Compensation and Benefit Plans

12 Months Ended

Dec. 31, 2020

Retirement Benefits [Abstract]

Compensation and Benefit Plans

Compensation and Benefit Plans

Employee Savings Plan

The 401(k) defined contribution savings plan is designed to supplement employees' retirement income. The employer contributions were as follows:

	Edison International		SCE
(in millions)	Years ended December 31,
2020	$	93	$	92
2019	82		81
2018	74		74

Pension Plans and Postretirement Benefits Other Than Pensions

Pension Plans

Noncontributory defined benefit pension plans (some with cash balance features) cover most employees meeting minimum service requirements. Employees hired by the Participating Companies on or after December 31, 2017 will no longer be eligible to participate in the Plan. In lieu of that, an additional non-contributory employer contribution will be deposited into the Edison 401(k) Savings Plan. SCE recognizes pension expense for its nonexecutive plan as calculated by the actuarial method used for ratemaking. The expected contributions (all by the employer) for Edison International and SCE are approximately $55 million and $31 million, respectively, for the year ending December 31, 2021. Annual contributions made by SCE to most of SCE's pension plans are anticipated to be recovered through CPUC-approved regulatory mechanisms.

The funded position of Edison International's pension is sensitive to changes in market conditions. Changes in overall interest rate levels significantly affect the company's liabilities, while assets held in the various trusts established to fund Edison International's pension are affected by movements in the equity and bond markets. Due to SCE's regulatory recovery treatment, a regulatory asset has been recorded equal to the unfunded status. See Note 11 for further information.

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)	2020			2019			2020			2019
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	4,139		$	3,880		$	3,662		$	3,431
Service cost	121			114			117			110
Interest cost	124			155			110			138
Actuarial loss	323			240			292			199
Benefits paid	(231)			(250)			(197)			(216)
Projected benefit obligation at end of year	$	4,476		$	4,139		$	3,984		$	3,662
Change in plan assets
Fair value of plan assets at beginning of year	$	3,755		$	3,321		$	3,541		$	3,124
Actual return on plan assets	584			611			551			576
Employer contributions	62			73			45			57
Benefits paid	(230)			(250)			(197)			(216)
Fair value of plan assets at end of year	4,171			3,755			3,940			3,541
Funded status at end of year	$	(305)		$	(384)		$	(44)		$	(121)
Amounts recognized in the consolidated balance sheets consist of 1:
Current liabilities	(24)			(19)			(2)			(2)
Long-term liabilities	(281)			(365)			(42)			(119)
	$	(305)		$	(384)		$	(44)		$	(121)
Amounts recognized in accumulated other comprehensive loss consist of:
Prior service cost	$	(1)		$	(1)		$	—		$	—
Net loss1	96			95			16			17
	95			94			16			17
Amounts recognized as a regulatory asset	12			87			12			87
Total not yet recognized as expense	$	107		$	181		$	28		$	104
Accumulated benefit obligation at end of year	$	4,238		$	3,968		$	3,776		$	3,529
Pension plans with an accumulated benefit obligation in excess of plan assets:
Projected benefit obligation	4,476			4,139			3,984			3,662
Accumulated benefit obligation	4,238			3,968			3,776			3,529
Fair value of plan assets	4,171			3,755			3,940			3,541
Weighted average assumptions used to determine obligations at end of year:
Discount rate	2.38		%	3.11		%	2.38		%	3.11		%
Rate of compensation increase	4.00		%	4.10		%	4.00		%	4.10		%

1    The SCE liability excludes a long-term payable due to Edison International Parent of $139 million and $133 million at December 31, 2020 and 2019, respectively, related to certain SCE postretirement benefit obligations transferred to Edison International Parent. SCE's accumulated other comprehensive loss of $16 million and $17 million at December 31, 2020 and 2019, excludes net losses of $41 million and $37 million related to these benefits, respectively.

For Edison International and SCE, respectively, the 2020 actuarial losses are primarily related to $339 million and $305 million in losses from a decrease in the discount rate (from 3.11% as of December 31, 2019 to 2.38% as of December 31, 2020), partially offset by $117 million and $124 million in gains from other economic assumption changes; the 2019 actuarial losses are primarily related to $401 million and $373 million in losses from a decrease in the discount rate (from 4.19% as of

December 31, 2018 to 3.11% as of December 31, 2019), partially offset by $157 million and $177 million in gains from other economic assumption changes.

Net periodic pension expense components for continuing operations are:

	Edison International						SCE
	Years ended December 31,
(in millions)	2020		2019		2018		2020		2019		2018
Service cost	$	121	$	114	$	126	$	119	$	111	$	123
Non-service cost
Interest cost	124		155		140		114		143		128
Expected return on plan assets	(215)		(205)		(228)		(203)		(194)		(214)
Amortization of prior service cost	2		2		3		1		2		3
Amortization of net loss	10		7		9		7		5		6
Regulatory adjustment (deferred)	16		(3)		15		16		(3)		15
Total non-service benefit	(63)		(44)		(61)		(65)		(47)		(62)
Total expense recognized	$	58	$	70	$	65	$	54	$	64	$	61

Other changes in pension plan assets and benefit obligations recognized in other comprehensive loss for continuing operations:

	Edison International						SCE
	Years ended December 31,
(in millions)	2020		2019		2018		2020		2019		2018
Net loss	$	11	$	19	$	5	$	9	$	21	$	5
Amortization of net loss	(10)		(7)		(9)		(7)		(5)		(6)
Total recognized in other comprehensive loss	1		12		(4)		2		16		(1)
Total recognized in expense and other comprehensive loss	$	59	$	82	$	61	$	56	$	80	$	60

In accordance with authoritative guidance on rate-regulated enterprises, SCE records regulatory assets and liabilities instead of charges and credits to other comprehensive income (loss) for the portion of SCE's postretirement benefit plans that are recoverable in utility rates.

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

	Years ended December 31,
	2020		2019		2018
Discount rate	3.11	%	4.19	%	3.46	%
Rate of compensation increase	4.10	%	4.10	%	4.10	%
Expected long-term return on plan assets	6.00	%	6.50	%	6.50	%
Interest crediting rate for cash balance account
Starting rate	3.61	%	4.46	%	4.36	%
Ultimate rate	5.00	%	5.75	%	5.75	%
Year ultimate rate is reached	2025		2022		2022

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

(in millions)	Edison International		SCE
2021	$	294	$	254
2022	297		259
2023	298		262
2024	299		266
2025	302		268
2026 – 2030	1,403		1,317

Postretirement Benefits Other Than Pensions ("PBOP(s)")

Employees hired prior to December 31, 2017 who are retiring at or after age 55 with at least 10 years of service may be eligible for postretirement healthcare benefits. Eligibility for a company contribution toward the cost of these benefits in retirement depends on a number of factors, including the employee's years of service, age, hire date, and retirement date. Employees hired on or after December 31, 2017 are no longer eligible for retiree healthcare benefits. In lieu of those benefits, the Company will provide a health reimbursement account of $200 per month available only after meeting certain age and service year requirements. Under the terms of the Edison International Welfare Benefit Plan ("PBOP Plan"), each participating employer (Edison International or its participating subsidiaries) is responsible for the costs and expenses of all PBOP Plan benefits with respect to its employees and former employees that exceed the participants' share of contributions. A participating employer may terminate the PBOP Plan benefits with respect to its employees and former employees, as may SCE (as PBOP Plan sponsor), and, accordingly, the participants' PBOP Plan benefits are not vested benefits.

The expected contributions (substantially all of which are expected to be made by SCE) for PBOP benefits are $9 million for the year ended December 31, 2021. Annual contributions related to SCE employees 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.

SCE has three voluntary employees' beneficiary association trusts ("VEBA Trusts") that can only be used to pay for retiree health care benefits of SCE and its subsidiaries. Once funded into the VEBA Trusts, neither SCE nor Edison International can subsequently recover remaining amounts in the VEBA Trusts. Participants of the PBOP Plan do not have a beneficial interest in the VEBA Trusts. The VEBA Trust assets are sensitive to changes in market conditions. Changes in overall interest rate levels significantly affect the company's liabilities, while assets held in the various trusts established to fund Edison International's other postretirement benefits are affected by movements in the equity and bond markets. Due to SCE's regulatory recovery treatment, the unfunded status is offset by a regulatory asset.

Information on PBOP Plan assets and benefit obligations is shown below:

	Edison International						SCE
	Years ended December 31,
(in millions)	2020			2019			2020			2019
Change in benefit obligation
Benefit obligation at beginning of year	$	2,083		$	1,986		$	2,074		$	1,977
Service cost	38			30			37			30
Interest cost	63			77			63			77
Actuarial (gain) loss	(46)			70			(45)			70
Plan participants' contributions	29			29			29			29
Benefits paid	(94)			(109)			(94)			(109)
Benefit obligation at end of year	$	2,073		$	2,083		$	2,064		$	2,074
Change in plan assets
Fair value of plan assets at beginning of year	$	2,465		$	2,133		$	2,464		$	2,133
Actual return on assets	309			401			309			401
Employer contributions	8			11			8			10
Plan participants' contributions	29			29			29			29
Benefits paid	(94)			(109)			(93)			(109)
Fair value of plan assets at end of year	2,717			2,465			2,717			2,464
Funded status at end of year	$	644		$	382		$	653		$	390
Amounts recognized in the consolidated balance sheets consist of:
Long-term assets	$	663		$	393		$	663		$	402
Current liabilities	(10)			(11)			(10)			(12)
Long-term liabilities	(9)			—			—			—
	$	644		$	382		$	653		$	390
Amounts recognized in accumulated other comprehensive loss consist of:
Net loss	$	1		$	2		$	—		$	—
Amounts recognized as a regulatory liability	(671)			(416)			(671)			(416)
Total not yet recognized as income	$	(670)		$	(414)		$	(671)		$	(416)
Weighted average assumptions used to determine obligations at end of year:
Discount rate	2.67		%	3.32		%	2.67		%	3.32		%
Assumed health care cost trend rates:
Rate assumed for following year	6.50		%	6.50		%	6.50		%	6.50		%
Ultimate rate	5.00		%	5.00		%	5.00		%	5.00		%
Year ultimate rate reached	2029			2029			2029			2029

Net periodic PBOP expense components for continuing operations are:

	Edison International						SCE
	Years ended December 31,
(in millions)	2020		2019		2018		2020		2019		2018
Service cost	$	38	$	30	$	37	$	37	$	30	$	37
Non-service cost
Interest cost	63		77		80		63		77		80
Expected return on plan assets	(119)		(111)		(121)		(119)		(111)		(122)
Amortization of prior service credit	(1)		(1)		(1)		(1)		(1)		(1)
Amortization of net gain	(29)		(17)		—		(29)		(17)		—
Regulatory adjustment	49		29		24		49		29		24
Total non-service benefit	(37)		(23)		(18)		(37)		(23)		(19)
Total expense	$	1	$	7	$	19	$	—	$	7	$	18

In accordance with authoritative guidance on rate-regulated enterprises, SCE records regulatory assets and liabilities instead of charges and credits to other comprehensive income (loss) for the portion of SCE's postretirement benefit plans that are recoverable in utility rates.

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

	Years ended December 31,
	2020		2019		2018
Discount rate	3.32	%	4.35	%	3.70	%
Expected long-term return on plan assets	4.90	%	5.30	%	5.30	%
Assumed health care cost trend rates:
Current year	6.50	%	6.75	%	6.75	%
Ultimate rate	5.00	%	5.00	%	5.00	%
Year ultimate rate reached	2029		2029		2029

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

(in millions)	Edison International		SCE
2021	$	83	$	82
2022	84		84
2023	86		86
2024	89		88
2025	90		90
2026 – 2030	475		472

Plan Assets

Description of Pension and Postretirement Benefits Other than Pensions Investment Strategies

The investment of plan assets is overseen by a fiduciary investment committee. Plan assets are invested using a combination of asset classes and may have active and passive investment strategies within asset classes. Target allocations for 2020 pension plan assets were 23% for U.S. equities, 17% for non-U.S. equities, 45% for fixed income and 15% for opportunistic and/or alternative investments. Target allocations for 2020 PBOP plan assets (except for Represented VEBA which is 95% for fixed income and 5% for U.S. and non-U.S. equities) are 58% for U.S. and non-U.S. equities, 29% for fixed income and 13% for opportunistic and/or alternative investments. Edison International employs multiple investment management firms. Investment managers within each asset class cover a range of investment styles and approaches. Risk is managed through diversification among multiple asset classes, managers, styles and securities. Plan asset classes and individual manager performances are measured against targets. Edison International also monitors the stability of its investment managers' organizations.

Allowable investment types include:

•United States equities: common and preferred stocks of large, medium, and small companies which are predominantly United States-based.

•Non-United States equities: equity securities issued by companies domiciled outside the United States and in depository receipts which represent ownership of securities of non-United States companies.

•Fixed income: fixed income securities issued or guaranteed by the United States government, non-United States governments, government agencies and instrumentalities including municipal bonds, mortgage backed securities and corporate debt obligations. A portion of the fixed income positions may be held in debt securities that are below investment grade.

•Opportunistic, alternative and other investments: Opportunistic investments in short to intermediate term market opportunities. Investments may have fixed income and/or equity characteristics and may be either liquid or illiquid. Alternative investments are limited partnerships that invest in non-publicly traded entities. Other investments are diversified among multiple asset classes such as global equity, fixed income currency and commodities markets. Investments are made in liquid instruments within and across markets. The investment returns are expected to approximate the plans' expected investment returns.

Asset class portfolio weights are permitted to range within plus or minus 3%. Where approved by the fiduciary investment committee, futures contracts are used for portfolio rebalancing and to reallocate portfolio cash positions. Where authorized, a few of the plans' investment managers employ limited use of derivatives, including futures contracts, options, options on futures and interest rate swaps in place of direct investment in securities to gain efficient exposure to markets. Derivatives are not used to leverage the plans or any portfolios.

Determination of the Expected Long-Term Rate of Return on Assets

The overall expected long-term rate of return on assets assumption is based on the long-term target asset allocation for plan assets and capital markets return forecasts for asset classes employed. A portion of the PBOP trust asset returns are subject to taxation, so the expected long-term rate of return for these assets is determined on an after-tax basis.

Capital Markets Return Forecasts

SCE's capital markets return forecast methodologies primarily use a combination of historical market data, current market conditions, proprietary forecasting expertise, complex models to develop asset class return forecasts and a building block approach. The forecasts are developed using variables such as real risk-free interest, inflation and asset class specific risk premiums. For equities, the risk premium is based on an assumed average equity risk premium of 5% over cash. The forecasted return on private equity and opportunistic investments are estimated at a 4% premium above public equity, reflecting a premium for higher volatility and lower liquidity. For fixed income, the risk premium is based on a comprehensive modeling of credit spreads.

Fair Value of Plan Assets

The PBOP Plan and the Southern California Edison Company Retirement Plan Trust ("Master Trust") assets include investments in equity securities, U.S. treasury securities, other fixed-income securities, common/collective funds, mutual funds, other investment entities, foreign exchange and interest rate contracts, and partnership/joint ventures. Equity securities,

U.S. treasury securities, mutual and money market funds are classified as Level 1 as fair value is determined by observable, unadjusted quoted market prices in active or highly liquid and transparent markets. The fair value of the underlying investments in equity mutual funds are based on stock-exchange prices. The fair value of the underlying investments in fixed-income mutual funds and other fixed income securities including municipal bonds are 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. Foreign exchange and interest rate contracts are classified as Level 2 because the values are based on observable prices but are not traded on an exchange. Futures contracts trade on an exchange and therefore are classified as Level 1. No investment is classified as Level 3 as of December 31, 2020 and 2019. Common/collective funds and partnerships are measured at fair value using the net asset value per share ("NAV") and have not been classified in the fair value hierarchy. Other investment entities are valued similarly to common/collective funds and are therefore classified as NAV. The Level 1 registered investment companies are either mutual or money market funds. The remaining funds in this category are readily redeemable and classified as NAV and are discussed further at Note 9 to the pension plan master trust investments table below.

Edison International reviews the process/procedures of both the pricing services and the trustee to gain an understanding of the inputs/assumptions and valuation techniques used to price each asset type/class. The trustee and Edison International's validation procedures for pension and PBOP equity and fixed income securities are the same as the nuclear decommissioning trusts. For further discussion, see Note 4. The values of Level 1 mutual and money market funds are publicly quoted. The trustees obtain the values of common/collective and other investment funds from the fund managers. The values of partnerships are based on partnership valuation statements updated for cash flows. SCE's investment managers corroborate the trustee fair values.

Pension Plan

The following table sets forth the Master Trust investments for Edison International and SCE that were accounted for at fair value as of December 31, 2020 by asset class and level within the fair value hierarchy:

(in millions)	Level 1		Level 2		NAV1		Total
U.S. government and agency securities2	$	151	$	1,006	$	—	$	1,157
Corporate stocks3	570		5		—		575
Corporate bonds4	—		601		—		601
Common/collective funds5	—		—		1,017		1,017
Partnerships/joint ventures6	—		—		569		569
Other investment entities7	—		—		137		137
Registered investment companies8	69		—		23		92
Interest-bearing cash	7		—		—		7
Other	—		39		—		39
Total	$	797	$	1,651	$	1,746	$	4,194
Receivables and payables, net							(23)
Combined net plan assets available for benefits							4,171
SCE's share of net plan assets							$	3,940

The following table sets forth the Master Trust investments that were accounted for at fair value as of December 31, 2019 by asset class and level within the fair value hierarchy:

(in millions)	Level 1		Level 2		NAV1		Total
U.S. government and agency securities2	$	146	$	992	$	—	$	1,138
Corporate stocks3	547		7		—		554
Corporate bonds4	—		572		—		572
Common/collective funds5	—		—		693		693
Partnerships/joint ventures6	—		—		471		471
Other investment entities7	—		—		130		130
Registered investment companies8	133		—		—		133
Interest-bearing cash	7		—		—		7
Other	—		79		—		79
Total	$	833	$	1,650	$	1,294	$	3,777
Receivables and payables, net							(22)
Combined net plan assets available for benefits							3,755
SCE's share of net plan assets							$	3,541

1    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. Performance for actively managed separate accounts is primarily benchmarked against the Russell Indexes (40%) and Morgan Stanley Capital International (MSCI) index (60%), at both December 31, 2020 and 2019.

4    Corporate bonds are diversified. At December 31, 2020 and 2019, respectively, this category includes $54 million and $45 million for collateralized mortgage obligations and other asset backed securities.

5 At December 31, 2020 and 2019, respectively, the common/collective assets were invested in equity index funds that seek to track performance of the Standard and Poor's 500 Index (37% and 35%) and Russell 1000 indexes (13% and 17%). In addition, at December 31, 2020 and 2019, respectively, 40% and 28% of the assets in this category are in index funds which seek to track performance in the MSCI All Country World Index exUS and 8% and 12% of this category are in non-index U.S. equity fund, which is actively managed.

6    At December 31, 2020 and 2019, respectively, 49% and 51% are invested in private equity funds with investment strategies that include branded consumer products and clean technology companies, 23% and 17% are invested in ABS including distressed mortgages and commercial and residential loans, 4% and 8% are invested in a broad range of financial assets in all global markets. 19% are invested in publicly traded fixed income securities for both periods.

7    At both December 31, 2020 and 2019, other investment entities were invested in (1) emerging market equity securities and (2) domestic mortgage backed securities.

8    Level 1 registered investment companies primarily consisted of a global equity mutual fund which seeks to outperform the MSCI World Total Return Index. In addition, investments included fixed income fund used for cash management at December 31, 2020.

At December 31, 2020 and 2019, respectively, approximately 59% and 56% of the publicly traded equity investments, including equities in the common/collective funds, were located in the United States.

Postretirement Benefits Other than Pensions

The following table sets forth the VEBA Trust assets for Edison International and SCE that were accounted for at fair value as of December 31, 2020 by asset class and level within the fair value hierarchy:

(in millions)	Level 1		Level 2		NAV1		Total
U.S. government and agency securities2	$	380	$	30	$	—	$	410
Corporate stocks3	224		3		—		227
Corporate notes and bonds4	—		1,079		—		1,079
Common/collective funds5	—		—		693		693
Partnerships6	—		—		81		81
Registered investment companies7	65		—		—		65
Interest bearing cash	—		26		—		26
Other8	—		132		—		132
Total	$	669	$	1,270	$	774	$	2,713
Receivables and payables, net							4
Combined net plan assets available for benefits							2,717
SCE's share of net plan assets							$	2,717

The following table sets forth the VEBA Trust assets for Edison International and SCE that were accounted for at fair value as of December 31, 2019 by asset class and level within the fair value hierarchy:

(in millions)	Level 1		Level 2		NAV1		Total
U.S. government and agency securities2	$	386	$	63	$	—	$	449
Corporate stocks3	242		2		—		244
Corporate notes and bonds4	—		885		—		885
Common/collective funds5	—		—		652		652
Partnerships6	—		—		68		68
Registered investment companies7	66		—		—		66
Interest bearing cash	—		17		—		17
Other8	2		101		—		103
Total	$	696	$	1,068	$	720	$	2,484
Receivables and payables, net							(19)
Combined net plan assets available for benefits							2,465
SCE's share of net plan assets							$	2,464

1    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 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 (70% and 68%) and the MSCI All Country World Index (30% and 32%) for 2020 and 2019, respectively.

4    Corporate notes and bonds are diversified and include approximately $170 million and $49 million for commercial collateralized mortgage obligations and other asset backed securities at December 31, 2020 and 2019, respectively.

5    At December 31, 2020 and 2019, respectively, 70% and 74% 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. 22% and 19% are invested in a non-index U.S. equity fund which is actively managed. The remaining assets in this category are primarily invested in emerging market fund.

6    At December 31, 2020 and 2019, respectively, 46% and 55% 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. 36%

and 28% of the remaining partnerships category are invested in asset backed securities including distressed mortgages, distressed companies and commercial and residential loans and debt and equity of banks. 18% and 15% are invested in a broad range of financial assets in all global markets.

7    At both December 31, 2020 and 2019, registered investment companies were primarily invested in a money market fund and exchange rate trade funds which seek to track performance of MSCI Emerging Market Index, Russell 2000 Index and international small cap equities.

8    Other includes $61 million and $66 million of municipal securities at December 31, 2020 and 2019, respectively.

At December 31, 2020 and 2019, respectively, approximately 66% and 65% of the publicly traded equity investments, including equities in the common/collective funds, were located in the United States.

Stock-Based Compensation

Edison International maintains a shareholder-approved incentive plan (the "2007 Performance Incentive Plan") that includes stock-based compensation. The maximum number of shares of Edison International's common stock authorized to be issued or transferred pursuant to awards under the 2007 Performance Incentive Plan, as amended, is approximately 71 million shares. As of December 31, 2020, Edison International had approximately 23 million shares remaining available for new award grants under its stock-based compensation plans.

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

	Edison International						SCE
	Years ended December 31,
(in millions)	2020		2019		2018		2020		2019		2018
Stock-based compensation expense1:
Stock options	$	15	$	13	$	11	$	7	$	7	$	6
Performance shares	5		8		1		2		4		1
Restricted stock units	8		6		7		4		3		4
Other	1		2		2		—		—		—
Total stock-based compensation expense	29		29		21		13		14		11
Income tax benefits related to stock compensation expense	$	4	$	10	$	6	$	3	$	6	$	3

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

Stock Options

Under the 2007 Performance Incentive Plan, Edison International has granted stock options at exercise prices equal to the closing price at the grant date. Edison International may grant stock options and other awards related to, or with a value derived from, its common stock to directors and certain employees. Options generally expire 10 years after the grant date and vest over a period of four years of continuous service in equal annual increments, except for awards granted to retirement-eligible participants, which vest on an accelerated basis.

The fair value for each option granted was determined as of the grant date using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires various assumptions noted in the following table:

	Years ended December 31,
	2020	2019	2018
Expected terms (in years)	5.2	5.5	5.7
Risk-free interest rate	0.4% - 0.6%	1.6% - 2.3%	2.6% - 3.0%
Expected dividend yield	4.2% - 5.0%	3.3% - 4.0%	3.6% - 4.3%
Weighted average expected dividend yield	4.7%	3.9%	3.8%
Expected volatility	24.9% - 26.9%	21.7% -24.1%	20.9% - 21.9%
Weighted average volatility	25.0%	21.8%	20.9%

The expected term represents the period of time for which the options are expected to be outstanding and is primarily based on historical exercise and post-vesting cancellation experience and stock price history. The risk-free interest rate for periods within the contractual life of the option is based on a zero-coupon U.S. Treasury STRIPS (separate trading of registered interest and principal of securities) whose maturity corresponds to the option's expected term on the measurement date. Expected volatility is based on the historical volatility of Edison International's common stock for the length of the option's expected term for 2020. The volatility period used was 63 months, 66 months and 68 months at December 31, 2020, 2019 and 2018, respectively.

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

		Weighted Average
	Stock Options	Exercise Price		Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in millions)
Edison International:
Outstanding at December 31, 2019	9,278,677	$	62.27
Granted	1,993,954	68.60
Forfeited or expired	(203,340)	65.75
Exercised1	(359,908)	48.59
Outstanding at December 31, 2020	10,709,383	63.85		6.03
Vested and expected to vest at December 31, 2020	10,391,796	63.60		6.17	$	30
Exercisable at December 31, 2020	6,489,876	$	62.08	4.83	$	27
SCE:
Outstanding at December 31, 2019	4,934,702	$	61.01
Granted	1,053,923	68.27
Forfeited or expired	(189,691)	65.75
Exercised1	(302,911)	49.49
Affiliate transfers, net	(5,535)	63.36
Outstanding at December 31, 2020	5,490,488	62.85		5.86
Vested and expected to vest at December 31, 2020	5,325,052	62.50		5.98	$	20
Exercisable at December 31, 2020	3,361,238	$	60.41	4.56	$	19

1 Edison International and SCE recognized tax benefits of $2 million and $2 million, respectively, from stock options exercised in 2020.

At December 31, 2020, total unrecognized compensation cost related to stock options and the weighted average period the cost is expected to be recognized are as follows:

	Edison International		SCE
Unrecognized compensation cost, net of expected forfeitures (in millions)	$	17	$	9
Weighted average period (in years)	2.3		2.3

Supplemental Data on Stock Options

	Edison International						SCE
	Years ended December 31,
(in millions, except per award amounts)	2020		2019		2018		2020		2019		2018
Stock options:
Weighted average grant date fair value per option granted	$	8.18	$	8.80	$	8.21	$	8.16	$	8.83	$	8.22
Fair value of options vested	2		14		14		2		7		7
Value of options exercised	9		27		10		7		19		7

Performance Shares

A target number of contingent performance shares were awarded to executives in March 2020, 2019 and 2018 and vest at December 31, 2022, 2021 and 2020, respectively. The vesting of the grants is dependent upon market and financial performance and service conditions as defined in the grants for each of the years. The number of performance shares earned from each year's grants could range from zero to twice the target number (plus additional units credited as dividend equivalents).

The fair value of market condition performance shares is determined using a Monte Carlo simulation valuation model for the total shareholder return. The fair value of financial performance condition performance shares is determined (i) at grant as the target number of shares (which Edison International determined to be the probable outcome) valued at the closing price on the grant date of Edison International common stock and (ii) subsequently using Edison International's earnings per share compared to pre-established targets.

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

	Equity Awards			Liability Awards
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
Edison International:
Nonvested at December 31, 2019	119,843	$	66.03	113,186	$	67.30
Granted	120,938	67.55		—
Forfeited	(7,157)	66.76		(3,825)
Vested1	—	—		(109,361)
Nonvested at December 31, 2020	233,624	$	66.80	—	$	—
SCE:
Nonvested at December 31, 2019	63,172	$	66.27	58,399	$	67.34
Granted	64,133	67.15		—
Forfeited	(6,408)	66.78		(3,409)
Vested1	—	—		(54,578)
Affiliate transfers, net	(253)	71.27		(412)
Nonvested at December 31, 2020	120,644	$	66.70	—	$	—

1    Relates to performance shares that will be paid in 2021 as performance targets were met at December 31, 2020.

Restricted Stock Units

Restricted stock units were awarded to executives in March 2020, 2019 and 2018 and vest and become payable on January 3, 2023, January 3, 2022 and January 4, 2021, respectively. Each restricted stock unit awarded includes a dividend equivalent feature and is a contractual right to receive one share of Edison International common stock, if vesting requirements are satisfied. The vesting of Edison International's restricted stock units is dependent upon continuous service through the end of the vesting period, except for awards granted to retirement-eligible participants, which vest on an accelerated basis.

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

	Edison International			SCE
	Restricted Stock Units	Weighted Average Grant Date Fair Value		Restricted Stock Units	Weighted Average Grant Date Fair Value
Nonvested at December 31, 2019	311,682	$	66.11	159,985	$	66.16
Granted	119,038	68.58		63,042	68.24
Forfeited	(11,294)	63.90		(10,095)	63.93
Vested	(85,553)	78.94		(42,549)	79.11
Affiliate transfers, net	—	—		(1,963)	68.16
Nonvested at December 31, 2020	333,873	$	63.78	168,420	$	63.78

The fair value for each restricted stock unit awarded is determined as the closing price of Edison International common stock on the grant date.