⁴		—		815		—		815
Common/collective funds⁵		—		—		964		964
Partnerships/joint ventures⁶		—		—		688		688
Other investment entities⁷		—		—		110		110
Registered investment companies⁸		57		—		31		88
Interest-bearing cash		8		—		—		8
Other		—		45		—		45
Total	$	748	$	1,782	$	1,793	$	4,323
Receivables and payables, net								(27)
Combined net plan assets available for benefits								4,296
SCE's share of net plan assets							$	4,061

These investments are measured at fair value using the net asset value per share practical expedient and have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the net plan assets available for benefits.

2	Level 1 U.S. government and agency securities are U.S. treasury bonds and notes. Level 2 primarily relates to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

3	Corporate stocks are diversified. At December 31, 2022 and 2021, respectively, performance for actively managed separate accounts is primarily benchmarked against the Russell Indexes (36% and 44%) and Morgan Stanley Capital International (MSCI) index (64% and 56%).

4	Corporate bonds are diversified. At December 31, 2022 and 2021, respectively, this category includes $67 million and $61 million for collateralized mortgage obligations and other asset backed securities.

The common/collective assets are invested in equity index funds that seek to track performance of the Standard and Poor's 500 Index (41% at both December 31, 2022 and 2021). 10% are invested on Russell 1000 indexes at December 31, 2021. In addition, at December 31, 2022 and 2021, respectively, 46% and 38% of the assets in this category are in index funds which seek to track performance in the MSCI All Country World Index ex-US and 11% and 9% of this category are in non-index U.S. equity fund, which is actively managed.

At December 31, 2022 and 2021, respectively, 76% and 62% are invested in private equity funds with investment strategies that include branded consumer products and clean technology companies, 18% and 17% are invested in ABS including distressed mortgages and commercial and residential loans, 2% and 3% are invested in a broad range of financial assets in all global markets. 15% are invested in publicly traded fixed income securities at December 31, 2021.

7	At December 31, 2022, 64% are invested in domestic mortgage backed securities and 36% in high yield debt securities, respectively. At December 31, 2021, 71% are invested in emerging market equity securities and 20% in domestic mortgage backed securities, respectively.

At December 31, 2022, 56% are invested in Level 1 corporate bond fund, 21% in fixed income fund used for cash management and 22% in US equity fund, respectively. At December 31, 2021, 63% were invested in Level 1 registered investment companies that primarily consisted of a global equity mutual fund which seeks to outperform the MSCI World Total Return Index and 35% on fixed income fund used for cash management.

Postretirement Benefits Other Than Pensions

Pension and Other Postretirement Benefits

Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan


	Edison International						SCE

	Years ended December 31,
(in millions)	2022			2021			2022			2021
Change in benefit obligation
Benefit obligation at beginning of year	$	1,904		$	2,073		$	1,895		$	2,064
Service cost		34			40			34			40
Interest cost		56			52			55			52
Actuarial gain		(598)			(190)			(596)			(190)
Plan participants' contributions		29			29			29			29
Benefits paid		(94)			(100)			(94)			(100)
Benefit obligation at end of year	$	1,331		$	1,904		$	1,323		$	1,895
Change in plan assets
Fair value of plan assets at beginning of year	$	2,772		$	2,717		$	2,772		$	2,717
Actual return on assets		(527)			119			(527)			119
Employer contributions		7			7			7			7
Plan participants' contributions		29			29			29			29
Benefits paid		(94)			(100)			(94)			(100)
Fair value of plan assets at end of year		2,187			2,772			2,187			2,772
Funded status at end of year	$	856		$	868		$	864		$	877
Amounts recognized in the consolidated balance sheets consist of:
Long-term assets	$	871		$	885		$	871		$	885
Current liabilities		(8)			(8)			(7)			(8)
Long-term liabilities		(7)			(9)			—			—
	$	856		$	868		$	864		$	877
Amounts recognized in accumulated other comprehensive loss consist of:
Net (gain)/loss	$	(2)		$	1		$	—		$	—
Amounts recognized as a regulatory liability		(867)			(886)			(867)			(886)
Weighted average assumptions used to determine obligations at end of year:
Discount rate		5.43	%		2.95	%		5.43	%		2.95	%
Assumed health care cost trend rates:
Rate assumed for following year		6.75	%		6.25	%		6.75	%		6.25	%
Ultimate rate		5.00	%		5.00	%		5.00	%		5.00	%
Year ultimate rate reached		2029			2029			2029			2029

Expense Components for Plans

Net periodic PBOP expense components are:


	Edison International						SCE

	Years ended December 31,
(in millions)	2022		2021		2020		2022		2021		2020
Service cost	$	34	$	40	$	38	$	34	$	40	$	37
Non-service cost (benefit)
Interest cost		56		52		63		55		52		63
Expected return on plan assets		(97)		(106)		(119)		(97)		(106)		(119)
Amortization of prior service cost		(2)		(1)		(1)		(2)		(1)		(1)
Amortization of net gain		(45)		(35)		(29)		(45)		(36)		(29)
Regulatory adjustment		55		51		49		55		51		49
Total non-service benefit¹		(33)		(39)		(37)		(34)		(40)		(37)
Total expense	$	1	$	1	$	1	$	—	$	—	$	—

1	Included in "Other income" on Edison International's and SCE's consolidated income statements. For further details, see Note 16.

Schedule of Assumptions Used

Edison International and SCE used the following weighted average assumptions to determine PBOP expense:


	Years ended December 31,
	2022		2021		2020
Discount rate	2.95	%	2.67	%	3.32	%
Expected long-term return on plan assets	3.50	%	4.00	%	4.90	%
Assumed health care cost trend rates:
Current year	6.25	%	6.50	%	6.50	%
Ultimate rate	5.00	%	5.00	%	5.00	%
Year ultimate rate reached	2029		2029		2029

Schedule of Expected Benefit Payments

The following benefit payments (net of plan participants' contributions) are expected to be paid:


	Edison
(in millions)	International		SCE
2023	$	78	$	78
2024		81		80
2025		82		82
2026		84		84
2027		86		85
2028 – 2032		450		447

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs


	December 31, 2022
(in millions)	Level 1		Level 2		NAV¹		Total
U.S. government and agency securities²	$	222	$	304	$	—	$	526
Corporate stocks³		103		2		—		105
Corporate notes and bonds⁴		—		860		—		860
Common/collective funds⁵		—		—		413		413
Partnerships⁶		—		—		119		119
Registered investment companies⁷		55		—		—		55
Interest bearing cash		—		56		—		56
Other⁸		—		59		—		59
Total	$	380	$	1,281	$	532	$	2,193
Receivables and payables, net								(6)
Combined net plan assets available for benefits								2,187
SCE's share of net plan assets							$	2,187


	December 31, 2021
(in millions)	Level 1		Level 2		NAV¹		Total
U.S. government and agency securities²	$	813	$	10	$	—	$	823
Corporate stocks³		145		3		—		148
Corporate notes and bonds⁴		—		997		—		997
Common/collective funds⁵		—		—		544		544
Partnerships⁶		—		—		107		107
Registered investment companies⁷		44		—		—		44
Interest bearing cash		—		51		—		51
Other⁸		—		59		—		59
Total	$	1,002	$	1,120	$	651	$	2,773
Receivables and payables, net								(1)
Combined net plan assets available for benefits							$	2,772
SCE's share of net plan assets							$	2,772

2	Level 1 U.S. government and agency securities are U.S. treasury bonds and notes. Level 2 primarily relates to the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association.

3	Corporate stock performance for actively managed separate accounts is primarily benchmarked against the Russell Indexes (73%) and the MSCI All Country World Index (27%) for both 2022 and 2021.

4	Corporate notes and bonds are diversified and include approximately $150 million for commercial collateralized mortgage obligations and other asset backed securities at both December 31, 2022 and 2021.

At December 31, 2022 and 2021, respectively, 53% and 65% of the common/collective assets are invested in index funds which seek to track performance in the MSCI All Country World Index Investable Market Index. 27% and 25% are invested in a non-index U.S. equity fund which is actively managed. The remaining assets in this category are primarily invested in fixed income fund and emerging market fund.

At December 31, 2022 and 2021, respectively, 63% and 54% of the partnerships are invested in private equity and venture capital funds. Investment strategies for these funds include branded consumer products, clean and information technology and healthcare. Of the remaining partnerships category, 31% and 35% are invested in asset backed securities including distressed mortgages, distressed companies and commercial and residential loans and debt and equity of banks, 6% and 11% are invested in a broad range of financial assets in all global markets.

At December 31, 2022 and 2021, respectively, registered investment companies were primarily invested in a money market fund (75% and 61%) and exchange rate trade funds which seek to track performance of MSCI Emerging Market Index, Russell 2000 Index and international small cap equities (25% and 39%)

8	Other includes $53 million and $44 million of municipal securities at December 31, 2022 and 2021, respectively.

Edison International

Unrecognized compensation cost, net of expected forfeitures (in millions)

Weighted average period (in years)