UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended   March 31, 2023
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                        to

Commission File Number	Exact Name of Registrant as specified in its charter	State or Other Jurisdiction of Incorporation or Organization	IRS Employer Identification Number
1-9936	EDISON INTERNATIONAL	California	95-4137452
1-2313	SOUTHERN CALIFORNIA EDISON COMPANY	California	95-1240335

EDISON INTERNATIONAL	SOUTHERN CALIFORNIA EDISON COMPANY
2244 Walnut Grove Avenue	2244 Walnut Grove Avenue
(P.O. Box 976)	(P.O. Box 800)
Rosemead, California 91770	Rosemead, California 91770
(Address of principal executive offices)	(Address of principal executive offices)
(626) 302-2222	(626) 302-1212
(Registrant's telephone number, including area code)	(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Edison International:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, no par value	EIX	NYSE LLC

Southern California Edison Company: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Edison International Yes ☑ No ☐ Southern California Edison Company Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Edison International Yes ☑ No ☐ Southern California Edison Company Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-12 of the Exchange Act.

Edison International	Large Accelerated Filer	Accelerated Filer	Non-accelerated Filer	Smaller Reporting Company	Emerging growth company
	☑	☐	☐	☐	☐
Southern California Edison Company	Large Accelerated Filer	Accelerated Filer	Non-accelerated Filer	Smaller Reporting Company	Emerging growth company
	☐	☐	☑	☐	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Edison International ☐ Southern California Edison Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Edison International Yes ☐ No ☑ Southern California Edison Company Yes☐ No ☑

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

Common Stock outstanding as of April 25, 2023:
Edison International	382,983,023 Shares
Southern California Edison Company	434,888,104 Shares

TABLE OF CONTENTS

		SEC Form 10-Q
		Reference Number
GLOSSARY	iii
FORWARD-LOOKING STATEMENTS	1
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4	Part I, Item 2
MANAGEMENT OVERVIEW	4
Highlights of Operating Results	4
Customer-funded Self-Insurance	5
Capital Program	5
Southern California Wildfires and Mudslides	6
RESULTS OF OPERATIONS	7
Southern California Edison Company	7
Three months ended March 31, 2023 versus March 31, 2022	8
Earning Activities	8
Cost-Recovery Activities	9
Supplemental Operating Revenue Information	9
Income Taxes	9
Edison International Parent and Other	9
Loss from Operations	10
LIQUIDITY AND CAPITAL RESOURCES	10
Southern California Edison Company	10
Available Liquidity	11
Regulatory Proceedings	11
Capital Investment Plan	12
Decommissioning of San Onofre	12
Margin and Collateral Deposits	13
Edison International Parent and Other	13
Edison International Income taxes	14
Historical Cash Flows	15
Southern California Edison Company	15
Edison International Parent and Other	17
Contingencies	18
MARKET RISK EXPOSURES	18
CRITICAL ACCOUNTING ESTIMATES AND POLICIES	18
NEW ACCOUNTING GUIDANCE	18
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	19	Part I, Item 3

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FINANCIAL STATEMENTS	20	Part I, Item 1
Edison International Consolidated Statements of Income	20
Edison International Consolidated Statements of Comprehensive Income	21
Edison International Consolidated Balance Sheets	22
Edison International Consolidated Statements of Cash Flows	24
SCE Consolidated Statements of Income	25
SCE Consolidated Statements of Comprehensive Income	25
SCE Consolidated Balance Sheets	26
SCE Consolidated Statements of Cash Flows	28
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	29
Note 1. Summary of Significant Accounting Policies	29
Note 2. Consolidated Statements of Changes in Equity	32
Note 3. Variable Interest Entities	33
Note 4. Fair Value Measurements	35
Note 5. Debt and Credit Agreements	38
Note 6. Derivative Instruments	39
Note 7. Revenue	41
Note 8. Income Taxes	42
Note 9. Compensation and Benefit Plans	43
Note 10. Investments	44
Note 11. Regulatory Assets and Liabilities	45
Note 12. Commitments and Contingencies	46
Note 13. Equity	58
Note 14. Accumulated Other Comprehensive Loss	58
Note 15. Other Income	59
Note 16. Supplemental Cash Flows Information	59
Note 17. Related-Party Transactions	59
CONTROLS AND PROCEDURES	61	Part I, Item 4
Disclosure Controls and Procedures	61
Changes in Internal Control Over Financial Reporting	61
Jointly Owned Utility Plant	61
LEGAL PROCEEDINGS	62	Part II, Item 1
2017/2018 Wildfire/Mudslide Events	62
Environmental Proceedings	62
EXHIBITS	63	Part II, Item 6
SIGNATURES	64

This combined Form 10-Q is separately filed by Edison International and SCE. Information contained in this document relating to SCE is filed by Edison International and separately by SCE. SCE makes no representation as to information relating to Edison International or its subsidiaries, except as it may relate to SCE and its subsidiaries.

ii

GLOSSARY

The following terms and abbreviations appearing in the text of this report have the meanings indicated below.

2017/2018 Wildfire/Mudslide Events	the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire, collectively
2022 Form 10-K	Edison International's and SCE's combined Annual Report on Form 10-K for the year ended December 31, 2022
2022 MD&A	Edison International's and SCE's MD&A for the calendar year 2022, which was included in the 2022 Form 10‑K
AB 1054	California Assembly Bill 1054, executed by the governor of California on July 12, 2019
AB 1054 Excluded Capital Expenditures	$1.6 billion in wildfire risk mitigation capital expenditures that SCE has excluded from the equity portion of SCE's rate base as required under AB 1054
AB 1054 Liability Cap	a cap on the aggregate requirement to reimburse the Wildfire Insurance Fund over a trailing three calendar year period which applies if certain conditions are met and is equal to 20% of the equity portion of the utility's transmission and distribution rate base, excluding general plant and intangibles, in the year of the applicable prudency determination
ARO(s)	asset retirement obligation(s)
BRRBA	Base Revenue Requirement Balancing Account
CAISO	California Independent System Operator
Capital Structure Compliance Period	January 1, 2023 to December 31, 2025, the current compliance period for SCE's CPUC authorized capital structure
CAPP	California Arrearage Payment Program
CCAs	community choice aggregators which are cities, counties, and certain other public agencies with the authority to generate and/or purchase electricity for their local residents and businesses
CDP	Coastal Development Permit
CEMA	Catastrophic Event Memorandum Account
COVID-19	Coronavirus disease 2019
CPUC	California Public Utilities Commission
CSRP	Customer Service Re-platform, a SCE project to implement a new customer service system
Edison Energy	Edison Energy, LLC, an indirect wholly-owned subsidiary of Edison International engaged in the competitive business of providing integrated decarbonization and energy solutions to commercial, institutional and industrial customers in North America and Europe
Edison International Proxy Statement	Proxy Statement filed with the SEC in connection with Edison International's Annual Meeting of Shareholders' held on April 27, 2023
EIS	Edison Insurance Services, Inc., a wholly-owned subsidiary of Edison International licensed to provide insurance to Edison International and its subsidiaries
Electric Service Provider	an entity that provides electric power and ancillary services to retail customers, other than utilities (investor-owned utilities and CCAs)
ERRA	Energy Resource Recovery Account
Fast curve settings	protective settings, used to mitigate the risk of wildfires, that enable quicker relays than under traditional settings
FERC	Federal Energy Regulatory Commission
Fitch	Fitch Ratings, Inc.
GAAP	generally accepted accounting principles in the United States
GHG	greenhouse gas
GRC	general rate case
IRA	Inflation Reduction Act of 2022
Koenigstein Fire	a wind-driven fire that originated near Koenigstein Road in the City of Santa Paula in Ventura County, California, on December 4, 2017
MD&A	Management's Discussion and Analysis of Financial Condition and Results of Operations

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Montecito Mudslides	the debris flows and flooding in Montecito, Santa Barbara County, California, that occurred in January 2018
Moody's	Moody's Investors Service, Inc.
MW	megawatts
NDCTP	Nuclear Decommissioning Cost Triennial Proceeding, a CPUC proceeding to review decommissioning costs
NERC	North American Electric Reliability Corporation
NRC	United States Nuclear Regulatory Commission
NSGBA	New System Generation Balancing Account
OEIS	Office of Energy Infrastructure Safety of the California Natural Resources Agency
PABA	Portfolio Allocation Balancing Account
Palo Verde	nuclear electric generating facility located near Phoenix, Arizona in which SCE holds a 15.8% ownership interest
PBOP(s)	postretirement benefits other than pension(s)
PG&E	Pacific Gas & Electric Company
Post-2018 Wildfires	Collectively, all the wildfires that originated in Southern California after 2018 where SCE's equipment may be alleged to be associated with the fire's ignition
PSPS	Public Safety Power Shutoff(s)
ROE	return on common equity
S&P	Standard & Poor's Financial Services LLC
San Onofre	retired nuclear generating facility located in south San Clemente, California in which SCE holds a 78.21% ownership interest
SCE	Southern California Edison Company, a wholly-owned subsidiary of Edison International
SCE Recovery Funding LLC	a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE
SDG&E	San Diego Gas & Electric
SEC	U.S. Securities and Exchange Commission
SED	Safety and Enforcement Division of the CPUC
SED Agreement	an agreement dated October 21, 2021 between SCE and the SED regarding the 2017/2018 Wildfire/Mudslide Events and three other 2017 wildfires
Thomas Fire	a wind-driven fire that originated in the Anlauf Canyon area of Ventura County, California, on December 4, 2017
TKM	collectively, the Thomas Fire, the Koenigstein Fire and the Montecito Mudslides
TKM Subrogation Plaintiffs	the plaintiffs party to the TKM Subrogation Settlement, representing all the insurance subrogation plaintiffs in the TKM litigation at the time of the settlement
TKM Subrogation Settlement	a settlement entered into by Edison International and SCE in September 2020 in the TKM litigation to which the TKM Subrogation Plaintiffs are party
WEMA	Wildfire Expense Memorandum Account
WMP	a wildfire mitigation plan required to be filed under AB 1054 to describe a utility's plans to construct, operate, and maintain electrical lines and equipment that will help minimize the risk of catastrophic wildfires caused by such electrical lines and equipment
Wildfire Insurance Fund	the insurance fund established under AB 1054
Woolsey Fire	a wind-driven fire that originated in Ventura County in November 2018
Woolsey Subrogation Plaintiffs	the plaintiffs party to the Woolsey Subrogation Settlement, representing all the insurance subrogation plaintiffs in the Woolsey Fire litigation at the time of the settlement
Woolsey Subrogation Settlement	a settlement entered into by Edison International and SCE in January 2021 in the Woolsey litigation to which the Woolsey Subrogation Plaintiffs are party

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FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Edison International's and SCE's current expectations and projections about future events based on Edison International's and SCE's knowledge of present facts and circumstances and assumptions about future events and include any statements that do not directly relate to a historical or current fact. Other information distributed by Edison International and SCE that is incorporated in this report, or that refers to or incorporates this report, may also contain forward-looking statements. In this report and elsewhere, the words "expects," "believes," "anticipates," "estimates," "projects," "intends," "plans," "probable," "may," "will," "could," "would," "should," and variations of such words and similar expressions, or discussions of strategy or plans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause results to differ from those currently expected, or that otherwise could impact Edison International and SCE, include, but are not limited to the:

● ability of SCE to recover its costs through regulated rates, including uninsured wildfire-related and debris flow-related costs, costs incurred to mitigate the risk of utility equipment causing future wildfires, costs incurred as a result of the COVID-19 pandemic, and increased costs due to supply chain constraints, inflation and rising interest rates;

● ability of SCE to implement its WMP and capital program;

● risks of regulatory or legislative restrictions that would limit SCE's ability to implement operational measures to mitigate wildfire risk, including PSPS and fast curve settings, when conditions warrant or would otherwise limit SCE's operational practices relative to wildfire risk mitigation;

● risks associated with SCE implementing PSPS, including regulatory fines and penalties, claims for damages and reputational harm;

● ability of SCE to maintain a valid safety certification;

● ability of Edison International and SCE to obtain sufficient insurance at a reasonable cost, including insurance relating to wildfire-related claims, and to recover the costs of such insurance or, in the event liabilities exceed insured amounts, the ability to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) from customers or other parties;

● extreme weather-related incidents (including events caused, or exacerbated, by climate change, such as wildfires, debris flows, flooding, droughts, high wind events and extreme heat events) and other natural disasters (such as earthquakes), which could cause, among other things, public safety issues, property damage, rotating outages and other operational issues (such as issues due to damaged infrastructure), PSPS activations and unanticipated costs;

● risk that AB 1054 does not effectively mitigate the significant exposure faced by California investor-owned utilities related to liability for damages arising from catastrophic wildfires where utility facilities are alleged to be a substantial cause, including the longevity of the Wildfire Insurance Fund and the CPUC's interpretation of and actions under AB 1054, including its interpretation of the prudency standard clarified by AB 1054;

● ability of Edison International and SCE to effectively attract, manage, develop and retain a skilled workforce, including its contract workers;

● decisions and other actions by the CPUC, OEIS, the FERC, the NRC and other governmental authorities, including decisions and actions related to nationwide or statewide crisis, determinations of authorized rates of return or return on equity, the recoverability of wildfire-related and debris flow-related costs, issuance of SCE's wildfire safety certification,

1

wildfire mitigation efforts, approval and implementation of electrification programs, and delays in executive, regulatory and legislative actions;

● cost and availability of labor, equipment and materials, including as a result of supply chain constraints and inflation;

● ability of Edison International or SCE to borrow funds and access bank and capital markets on reasonable terms;

● risks associated with the decommissioning of San Onofre, including those related to worker and public safety, public opposition, permitting, governmental approvals, on-site storage of spent nuclear fuel and other radioactive material, delays, contractual disputes, and cost overruns;

● pandemics, such as COVID-19, and other events that cause regional, statewide, national or global disruption, which could impact, among other things, Edison International's and SCE's business, operations, cash flows, liquidity and/or financial results and cause Edison International and SCE to incur unanticipated costs;

● physical security of Edison International's and SCE's critical assets and personnel and the cybersecurity of Edison International's and SCE's critical information technology systems for grid control, and business, employee and customer data;

● risks associated with cost allocation resulting in higher rates for utility bundled service customers because of possible customer bypass or departure for other electricity providers such as CCAs and Electric Service Providers;

● risks inherent in SCE's capital investment program, including those related to project site identification, public opposition, environmental mitigation, construction, permitting, contractor performance, availability of labor, equipment and materials, weather, changes in the CAISO's transmission plans, and governmental approvals;

● risks associated with the operation of electrical facilities, including worker and public safety issues, the risk of utility assets causing or contributing to wildfires, failure, availability, efficiency, and output of equipment and facilities, and availability and cost of spare parts;

● actions by credit rating agencies to downgrade Edison International or SCE's credit ratings or to place those ratings on negative watch or negative outlook;

● changes in tax laws and regulations, at both the state and federal levels, or changes in the application of those laws, that could affect recorded deferred tax assets and liabilities, effective tax rates and cash flows;

● changes in future taxable income, or changes in tax law, that would limit Edison International's and SCE's realization of expected net operating loss and tax credit carryover benefits prior to expiration;

● changes in the fair value of investments and other assets;

● changes in interest rates and potential adjustments to SCE's ROE based on changes in Moody's utility bond rate index;

● changes in rates of inflation (including whether inflation-related adjustments to SCE's authorized revenues allowed by the public utility regulators are commensurate with inflation rates);

● governmental, statutory, regulatory, or administrative changes or initiatives affecting the electricity industry, including the market structure rules applicable to each market adopted by the NERC, CAISO, Western Electricity Coordinating Council, and similar regulatory bodies in adjoining regions, and changes in the United States' and California's environmental priorities that lessen the importance placed on GHG reduction and other climate related priorities;

● availability and creditworthiness of counterparties and the resulting effects on liquidity in the power and fuel markets and/or the ability of counterparties to pay amounts owed in excess of collateral provided in support of their obligations;

2

● potential for penalties or disallowance for non-compliance with applicable laws and regulations, including fines, penalties and disallowances related to wildfires where SCE's equipment is alleged to be associated with ignition; and

● cost of fuel for generating facilities and related transportation, which could be impacted by, among other things, disruption of natural gas storage facilities, to the extent not recovered through regulated rate cost escalation provisions or balancing accounts.

Additional information about risks and uncertainties, including more detail about the factors described in this report, is contained throughout this report and in the 2022 Form 10-K, including the "Risk Factors" section. Readers are urged to read this entire report, including information incorporated by reference, as well as the 2022 Form 10-K, and carefully consider the risks, uncertainties, and other factors that affect Edison International's and SCE's businesses. Forward-looking statements speak only as of the date they are made and neither Edison International nor SCE are obligated to publicly update or revise forward-looking statements. Readers should review future reports filed by Edison International and SCE with the SEC. Edison International and SCE post or provide direct links to (i) certain SCE and other parties' regulatory filings and documents with the CPUC and the FERC and certain agency rulings and notices in open proceedings in a section titled "SCE Regulatory Highlights," (ii) certain documents and information related to Southern California wildfires which may be of interest to investors in a section titled "Southern California Wildfires," and (iii) presentations, documents and information that may be of interest to investors in a section titled "Presentations and Updates" at www.edisoninvestor.com in order to publicly disseminate such information. The reports, presentations, documents and information contained on, or connected to, the Edison investor website are not deemed part of, and are not incorporated by reference into, this report.

The MD&A for the three months ended March 31, 2023 discusses material changes in the consolidated financial condition, results of operations and other developments of Edison International and SCE since December 31, 2022 and as compared to the three months ended March 31, 2022. This discussion presumes that the reader has read or has access to the 2022 MD&A.

Except when otherwise stated, references to each of Edison International or SCE mean each such company with its subsidiaries on a consolidated basis. References to "Edison International Parent and Other" mean Edison International Parent and its subsidiaries other than SCE and its subsidiaries and "Edison International Parent" mean Edison International on a stand-alone basis, not consolidated with its subsidiaries. Unless otherwise described, all the information contained in this report relates to both filers.

3

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT OVERVIEW

Highlights of Operating Results

Edison International is the ultimate parent holding company of SCE and Edison Energy. SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of southern California. Edison Energy is engaged in the competitive business of providing integrated decarbonization and energy solutions to commercial, institutional and industrial customers in North America and Europe. Edison Energy's business activities are currently not material to report as a separate business segment.

Edison International's earnings are prepared in accordance with GAAP. Management uses core earnings (losses) internally for financial planning and for analysis of performance. Core earnings (losses) are also used when communicating with investors and analysts regarding Edison International's earnings results to facilitate comparisons of the company's performance from period to period. Core earnings (losses) are a non-GAAP financial measure and may not be comparable to those of other companies. Core earnings (losses) are defined as earnings attributable to Edison International shareholders less non-core items. Non-core items include income or loss from discontinued operations and income or loss from significant discrete items that management does not consider representative of ongoing earnings, such as write downs, asset impairments and other income and expense related to changes in law, outcomes in tax, regulatory or legal proceedings, and exit activities, including sale of certain assets and other activities that are no longer continuing.

	Three months ended
	March 31,
(in millions)	2023		2022		Change
Net income (loss) attributable to Edison International
SCE	$	370	$	147	$	223
Edison International Parent and Other		(60)		(63)		3
Edison International		310		84		226
Less: Non-core items
SCE
2017/2018 Wildfire/Mudslide Events claims and expenses, net of recoveries		(90)		(396)		306
Wildfire Insurance Fund expense		(52)		(53)		1
2021 NDCTP estimated loss		(30)		—		(30)
Income tax benefits1		48		126		(78)
Edison International Parent and Other
Customer revenues for EIS insurance contract		22		—		22
Income tax expense1		(4)		—		(4)
Total non-core items		(106)		(323)		217
Core earnings (losses)
SCE		494		470		24
Edison International Parent and Other		(78)		(63)		(15)
Edison International	$	416	$	407	$	9

1 SCE and Edison International Parent and Other non-core items are tax-effected at an estimated statutory rate of approximately 28%; customer revenues for EIS insurance contract are tax-effected at an estimated statutory rate of approximately 20%.

Edison International's first quarter 2023 earnings increased $226 million from the first quarter 2022, resulting from an increase in SCE's earnings of $223 million and a decrease in Edison International Parent and Other's losses of $3 million. SCE's higher net earnings consisted of $199 million of lower non-core losses and $24 million of higher core earnings. Edison

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International Parent and Other's lower losses consisted of $18 million of higher non-core earnings and $15 million of higher core losses.

The increase in SCE's core earnings for the three months ended March 31, 2023 from the same period in 2022 was primarily due to revenue from the escalation mechanism set forth in the 2021 GRC final decision, partially offset by higher net interest expense.

The increase in Edison International Parent and Other's core losses for the three months ended March 31, 2023 was primarily due to higher interest expense.

Consolidated non-core items for the three months ended March 31, 2023 and 2022 primarily included:

● Charges of $52 million ($38 million after-tax) recorded in 2023 and $53 million ($38 million after-tax) recorded in 2022 from the amortization of SCE's contribution to the Wildfire Insurance Fund. See "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies" in the 2022 Form 10-K for further information.

● Charges of $90 million ($65 million after-tax) recorded in 2023 and $396 million ($285 million after-tax) recorded in 2022 for 2017/2018 Wildfire/Mudslide Events claims and expenses, net of recoveries. See "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies" for further information.

● A charge of $30 million ($21 million after-tax) recorded in 2023 for estimated losses related to the reasonableness review of recorded San Onofre Units 2 and 3 decommissioning costs in the 2021 NDCTP. See "Liquidity and Capital Resources—SCE—Decommissioning of San Onofre" for more information.

● Customer revenues of $22 million ($18 million after-tax) recorded in 2023 related to an EIS insurance contract. See "Notes to Consolidated Financial Statements—Note 17. Related-Party Transactions" for further information.

See "Results of Operations" for discussion of SCE's and Edison International Parent and Other's results of operations.

Customer-funded Self-Insurance

In April 2023, the CPUC issued a proposed decision which, if adopted, would approve a joint petition for modification of the 2021 GRC decision filed by SCE, The Utility Reform Network and the Public Advocates Office. If approved by the CPUC, the petition would allow SCE to expand its use of self-insurance. The self-insurance program would be funded through CPUC-jurisdictional rates with $150 million collected for the second half of 2023 and, in the absence of wildfire-related claims, $300 million collected for 2024. These modifications would result in a reduction to current revenue requirements of $80 million in 2023 and, subject to adjustment, $160 million in 2024. If losses are accrued for wildfire-related claims, the petition for modification contains an adjustment mechanism which would increase rates in subsequent years to allow for recovery of the amounts accrued, subject to a shareholder contribution of 2.5% of any self-insurance costs ultimately paid exceeding $500 million in any year, up to a maximum annual contribution of $12.5 million.

Capital Program

Total capital expenditures (including accruals) were $1.3 billion for both the first three months ended March 31, 2023 and 2022. SCE expects to file its 2025 GRC application with the CPUC in May 2023 including its capital expenditure requests for the years 2025 to 2028. For further information regarding the capital program, see "Liquidity and Capital Resources—SCE—Capital Investment Plan" and "Management Overview—Capital Program" in the 2022 MD&A.

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Southern California Wildfires and Mudslides

2017/2018 Wildfire/Mudslide Events

As discussed in the 2022 Form 10-K, multiple lawsuits and investigations related to the 2017/2018 Wildfire/Mudslide Events have been initiated against SCE and Edison International. SCE has previously settled claims under the Local Public Entity Settlement, the TKM Subrogation Settlement, the Woolsey Subrogation Settlement and the SED Agreement. In addition, SCE has also entered into settlements with approximately 10,000 individual plaintiffs in the 2017/2018 Wildfire/Mudslide Events litigation as of March 31, 2023.

Each reporting period, management reviews its loss estimates for remaining alleged and potential claims related to the 2017/2018 Wildfire/Mudslide Events. As a result of management's first quarter 2023 review, a $90 million increase in estimated losses for the 2017/2018 Wildfire/Mudslide Events as of March 31, 2023 was recorded. As a result, SCE recorded expected recoveries through FERC electric rates of $6 million against the charge. The resulting net charge to earnings was $84 million ($61 million after-tax).

Estimated losses for the 2017/2018 Wildfire/Mudslide Events litigation are based on a number of assumptions and are subject to change as additional information becomes available. Actual losses incurred may be higher or lower than estimated based on several factors, including the uncertainty in estimating damages that have been or may be alleged. For instance, SCE will receive additional information with respect to damages claimed as the claims mediation processes progress. Other factors that can cause actual losses incurred to be higher or lower than estimated include the ability to reach settlements and the outcomes of settlements reached through the ongoing claims mediation processes, uncertainties related to the sufficiency of insurance held by plaintiffs, uncertainties related to the litigation processes, including whether plaintiffs will ultimately pursue claims, uncertainty as to the legal and factual determinations to be made during litigation, including uncertainty as to the contributing causes of the 2017/2018 Wildfire/Mudslide Events, the complexities associated with fires that merge and whether inverse condemnation will be held applicable to SCE with respect to damages caused by the Montecito Mudslides, and the uncertainty as to how these factors impact future settlements.

Through March 31, 2023, SCE has accrued estimated losses of $8.8 billion, expected recoveries from insurance of $2.0 billion and expected recoveries through FERC electric rates of $382 million related to the 2017/2018 Wildfire/Mudslide Events. The after-tax net charges to earnings recorded through March 31, 2023 have been $4.7 billion.

As of March 31, 2023, SCE had paid $7.8 billion under executed settlements and had $135 million to be paid under executed settlements, including $120 million to be paid under the SED Agreement, related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, SCE had recovered $2.0 billion through insurance and approximately $319 million through FERC-jurisdictional electric rates.

After giving effect to all payment obligations under settlements entered into through March 31, 2023, including under the SED Agreement, Edison International's and SCE's best estimate of expected losses for remaining alleged and potential claims related to the 2017/2018 Wildfire/Mudslide Events was $988 million. As of the same date, SCE had assets for expected recoveries through FERC electric rates of $63 million on its consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events. Edison International and SCE may incur a material loss in excess of amounts accrued in connection with the remaining alleged and potential claims related to the 2017/2018 Wildfire/Mudslide Events.

SCE will seek CPUC-jurisdictional rate recovery of prudently-incurred losses and related costs realized in connection with the 2017/2018 Wildfire/Mudslide Events in excess of available insurance and FERC-jurisdictional recoveries, other than for any obligations under the SED Agreement. Based on Edison International's and SCE's current best estimate of expected losses for the 2017/2018 Wildfire/Mudslide Events, SCE currently expects to seek CPUC-jurisdictional rate recovery of approximately $6 billion by filing several future applications with the CPUC. SCE targets the third quarter of 2023 for the first of such cost recovery applications, and expects to request recovery of approximately $2 billion in that filing

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related to TKM. SCE's plans with respect to these filings may be delayed or modified. For example, the filings may be delayed if proceedings related to the 2017/2018 Wildfire/Mudslide Events do not progress as anticipated. SCE believes that, in light of the CPUC's decision in a cost recovery proceeding involving SDG&E arising from several 2007 wildfires in SDG&E's service area, there is substantial uncertainty regarding how the CPUC will interpret and apply its prudency standard to an investor-owned utility in wildfire cost-recovery proceedings for fires ignited prior to the adoption of AB 1054 on July 12, 2019. Accordingly, while the CPUC has not made a determination regarding SCE's prudency relative to any of the 2017/2018 Wildfire/Mudslide Events, SCE is unable to conclude, at this time, that uninsured CPUC-jurisdictional wildfire-related costs related to the 2017/2018 Wildfire/Mudslide Events are probable of recovery through electric rates.

For further information on Southern California Wildfires and Mudslides, see "Risk Factors," "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054," "Business—Southern California Wildfires" in the 2022 Form 10-K and "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides" in this report.

RESULTS OF OPERATIONS

SCE

SCE's results of operations are derived mainly through two sources:

● Earning activities – representing revenue authorized by the CPUC and the FERC, which is intended to provide SCE with a reasonable opportunity to recover its costs and earn a return on its net investment in generation, transmission and distribution assets. The annual revenue requirements are comprised of authorized operation and maintenance costs, depreciation, taxes and a return consistent with the capital structure. Also, included in earnings activities are revenue or penalties related to incentive mechanisms, other operating revenue, and regulatory charges or disallowances.

● Cost-recovery activities – representing CPUC- and FERC- authorized balancing accounts, which allow for recovery of specific project or program costs, subject to reasonableness review or compliance with upfront standards, as well as non-bypassable rates collected for SCE Recovery Funding LLC. Cost-recovery activities include rates which provide recovery, subject to reasonableness review of, among other things, fuel costs, purchased power costs, public purpose related-program costs (including energy efficiency and demand-side management programs), certain operation and maintenance expenses (including vegetation management and wildfire insurance), and repayment of bonds and financing costs of SCE Recovery Funding LLC. SCE earns no return on these activities.

The following table is a summary of SCE's results of operations for the periods indicated.

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Three months ended March 31, 2023 versus March 31, 2022

	Three months ended March 31, 2023						Three months ended March 31, 2022
			Cost-						Cost-
	Earning		Recovery		Total		Earning		Recovery		Total
(in millions)	Activities		Activities		Consolidated		Activities		Activities		Consolidated
Operating revenue	$	2,233	$	1,717	$	3,950	$	2,267	$	1,694	$	3,961
Purchased power and fuel		—		1,318		1,318		—		1,037		1,037
Operation and maintenance		670		411		1,081		790		676		1,466
Wildfire-related claims, net of insurance recoveries		96		—		96		425		—		425
Wildfire Insurance Fund expense		52		—		52		53		—		53
Depreciation and amortization		649		7		656		579		4		583
Property and other taxes		137		2		139		116		8		124
Other operating income		—		—		—		(2)		—		(2)
Total operating expenses		1,604		1,738		3,342		1,961		1,725		3,686
Operating income (loss)		629		(21)		608		306		(31)		275
Interest expense		(295)		(5)		(300)		(210)		(3)		(213)
Other income		94		26		120		37		34		71
Income before income taxes		428		—		428		133		—		133
Income tax expense (benefit)		29		—		29		(40)		—		(40)
Net income		399		—		399		173		—		173
Less: Preference stock dividend requirements		29		—		29		26		—		26
Net income available for common stock	$	370	$	—	$	370	$	147	$	—	$	147

Earning Activities

Earning activities were primarily affected by the following:

● Lower operating revenue of $34 million primarily due to the following:

● A decrease of CPUC-related revenue of $183 million due to lower wildfire-related expenses that had been authorized for recovery during 2022 through tracks 2 and 3 of the 2021 GRC.

● An increase of CPUC-related revenue of $102 million due to the escalation mechanism set forth in the 2021 GRC decision.

● An increase of $63 million of revenue related to CSRP revenue requirements approved in 2022 and 2023. See "Liquidity and Capital Resources—SCE—Regulatory Proceedings" for more information.

● A decrease of FERC-related revenue of $20 million due to lower wildfire-related claims and expenses to be recovered in FERC revenues.

● An increase of FERC-related revenue of $6 million due to rate base growth.

● Lower operation and maintenance expenses of $120 million.

● In 2022, SCE recognized $241 million of previously deferred wildfire-related expenses upon approval of the 2021 GRC track 2, compared to $84 million previously deferred expenses recognized in 2023, primarily related to the 2021 GRC track 3 and CSRP approvals. The wildfire and CSRP-related expenses were offset in revenue above.

● In 2023, SCE accrued $30 million in estimated losses relating to the 2021 NDCTP. See "Liquidity and Capital Resources—SCE— Decommissioning of San Onofre" for more information.

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● Wildfire-related claims were impacted by charges of $90 million and $416 million recorded in 2023 and 2022, respectively, related to the 2017/2018 Wildfire/Mudslide Events. Also included in the charges are $6 million and
$9 million recorded in 2023 and 2022, respectively, for self-insured retention expenses related to the Post-2018 wildfires. See "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides."

● Higher depreciation and amortization expense of $70 million primarily due to recognition of previously deferred CSRP-related expenses (offset in revenue above) and increased plant balances in 2023.

● Higher property and other taxes of $21 million primarily due to higher property assessed value in 2023.

● Higher interest expense of $85 million primarily due to increased long-term borrowing, higher interest rates on long-term debt, short-term debt and balancing account overcollections.

● Higher other income of $57 million primarily due to a higher interest rate applied to balancing account undercollections.

● See "Income Taxes" below for the explanation of the $69 million increase in income tax expenses.

Cost-Recovery Activities

Operating revenue and the corresponding operating expenses in cost-recovery activities were primarily affected by the following:

● Higher purchased power and fuel costs of $281 million, primarily due to higher power and gas prices, partially offset by hedging gains.

● Lower operation and maintenance costs of $265 million. In 2022, SCE recognized $160 million of wildfire-related expenses previously deferred upon obtaining approval of the 2021 GRC track 2 and $109 million of previously deferred uncollectible costs through a balancing account.

Supplemental Operating Revenue Information

As a result of the CPUC-authorized decoupling mechanism, SCE revenues are not affected by changes in retail electricity sales.

Income Taxes

The increase in income tax expense of $69 million for the three months ended March 31, 2023 compared to the same period in 2022 was primarily driven by the increase in pre-tax income. The effective tax rates were 6.8% and (30.1)% for the three months ended March 31, 2023 and 2022, respectively. SCE’s effective tax rate is below the federal statutory rate of 21% for 2023 and 2022 primarily due to the CPUC’s ratemaking treatment for the current tax benefit arising from certain property-related and other temporary differences, which reverse over time. The accounting treatment for these temporary differences results in recording regulatory assets and liabilities for amounts that would otherwise be recorded to deferred tax expense.

See "Notes to Consolidated Financial Statements—Note 8. Income Taxes" for a reconciliation of the federal statutory rate to the effective income tax rates.

Edison International Parent and Other

Results of operations for Edison International Parent and Other include amounts from other subsidiaries that are not reportable as segments, as well as intercompany eliminations.

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Loss from Operations

The following table summarizes the results of Edison International Parent and Other:

	Three months ended March 31,
(in millions)	2023		2022
Edison Energy Group and subsidiaries	$	(2)	$	(5)
Corporate expenses and other subsidiaries		(32)		(32)
Edison International Parent and Other net loss	$	(34)	$	(37)
Preferred stock dividend requirement		26		26
Edison International Parent and Other net loss attributable to common stock	$	(60)	$	(63)

The net loss attributable to common stock from operations of Edison International Parent and Other decreased $3 million for the three months ended March 31, 2023 compared to the same period in 2022, primarily due to higher interest expense, partially offset by earnings of $22 million ($18 million after-tax) recorded in 2023 related to customer revenues for an EIS insurance contract. See "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies" and "Notes to Consolidated Financial Statements—Note 17. Related Party Transactions.

LIQUIDITY AND CAPITAL RESOURCES

SCE

SCE's ability to operate its business, fund capital expenditures, and implement its business strategy is dependent upon its cash flows and access to the bank and capital markets. SCE's overall cash flows fluctuate based on, among other things, its ability to recover its costs in a timely manner from its customers through regulated rates, changes in commodity prices and volumes, collateral requirements, interest obligations, dividend payments to and equity contributions from Edison International, obligations to preference shareholders, and the outcome of tax, regulatory and legal matters.

In the next 12 months, SCE expects to fund its cash requirements through operating cash flows, capital market and bank financings and equity contributions from Edison International Parent, as needed. SCE also has availability under its credit facility to fund cash requirements. SCE expects to issue bonds to finance or refinance eligible sustainable projects. For further information about eligible sustainable projects, see "Liquidity and Capital Resources—SCE" in the 2022 MD&A. SCE also expects to issue additional debt for general corporate purposes and to finance payments for future resolutions of claims related to the 2017/2018 Wildfire/Mudslide Events.

SCE has invested all $1.6 billion of the required AB 1054 Excluded Capital Expenditures. SCE issued securitized bonds in the amounts of $338 million, $533 million and $775 million in February 2021, February 2022 and April 2023, respectively, to finance these expenditures and related financing costs. SCE used the proceeds of the April 2023 securitized bonds to repay a term loan of $730 million prior to its maturity in May 2023.

In the first quarter of 2023, Moody's upgraded SCE's credit rating from Baa2 to Baa1 and revised SCE's rating outlook from positive to stable. In April 2023, Fitch upgraded SCE's credit rating from BBB- to BBB and revised SCE's rating outlook from positive to stable. The following tables summarizes SCE’s current long-term issuer credit ratings and outlook from the major credit rating agencies:

	Moody's	Fitch	S&P
Credit Rating	Baa1	BBB	BBB
Outlook	Stable	Stable	Stable

SCE's credit ratings may be affected if, among other things, regulators fail to successfully implement AB 1054 in a consistent and credit supportive manner or the Wildfire Insurance Fund is depleted by claims from catastrophic wildfires. Credit rating downgrades increase the cost and may impact the availability of short-term and long-term borrowings, including commercial paper, credit facilities, bond financings or other borrowings. In addition, some of SCE's power procurement contracts would

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require SCE to pay related liabilities or post additional collateral if SCE's credit rating were to fall below investment grade. For further details, see "—Margin and Collateral Deposits."

The cost of capital adjustment mechanism set by the CPUC could impact SCE's results of operations and cash flows. The cost of capital adjustment mechanism's benchmark beginning January 1, 2023, is the 12-month, October 1, 2021 through September 30, 2022, average Moody's Baa utility bond yield of 4.37%. If the difference between the benchmark and the average of the same index for the 12-month period from October 1, 2022 to September 30, 2023 exceeds 100-basis points, SCE's CPUC-authorized ROE will be adjusted for 2024 by half the amount of the difference (up or down). The average Moody's Baa utility bond yield between October 1, 2022 and April 25, 2023 was 5.72%. The spot rate for Moody's Baa utility bond was 5.42% on April 25, 2023. An average Moody's Baa utility bond yield of 4.94% or higher from April 26, 2023 through September 30, 2023 would trigger the mechanism to adjust upward. For further information see "Business—SCE— Overview of Ratemaking Process" in the 2022 Form 10-K.

Available Liquidity

At March 31, 2023, SCE had cash on hand of $690 million and approximately $2.5 billion available to borrow on its $3.4 billion revolving credit facility. The credit facility is available for borrowing needs until May 2026 and the aggregate maximum principal amount may be increased up to $4.0 billion, provided that additional lender commitments are obtained. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."

SCE may finance balancing account undercollections and working capital requirements to support operations and capital expenditures with commercial paper, its credit facilities or other borrowings, subject to availability in the bank and capital markets. As necessary, SCE will utilize its available liquidity, capital market financings, other borrowings or parent company contributions to SCE equity in order to meet its obligations as they become due, including costs related to the 2017/2018 Wildfire/Mudslide Events. For further information, see "Management Overview—Southern California Wildfires and Mudslides."

Debt Covenant

SCE's credit facilities and term loan require a debt to total capitalization ratio as defined in the applicable agreements of less than or equal to 0.65 to 1. At March 31, 2023, SCE's debt to total capitalization ratio was 0.57 to 1.

At March 31, 2023, SCE was in compliance with all financial covenants that affect access to capital.

Regulatory Proceedings

Wildfire Related Regulatory Proceedings

In response to the increase in wildfire activity, and faster progression of and increased damage from wildfires across SCE's service territory and throughout California, SCE has incurred wildfire mitigation, wildfire insurance and wildfire and drought restoration related spending at levels significantly exceeding amounts authorized in SCE's GRCs.

Wildfire Expense Memorandum Account

SCE tracks insurance premium costs related to wildfire liability insurance policies as well as other wildfire-related costs in its WEMA. In December 2020, SCE filed a WEMA application with the CPUC to seek recovery of $215 million of costs recorded in WEMA at December 31, 2020. The costs are primarily related to incremental wildfire insurance premium expenses and associated costs for wildfire liability insurance policies that provide coverage for the last six months of 2020. In March 2023, the CPUC issued a proposed decision which, if approved, would authorize recovery of $207 million. The amount not approved in this decision relates to wildfire liability insurance coverage previously allocated to San Onofre, which SCE expects to be eligible for recovery from the nuclear decommissioning trusts or from SCE customers in a future cost recovery proceeding.

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CSRP

In March 2023, the CPUC approved SCE's second CSRP application to recover approximately $59 million of capital expenditures and $28 million of operation and maintenance expenses incurred from May 2021 to December 2021, resulting in a revenue requirement of $65 million. The decision also approved SCE seeking review and cost recovery of additional post-implementation CSRP costs incurred from January 2022 through December 2024 in its 2025 GRC filing.

ERRA Proceeding

In January 2023, as a result of undercollection in ERRA and PABA at the end of 2022 due to higher gas and power prices, SCE filed an expedited ERRA trigger application with the CPUC. In April 2023, the CPUC approved SCE to recover a revenue requirement of up to $596 million over 12 months beginning June 1, 2023. The decision also granted SCE authority to decline to place some or all of the increase into rates if its forecast reasonably demonstrates that it will not need some or all of the increase in order to bring its ERRA trigger balance within the prescribed threshold. See "Business—SCE—Overview of Ratemaking Process" in 2022 10-K for further information of ERRA trigger mechanism.

Capital Investment Plan

Major Transmission and Utility Owned Storage Projects

Eldorado-Lugo-Mohave Upgrade Project

The total costs for the Eldorado-Lugo-Mohave Upgrade Project are expected to exceed amounts currently approved in the certificate of public convenience and necessity granted by the CPUC due to delays in regulatory approvals, contractor performance issues, COVID-19 and the availability of CAISO outage windows. Additional work may also be required to mitigate the impact of the project on nearby gas lines. SCE expects to request CPUC approval for the additional expenditures and expects the project to be in service in 2023. See "Liquidity—SCE—Capital Investment Plan" in 2022 10-K for further information.

Utility Owned Storage

As discussed in the 2022 Form 10-K, in October 2021, SCE contracted with Ameresco, Inc. ("Ameresco") for the construction of utility owned energy storage projects at three sites in SCE's service territory with an aggregate capacity of 537.5 MW.

In April 2023, Ameresco discovered damage to some of the equipment at one of the projects which makes up 225 MW of the 537.5 MW aggregate capacity. SCE has received a notice of potential force majeure event from Ameresco noting that Ameresco is performing further analyses on the cause of the damage and asserting that rainstorms at the project site may have caused or contributed to the damage. SCE believes that there is significant risk that this project will not be in-service to meet summer peak reliability needs.

Ameresco has advised SCE that it currently expects the other two projects to be in-service prior to August 2023.

Decommissioning of San Onofre

As discussed in the 2022 Form 10-K, in February 2022, SCE filed its application in the 2021 NDCTP with the CPUC requesting reasonableness review of approximately $570 million (SCE share in 2022 dollars) of recorded San Onofre Units 2 and 3 decommissioning costs incurred during the period 2018 to 2020. Intervenors in the proceeding have recommended approximately $115 million (SCE share in 2022 dollars) in disallowances for San Onofre Units 2 and 3 decommissioning costs. This amount includes a recommended disallowance of approximately $45 million in costs associated with an August 2018 incident that occurred when an SCE contractor was loading a spent nuclear fuel canister into an ISFSI resulting in fuel transfer operations being suspended for approximately one year. The remainder of the recommended disallowance amount is

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primarily for contractor staffing costs incurred during a delay in issuance of the CDP to allow for decommissioning. In the first quarter of 2023, SCE accrued $30 million in estimated losses relating to the 2021 NDCTP.

Margin and Collateral Deposits

Certain derivative instruments, power and energy procurement contracts and other contractual arrangements contain collateral requirements. In addition, certain environmental remediation obligations require financial assurance that may be in the form of collateral postings. Future collateral requirements may differ from the requirements at March 31, 2023, due to the addition of incremental power and energy procurement contracts with collateral requirements, if any, the impact of changes in wholesale power and natural gas prices on SCE's contractual obligations, and the impact of SCE's credit ratings falling below investment grade.

The table below provides the amount of collateral posted by SCE to its counterparties as well as the potential collateral that would have been required as of March 31, 2023, if SCE's credit rating had been downgraded to below investment grade as of that date. The table below also provides the potential collateral that could be required due to adverse changes in wholesale power and natural gas prices over the remaining lives of existing power and fuel derivative contracts.

In addition to amounts shown in the table, power and fuel contract counterparties may also institute new collateral requirements, applicable to future transactions to allow SCE to continue trading in power and fuel contracts at the time of a downgrade or upon significant increases in market prices. Furthermore, SCE may also be required to post up to $50 million in collateral in connection with its environmental remediation obligations, within 120 days of the end of the fiscal year in which the downgrade occurs.

(in millions)
Collateral posted as of March 31, 20231	$	356
Incremental collateral requirements for purchased power and fuel contracts resulting from a potential downgrade of SCE's credit rating to below investment grade2		59
Incremental collateral requirements for SCE's financial hedging activities resulting from adverse market price movement3		71
Posted and potential collateral requirements	$	486

¹ Net collateral provided to counterparties and other brokers consisted of $261 million in letters of credit and surety bonds and $95 million of cash collateral.

² Represents potential collateral requirements for accounts payable and mark-to-market valuation at March 31, 2023. Requirement varies throughout the period and is generally lower at the end of the month.

³ Incremental collateral requirements were based on potential changes in SCE's forward positions as of March 31, 2023 due to adverse market price movements over the remaining lives of the existing power and fuel derivative contracts using a 95% confidence level.

Edison International Parent and Other

In the next 12 months, Edison International expects to fund its net cash requirements through cash on hand, dividends from SCE, and capital market and bank financings. Edison International may finance its ongoing cash requirements, including dividends, working capital requirements, payment of obligations, and capital investments, including capital contributions to subsidiaries, with short-term or other financings, subject to availability in the bank and capital markets.

At March 31, 2023, Edison International Parent and Other had cash on hand of $146 million and $878 million available to borrow on its $1.5 billion revolving credit facility. The credit facility is available for borrowing needs until May 2026 and the aggregate maximum principal amount may be increased up to $2.0 billion, provided that additional lender commitments are obtained. For further information, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."

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In March 2023, Edison International Parent issued $500 million of junior subordinated notes, due in 2053, which provide approximately $250 million of equity content as viewed by rating agencies. Edison International expects to raise any additional equity this year through its internal programs, which are estimated to generate approximately $100 million. The total expected equity content is consistent with the $300 million to $400 million of equity content identified in Edison International's 2023 financing plan.

Edison International Parent and Other's liquidity and its ability to pay operating expenses and pay dividends to preferred and common shareholders are dependent on access to the bank and capital markets, dividends from SCE, realization of tax benefits and its ability to meet California law requirements for the declaration of dividends. Prior to declaring dividends, Edison International's Board of Directors evaluates available information to ensure that the California law requirements for the declarations are met. For information on the California law requirements on the declaration of dividends, see "Liquidity and Capital Resources—SCE—SCE Dividends" in the 2022 Form 10-K. Edison International intends to maintain its target payout ratio of 45% – 55% of SCE's core earnings, subject to the factors identified above.

Edison International's ability to declare and pay common dividends may be restricted under the terms of its Series A and Series B Preferred Stock. For further information, see "Notes to Consolidated Financial Statements—Note 14. Equity" in the 2022 Form 10-K.

Edison International Parent's credit facility requires a consolidated debt to total capitalization ratio as defined in the applicable agreements of less than or equal to 0.70 to 1. At March 31, 2023, Edison International's consolidated debt to total capitalization ratio was 0.64 to 1.

At March 31, 2023, Edison International Parent was in compliance with all financial covenants that affect access to capital.

In the first quarter of 2023, Moody's upgraded Edison International's credit rating from Baa3 to Baa2 and revised Edison International's rating outlook from positive to stable. In April 2023, Fitch upgraded Edison International's credit rating from BBB- to BBB and revised Edison International's rating outlook from positive to stable The following table summarizes Edison International Parent's current long-term issuer credit ratings and outlook from the major credit rating agencies:

	Moody's	Fitch	S&P
Credit Rating	Baa2	BBB	BBB
Outlook	Stable	Stable	Stable

Edison International Parent's credit ratings may be affected if, among other things, regulators fail to successfully implement AB 1054 in a consistent and credit supportive manner or the Wildfire Insurance Fund is depleted by claims from catastrophic wildfires. Credit rating downgrades increase the cost and may impact the availability of short-term and long-term borrowings, including commercial paper, credit facilities, note financings or other borrowings.

Edison International Income Taxes

Inflation Reduction Act of 2022

On August 16, 2022, the IRA was signed into law. The law imposes a 15% corporate alternative minimum tax ("CAMT") on adjusted financial statement income ("AFSI") of corporations with average AFSI exceeding $1 billion over a specified 3-year period. The CAMT was effective beginning January 1, 2023. Based on the current interpretation of the law and historical financial data, Edison International estimates that it will exceed the $1 billion threshold and be subject to CAMT on its consolidated Federal tax returns beginning in 2025. SCE expects to be subject to CAMT on its stand-alone Federal return beginning in 2024.

The law also includes significant extensions, expansions, and enhancements of numerous energy-related investment tax credits, as well as creating new credits applicable to electricity production which may apply to SCE's capital expenditures.

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Under the IRA, SCE expects to generate investment tax credits related to its utility owned storage projects, which will accrue to the benefit of its customers.

Historical Cash Flows

SCE

	Three months ended March 31,
(in millions)	2023		2022
Net cash (used in) provided by operating activities	$	(20)	$	827
Net cash provided by financing activities		1,249		171
Net cash used in investing activities		(1,305)		(1,159)
Net decrease in cash and cash equivalents	$	(76)	$	(161)

Net Cash (Used in) Provided by Operating Activities

The following table summarizes major categories of net cash for operating activities as provided in more detail in SCE's consolidated statements of cash flows for the three months ended March 31, 2023 and 2022.

	Three months ended March 31,				Change in cash flows
(in millions)	2023		2022		2023/2022
Net income	$	399	$	173
Non-cash items1		719		611
Subtotal		1,118		784	$	334
Changes in cash flow resulting from working capital2		(725)		78		(803)
Regulatory assets and liabilities		(296)		259		(555)
Wildfire related claims3		(133)		(196)		63
Other noncurrent assets and liabilities4		16		(98)		114
Net cash (used in) provided by operating activities	$	(20)	$	827	$	(847)

1 Non-cash items include depreciation and amortization, allowance for equity during construction, deferred income taxes, Wildfire Insurance Fund amortization expenses and other.

2 Changes in working capital items include receivables, accrued unbilled revenue, inventory, amortization of prepaid expenses, accounts payable, tax receivables and payables, derivative assets and liabilities and other current assets and liabilities.

3 2023 amount represents payments of $221 million for 2017/2018 Wildfire/Mudslide Events and $7 million for Post-2018 Wildfires, partially offset by an increase in wildfire estimated losses of $96 million. 2022 amount represents payment of $717 million for 2017/2018 Wildfire/Mudslide Events, partially offset by an increase in wildfire estimated losses of $521 million.

4 Includes nuclear decommissioning trusts. See "Nuclear Decommissioning Activities" below for further information. 2022 amount also includes outflow from increase in wildfire insurance receivables of $96 million.

Net cash (used in) provided by operating activities was impacted by the following:

Net income and non-cash items increased in 2023 by $334 million primarily due to revenue from escalation mechanism set forth in the 2021 GRC final decision, partially offset by higher net interest expense.

Net changes in cash resulting from working capital was an outflow of $725 million and an inflow of $78 million during the three months ended March 31, 2023 and 2022, respectively. Net cash outflow for 2023 was primarily due to decreases in payables of $695 million mainly from payments of power purchase contracts driven by a decrease in gas prices from December 2022, and $171 million cash outflow for margin and collateral deposits due to the decrease in the market value of power and gas derivatives, partially offset by inflow from net decreases in customer receivables and unbilled revenue of $113 million. Net cash inflow for 2022 was primarily due to a net decrease in customer receivables and unbilled revenue of

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$161 million (mainly due to $185 million of CAPP funds received in January 2022), and a net decrease in prepaid insurance of $88 million, partially offset by a decrease in payables of $166 million.

Net cash (used in) provided by regulatory assets and liabilities, including changes in net undercollections recorded in balancing accounts, was $(296) million and $259 million during the three months ended March 31, 2023 and 2022, respectively. SCE has a number of balancing and memorandum accounts, which impact cash flows based on differences between timing of collection of amounts through rates and accrual expenditures. Cash flows were primarily impacted by the following:

2023

● Decreased overcollections of $234 million for GHG revenue related to climate credits provided to customers, partially offset by GHG revenue related to GHG auction revenue received.

● Undercollections of wildfire related memorandum and balancing accounts increased by $106 million primarily due to additional wildfire risk mitigation and restoration costs incurred.

● Net undercollections of BRRBA increased by $26 million primarily due to lower sales volume in 2023, partially offset by recovery of prior year undercollections from various tracks of the 2021 GRC.

● Net undercollections for ERRA, PABA and NSGBA decreased by $14 million primarily due to recovery of prior PABA undercollections, partially offset by current year undercollections due to lower than forecast sale volume.

2022

● Net undercollections of BRRBA increased by $511 million primarily due to $401 million of expense authorized under GRC track 2 for collection in customer rates starting March 2022 over a 36-month period, and current year undercollections due to actual billed prices lower than forecast due to timing, partially offset by recovery of prior year undercollections, including 2021 GRC authorized additional revenue requirement for the first nine months of 2021 to be collected over a 27-month period starting October 2021.

● Undercollections decreased by $371 million related to wildfire risk mitigation memorandum and balancing accounts as a result of approval to recover costs in GRC track 2, which were transferred to BRRBA for recovery as mentioned above, partially offset by additional wildfire risk mitigation costs incurred.

● Net undercollections for ERRA, PABA and NSGBA decreased by $72 million primarily due to recovery of prior PABA and NSGBA undercollections, partially offset by current year undercollections due to delay in rate change and higher market exposure.

● Increased overcollections of $221 million for the public purpose and energy efficiency programs as a result of lower program spending due to timing.

● Increase in overcollection of $144 million for excess California Department of Water Resources ("DWR") bond and power charges to be refunded to customers over a 12-month period beginning in June 2022.

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Net Cash Provided by Financing Activities

The following table summarizes cash provided by financing activities for the three months ended March 31, 2023 and 2022. Issuances of debt are discussed in "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements."

		Three months ended March 31,
(in millions)	2023		2022
Issuances of long-term debt, including premium/discount and net of issuance costs	$	1,186	$	1,713
Long-term debt repaid		(1)		(365)
Short-term debt repaid		—		(518)
Commercial paper borrowing (repayment), net		431		(306)
Payment of common stock dividends to Edison International		(350)		(325)
Payment of preference stock dividends		(29)		(32)
Other		12		4
Net cash provided by financing activities	$	1,249	$	171

Net Cash Used in Investing Activities

Cash flows used in investing activities are primarily due to total capital expenditures of $1.3 billion and $1.2 billion for the three months ended March 31, 2023 and 2022, respectively. In addition, SCE had a net redemption of nuclear decommissioning trust investments of $19 million and $34 million during the three months ended March 31, 2023 and 2022, respectively. See "Nuclear Decommissioning Activities" below for further discussion.

Nuclear Decommissioning Activities

SCE's consolidated statements of cash flows include nuclear decommissioning activities, which are reflected in the following line items:

	Three months ended March 31,
(in millions)	2023		2022
Net cash used in operating activities:
Net earnings from nuclear decommissioning trust investments	$	21	$	19
SCE's decommissioning costs		(57)		(35)
Net cash provided by investing activities:
Proceeds from sale of investments		951		867
Purchases of investments		(932)		(833)
Net cash (outflow) inflow	$	(17)	$	18

Net cash used in operating activities relates to interest and dividends less administrative expenses, taxes and SCE's decommissioning costs. Investing activities represent the purchase and sale of investments within the nuclear decommissioning trusts, including the reinvestment of earnings from nuclear decommissioning trust investments. The net cash impact reflects timing of decommissioning payments ($57 million and $35 million in 2023 and 2022, respectively) and reimbursements to SCE from the nuclear decommissioning trust ($40 million and $53 million in 2023 and 2022 respectively).

Edison International Parent and Other

The table below sets forth condensed historical cash flow from operations for Edison International Parent and Other, including intercompany eliminations.

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	Three months ended March 31,
(in millions)	2023		2022
Net cash used in operating activities	$	(70)	$	(35)
Net cash provided by financing activities		67		34
Net cash provided by investing activities		—		2
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(3)	$	1

Net Cash Used in Operating Activities

Net cash used in operating activities was impacted by the following:

● $70 million and $35 million cash outflow from operating activities in 2023 and 2022, respectively, primarily due to payments relating to interest and operating costs. The 2022 amount is partially offset by $18 million income tax refund received from the California Franchise Tax Board.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was as follows:

	Three months ended March 31,
(in millions)	2023		2022
Dividends paid to Edison International common shareholders	$	(277)	$	(262)
Dividends paid to Edison International preferred shareholders		(52)		(46)
Dividends received from SCE		350		325
Long-term debt issuance, net of discount and issuance costs		495		—
Long-term debt repayments		(400)		—
Repayments of term loan		(600)		—
Commercial paper financing, net		529		—
Other		22		17
Net cash provided by financing activities	$	67	$	34

Contingencies

Edison International's and SCE's contingencies are discussed in "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies."

MARKET RISK EXPOSURES

Edison International's and SCE's primary market risks are described in the 2022 Form 10-K, and there have been no material changes for the three months ended March 31, 2023. For further discussion of market risk exposures, including commodity price risk and credit risk, see "Notes to Consolidated Financial Statements—Note 4. Fair Value Measurements" and "—Note 6. Derivative Instruments."

CRITICAL ACCOUNTING ESTIMATES AND POLICIES

For a discussion of Edison International's and SCE's critical accounting policies, see "Critical Accounting Estimates and Policies" in the 2022 MD&A.

NEW ACCOUNTING GUIDANCE

There have been no material changes in recently issued or adopted accounting standards from those disclosed in "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—New Accounting Guidance" in the 2022 Form 10-K.

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information responding to this section is included in the MD&A under the heading "Market Risk Exposures" and is incorporated herein by reference.

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FINANCIAL STATEMENTS

Consolidated Statements of Income Edison International

	Three months ended
	March 31,
(in millions, except per-share amounts, unaudited)	2023		2022
Operating revenue	$	3,966	$	3,968
Purchased power and fuel		1,318		1,037
Operation and maintenance		1,084		1,487
Wildfire-related claims, net of insurance recoveries		96		425
Wildfire Insurance Fund expense		52		53
Depreciation and amortization		656		583
Property and other taxes		140		126
Other operating income		—		(2)
Total operating expenses		3,346		3,709
Operating income		620		259
Interest expense		(361)		(246)
Other income		119		68
Income before income taxes		378		81
Income tax expense (benefit)		13		(55)
Net income		365		136
Less: Preference stock dividend requirements of SCE		29		26
Less: Preferred stock dividend requirement of Edison International		26		26
Net income attributable to Edison International common shareholders	$	310	$	84
Basic earnings per share:
Weighted average shares of common stock outstanding		383		381
Basic earnings per common share attributable to Edison International common shareholders	$	0.81	$	0.22
Diluted earnings per share:
Weighted average shares of common stock outstanding, including effect of dilutive securities		384		382
Diluted earnings per common share attributable to Edison International common shareholders	$	0.81	$	0.22

The accompanying notes are an integral part of these consolidated financial statements.

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Consolidated Statements of Comprehensive Income Edison International

		Three months ended
	March 31,
(in millions, unaudited)	2023		2022
Net income	$	365	$	136
Other comprehensive income, net of tax:
Pension and postretirement benefits other than pensions		—		2
Foreign currency translation adjustments		2		—
Other comprehensive income, net of tax		2		2
Comprehensive income		367		138
Less: Comprehensive income attributable to noncontrolling interests