{ "ticker": "EIX", "company": "Edison International", "filing_type": "10-K", "year_current": "2024", "year_prior": "2023", "summary": { "added": 17, "removed": 12, "modified": 78, "unchanged": 28, "total_current": 123, "total_prior": 118 }, "source": "SEC EDGAR", "url": "https://riskdiff.com/eix/2024-vs-2023/", "markdown_url": "https://riskdiff.com/eix/2024-vs-2023/index.md", "json_url": "https://riskdiff.com/eix/2024-vs-2023/index.json", "generated": "2026-06-01", "ai_summary": null, "risks": [ { "status": "ADDED", "current_title": "Climate change exacerbated weather-related incidents and other natural disasters could materially affect SCE's financial condition and results of operations.", "prior_title": null, "current_body": "Weather-related incidents, including storms and events caused, or exacerbated, by climate change, such as wildfires, flooding and debris flows, and other natural disasters such as earthquakes can disrupt the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver power to SCE's customers. The impacts of climate change continue to evolve and remain dynamic and unpredictable. Climate change has caused, and exacerbated, extreme weather events and wildfires in southern California, and wildfires could cause, among other things, public safety issues, property damage and operational issues. In addition, the risk of flooding and debris flows occurring as a result of rain may be heightened. For example, the 2017/2018 Wildfire/Mudslide Events resulted in, among other things, loss of life, property damage and loss of service. For more information on the impact of the 2017/2018 Wildfire/Mudslide Events and Post-2018 Wildfires on SCE and Edison International, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" Extreme heat events have and can continue to lead to prolonged widespread outages due to, among other things, state-wide capacity supply shortages or equipment failure. Extreme weather events can also lead to use of PSPS. Weather-related events, such as debris flows, flooding and melting of a significantly higher than normal snowpack, and earthquakes can cause over-topping or failure at an SCE dam resulting in a rapid release of water that could cause, among other things, public safety issues, property damage and operational issues. Weather-related incidents and other natural disasters can lead to lost revenue and increased expense, including higher maintenance and repair costs, which SCE may not be able to recover from its customers. These incidents can also result in regulatory penalties and disallowances, particularly if SCE encounters difficulties in restoring power to its customers on a timely basis or if fire-related losses are found to be the result of utility practices and/or the failure of electric and other utility equipment. In addition, these occurrences could lead to significant claims for damages, including for loss of life and property damage. These occurrences could materially affect SCE's business, financial condition and results of operations, and the inability to restore power to SCE's customers could also materially damage the business reputation of SCE and Edison International. For additional information related to climate related risks, see “Business—Environmental Considerations—Environmental Risks.”" }, { "status": "ADDED", "current_title": "As a capital-intensive company, SCE relies on access to the capital markets. If SCE were unable to access the capital markets or the cost of financing were to substantially increase, its liquidity and operations could be materially affected.", "prior_title": null, "current_body": "SCE regularly accesses the capital markets to finance its activities and is expected to do so by its regulators as part of its obligation to serve as a regulated utility. SCE needs substantial capital for its ongoing infrastructure investment program and for financing wildfire related losses. SCE's ability to obtain financing, as well as its ability to refinance debt and make scheduled payments of principal and interest, are dependent on numerous factors, including SCE's levels of indebtedness, maintenance of acceptable credit ratings, financial performance, liquidity and cash flow, increases in interest rates and credit spreads due to inflationary pressures, and other market conditions. In addition, the actions of other California investor-owned utilities and legal, regulatory and legislative decisions impacting investor-owned utilities can affect market conditions and therefore, SCE's ability to obtain financing. SCE's inability to obtain additional capital from time to time could have a material effect on SCE's liquidity and operations." }, { "status": "ADDED", "current_title": "Successful attacks on SCE information and operational technology systems and infrastructure could have a material impact on SCE's operations or financial condition", "prior_title": null, "current_body": "Edison International and SCE systems are targets for physical and cyber attacks. Regulators such as NERC and U.S. Government agencies, including the Departments of Defense, Homeland Security, and Energy, have increasingly stressed that threat sources continue to seek to identify and exploit vulnerabilities in the U.S. national electric grid and other critical energy infrastructures, and that such attacks and disruptions, both physical and cyber, are highly sophisticated and dynamic. Several U.S. Government agencies have highlighted the increasing risks related to physical and cybersecurity attacks, including ransomware attacks, related to the electric sector, including its supply chain, and that the risks may escalate during periods of heightened geopolitical tensions. SCE requires the uninterrupted use of sophisticated information and operational technology systems and infrastructure to monitor and operate the electric grid. In the regular course of SCE’s business, it also handles a range of sensitive infrastructure, security, employee, customer, and business systems information. If SCE's information technology and operational technology systems' security were to be compromised by physical or electronic means or a critical system or technology failure were to occur without timely recovery, including failure of new technology to be implemented as designed, SCE could be unable to fulfill critical business functions and/or sensitive information could be misappropriated or compromised. Such events could result in violations of privacy and other laws, material financial loss to SCE and/or to its customers, loss of confidence in SCE's security risk management, customer dissatisfaction, and significant litigation and/or regulatory exposure, all of which could materially affect Edison International’s and SCE's financial condition, operations, and the business reputation of Edison International and SCE." }, { "status": "ADDED", "current_title": "SCE's security program cannot prevent all attacks", "prior_title": null, "current_body": "SCE's systems have experienced, and will continue to face, cyber and physical security events involving vandalism, malicious code, unauthorized access attempts, and other illicit activities. No security program can completely shield its 48 48 Table of Contentssystems, infrastructure, and data from attacks, intrusions, or other catastrophic events that could result in their failure or reduced functionality. There is no guarantee that SCE's security program, including prevention, detection, mitigation, and remediation of risks, will prevent all future cyber and physical security incidents that could materially impact its operations or financial condition.SCE is not able to anticipate and prevent all physical and cyber attacks or information security breaches, and its investments in security resources, talent, and business practices may not be effective against all threat actors, particularly nation-state actors. Voluntary cybersecurity guidelines and practices cannot be applied to all businesses equally due to system capability, complexity, and resources for implementation. SCE's security tools and controls, including those supporting configuration management, identity and access management, network segmentation, and boundary defenses, may not fully protect against unauthorized access from internal and external threats. SCE's current security controls and defenses may also not protect against insider threats, including deliberate and unintentional actions (e.g., human error) and other emerging cybersecurity risks created by artificial intelligence, quantum computing, cyber skills shortages, and regulatory constraints. SCE's security program is prioritized based on known risks, available resources, and regulatory requirements, and therefore all SCE assets are not equally protected. For example, not all of SCE's information technology assets are inventoried, which could result in unmitigated vulnerabilities or slow the detection, investigation, and recovery of an incident. Known vulnerabilities in SCE's information technology and operational technology environments may not be remediated before an adversary could discover or exploit them. Attackers can also exploit new, unknown vulnerabilities (e.g., zero day) and vulnerabilities where a patch or other remediation measure is not yet available. SCE's transition to a more network-connected grid and increased deployment of new technologies increases the number of systems adversaries can targetSCE's operations require the continuous availability and deployment of critical information and operational technology systems, sensitive customer and employee data and infrastructure information, all of which are targets for malicious actors. New cyber and physical threats arise as SCE moves to an increasingly digital electric grid. For example, SCE's grid modernization efforts and the transition to a more connected grid, including the integration of new technologies and increased networking of operational technology assets such as substations, increases the threat surface and potential vulnerabilities that an adversary can target. As new systems are developed or procured by SCE, software development practices may not comprehensively prevent the introduction of new software vulnerabilities. Additionally, certain existing or legacy information technology, operational technology, and communications infrastructure use less secure protocols or configurations.Vendors and other third parties may be used to target and attack SCESCE interacts with a wide array of third parties and depends on vendors to provide it with products and services. Malicious actors may attack vendors to disrupt the services they provide to SCE, or to use those vendors as a conduit to attack SCE. SCE system data and architecture are also disclosed, either voluntarily or by mandate, to third parties and the public by regulators, employees, contractors, and vendors. This system data may be used by malicious actors to understand SCE’s systems to prepare for a cyber or physical attack.The products and services provided by SCE's vendors may contain vulnerabilities or otherwise not adhere to SCE's enterprise cybersecurity standards (e.g., lack of encryption). Additionally, SCE's operational technology vendors have increasingly been targeted by threat actors. A compromise of equipment and/or exfiltration of SCE data, whether by physical or by electronic means, could result in loss or changes to confidential or sensitive information and interruption of business processes. For example, compromises to widely-used products and services such as MOVEit affected the supply chains of many industries, including companies in SCE’s supply chain. While SCE vendors have experienced cybersecurity incidents, such incidents have not, to SCE's knowledge, resulted in a material impact to SCE to date.49 Table of Contents Table of Contents Table of Contents systems, infrastructure, and data from attacks, intrusions, or other catastrophic events that could result in their failure or reduced functionality. There is no guarantee that SCE's security program, including prevention, detection, mitigation, and remediation of risks, will prevent all future cyber and physical security incidents that could materially impact its operations or financial condition.SCE is not able to anticipate and prevent all physical and cyber attacks or information security breaches, and its investments in security resources, talent, and business practices may not be effective against all threat actors, particularly nation-state actors. Voluntary cybersecurity guidelines and practices cannot be applied to all businesses equally due to system capability, complexity, and resources for implementation. SCE's security tools and controls, including those supporting configuration management, identity and access management, network segmentation, and boundary defenses, may not fully protect against unauthorized access from internal and external threats. SCE's current security controls and defenses may also not protect against insider threats, including deliberate and unintentional actions (e.g., human error) and other emerging cybersecurity risks created by artificial intelligence, quantum computing, cyber skills shortages, and regulatory constraints. SCE's security program is prioritized based on known risks, available resources, and regulatory requirements, and therefore all SCE assets are not equally protected. For example, not all of SCE's information technology assets are inventoried, which could result in unmitigated vulnerabilities or slow the detection, investigation, and recovery of an incident. Known vulnerabilities in SCE's information technology and operational technology environments may not be remediated before an adversary could discover or exploit them. Attackers can also exploit new, unknown vulnerabilities (e.g., zero day) and vulnerabilities where a patch or other remediation measure is not yet available. SCE's transition to a more network-connected grid and increased deployment of new technologies increases the number of systems adversaries can targetSCE's operations require the continuous availability and deployment of critical information and operational technology systems, sensitive customer and employee data and infrastructure information, all of which are targets for malicious actors. New cyber and physical threats arise as SCE moves to an increasingly digital electric grid. For example, SCE's grid modernization efforts and the transition to a more connected grid, including the integration of new technologies and increased networking of operational technology assets such as substations, increases the threat surface and potential vulnerabilities that an adversary can target. As new systems are developed or procured by SCE, software development practices may not comprehensively prevent the introduction of new software vulnerabilities. Additionally, certain existing or legacy information technology, operational technology, and communications infrastructure use less secure protocols or configurations.Vendors and other third parties may be used to target and attack SCESCE interacts with a wide array of third parties and depends on vendors to provide it with products and services. Malicious actors may attack vendors to disrupt the services they provide to SCE, or to use those vendors as a conduit to attack SCE. SCE system data and architecture are also disclosed, either voluntarily or by mandate, to third parties and the public by regulators, employees, contractors, and vendors. This system data may be used by malicious actors to understand SCE’s systems to prepare for a cyber or physical attack.The products and services provided by SCE's vendors may contain vulnerabilities or otherwise not adhere to SCE's enterprise cybersecurity standards (e.g., lack of encryption). Additionally, SCE's operational technology vendors have increasingly been targeted by threat actors. A compromise of equipment and/or exfiltration of SCE data, whether by physical or by electronic means, could result in loss or changes to confidential or sensitive information and interruption of business processes. For example, compromises to widely-used products and services such as MOVEit affected the supply chains of many industries, including companies in SCE’s supply chain. While SCE vendors have experienced cybersecurity incidents, such incidents have not, to SCE's knowledge, resulted in a material impact to SCE to date. systems, infrastructure, and data from attacks, intrusions, or other catastrophic events that could result in their failure or reduced functionality. There is no guarantee that SCE's security program, including prevention, detection, mitigation, and remediation of risks, will prevent all future cyber and physical security incidents that could materially impact its operations or financial condition. SCE is not able to anticipate and prevent all physical and cyber attacks or information security breaches, and its investments in security resources, talent, and business practices may not be effective against all threat actors, particularly nation-state actors. Voluntary cybersecurity guidelines and practices cannot be applied to all businesses equally due to system capability, complexity, and resources for implementation. SCE's security tools and controls, including those supporting configuration management, identity and access management, network segmentation, and boundary defenses, may not fully protect against unauthorized access from internal and external threats. SCE's current security controls and defenses may also not protect against insider threats, including deliberate and unintentional actions (e.g., human error) and other emerging cybersecurity risks created by artificial intelligence, quantum computing, cyber skills shortages, and regulatory constraints. SCE's security program is prioritized based on known risks, available resources, and regulatory requirements, and therefore all SCE assets are not equally protected. For example, not all of SCE's information technology assets are inventoried, which could result in unmitigated vulnerabilities or slow the detection, investigation, and recovery of an incident. Known vulnerabilities in SCE's information technology and operational technology environments may not be remediated before an adversary could discover or exploit them. Attackers can also exploit new, unknown vulnerabilities (e.g., zero day) and vulnerabilities where a patch or other remediation measure is not yet available." }, { "status": "ADDED", "current_title": "SCE's transition to a more network-connected grid and increased deployment of new technologies increases the number of systems adversaries can target", "prior_title": null, "current_body": "SCE's operations require the continuous availability and deployment of critical information and operational technology systems, sensitive customer and employee data and infrastructure information, all of which are targets for malicious actors. New cyber and physical threats arise as SCE moves to an increasingly digital electric grid. For example, SCE's grid modernization efforts and the transition to a more connected grid, including the integration of new technologies and increased networking of operational technology assets such as substations, increases the threat surface and potential vulnerabilities that an adversary can target. As new systems are developed or procured by SCE, software development practices may not comprehensively prevent the introduction of new software vulnerabilities. Additionally, certain existing or legacy information technology, operational technology, and communications infrastructure use less secure protocols or configurations." }, { "status": "ADDED", "current_title": "Balance at December 31, 2022", "prior_title": null, "current_body": "​ $ 1,978 ​ $ 6,200 ​ $ (11) ​ $ 7,454 ​ $ 15,621 ​ $ 1,901 ​ $ 17,522 Net income ​ ​ — ​ — ​ — ​ 1,284 ​ 1,284 ​ 123 ​ 1,407 Other comprehensive income ​ ​ — ​ — ​ 2 ​ — ​ 2 ​ — ​ 2 Common stock issued ​ ​ — ​ 92 ​ — ​ — ​ 92 ​ — ​ 92 Common stock dividends declared ($2.9925 per share) ​ ​ — ​ — ​ — ​ (1,147) ​ (1,147) ​ — ​ (1,147) Preferred stock dividend declared ($53.75 per share for Series A and $50.00 per share for Series B) ​ ​ — ​ ​ — ​ ​ — ​ ​ (108) ​ ​ (108) ​ ​ — ​ ​ (108) Dividends to noncontrolling interests ($96.823 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (123) ​ (123) Noncash stock-based compensation ​ ​ — ​ 46 ​ — ​ — ​ 46 ​ — ​ 46 Preference stock issued, net of issuance cost ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 542 ​ ​ 542 Preferred stock repurchased ​ ​ (305) ​ ​ — ​ ​ — ​ ​ 16 ​ ​ (289) ​ ​ — ​ ​ (289)" }, { "status": "ADDED", "current_title": "Balance at December 31, 2022", "prior_title": null, "current_body": "​ $ 1,978 ​ $ 6,200 ​ $ (11) ​ $ 7,454 ​ $ 15,621 ​ $ 1,901 ​ $ 17,522 Net income ​ ​ — ​ — ​ — ​ 1,284 ​ 1,284 ​ 123 ​ 1,407 Other comprehensive income ​ ​ — ​ — ​ 2 ​ — ​ 2 ​ — ​ 2 Common stock issued ​ ​ — ​ 92 ​ — ​ — ​ 92 ​ — ​ 92 Common stock dividends declared ($2.9925 per share) ​ ​ — ​ — ​ — ​ (1,147) ​ (1,147) ​ — ​ (1,147) Preferred stock dividend declared ($53.75 per share for Series A and $50.00 per share for Series B) ​ ​ — ​ ​ — ​ ​ — ​ ​ (108) ​ ​ (108) ​ ​ — ​ ​ (108) Dividends to noncontrolling interests ($96.823 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (123) ​ (123) Noncash stock-based compensation ​ ​ — ​ 46 ​ — ​ — ​ 46 ​ — ​ 46 Preference stock issued, net of issuance cost ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 542 ​ ​ 542 Preferred stock repurchased ​ ​ (305) ​ ​ — ​ ​ — ​ ​ 16 ​ ​ (289) ​ ​ — ​ ​ (289)" }, { "status": "ADDED", "current_title": "Balance at December 31, 2021", "prior_title": null, "current_body": "​ $ 1,977 ​ $ 6,071 ​ $ (54) ​ $ 7,894 ​ $ 15,888 ​ $ 1,901 ​ $ 17,789 Net income ​ ​ — ​ — ​ — ​ 717 ​ 717 ​ 107 ​ 824 Other comprehensive income ​ ​ — ​ — ​ 43 ​ — ​ 43 ​ — ​ 43 Common stock issued ​ ​ — ​ 87 ​ — ​ — ​ 87 ​ — ​ 87 Common stock dividends declared ($2.8375 per share) ​ ​ — ​ — ​ — ​ (1,083) ​ (1,083) ​ — ​ (1,083) Preferred stock dividend declared ($53.75 per share for Series A and $42.08333 per share for Series B) ​ ​ — ​ ​ — ​ ​ — ​ ​ (74) ​ ​ (74) ​ ​ — ​ ​ (74) Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (107) ​ (107) Noncash stock-based compensation ​ ​ — ​ 42 ​ — ​ — ​ 42 ​ — ​ 42 Other ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1 ​ ​ — ​ ​ 1" }, { "status": "ADDED", "current_title": "Balance at December 31, 2022²", "prior_title": null, "current_body": "​ $ 334 $ 20 ​ $ 354 Current period provision for uncollectible accounts1 ​ ​ 109 ​ ​ 6 ​ ​ 115 Write-offs, net of recoveries ​ (96) ​ (9) ​ (105)" }, { "status": "ADDED", "current_title": "Balance at December 31, 2023²", "prior_title": null, "current_body": "​ $ 347 $ 17 ​ $ 364 Inventory SCE's inventory is primarily composed of materials, supplies and spare parts, and generally stated at weighted average cost. Edison Carrier Solutions SCE operates commercial telecommunications service under the name of Edison Carrier Solutions (\"ECS\"), leveraging the temporarily available capacity of SCE's telecommunications network. As technology evolves, management is implementing strategic shifts in ECS services, including potential disposition of assets and ceasing to offer certain wire data services. ECS has notified affected customers of its intent to discontinue certain services over time and gave customers the option to discontinue those services. As a result of customer cancellations in the second quarter of 2023, materials and supplies inventory supporting data services are expected to be sold instead of placed into service and have been written-down to net realizable value, resulting in a charge of $13 million ($9 million after-tax). Labor and other costs of $4 million previously recorded as construction work in progress for projects no longer probable of completion were also expensed in the period." }, { "status": "ADDED", "current_title": "Deferred Financing Costs", "prior_title": null, "current_body": "Debt premium, discount and issuance expenses incurred in connection with obtaining financing are deferred and amortized over the life of each debt issue. These deferred amounts are recorded as an offset to long-term debt. See Note 5 for further details. Under CPUC ratemaking procedures, SCE's debt reacquisition expenses are amortized over the remaining life of the reacquired debt, or if refinanced, the life of the new debt. The unamortized losses on reacquired debt are reflected as long-term \"Regulatory assets\" in the consolidated balance sheets. See Note 11 for further details. Amortization of deferred financing costs charged to interest expense is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Edison International SCE ​ ​ Years ended December 31, (in millions) 2023 2022 2021 2023 2022 2021 Amortization of deferred financing costs charged to interest expense ​ $ 39 ​ $ 37 ​ $ 34 ​ $ 32 ​ $ 31 ​ $ 29 ​" }, { "status": "ADDED", "current_title": "Stock-Based Compensation", "prior_title": null, "current_body": "Stock options, performance shares, deferred stock units and restricted stock units have been granted under Edison International's long-term incentive compensation programs. For equity awards that are settled in common stock, Edison International either issues new common stock, or uses a third party to purchase shares from the market and deliver such shares for the settlement of the awards. Stock options, performance shares, deferred stock units and restricted stock units are settled in common stock. For awards that are otherwise settled entirely in common stock, Edison International substitutes cash awards to the extent necessary to satisfy applicable tax withholding obligations or government levies. Stock-based compensation expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period based on estimated fair values. For equity awards paid in common stock, fair value is determined at the grant date. For equity awards that have market conditions defined in the grants, expense is recognized based on grant date fair value if the requisite service period is fulfilled. However, with respect to the portion of the performance shares payable in common stock that are subject to financial performance conditions defined in the grants, the number of performance shares expected to be earned is subject to revision and updated at each reporting period, with a related adjustment to compensation expense. For awards granted to retirement-eligible participants, stock compensation expense is recognized on a prorated basis over the initial year. For awards granted to participants who become eligible for retirement during the requisite service period, stock compensation expense is recognized over the period between the date of grant and the date the participant first becomes eligible for retirement. Edison International and SCE estimate the number of awards that are expected to vest rather than account for forfeitures when they occur. Share-based payments may create a permanent difference between the amount of compensation expense recognized for book and tax purposes. The tax impact of this permanent difference is recognized in earnings in the period it is created. See Note 9 for further information. Employee Stock Purchase Plan The Edison International Employee Stock Purchase Plan (\"ESPP\"), effective beginning July 2021, allows eligible employees to make purchases of Edison International's common stock. The maximum aggregate numbers of shares that may be issued under the ESPP is 3,000,000 shares. Eligible employees may authorize payroll deductions of between 1% and 10% of their compensation, up to a maximum of $25,000, to purchase shares of common stock at 97% of the market price on the last day of each six months offering period. The ESPP is considered noncompensatory and stock issuances under the ESPP are recorded directly in equity." }, { "status": "ADDED", "current_title": "SCE Dividends", "prior_title": null, "current_body": "CPUC holding company rules require that SCE's dividend policy be established by SCE's Board of Directors on the same basis as if SCE were a stand-alone utility company, and that the capital requirements of SCE, as deemed to be necessary to meet SCE's electricity service obligations, shall receive first priority from the Boards of Directors of both Edison International and SCE. In addition, the CPUC regulates SCE's capital structure which limits the dividends it may pay to its shareholders." }, { "status": "ADDED", "current_title": "allowed by CPUC, including the impact of SCE's contributions to the Wildfire Insurance Fund under AB 1054.", "prior_title": null, "current_body": "In August 2023, the CPUC issued a decision on SCE's application to the CPUC for an extension of the waiver of compliance with its equity ratio requirement that allows SCE to exclude from its equity ratio calculations (i) net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events and (ii) debt issued for the purpose of paying claims, and associated expenses, related to the 2017/2018 Wildfire/Mudslide Events up to an amount equal to the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events. Under the decision, effective as of the beginning of the new cost of capital cycle on January 1, 2023, the CPUC also authorized SCE to exclude from its equity ratio calculations debt that exceeds the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events due to the timing difference between the wildfire claims payment and the realization of the cash tax benefits. The temporary exclusion will lapse on August 31, 2025 or when determinations regarding cost recovery for the 2017/2018 Wildfire/Mudslide Events are made, whichever comes earlier. If the CPUC has not made determinations regarding cost recovery by August 31, 2025, SCE is permitted to file another application for a waiver of compliance with its equity ratio requirement. While the exclusion is in place, SCE is required to notify the CPUC if an adverse financial event reduces SCE's spot equity ratio by more than one percent from the level most recently filed with the CPUC in the proceeding. The last spot equity ratio SCE filed with the CPUC in the proceeding did not exclude the then $1.8 billion net charge and was 45.2% as of December 31, 2018 (at the time the common equity component of SCE's CPUC authorized capital structure was required to remain at or above 48% on a weighted average basis over the applicable 37-month period). SCE's spot equity ratio on December 31, 2018 would have been 48.7% had the $1.8 billion net charge at December 31, 2018 been excluded, therefore SCE will notify the CPUC if its spot ratio drops below 47.7% in any quarter. For further information, see \"Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" 37-month" }, { "status": "ADDED", "current_title": "New Accounting Guidance", "prior_title": null, "current_body": "Accounting Guidance Adopted No material accounting standards were adopted in 2023. Accounting Guidance Not Yet Adopted In November 2023, the FASB issued an accounting standards update to enhance the disclosures related to public entities' reportable segments. The new guidance requires an entity with only one reportable segment to include all the required segment disclosures. The guidance will be effective for annual disclosures for the year ended December 31, 2024 and subsequent interim periods with early adoption permitted. The guidance is applied retrospectively to all periods presented in the financial statements. Edison International and SCE have one reportable segment and are currently evaluating the impact of any increased segment disclosures. In December 2023, the FASB issued an accounting standards update requiring public entities to provide more disclosures primarily related to the income tax rate reconciliation and income taxes paid. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The guidance is effective January 1, 2025 with early adoption permitted. The guidance is applied prospectively. Edison International and SCE are currently evaluating the impact of the new guidance." }, { "status": "ADDED", "current_title": "Note 3.Variable Interest Entities", "prior_title": null, "current_body": "A VIE is defined as a legal entity that meets one of two conditions: (1) the equity owners do not have sufficient equity at risk, or (2) the holders of the equity investment at risk, as a group, lack any of the following three characteristics: decision-making rights, the obligation to absorb losses or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. Commercial and operating activities are generally the factors that most significantly impact the economic performance of such VIEs. Commercial and operating activities include construction, operation and maintenance, fuel procurement, dispatch and compliance with regulatory and contractual requirements." }, { "status": "ADDED", "current_title": "Variable Interest in VIEs that are Consolidated", "prior_title": null, "current_body": "SCE Recovery Funding LLC is a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE. SCE Recovery Funding LLC is a VIE and SCE is the primary beneficiary. SCE Recovery Funding LLC was formed in 2021 for the purpose of issuing and servicing securitized bonds related to SCE's AB 1054 Excluded Capital Expenditures. SCE Recovery Funding LLC has issued a total of $1.6 billion of securitized bonds. The proceeds were used to acquire SCE's right, title and interest in and to non-bypassable rates and other charges to be collected from certain existing and future customers in SCE's service territory (\"Recovery Property\"), associated with the AB 1054 Excluded Capital Expenditures, until the bonds are paid in full, and all financing costs have been recovered. The securitized bonds are secured by the Recovery Property and cash collections from the non-bypassable rates and other charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to SCE. For further details, see Note 5. The following table summarizes the impact of SCE Recovery Funding LLC on SCE's and Edison International's consolidated balance sheets. ​ 83 83 Table of Contents​​​​​​​December 31, (in millions)2023​2022Other current assets$ 53​$ 45Regulatory assets: non-current​ 1,558​​ 834Regulatory liabilities: current​ 34​​ 33Current portion of long-term debt1​ 47​​ 29Other current liabilities​ 6​​ 4Long-term debt1 1,515​​ 8091The bondholders have no recourse to SCE. The long-term debt balance is net of unamortized debt issuance costs.Variable Interest in VIEs that are not ConsolidatedPower Purchase AgreementsSCE has PPAs that are classified as variable interests in VIEs, including agreements through which SCE provides the natural gas to fuel the plants, fixed price contracts for renewable energy, and resource adequacy agreements that, upon the seller's election, include the purchase of energy at fixed prices. SCE has concluded that it is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of these entities. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants, which SCE does not perform. As of the balance sheet date, the carrying amount of assets and liabilities included in SCE's consolidated balance sheet that relate to involvement with VIEs that are not consolidated, result from amounts due under the PPAs. Under these contracts, SCE recovers the costs incurred through demonstration of compliance with its CPUC-approved long-term power procurement plans. SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees, or other commitments associated with these contracts other than the purchase commitments described in Note 12. As a result, there is no significant potential exposure to loss to SCE from its variable interest in these VIEs. The aggregate contracted capacity dedicated to SCE from these VIE projects was 3,343 megawatts (\"MW\") and 3,907 MW at December 31, 2023 and 2022, respectively, and the amounts that SCE paid to these projects were $528 million and $608 million for the years ended December 31, 2023 and 2022, respectively. These amounts are recoverable in customer rates, subject to reasonableness review.Unconsolidated Trusts of SCESCE Trust II, Trust III, Trust IV, Trust V, Trust VI and Trust VII were utilized in 2013, 2014, 2015, 2016, 2017 and 2023, respectively, for the exclusive purpose of issuing the 5.10%, 5.75%, 5.375%, 5.45%, 5.00% and 7.50% trust preference securities, respectively (\"trust securities\"). The trusts are VIEs. SCE has concluded that it is not the primary beneficiary of these VIEs as it does not have the obligation to absorb the expected losses or the right to receive the expected residual returns of the trusts. SCE Trust II, Trust III, Trust IV, Trust V, Trust VI and Trust VII issued to the public trust securities in the face amounts of $400 million, $275 million, $325 million, $300 million, $475 million and $550 million (cumulative, liquidation amounts of $25 per share), respectively, and $10,000 of common stock each to SCE. The trusts invested the proceeds of these trust securities in Series G, Series H, Series J, Series K, Series L and Series M Preference Stock issued by SCE in the principal amounts of $400 million, $275 million, $325 million, $300 million, $475 million and $550 million (cumulative, $2,500 per share liquidation values), respectively, which have substantially the same payment terms as the respective trust securities.The Series G, Series H, Series J, Series K, Series L and Series M Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series G, Series H, Series J, Series K, Series L or Series M Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust (see Note 14 for further information). The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities if and when the SCE board of directors declares and makes dividend payments 84 Table of Contents Table of Contents Table of Contents ​​​​​​​December 31, (in millions)2023​2022Other current assets$ 53​$ 45Regulatory assets: non-current​ 1,558​​ 834Regulatory liabilities: current​ 34​​ 33Current portion of long-term debt1​ 47​​ 29Other current liabilities​ 6​​ 4Long-term debt1 1,515​​ 8091The bondholders have no recourse to SCE. The long-term debt balance is net of unamortized debt issuance costs.Variable Interest in VIEs that are not ConsolidatedPower Purchase AgreementsSCE has PPAs that are classified as variable interests in VIEs, including agreements through which SCE provides the natural gas to fuel the plants, fixed price contracts for renewable energy, and resource adequacy agreements that, upon the seller's election, include the purchase of energy at fixed prices. SCE has concluded that it is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of these entities. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants, which SCE does not perform. As of the balance sheet date, the carrying amount of assets and liabilities included in SCE's consolidated balance sheet that relate to involvement with VIEs that are not consolidated, result from amounts due under the PPAs. Under these contracts, SCE recovers the costs incurred through demonstration of compliance with its CPUC-approved long-term power procurement plans. SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees, or other commitments associated with these contracts other than the purchase commitments described in Note 12. As a result, there is no significant potential exposure to loss to SCE from its variable interest in these VIEs. The aggregate contracted capacity dedicated to SCE from these VIE projects was 3,343 megawatts (\"MW\") and 3,907 MW at December 31, 2023 and 2022, respectively, and the amounts that SCE paid to these projects were $528 million and $608 million for the years ended December 31, 2023 and 2022, respectively. These amounts are recoverable in customer rates, subject to reasonableness review.Unconsolidated Trusts of SCESCE Trust II, Trust III, Trust IV, Trust V, Trust VI and Trust VII were utilized in 2013, 2014, 2015, 2016, 2017 and 2023, respectively, for the exclusive purpose of issuing the 5.10%, 5.75%, 5.375%, 5.45%, 5.00% and 7.50% trust preference securities, respectively (\"trust securities\"). The trusts are VIEs. SCE has concluded that it is not the primary beneficiary of these VIEs as it does not have the obligation to absorb the expected losses or the right to receive the expected residual returns of the trusts. SCE Trust II, Trust III, Trust IV, Trust V, Trust VI and Trust VII issued to the public trust securities in the face amounts of $400 million, $275 million, $325 million, $300 million, $475 million and $550 million (cumulative, liquidation amounts of $25 per share), respectively, and $10,000 of common stock each to SCE. The trusts invested the proceeds of these trust securities in Series G, Series H, Series J, Series K, Series L and Series M Preference Stock issued by SCE in the principal amounts of $400 million, $275 million, $325 million, $300 million, $475 million and $550 million (cumulative, $2,500 per share liquidation values), respectively, which have substantially the same payment terms as the respective trust securities.The Series G, Series H, Series J, Series K, Series L and Series M Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series G, Series H, Series J, Series K, Series L or Series M Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust (see Note 14 for further information). The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities if and when the SCE board of directors declares and makes dividend payments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions) 2023 ​ 2022 Other current assets $ 53 ​ $ 45 Regulatory assets: non-current ​ 1,558 ​ ​ 834 Regulatory liabilities: current ​ 34 ​ ​ 33 Current portion of long-term debt1 ​ 47 ​ ​ 29 Other current liabilities ​ 6 ​ ​ 4 Long-term debt1 1,515 ​ ​ 809" }, { "status": "REMOVED", "current_title": null, "prior_title": "The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to SCE’s workforce and the general public.", "prior_body": "Electricity poses hazards for SCE’s workforce and the general public should they come in contact with electrical current or equipment, including through energized downed power lines or if equipment malfunctions. In addition, the risks associated with the operation of transmission and distribution assets and power generation and storage facilities include public and workforce safety issues and the risk of utility assets causing or contributing to wildfires. Injuries and property damage caused by such events can subject SCE to liability that, despite the existence of insurance coverage, can be significant. In addition, SCE may be held responsible for the actions of its contractors. No assurance can be given that future losses will not exceed the limits of SCE's or its contractors' insurance coverage. The CPUC has increased its focus on public safety with an emphasis on heightened compliance with construction and operating standards and the potential for penalties being imposed on utilities. Additionally, the CPUC has delegated to its staff the authority to issue citations to electric utilities, which can impose fines of up to $100,000 per violation per day (capped at a maximum of $8 million), pursuant to the CPUC's jurisdiction for violations of safety rules found in statutes, regulations, and the CPUC's General Orders. The CPUC also can issue fines greater than $8 million outside of the citation program. Such penalties and liabilities could be significant and materially affect SCE's liquidity and results of operations." }, { "status": "REMOVED", "current_title": null, "prior_title": "SCE's inability to effectively and timely respond to the changes that the electricity industry is undergoing, as a result of increased competition, technological advances, and changes to the regulatory environment, could materially impact SCE's business model, financial condition and results of operations.", "prior_body": "Customers and third parties are increasingly deploying distributed energy resources (\"DERs\"), such as solar generation, energy storage, energy efficiency and demand response technologies. California's environmental policy objectives are accelerating the pace and scope of industry change. This change will require modernization of the electric distribution grid to, among other things, accommodate two-way flows of electricity and increase the grid's capacity to interconnect DERs. In addition, enabling California's clean energy economy goals will require sustained investments in grid modernization, renewable integration projects, energy efficiency programs, energy storage options and electric vehicle infrastructure. If SCE is unable to effectively adapt to these changes, its business model, its ability to execute on its strategy, and ultimately its financial condition and results of operations could be materially impacted. Customer-owned generation and load departures to CCAs or Electric Service Providers each reduce the amount of electricity that customers purchase from utilities and have the effect of increasing utility rates unless customer rates are designed to allocate the costs of the distribution grid across all customers that benefit from its use. For example, some customers in California who generate their own power are not currently required to pay all transmission and distribution charges and non-bypassable charges, subject to limitations, which results in increased costs for those customers who do not own their generation. If regulations aren't changed such that customers pay their share of transmission and distribution costs and non-bypassable charges and the demand for electricity reduces so significantly that SCE is no longer effectively able to recover such costs from its customers, SCE's business, financial condition and results of operations will be materially impacted. In addition, the FERC has opened transmission development to competition from independent developers, allowing such developers to compete with incumbent utilities for the construction and operation of transmission facilities. For more information. See \"Business—SCE—Competition.\"" }, { "status": "REMOVED", "current_title": null, "prior_title": "Balance at December 31, 2019", "prior_body": "$ — ​ $ 4,990 ​ $ (69) ​ $ 8,382 ​ $ 13,303 ​ $ 2,193 ​ $ 15,496 Net income ​ ​ — ​ — ​ — ​ 739 ​ 739 ​ 132 ​ 871 Common stock issued, net of issuance cost ​ ​ — ​ 942 ​ — ​ — ​ ​ 942 ​ — ​ ​ 942 Common stock dividends declared ($2.5750 per share) ​ ​ — ​ — ​ — ​ (965) ​ (965) ​ — ​ (965) Dividends to noncontrolling interests ($0.757 - $0.886 per share for preferred stock; $62.50 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (117) ​ (117) Noncash stock-based compensation ​ ​ — ​ 30 ​ — ​ (1) ​ 29 ​ 1 ​ 30 Redemption of preferred and preference stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (308) ​ ​ (308)" }, { "status": "REMOVED", "current_title": null, "prior_title": "Balance at December 31, 2019", "prior_body": "$ — ​ $ 4,990 ​ $ (69) ​ $ 8,382 ​ $ 13,303 ​ $ 2,193 ​ $ 15,496 Net income ​ ​ — ​ — ​ — ​ 739 ​ 739 ​ 132 ​ 871 Common stock issued, net of issuance cost ​ ​ — ​ 942 ​ — ​ — ​ ​ 942 ​ — ​ ​ 942 Common stock dividends declared ($2.5750 per share) ​ ​ — ​ — ​ — ​ (965) ​ (965) ​ — ​ (965) Dividends to noncontrolling interests ($0.757 - $0.886 per share for preferred stock; $62.50 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (117) ​ (117) Noncash stock-based compensation ​ ​ — ​ 30 ​ — ​ (1) ​ 29 ​ 1 ​ 30 Redemption of preferred and preference stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (308) ​ ​ (308)" }, { "status": "REMOVED", "current_title": null, "prior_title": "Balance at December 31, 2019", "prior_body": "$ — ​ $ 4,990 ​ $ (69) ​ $ 8,382 ​ $ 13,303 ​ $ 2,193 ​ $ 15,496 Net income ​ ​ — ​ — ​ — ​ 739 ​ 739 ​ 132 ​ 871 Common stock issued, net of issuance cost ​ ​ — ​ 942 ​ — ​ — ​ ​ 942 ​ — ​ ​ 942 Common stock dividends declared ($2.5750 per share) ​ ​ — ​ — ​ — ​ (965) ​ (965) ​ — ​ (965) Dividends to noncontrolling interests ($0.757 - $0.886 per share for preferred stock; $62.50 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (117) ​ (117) Noncash stock-based compensation ​ ​ — ​ 30 ​ — ​ (1) ​ 29 ​ 1 ​ 30 Redemption of preferred and preference stock ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ (308) ​ ​ (308)" }, { "status": "REMOVED", "current_title": null, "prior_title": "Balance at December 31, 2021³", "prior_body": "​ $ 293 $ 16 ​ $ 309 Current period provision for uncollectible accounts ​ ​ ​ ​ ​ ​ ​ ​ ​ Included in operation and maintenance expenses in earning activities1 ​ 71 ​ 11 ​ 82 Included in operation and maintenance expenses in cost-recovery activities2,4 ​ ​ 58 ​ ​ — ​ ​ 58 Deferred to regulatory memorandum accounts4 ​ (18) ​ — ​ (18) Write-offs, net of recoveries ​ (70) ​ (7) ​ (77)" }, { "status": "REMOVED", "current_title": null, "prior_title": "Balance at December 31, 2022³", "prior_body": "​ $ 334 $ 20 ​ $ 354 Inventory SCE's inventory is primarily composed of materials, supplies and spare parts, and generally stated at weighted average cost." }, { "status": "REMOVED", "current_title": null, "prior_title": "Deferred Financing Costs", "prior_body": "Debt premium, discount and issuance expenses incurred in connection with obtaining financing are deferred and amortized on a straight-line basis. Under CPUC ratemaking procedures, SCE's debt reacquisition expenses are amortized over the remaining life of the reacquired debt or, if refinanced, the life of the new debt. SCE had unamortized losses on reacquired debt of $109 million and $121 million at December 31, 2022 and 2021, respectively, reflected as long-term \"Regulatory assets\" in the consolidated balance sheets. In addition, Edison International and SCE had debt issuance costs related to issuances of long-term debt of $178 million and $165 million at December 31, 2022 and $153 million and $143 million at December 31, 2021, respectively. These costs are recorded as an offset to long-term debt. 80 80 Table of ContentsAmortization of deferred financing costs charged to interest expense is as follows:​​​​​​​​​​​​​​​​​​​​ Edison International SCE​​Years ended December 31, (in millions) 2022 2021 2020 2022 2021 2020Amortization of deferred financing costs charged to interest expense​$ 37​$ 34​$ 32​$ 31​$ 29​$ 27​Revenue RecognitionRevenue is recognized by Edison International and SCE when a performance obligation to transfer control of the promised goods is satisfied or when services are rendered to customers. This typically occurs when electricity is delivered to customers, which includes amounts for services rendered but unbilled at the end of a reporting period.SCE's Revenue from Contracts with CustomersProvision of ElectricitySCE principally generates revenue through supplying and delivering electricity to its customers. Rates charged to customers are based on tariff rates, approved by the CPUC and FERC. Starting with SCE's 2021 GRC, revenue will be authorized through quadrennial GRC proceedings, which are intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its CPUC-jurisdictional rate base. The CPUC sets an annual revenue requirement for the base year and the remaining three years are set by a methodology established in the GRC proceeding. Revenue was previously authorized by the CPUC in triennial GRC proceedings. As described above, SCE also earns revenue, with no return, to recover costs for power procurement, certain wildfire related expenses and other activities.Revenue is authorized by the FERC through a formula rate which is intended to provide SCE a reasonable opportunity to recover transmission capital and operating costs that are prudently incurred, including a return on its FERC-jurisdictional rate base. Under the operation of the formula rate, transmission revenue is updated to actual cost of service annually.For SCE's electricity sales for both residential and non-residential customers, SCE satisfies the performance obligation of delivering electricity over time as the customers simultaneously receive and consume the delivered electricity.Energy sales are typically on a month-to-month implied contract for transmission, distribution and generation services. Revenue is recognized over time as the energy is supplied and delivered to customers and the respective revenue is billed and paid on a monthly basis.CPUC and FERC rates decouple authorized revenue from the volume of electricity sales and the price of energy procured so that SCE receives revenue equal to amounts authorized by the relevant regulatory agencies. As a result, the volume of electricity sold to customers and specific customer classes does not have a direct impact on SCE's financial results. See Note 7 for further information on SCE's revenue.Sales and Use TaxesSCE bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which SCE pays to various municipalities (based on contracts with these municipalities) in order to operate within the limits of the municipality. SCE bills these franchise fees to its customers based on a CPUC-authorized rate. These franchise fees, which are required to be paid regardless of SCE's ability to collect from the customer, are accounted for on a gross basis. SCE's franchise fees billed to customers were $172 million, $147 million and $131 million for the years ended December 31, 2022, 2021, and 2020, respectively. When SCE acts as an agent for sales and use tax, the taxes are accounted for on a net basis. Amounts billed to and collected from customers for these taxes are remitted to the taxing authorities and are not recognized as electric utility revenue.81 Table of Contents Table of Contents Table of Contents Amortization of deferred financing costs charged to interest expense is as follows:​​​​​​​​​​​​​​​​​​​​ Edison International SCE​​Years ended December 31, (in millions) 2022 2021 2020 2022 2021 2020Amortization of deferred financing costs charged to interest expense​$ 37​$ 34​$ 32​$ 31​$ 29​$ 27​Revenue RecognitionRevenue is recognized by Edison International and SCE when a performance obligation to transfer control of the promised goods is satisfied or when services are rendered to customers. This typically occurs when electricity is delivered to customers, which includes amounts for services rendered but unbilled at the end of a reporting period.SCE's Revenue from Contracts with CustomersProvision of ElectricitySCE principally generates revenue through supplying and delivering electricity to its customers. Rates charged to customers are based on tariff rates, approved by the CPUC and FERC. Starting with SCE's 2021 GRC, revenue will be authorized through quadrennial GRC proceedings, which are intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its CPUC-jurisdictional rate base. The CPUC sets an annual revenue requirement for the base year and the remaining three years are set by a methodology established in the GRC proceeding. Revenue was previously authorized by the CPUC in triennial GRC proceedings. As described above, SCE also earns revenue, with no return, to recover costs for power procurement, certain wildfire related expenses and other activities.Revenue is authorized by the FERC through a formula rate which is intended to provide SCE a reasonable opportunity to recover transmission capital and operating costs that are prudently incurred, including a return on its FERC-jurisdictional rate base. Under the operation of the formula rate, transmission revenue is updated to actual cost of service annually.For SCE's electricity sales for both residential and non-residential customers, SCE satisfies the performance obligation of delivering electricity over time as the customers simultaneously receive and consume the delivered electricity.Energy sales are typically on a month-to-month implied contract for transmission, distribution and generation services. Revenue is recognized over time as the energy is supplied and delivered to customers and the respective revenue is billed and paid on a monthly basis.CPUC and FERC rates decouple authorized revenue from the volume of electricity sales and the price of energy procured so that SCE receives revenue equal to amounts authorized by the relevant regulatory agencies. As a result, the volume of electricity sold to customers and specific customer classes does not have a direct impact on SCE's financial results. See Note 7 for further information on SCE's revenue.Sales and Use TaxesSCE bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which SCE pays to various municipalities (based on contracts with these municipalities) in order to operate within the limits of the municipality. SCE bills these franchise fees to its customers based on a CPUC-authorized rate. These franchise fees, which are required to be paid regardless of SCE's ability to collect from the customer, are accounted for on a gross basis. SCE's franchise fees billed to customers were $172 million, $147 million and $131 million for the years ended December 31, 2022, 2021, and 2020, respectively. When SCE acts as an agent for sales and use tax, the taxes are accounted for on a net basis. Amounts billed to and collected from customers for these taxes are remitted to the taxing authorities and are not recognized as electric utility revenue. Amortization of deferred financing costs charged to interest expense is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Edison International SCE ​ ​ Years ended December 31, (in millions) 2022 2021 2020 2022 2021 2020 Amortization of deferred financing costs charged to interest expense ​ $ 37 ​ $ 34 ​ $ 32 ​ $ 31 ​ $ 29 ​ $ 27 ​" }, { "status": "REMOVED", "current_title": null, "prior_title": "Business Acquisition", "prior_body": "In October 2022, Edison Energy acquired 100% of Alfa Energy Ltd., an international energy and sustainability consultancy based in the United Kingdom, for total consideration of $22 million, including the estimated fair value of contingent consideration up to 14 million British pounds ($17 million U.S. dollars at December 31, 2022) that the sellers will be entitled to if certain financial thresholds are achieved after 3 years. As a result of the acquisition, Edison Energy recognized goodwill of $16 million, which is included in \"Other long-term assets\" on Edison International's consolidated balance sheets as of December 31, 2022. 3 years" }, { "status": "REMOVED", "current_title": null, "prior_title": "New Accounting Guidance", "prior_body": "Accounting Guidance Adopted In November 2021, the Financial Accounting Standards Board (\"FASB\") issued an accounting standards update to require business entities that account for transactions with a government by providing additional details about the transactions and their accounting impact. Edison International and SCE have adopted this standard on January 1, 2022 using the prospective adoption approach. The adoption of this standard did not have a material impact on Edison International's and SCE's annual disclosure. In December 2022, the FASB issued an accounting standards update to defer the original sunset date for applying the reference rate reform relief in Accounting Standards Codification (\"ASC\") 848 to December 31, 2024 from December 31, 2022. Edison International and SCE have adopted the standard as of December 1, 2022 prospectively. SCE has certain preference stocks, for which the distributions will be payable at a floating rate referenced to the London Interbank Offered Rate (\"LIBOR\") from 2022. Upon adoption of this standard, if contract amendments are made where LIBOR is no longer valid, SCE expects to utilize the expedients in ASC 848 through the allowed period of December 31, 2024. 86 86 Table of ContentsNote 2.Property, Plant and EquipmentSCE's utility property, plant and equipment included in the consolidated balance sheets is composed of the following:​​​​​​​​ December 31, (in millions) 2022 2021Distribution​$ 32,754​$ 30,821Transmission​ 18,106​ 17,016Generation​ 3,880​ 3,769General plant and other​ 6,121​ 6,108Accumulated depreciation​ (12,260)​ (11,407)​​ 48,601​ 46,307Construction work in progress​ 4,551​ 4,067Nuclear fuel, at amortized cost​ 122​ 123Total utility property, plant and equipment​$ 53,274​$ 50,497​Capitalized Software CostsSCE capitalizes costs incurred during the application development stage of internal use software projects to property, plant and equipment. SCE amortizes capitalized software costs ratably over the expected lives of the software, primarily ranging from 5 to 7 years and commencing upon operational use. Capitalized software costs, included in general plant and other above, was $2.0 billion at both December 31, 2022 and 2021, and accumulated amortization was $0.7 billion and $0.6 billion, at December 31, 2022 and 2021, respectively. Amortization expense for capitalized software was $344 million, $311 million and $218 million in 2022, 2021 and 2020, respectively. At December 31, 2022, amortization expense is estimated to be $342 million, $309 million, $262 million, $190 million and $110 million for 2023 through 2027, respectively.Jointly Owned Utility ProjectsSCE owns undivided interests in transmission and generating assets for which each participant provides its own financing. SCE's proportionate share of these assets is reflected in the consolidated balance sheets and included in the above table. SCE's proportionate share of expenses for each project is reflected in the consolidated statements of income.The following is SCE's investment in each asset as of December 31, 2022:​​​​​​​​​​​​​​​​​​​​​​​​Construction​​​​​​​​​​​​​ Plant in Work in Accumulated Nuclear Fuel Net Book Ownership (in millions) ​ Service ​Progress ​Depreciation ​ (at amortized cost) ​Value ​Interest Transmission systems:​ ​​ ​​ ​​ ​​ ​​ Eldorado​$ 351​$ 107​$ (56)​$ —​$ 402​ 77%Pacific Intertie ​ 354 ​ 2 ​ (82) ​ — ​ 274 50%Generating station: ​ ​ ​ ​ ​ ​Palo Verde (nuclear) ​ 2,180 ​ 56 ​ (1,653) ​ 122 ​ 705 16%Total​$ 2,885​$ 165​$ (1,791)​$ 122​$ 1,381 ​​In addition to the jointly owned assets in the table above, SCE has ownership interests in jointly owned power poles with other companies.Note 3.Variable Interest EntitiesA VIE is defined as a legal entity that meets one of two conditions: (1) the equity owners do not have sufficient equity at risk, or (2) the holders of the equity investment at risk, as a group, lack any of the following three characteristics: decision-making rights, the obligation to absorb losses or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the 87 Table of Contents Table of Contents Table of Contents Note 2.Property, Plant and EquipmentSCE's utility property, plant and equipment included in the consolidated balance sheets is composed of the following:​​​​​​​​ December 31, (in millions) 2022 2021Distribution​$ 32,754​$ 30,821Transmission​ 18,106​ 17,016Generation​ 3,880​ 3,769General plant and other​ 6,121​ 6,108Accumulated depreciation​ (12,260)​ (11,407)​​ 48,601​ 46,307Construction work in progress​ 4,551​ 4,067Nuclear fuel, at amortized cost​ 122​ 123Total utility property, plant and equipment​$ 53,274​$ 50,497​Capitalized Software CostsSCE capitalizes costs incurred during the application development stage of internal use software projects to property, plant and equipment. SCE amortizes capitalized software costs ratably over the expected lives of the software, primarily ranging from 5 to 7 years and commencing upon operational use. Capitalized software costs, included in general plant and other above, was $2.0 billion at both December 31, 2022 and 2021, and accumulated amortization was $0.7 billion and $0.6 billion, at December 31, 2022 and 2021, respectively. Amortization expense for capitalized software was $344 million, $311 million and $218 million in 2022, 2021 and 2020, respectively. At December 31, 2022, amortization expense is estimated to be $342 million, $309 million, $262 million, $190 million and $110 million for 2023 through 2027, respectively.Jointly Owned Utility ProjectsSCE owns undivided interests in transmission and generating assets for which each participant provides its own financing. SCE's proportionate share of these assets is reflected in the consolidated balance sheets and included in the above table. SCE's proportionate share of expenses for each project is reflected in the consolidated statements of income.The following is SCE's investment in each asset as of December 31, 2022:​​​​​​​​​​​​​​​​​​​​​​​​Construction​​​​​​​​​​​​​ Plant in Work in Accumulated Nuclear Fuel Net Book Ownership (in millions) ​ Service ​Progress ​Depreciation ​ (at amortized cost) ​Value ​Interest Transmission systems:​ ​​ ​​ ​​ ​​ ​​ Eldorado​$ 351​$ 107​$ (56)​$ —​$ 402​ 77%Pacific Intertie ​ 354 ​ 2 ​ (82) ​ — ​ 274 50%Generating station: ​ ​ ​ ​ ​ ​Palo Verde (nuclear) ​ 2,180 ​ 56 ​ (1,653) ​ 122 ​ 705 16%Total​$ 2,885​$ 165​$ (1,791)​$ 122​$ 1,381 ​​In addition to the jointly owned assets in the table above, SCE has ownership interests in jointly owned power poles with other companies.Note 3.Variable Interest EntitiesA VIE is defined as a legal entity that meets one of two conditions: (1) the equity owners do not have sufficient equity at risk, or (2) the holders of the equity investment at risk, as a group, lack any of the following three characteristics: decision-making rights, the obligation to absorb losses or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the" }, { "status": "REMOVED", "current_title": null, "prior_title": "Capitalized Software Costs", "prior_body": "SCE capitalizes costs incurred during the application development stage of internal use software projects to property, plant and equipment. SCE amortizes capitalized software costs ratably over the expected lives of the software, primarily ranging from 5 to 7 years and commencing upon operational use. Capitalized software costs, included in general plant and other above, was $2.0 billion at both December 31, 2022 and 2021, and accumulated amortization was $0.7 billion and $0.6 billion, at December 31, 2022 and 2021, respectively. Amortization expense for capitalized software was $344 million, $311 million and $218 million in 2022, 2021 and 2020, respectively. At December 31, 2022, amortization expense is estimated to be $342 million, $309 million, $262 million, $190 million and $110 million for 2023 through 2027, respectively." }, { "status": "REMOVED", "current_title": null, "prior_title": "Variable Interest in VIEs that are Consolidated", "prior_body": "SCE Recovery Funding LLC is a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE. SCE Recovery Funding LLC is a VIE and SCE is the primary beneficiary. SCE Recovery Funding LLC was formed in 2021 for the purpose of issuing and servicing securitized bonds related to SCE's AB 1054 Excluded Capital Expenditures. In February 2022 and 2021, SCE Recovery Funding LLC issued $533 million and $338 million of securitized bonds, respectively, and used the proceeds to acquire SCE's right, title and interest in and to non-bypassable rates and other charges to be collected from certain existing and future customers in SCE's service territory, associated with the AB 1054 Excluded Capital Expenditures (\"Recovery Property\"), until the bonds are paid in full and all financing costs have been recovered. The securitized bonds are secured by the Recovery Property and cash collections from the non-bypassable rates and other charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to SCE. For further details, see Note 5. The following table summarizes the impact of SCE Recovery Funding LLC on SCE's and Edison International's consolidated balance sheets. ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ December 31, (in millions) ​ 2022 ​ ​ 2021 Other current assets $ 45 ​ $ 19 Regulatory assets: non-current ​ 834 ​ ​ 325 Regulatory liabilities: current ​ 33 ​ ​ 14 Current portion of long-term debt ​ 29 ​ ​ 14 Other current liabilities ​ 4 ​ ​ 1 Long-term debt1 809 ​ ​ 314" }, { "status": "MODIFIED", "current_title": "Edison International", "prior_title": "Edison International", "similarity_score": 0.919, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noncontrolling ​ ​ ​ ​ Equity Attributable to Edison International Shareholders Interests ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Other ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Preferred ​ Common ​ Comprehensive ​ Retained ​ ​ ​ ​ Preference ​ Total (in millions, except per share amounts) ​ Stock ​ Stock ​ Loss ​ Earnings ​ Subtotal ​ Stock ​ Equity\"" ], "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) ​ 2023 2022 2021", "prior_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) 2022 2021 2020" }, { "status": "MODIFIED", "current_title": "SCE's insurance coverage for wildfires may not be sufficient.", "prior_title": "SCE's insurance coverage for wildfires may not be sufficient.", "similarity_score": 0.918, "confidence": "high", "key_changes": [ "Reworded sentence: \"SCE may not be able to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) in electric rates.\"", "Reworded sentence: \"Losses which are not fully insured or cannot be recovered from contractors, through the Wildfire Insurance Fund or electric rates could materially affect Edison International's and SCE's financial condition and results of operations.\"" ], "current_body": "SCE may not be able to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) in electric rates. Additionally, SCE’s contractors may experience coverage reductions and/or increased wildfire insurance costs in future years. No assurance can be given that losses will not exceed the limits of SCE's or its contractors' insurance coverage. Losses which are not fully insured or cannot be recovered from contractors, through the Wildfire Insurance Fund or electric rates could materially affect Edison International's and SCE's financial condition and results of operations. For more information on wildfire insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"", "prior_body": "Edison International has experienced increased costs and difficulties in obtaining insurance coverage for wildfires that could arise in connection with SCE's ordinary operations. Edison International, SCE and its contractors may experience coverage reductions and/or increased wildfire insurance costs in future years. No assurance can be given that losses will not exceed the limits of SCE's or its contractors' insurance coverage. SCE may not be able to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) and increases in the cost of insurance in electric rates. Losses which are not fully insured or cannot be recovered through the Wildfire Insurance Fund or electric rates could materially affect Edison International's and SCE's financial condition and results of operations. For more information on wildfire insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"" }, { "status": "MODIFIED", "current_title": "Impairment of Long-Lived Assets", "prior_title": "Impairment of Long-Lived Assets", "similarity_score": 0.917, "confidence": "high", "key_changes": [ "Reworded sentence: \"73 73 Table of ContentsAccounting principles for rate-regulated enterprises also require recognition of an impairment loss if it becomes probable that the regulated utility will abandon a plant investment, or if it becomes probable that the cost of a recently completed plant will be disallowed, either directly or indirectly, for ratemaking purposes and a reasonable estimate of the disallowance amount can be made.In September 2022, the CPUC approved the settlement agreement between SCE and The Utility Reform Network for SCE's Customer Service Re-platform proceeding filed in 2021 for expenditures incurred through April 2021.\"", "Reworded sentence: \"At December 31, 2023 and 2022, Edison International and SCE had a $2.0 billion and a $2.2 billion long-term asset, respectively, as well as a $204 million current asset for both years, reflected as \"Wildfire Insurance Fund contributions\" in their consolidated balance sheets for the initial $2.4 billion contribution made during 2019 and the present value of annual contributions SCE committed to make to the Wildfire Insurance Fund, reduced by amortization.\"", "Reworded sentence: \"In estimating the period of coverage, Edison International and SCE used Monte Carlo simulations based on historical data from wildfires caused by electrical utility equipment to estimate expected losses, using nine years (2014 – 2022) of available historical data in 2023 and eight years (2014 – 2021) of available historical data in 2022.\"", "Reworded sentence: \"Edison International and SCE reassesses the period of coverage of the fund at least annually in January each year, or upon claims being made from the fund for catastrophic wildfires.\"", "Reworded sentence: \"At December 31, 2023 and 2022, Edison International and SCE had a $2.0 billion and a $2.2 billion long-term asset, respectively, as well as a $204 million current asset for both years, reflected as \"Wildfire Insurance Fund contributions\" in their consolidated balance sheets for the initial $2.4 billion contribution made during 2019 and the present value of annual contributions SCE committed to make to the Wildfire Insurance Fund, reduced by amortization.\"" ], "current_body": "Impairments of long-lived assets are evaluated based on a review of estimated future cash flows expected to be generated whenever events or changes in circumstances indicate that the carrying amount of such investments or assets may not be recoverable. If the carrying amount of a long-lived asset exceeds expected future cash flows, undiscounted and without interest charges, an impairment loss is recognized in the amount of the excess of fair value over the carrying amount. Fair value is determined via market, cost and income-based valuation techniques, as appropriate. 73 73 Table of ContentsAccounting principles for rate-regulated enterprises also require recognition of an impairment loss if it becomes probable that the regulated utility will abandon a plant investment, or if it becomes probable that the cost of a recently completed plant will be disallowed, either directly or indirectly, for ratemaking purposes and a reasonable estimate of the disallowance amount can be made.In September 2022, the CPUC approved the settlement agreement between SCE and The Utility Reform Network for SCE's Customer Service Re-platform proceeding filed in 2021 for expenditures incurred through April 2021. As a result of the settlement agreement, SCE recorded a $47 million ($34 million after-tax) impairment of property, plant and equipment, reflected in \"Impairment, net of other operating income\" in the consolidated statements of income.In August 2021, as a result of adoption of the 2021 GRC, SCE recorded $79 million ($47 million after-tax) in impairment charges related to disallowed capital expenditures of pole replacements the CPUC determined were performed prematurely in 2021. The impairment is included in \"Impairment, net of other operating income\" in the consolidated statements of income.Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054 (the \"Wildfire Insurance Fund\" and \"AB 1054\")Edison International and SCE accounted for the contributions to the Wildfire Insurance Fund similarly to prepaid insurance. No period of coverage was provided in AB 1054, therefore expense is being allocated to periods ratably based on an estimated period of coverage. At December 31, 2023 and 2022, Edison International and SCE had a $2.0 billion and a $2.2 billion long-term asset, respectively, as well as a $204 million current asset for both years, reflected as \"Wildfire Insurance Fund contributions\" in their consolidated balance sheets for the initial $2.4 billion contribution made during 2019 and the present value of annual contributions SCE committed to make to the Wildfire Insurance Fund, reduced by amortization. At December 31, 2023 and 2022, long-term liabilities of $450 million and $536 million, respectively, have been reflected in \"Other deferred credits and other long-term liabilities\" for the present value of unpaid contributions. Contributions were discounted to the present value using US treasury interest rates at the date SCE committed to participate in the Wildfire Insurance Fund.In 2023 and 2022, the asset was amortized based on an estimated period of coverage of 15 years. All expenses related to the contributions are being reflected in \"Wildfire Insurance Fund Expense\" in the consolidated statements of income. Changes in the estimated period of coverage provided by the Wildfire Insurance Fund could lead to material changes in future expense recognition. In estimating the period of coverage, Edison International and SCE used Monte Carlo simulations based on historical data from wildfires caused by electrical utility equipment to estimate expected losses, using nine years (2014 – 2022) of available historical data in 2023 and eight years (2014 – 2021) of available historical data in 2022. The details of the operation of the Wildfire Insurance Fund and estimates related to claims by SCE, Pacific Gas & Electric Company (\"PG&E\"), and San Diego Gas & Electric (\"SDG&E\") against the fund have been applied to the expected loss simulations to estimate the period of coverage of the fund. The most sensitive inputs to the estimated period of coverage are the expected frequency of wildfire events caused by investor-owned utility electrical equipment and the estimated costs associated with those forecasted events. Edison International and SCE reassesses the period of coverage of the fund at least annually in January each year, or upon claims being made from the fund for catastrophic wildfires. Based on information available in January of 2024 regarding catastrophic wildfires during 2023, SCE reassessed its estimate of the life of the Wildfire Insurance Fund. After incorporating 2023 expected losses into the historical data for the Monte Carlo simulations by using ten years of historical data (2014 – 2023), SCE determined that effective in the first quarter of 2024, the life of the Wildfire Insurance Fund is expected to increase to 20 years from the date SCE committed to participate in the Wildfire Insurance Fund.Edison International and SCE will assess the Wildfire Insurance Fund contribution assets for impairment in the event that a participating utility's electrical equipment is found to be the substantial cause of a catastrophic wildfire, based on 74 Table of Contents Table of Contents Table of Contents Accounting principles for rate-regulated enterprises also require recognition of an impairment loss if it becomes probable that the regulated utility will abandon a plant investment, or if it becomes probable that the cost of a recently completed plant will be disallowed, either directly or indirectly, for ratemaking purposes and a reasonable estimate of the disallowance amount can be made.In September 2022, the CPUC approved the settlement agreement between SCE and The Utility Reform Network for SCE's Customer Service Re-platform proceeding filed in 2021 for expenditures incurred through April 2021. As a result of the settlement agreement, SCE recorded a $47 million ($34 million after-tax) impairment of property, plant and equipment, reflected in \"Impairment, net of other operating income\" in the consolidated statements of income.In August 2021, as a result of adoption of the 2021 GRC, SCE recorded $79 million ($47 million after-tax) in impairment charges related to disallowed capital expenditures of pole replacements the CPUC determined were performed prematurely in 2021. The impairment is included in \"Impairment, net of other operating income\" in the consolidated statements of income.Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054 (the \"Wildfire Insurance Fund\" and \"AB 1054\")Edison International and SCE accounted for the contributions to the Wildfire Insurance Fund similarly to prepaid insurance. No period of coverage was provided in AB 1054, therefore expense is being allocated to periods ratably based on an estimated period of coverage. At December 31, 2023 and 2022, Edison International and SCE had a $2.0 billion and a $2.2 billion long-term asset, respectively, as well as a $204 million current asset for both years, reflected as \"Wildfire Insurance Fund contributions\" in their consolidated balance sheets for the initial $2.4 billion contribution made during 2019 and the present value of annual contributions SCE committed to make to the Wildfire Insurance Fund, reduced by amortization. At December 31, 2023 and 2022, long-term liabilities of $450 million and $536 million, respectively, have been reflected in \"Other deferred credits and other long-term liabilities\" for the present value of unpaid contributions. Contributions were discounted to the present value using US treasury interest rates at the date SCE committed to participate in the Wildfire Insurance Fund.In 2023 and 2022, the asset was amortized based on an estimated period of coverage of 15 years. All expenses related to the contributions are being reflected in \"Wildfire Insurance Fund Expense\" in the consolidated statements of income. Changes in the estimated period of coverage provided by the Wildfire Insurance Fund could lead to material changes in future expense recognition. In estimating the period of coverage, Edison International and SCE used Monte Carlo simulations based on historical data from wildfires caused by electrical utility equipment to estimate expected losses, using nine years (2014 – 2022) of available historical data in 2023 and eight years (2014 – 2021) of available historical data in 2022. The details of the operation of the Wildfire Insurance Fund and estimates related to claims by SCE, Pacific Gas & Electric Company (\"PG&E\"), and San Diego Gas & Electric (\"SDG&E\") against the fund have been applied to the expected loss simulations to estimate the period of coverage of the fund. The most sensitive inputs to the estimated period of coverage are the expected frequency of wildfire events caused by investor-owned utility electrical equipment and the estimated costs associated with those forecasted events. Edison International and SCE reassesses the period of coverage of the fund at least annually in January each year, or upon claims being made from the fund for catastrophic wildfires. Based on information available in January of 2024 regarding catastrophic wildfires during 2023, SCE reassessed its estimate of the life of the Wildfire Insurance Fund. After incorporating 2023 expected losses into the historical data for the Monte Carlo simulations by using ten years of historical data (2014 – 2023), SCE determined that effective in the first quarter of 2024, the life of the Wildfire Insurance Fund is expected to increase to 20 years from the date SCE committed to participate in the Wildfire Insurance Fund.Edison International and SCE will assess the Wildfire Insurance Fund contribution assets for impairment in the event that a participating utility's electrical equipment is found to be the substantial cause of a catastrophic wildfire, based on Accounting principles for rate-regulated enterprises also require recognition of an impairment loss if it becomes probable that the regulated utility will abandon a plant investment, or if it becomes probable that the cost of a recently completed plant will be disallowed, either directly or indirectly, for ratemaking purposes and a reasonable estimate of the disallowance amount can be made. In September 2022, the CPUC approved the settlement agreement between SCE and The Utility Reform Network for SCE's Customer Service Re-platform proceeding filed in 2021 for expenditures incurred through April 2021. As a result of the settlement agreement, SCE recorded a $47 million ($34 million after-tax) impairment of property, plant and equipment, reflected in \"Impairment, net of other operating income\" in the consolidated statements of income. In August 2021, as a result of adoption of the 2021 GRC, SCE recorded $79 million ($47 million after-tax) in impairment charges related to disallowed capital expenditures of pole replacements the CPUC determined were performed prematurely in 2021. The impairment is included in \"Impairment, net of other operating income\" in the consolidated statements of income.", "prior_body": "Impairments of long-lived assets are evaluated based on a review of estimated future cash flows expected to be generated whenever events or changes in circumstances indicate that the carrying amount of such investments or assets may not be recoverable. If the carrying amount of a long-lived asset exceeds expected future cash flows, undiscounted and without interest charges, an impairment loss is recognized in the amount of the excess of fair value over the carrying amount. Fair value is determined via market, cost and income-based valuation techniques, as appropriate. 77 77 Table of ContentsAccounting principles for rate-regulated enterprises also require recognition of an impairment loss if it becomes probable that the regulated utility will abandon a plant investment, or if it becomes probable that the cost of a recently completed plant will be disallowed, either directly or indirectly, for ratemaking purposes and a reasonable estimate of the amount of the disallowance can be made.In September 2022, the CPUC approved the settlement agreement between SCE and The Utility Reform Network for SCE's Customer Service Re-platform (\"CSRP\") proceeding filed in 2021 for expenditures incurred through April 2021. As a result of the settlement agreement, SCE recorded a $47 million ($34 million after-tax) impairment of property, plant and equipment, reflected in \"Impairment, net of other (income)\" in the consolidated statements of income.In August 2021, as a result of adoption of 2021 GRC, SCE recorded $79 million ($47 million after-tax) in impairment charges related to disallowed historical capital expenditures of pole replacements the CPUC determined were performed prematurely in 2021. The impairment is included in \"Impairment, net of other (income)\" in the consolidated statements of income.As of December 31, 2022 and 2021, SCE has $177 million and $186 million in assets recorded in property, plant and equipment in relation to restoration costs related to the 2017/2018 Wildfire/Mudslide Events, respectively, which may not be recoverable. These assets would be impaired if the restoration costs are permanently disallowed by the CPUC in future cost recovery proceedings. For further details, see Note 12.Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054 (the \"Wildfire Insurance Fund\" and \"AB 1054\")Edison International and SCE accounted for the contributions to the Wildfire Insurance Fund similarly to prepaid insurance. No period of coverage was provided in AB 1054, therefore expense is being allocated to periods ratably based on an estimated period of coverage. At December 31, 2022 and 2021, Edison International and SCE had a $2.2 billion and a $2.4 billion long-term asset, respectively, as well as a $204 million current asset for both years, reflected as \"Wildfire Insurance Fund contributions\" in their consolidated balance sheets for the initial $2.4 billion contribution made during 2019 and the present value of annual contributions SCE committed to make to the Wildfire Insurance Fund, reduced by amortization. At December 31, 2022 and 2021, long-term liabilities of $536 million and $620 million, respectively, have been reflected in \"Other deferred credits and other long-term liabilities\" for the present value of unpaid contributions. Contributions were discounted to the present value using US treasury interest rates at the date SCE committed to participate in the Wildfire Insurance Fund.In 2022 and 2021, the asset was amortized based on an estimated period of coverage of 15 years. All expenses related to the contributions are being reflected in \"Wildfire Insurance Fund Expense\" in the consolidated statements of income. Changes in the estimated period of coverage provided by the Wildfire Insurance Fund could lead to material changes in future expense recognition. In estimating the period of coverage, Edison International and SCE used Monte Carlo simulations based on historical data from wildfires caused by electrical utility equipment to estimate expected losses, using eight years (2014 – 2021) of available historical data in 2022 and seven years (2014 – 2020) of available historical data in 2021. The details of the operation of the Wildfire Insurance Fund and estimates related to claims by SCE, Pacific Gas & Electric Company (\"PG&E\"), and San Diego Gas & Electric (\"SDG&E\") against the fund have been applied to the expected loss simulations to estimate the period of coverage of the fund. The most sensitive inputs to the estimated period of coverage are the expected frequency of wildfire events caused by investor-owned utility electrical equipment and the estimated costs associated with those forecasted events. Edison International and SCE evaluate all inputs annually, or upon claims being made from the fund for catastrophic wildfires, and the expected life of the insurance fund will be adjusted as required. Based on information available in the first quarter of 2023 regarding catastrophic wildfires during 2022, SCE reassessed its estimate of the life of the Wildfire Insurance Fund. Using nine years of historical data (2014 – 2022) of wildfires caused by electrical utility equipment to create Monte Carlo simulations of expected losses, 78 Table of Contents Table of Contents Table of Contents Accounting principles for rate-regulated enterprises also require recognition of an impairment loss if it becomes probable that the regulated utility will abandon a plant investment, or if it becomes probable that the cost of a recently completed plant will be disallowed, either directly or indirectly, for ratemaking purposes and a reasonable estimate of the amount of the disallowance can be made.In September 2022, the CPUC approved the settlement agreement between SCE and The Utility Reform Network for SCE's Customer Service Re-platform (\"CSRP\") proceeding filed in 2021 for expenditures incurred through April 2021. As a result of the settlement agreement, SCE recorded a $47 million ($34 million after-tax) impairment of property, plant and equipment, reflected in \"Impairment, net of other (income)\" in the consolidated statements of income.In August 2021, as a result of adoption of 2021 GRC, SCE recorded $79 million ($47 million after-tax) in impairment charges related to disallowed historical capital expenditures of pole replacements the CPUC determined were performed prematurely in 2021. The impairment is included in \"Impairment, net of other (income)\" in the consolidated statements of income.As of December 31, 2022 and 2021, SCE has $177 million and $186 million in assets recorded in property, plant and equipment in relation to restoration costs related to the 2017/2018 Wildfire/Mudslide Events, respectively, which may not be recoverable. These assets would be impaired if the restoration costs are permanently disallowed by the CPUC in future cost recovery proceedings. For further details, see Note 12.Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054 (the \"Wildfire Insurance Fund\" and \"AB 1054\")Edison International and SCE accounted for the contributions to the Wildfire Insurance Fund similarly to prepaid insurance. No period of coverage was provided in AB 1054, therefore expense is being allocated to periods ratably based on an estimated period of coverage. At December 31, 2022 and 2021, Edison International and SCE had a $2.2 billion and a $2.4 billion long-term asset, respectively, as well as a $204 million current asset for both years, reflected as \"Wildfire Insurance Fund contributions\" in their consolidated balance sheets for the initial $2.4 billion contribution made during 2019 and the present value of annual contributions SCE committed to make to the Wildfire Insurance Fund, reduced by amortization. At December 31, 2022 and 2021, long-term liabilities of $536 million and $620 million, respectively, have been reflected in \"Other deferred credits and other long-term liabilities\" for the present value of unpaid contributions. Contributions were discounted to the present value using US treasury interest rates at the date SCE committed to participate in the Wildfire Insurance Fund.In 2022 and 2021, the asset was amortized based on an estimated period of coverage of 15 years. All expenses related to the contributions are being reflected in \"Wildfire Insurance Fund Expense\" in the consolidated statements of income. Changes in the estimated period of coverage provided by the Wildfire Insurance Fund could lead to material changes in future expense recognition. In estimating the period of coverage, Edison International and SCE used Monte Carlo simulations based on historical data from wildfires caused by electrical utility equipment to estimate expected losses, using eight years (2014 – 2021) of available historical data in 2022 and seven years (2014 – 2020) of available historical data in 2021. The details of the operation of the Wildfire Insurance Fund and estimates related to claims by SCE, Pacific Gas & Electric Company (\"PG&E\"), and San Diego Gas & Electric (\"SDG&E\") against the fund have been applied to the expected loss simulations to estimate the period of coverage of the fund. The most sensitive inputs to the estimated period of coverage are the expected frequency of wildfire events caused by investor-owned utility electrical equipment and the estimated costs associated with those forecasted events. Edison International and SCE evaluate all inputs annually, or upon claims being made from the fund for catastrophic wildfires, and the expected life of the insurance fund will be adjusted as required. Based on information available in the first quarter of 2023 regarding catastrophic wildfires during 2022, SCE reassessed its estimate of the life of the Wildfire Insurance Fund. Using nine years of historical data (2014 – 2022) of wildfires caused by electrical utility equipment to create Monte Carlo simulations of expected losses, Accounting principles for rate-regulated enterprises also require recognition of an impairment loss if it becomes probable that the regulated utility will abandon a plant investment, or if it becomes probable that the cost of a recently completed plant will be disallowed, either directly or indirectly, for ratemaking purposes and a reasonable estimate of the amount of the disallowance can be made. In September 2022, the CPUC approved the settlement agreement between SCE and The Utility Reform Network for SCE's Customer Service Re-platform (\"CSRP\") proceeding filed in 2021 for expenditures incurred through April 2021. As a result of the settlement agreement, SCE recorded a $47 million ($34 million after-tax) impairment of property, plant and equipment, reflected in \"Impairment, net of other (income)\" in the consolidated statements of income. In August 2021, as a result of adoption of 2021 GRC, SCE recorded $79 million ($47 million after-tax) in impairment charges related to disallowed historical capital expenditures of pole replacements the CPUC determined were performed prematurely in 2021. The impairment is included in \"Impairment, net of other (income)\" in the consolidated statements of income. As of December 31, 2022 and 2021, SCE has $177 million and $186 million in assets recorded in property, plant and equipment in relation to restoration costs related to the 2017/2018 Wildfire/Mudslide Events, respectively, which may not be recoverable. These assets would be impaired if the restoration costs are permanently disallowed by the CPUC in future cost recovery proceedings. For further details, see Note 12." }, { "status": "MODIFIED", "current_title": "Variable Interest in VIEs that are not Consolidated", "prior_title": "Variable Interest in VIEs that are not Consolidated", "similarity_score": 0.916, "confidence": "high", "key_changes": [ "Reworded sentence: \"Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants, which SCE does not perform.\"", "Reworded sentence: \"SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees, or other commitments associated with these contracts other than the purchase commitments described in Note 12.\"", "Reworded sentence: \"SCE Trust II, Trust III, Trust IV, Trust V, Trust VI and Trust VII issued to the public trust securities in the face amounts of $400 million, $275 million, $325 million, $300 million, $475 million and $550 million (cumulative, liquidation amounts of $25 per share), respectively, and $10,000 of common stock each to SCE.\"", "Reworded sentence: \"SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock.The Trust VII balance sheet as of December 31, 2023, consisted of investments of $550 million in the Series M Preference Stock, $550 million of trust securities and $10,000 of common stock.\"", "Reworded sentence: \"SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock.The Trust VII balance sheet as of December 31, 2023, consisted of investments of $550 million in the Series M Preference Stock, $550 million of trust securities and $10,000 of common stock.\"" ], "current_body": "Power Purchase Agreements SCE has PPAs that are classified as variable interests in VIEs, including agreements through which SCE provides the natural gas to fuel the plants, fixed price contracts for renewable energy, and resource adequacy agreements that, upon the seller's election, include the purchase of energy at fixed prices. SCE has concluded that it is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of these entities. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants, which SCE does not perform. As of the balance sheet date, the carrying amount of assets and liabilities included in SCE's consolidated balance sheet that relate to involvement with VIEs that are not consolidated, result from amounts due under the PPAs. Under these contracts, SCE recovers the costs incurred through demonstration of compliance with its CPUC-approved long-term power procurement plans. SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees, or other commitments associated with these contracts other than the purchase commitments described in Note 12. As a result, there is no significant potential exposure to loss to SCE from its variable interest in these VIEs. The aggregate contracted capacity dedicated to SCE from these VIE projects was 3,343 megawatts (\"MW\") and 3,907 MW at December 31, 2023 and 2022, respectively, and the amounts that SCE paid to these projects were $528 million and $608 million for the years ended December 31, 2023 and 2022, respectively. These amounts are recoverable in customer rates, subject to reasonableness review. Unconsolidated Trusts of SCE SCE Trust II, Trust III, Trust IV, Trust V, Trust VI and Trust VII were utilized in 2013, 2014, 2015, 2016, 2017 and 2023, respectively, for the exclusive purpose of issuing the 5.10%, 5.75%, 5.375%, 5.45%, 5.00% and 7.50% trust preference securities, respectively (\"trust securities\"). The trusts are VIEs. SCE has concluded that it is not the primary beneficiary of these VIEs as it does not have the obligation to absorb the expected losses or the right to receive the expected residual returns of the trusts. SCE Trust II, Trust III, Trust IV, Trust V, Trust VI and Trust VII issued to the public trust securities in the face amounts of $400 million, $275 million, $325 million, $300 million, $475 million and $550 million (cumulative, liquidation amounts of $25 per share), respectively, and $10,000 of common stock each to SCE. The trusts invested the proceeds of these trust securities in Series G, Series H, Series J, Series K, Series L and Series M Preference Stock issued by SCE in the principal amounts of $400 million, $275 million, $325 million, $300 million, $475 million and $550 million (cumulative, $2,500 per share liquidation values), respectively, which have substantially the same payment terms as the respective trust securities. The Series G, Series H, Series J, Series K, Series L and Series M Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series G, Series H, Series J, Series K, Series L or Series M Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust (see Note 14 for further information). The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities if and when the SCE board of directors declares and makes dividend payments 84 84 Table of Contentson the related Preference Stock. The applicable trust will use any dividends it receives on the related Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to any of these trusts, SCE would be prohibited from paying dividends on its common stock. SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock.The Trust VII balance sheet as of December 31, 2023, consisted of investments of $550 million in the Series M Preference Stock, $550 million of trust securities and $10,000 of common stock. The Trust II, Trust III, Trust IV, Trust V and Trust VI balance sheets as of December 31, 2023 and 2022, consisted of investments of $220 million, $275 million, $325 million, $300 million and $475 million in the Series G, Series H, Series J, Series K and Series L Preference Stock, respectively, $220 million, $275 million, $325 million, $300 million and $475 million of trust securities, respectively, and $10,000 each of common stock.The following table provides a summary of the trusts' income statements:​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) Trust II Trust III Trust IV Trust V Trust VI Trust VII2023​​​​​​​​​​​​​ ​​ ​Dividend income​$ 11​$ 16​$ 17​$ 16​$ 24​$ 4Dividend distributions​ 11​ 16​ 17​ 16​ 24​ 42022​ ​ ​ ​ ​ ​ Dividend income​$ 11​$ 16​$ 17​$ 16​$ 24​$ —Dividend distributions​ 11​ 16​ 17​ 16​ 24​ —2021​ ​ ​ ​ ​ ​ Dividend income​$ 20​$ 16​$ 17​$ 16​$ 24​$ —Dividend distributions​ 20​ 16​ 17​ 16​ 24​ —​​Note 4.Fair Value MeasurementsRecurring Fair Value MeasurementsFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an \"exit price\"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of December 31, 2023 and 2022, nonperformance risk was not material for Edison International and SCE.Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value.Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds, and money market funds.Level 2 – Edison International's and SCE's Level 2 assets and liabilities include fixed income securities, primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter commodity derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument.The fair value of SCE's over-the-counter commodity derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing 85 Table of Contents Table of Contents Table of Contents on the related Preference Stock. The applicable trust will use any dividends it receives on the related Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to any of these trusts, SCE would be prohibited from paying dividends on its common stock. SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock.The Trust VII balance sheet as of December 31, 2023, consisted of investments of $550 million in the Series M Preference Stock, $550 million of trust securities and $10,000 of common stock. The Trust II, Trust III, Trust IV, Trust V and Trust VI balance sheets as of December 31, 2023 and 2022, consisted of investments of $220 million, $275 million, $325 million, $300 million and $475 million in the Series G, Series H, Series J, Series K and Series L Preference Stock, respectively, $220 million, $275 million, $325 million, $300 million and $475 million of trust securities, respectively, and $10,000 each of common stock.The following table provides a summary of the trusts' income statements:​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) Trust II Trust III Trust IV Trust V Trust VI Trust VII2023​​​​​​​​​​​​​ ​​ ​Dividend income​$ 11​$ 16​$ 17​$ 16​$ 24​$ 4Dividend distributions​ 11​ 16​ 17​ 16​ 24​ 42022​ ​ ​ ​ ​ ​ Dividend income​$ 11​$ 16​$ 17​$ 16​$ 24​$ —Dividend distributions​ 11​ 16​ 17​ 16​ 24​ —2021​ ​ ​ ​ ​ ​ Dividend income​$ 20​$ 16​$ 17​$ 16​$ 24​$ —Dividend distributions​ 20​ 16​ 17​ 16​ 24​ —​​Note 4.Fair Value MeasurementsRecurring Fair Value MeasurementsFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an \"exit price\"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of December 31, 2023 and 2022, nonperformance risk was not material for Edison International and SCE.Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value.Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds, and money market funds.Level 2 – Edison International's and SCE's Level 2 assets and liabilities include fixed income securities, primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter commodity derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument.The fair value of SCE's over-the-counter commodity derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing on the related Preference Stock. The applicable trust will use any dividends it receives on the related Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to any of these trusts, SCE would be prohibited from paying dividends on its common stock. SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock. The Trust VII balance sheet as of December 31, 2023, consisted of investments of $550 million in the Series M Preference Stock, $550 million of trust securities and $10,000 of common stock. The Trust II, Trust III, Trust IV, Trust V and Trust VI balance sheets as of December 31, 2023 and 2022, consisted of investments of $220 million, $275 million, $325 million, $300 million and $475 million in the Series G, Series H, Series J, Series K and Series L Preference Stock, respectively, $220 million, $275 million, $325 million, $300 million and $475 million of trust securities, respectively, and $10,000 each of common stock. The following table provides a summary of the trusts' income statements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) Trust II Trust III Trust IV Trust V Trust VI Trust VII 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividend income ​ $ 11 ​ $ 16 ​ $ 17 ​ $ 16 ​ $ 24 ​ $ 4 Dividend distributions ​ 11 ​ 16 ​ 17 ​ 16 ​ 24 ​ 4 2022 ​ ​ ​ ​ ​ ​ Dividend income ​ $ 11 ​ $ 16 ​ $ 17 ​ $ 16 ​ $ 24 ​ $ — Dividend distributions ​ 11 ​ 16 ​ 17 ​ 16 ​ 24 ​ — 2021 ​ ​ ​ ​ ​ ​ Dividend income ​ $ 20 ​ $ 16 ​ $ 17 ​ $ 16 ​ $ 24 ​ $ — Dividend distributions ​ 20 ​ 16 ​ 17 ​ 16 ​ 24 ​ — ​ ​", "prior_body": "Power Purchase Agreements SCE has PPAs that are classified as variable interests in VIEs, including agreements through which SCE provides the natural gas to fuel the plants, fixed price contracts for renewable energy, and resource adequacy agreements that, upon the seller's election, include the purchase of energy at fixed prices. SCE has concluded that it is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of these entities. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants. As of the balance sheet date, the carrying amount of assets and liabilities in SCE's consolidated balance sheet that relate to involvement with VIEs that are not consolidated result from amounts due under the PPAs. Under these contracts, SCE recovers the costs incurred through demonstration of compliance with its CPUC-approved long-term power procurement plans. SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 12. As a result, there is no significant potential exposure to loss to SCE from its variable 88 88 Table of Contentsinterest in these VIEs. The aggregate contracted capacity dedicated to SCE from these VIE projects was 3,907 megawatts (\"MW\") and 3,545 MW at December 31, 2022 and 2021, respectively, and the amounts that SCE paid to these projects were $608 million and $673 million for the years ended December 31, 2022 and 2021, respectively. These amounts are recoverable in customer rates, subject to reasonableness review.Unconsolidated Trusts of SCESCE Trust II, Trust III, Trust IV, Trust V and Trust VI were formed in 2013, 2014, 2015, 2016 and 2017, respectively, for the exclusive purpose of issuing the 5.10%, 5.75%, 5.375%, 5.45% and 5.00% trust preference securities, respectively (\"trust securities\"). The trusts are VIEs. SCE has concluded that it is not the primary beneficiary of these VIEs as it does not have the obligation to absorb the expected losses or the right to receive the expected residual returns of the trusts. SCE Trust II, Trust III, Trust IV, Trust V and Trust VI issued to the public trust securities in the face amounts of $400 million, $275 million, $325 million, $300 million and $475 million (cumulative, liquidation amounts of $25 per share), respectively, and $10,000 of common stock each to SCE. The trusts invested the proceeds of these trust securities in Series G, Series H, Series J, Series K and Series L Preference Stock issued by SCE in the principal amounts of $400 million, $275 million, $325 million, $300 million and $475 million (cumulative, $2,500 per share liquidation values), respectively, which have substantially the same payment terms as the respective trust securities.The Series G, Series H, Series J, Series K and Series L Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series G, Series H, Series J, Series K or Series L Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust (see Note 14 for further information). The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities if and when the SCE board of directors declares and makes dividend payments on the related Preference Stock. The applicable trust will use any dividends it receives on the related Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to any of these trusts, SCE would be prohibited from paying dividends on its common stock. SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock.The Trust II, Trust III, Trust IV, Trust V and Trust VI balance sheets as of December 31, 2022 and 2021, consisted of investments of $220 million, $275 million, $325 million, $300 million and $475 million in the Series G, Series H, Series J, Series K and Series L Preference Stock, respectively, $220 million, $275 million, $325 million, $300 million and $475 million of trust securities, respectively, and $10,000 each of common stock.The following table provides a summary of the trusts' income statements:​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) Trust II Trust III Trust IV Trust V Trust VI2022​​​​​​​​​​​​​ ​Dividend income​$ 11​$ 16​$ 17​$ 16​$ 24Dividend distributions​ 11​ 16​ 17​ 16​ 242021​ ​ ​ ​ ​ Dividend income​$ 20​$ 16​$ 17​$ 16​$ 24Dividend distributions​ 20​ 16​ 17​ 16​ 242020​ ​ ​ ​ ​ Dividend income​$ 20​$ 16​$ 17​$ 16​$ 24Dividend distributions​ 20​ 16​ 17​ 16​ 24​​89 Table of Contents Table of Contents Table of Contents interest in these VIEs. The aggregate contracted capacity dedicated to SCE from these VIE projects was 3,907 megawatts (\"MW\") and 3,545 MW at December 31, 2022 and 2021, respectively, and the amounts that SCE paid to these projects were $608 million and $673 million for the years ended December 31, 2022 and 2021, respectively. These amounts are recoverable in customer rates, subject to reasonableness review.Unconsolidated Trusts of SCESCE Trust II, Trust III, Trust IV, Trust V and Trust VI were formed in 2013, 2014, 2015, 2016 and 2017, respectively, for the exclusive purpose of issuing the 5.10%, 5.75%, 5.375%, 5.45% and 5.00% trust preference securities, respectively (\"trust securities\"). The trusts are VIEs. SCE has concluded that it is not the primary beneficiary of these VIEs as it does not have the obligation to absorb the expected losses or the right to receive the expected residual returns of the trusts. SCE Trust II, Trust III, Trust IV, Trust V and Trust VI issued to the public trust securities in the face amounts of $400 million, $275 million, $325 million, $300 million and $475 million (cumulative, liquidation amounts of $25 per share), respectively, and $10,000 of common stock each to SCE. The trusts invested the proceeds of these trust securities in Series G, Series H, Series J, Series K and Series L Preference Stock issued by SCE in the principal amounts of $400 million, $275 million, $325 million, $300 million and $475 million (cumulative, $2,500 per share liquidation values), respectively, which have substantially the same payment terms as the respective trust securities.The Series G, Series H, Series J, Series K and Series L Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series G, Series H, Series J, Series K or Series L Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust (see Note 14 for further information). The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities if and when the SCE board of directors declares and makes dividend payments on the related Preference Stock. The applicable trust will use any dividends it receives on the related Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to any of these trusts, SCE would be prohibited from paying dividends on its common stock. SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock.The Trust II, Trust III, Trust IV, Trust V and Trust VI balance sheets as of December 31, 2022 and 2021, consisted of investments of $220 million, $275 million, $325 million, $300 million and $475 million in the Series G, Series H, Series J, Series K and Series L Preference Stock, respectively, $220 million, $275 million, $325 million, $300 million and $475 million of trust securities, respectively, and $10,000 each of common stock.The following table provides a summary of the trusts' income statements:​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) Trust II Trust III Trust IV Trust V Trust VI2022​​​​​​​​​​​​​ ​Dividend income​$ 11​$ 16​$ 17​$ 16​$ 24Dividend distributions​ 11​ 16​ 17​ 16​ 242021​ ​ ​ ​ ​ Dividend income​$ 20​$ 16​$ 17​$ 16​$ 24Dividend distributions​ 20​ 16​ 17​ 16​ 242020​ ​ ​ ​ ​ Dividend income​$ 20​$ 16​$ 17​$ 16​$ 24Dividend distributions​ 20​ 16​ 17​ 16​ 24​​ interest in these VIEs. The aggregate contracted capacity dedicated to SCE from these VIE projects was 3,907 megawatts (\"MW\") and 3,545 MW at December 31, 2022 and 2021, respectively, and the amounts that SCE paid to these projects were $608 million and $673 million for the years ended December 31, 2022 and 2021, respectively. These amounts are recoverable in customer rates, subject to reasonableness review. Unconsolidated Trusts of SCE SCE Trust II, Trust III, Trust IV, Trust V and Trust VI were formed in 2013, 2014, 2015, 2016 and 2017, respectively, for the exclusive purpose of issuing the 5.10%, 5.75%, 5.375%, 5.45% and 5.00% trust preference securities, respectively (\"trust securities\"). The trusts are VIEs. SCE has concluded that it is not the primary beneficiary of these VIEs as it does not have the obligation to absorb the expected losses or the right to receive the expected residual returns of the trusts. SCE Trust II, Trust III, Trust IV, Trust V and Trust VI issued to the public trust securities in the face amounts of $400 million, $275 million, $325 million, $300 million and $475 million (cumulative, liquidation amounts of $25 per share), respectively, and $10,000 of common stock each to SCE. The trusts invested the proceeds of these trust securities in Series G, Series H, Series J, Series K and Series L Preference Stock issued by SCE in the principal amounts of $400 million, $275 million, $325 million, $300 million and $475 million (cumulative, $2,500 per share liquidation values), respectively, which have substantially the same payment terms as the respective trust securities. The Series G, Series H, Series J, Series K and Series L Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series G, Series H, Series J, Series K or Series L Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust (see Note 14 for further information). The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities if and when the SCE board of directors declares and makes dividend payments on the related Preference Stock. The applicable trust will use any dividends it receives on the related Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to any of these trusts, SCE would be prohibited from paying dividends on its common stock. SCE has fully and unconditionally guaranteed the payment of the trust securities and trust distributions, if and when SCE pays dividends on the related Preference Stock. The Trust II, Trust III, Trust IV, Trust V and Trust VI balance sheets as of December 31, 2022 and 2021, consisted of investments of $220 million, $275 million, $325 million, $300 million and $475 million in the Series G, Series H, Series J, Series K and Series L Preference Stock, respectively, $220 million, $275 million, $325 million, $300 million and $475 million of trust securities, respectively, and $10,000 each of common stock. The following table provides a summary of the trusts' income statements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) Trust II Trust III Trust IV Trust V Trust VI 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Dividend income ​ $ 11 ​ $ 16 ​ $ 17 ​ $ 16 ​ $ 24 Dividend distributions ​ 11 ​ 16 ​ 17 ​ 16 ​ 24 2021 ​ ​ ​ ​ ​ Dividend income ​ $ 20 ​ $ 16 ​ $ 17 ​ $ 16 ​ $ 24 Dividend distributions ​ 20 ​ 16 ​ 17 ​ 16 ​ 24 2020 ​ ​ ​ ​ ​ Dividend income ​ $ 20 ​ $ 16 ​ $ 17 ​ $ 16 ​ $ 24 Dividend distributions ​ 20 ​ 16 ​ 17 ​ 16 ​ 24 ​ ​ 89 89 Table of ContentsNote 4.Fair Value MeasurementsRecurring Fair Value MeasurementsFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an \"exit price\"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of December 31, 2022 and 2021, nonperformance risk was not material for Edison International and SCE.Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value.Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds and money market funds.Level 2 – Edison International's and SCE's Level 2 assets and liabilities include fixed income securities, primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument.The fair value of SCE's over-the-counter derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing models include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity.Level 3 – The fair value of SCE's Level 3 assets and liabilities is determined using the income approach through various models and techniques that require significant unobservable inputs. This level includes derivative contracts that trade infrequently such as congestion revenue rights (\"CRRs\"). Edison International Parent and Other does not have any Level 3 assets and liabilities.Assumptions are made in order to value derivative contracts in which observable inputs are not available. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs, and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of derivative instruments.90 Table of Contents Table of Contents Table of Contents Note 4.Fair Value MeasurementsRecurring Fair Value MeasurementsFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an \"exit price\"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of December 31, 2022 and 2021, nonperformance risk was not material for Edison International and SCE.Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value.Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds and money market funds.Level 2 – Edison International's and SCE's Level 2 assets and liabilities include fixed income securities, primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument.The fair value of SCE's over-the-counter derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing models include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity.Level 3 – The fair value of SCE's Level 3 assets and liabilities is determined using the income approach through various models and techniques that require significant unobservable inputs. This level includes derivative contracts that trade infrequently such as congestion revenue rights (\"CRRs\"). Edison International Parent and Other does not have any Level 3 assets and liabilities.Assumptions are made in order to value derivative contracts in which observable inputs are not available. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs, and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of derivative instruments." }, { "status": "MODIFIED", "current_title": "Southern California Edison Company", "prior_title": "Southern California Edison Company", "similarity_score": 0.915, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Accumulated ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Additional ​ Other ​ ​ ​ ​ ​ ​ ​ ​ Preference ​ Common ​ Paid-in ​ Comprehensive ​ Retained ​ Total (in millions, except per share amounts) ​ Stock ​ Stock ​ Capital ​ Loss ​ Earnings ​ Equity\"" ], "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) 2023 2022 2021", "prior_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) 2022 2021 2020" }, { "status": "MODIFIED", "current_title": "SCE is subject to extensive regulation and the risk of adverse regulatory and legislative decisions, delays in regulatory or legislative decisions, and changes in applicable regulations or legislation.", "prior_title": "SCE is subject to extensive regulation and the risk of adverse regulatory and legislative decisions, delays in regulatory or legislative decisions, and changes in applicable regulations or legislation.", "similarity_score": 0.912, "confidence": "high", "key_changes": [ "Reworded sentence: \"Should SCE be unsuccessful in obtaining necessary licenses or permits or should these regulatory authorities initiate any investigations or enforcement actions or impose fines, penalties or disallowances on SCE, SCE may be prevented from executing its strategy and its business could be materially affected.\"", "Reworded sentence: \"For further information, see \"Business—SCE—Purchased Power and Fuel Supply.\" SCE is also subject to the risks of unfavorable or untimely CPUC decisions about the compliance with SCE's procurement plan and the reasonableness of certain procurement-related costs.SCE may not be able to hedge its risk for commodities on economic terms or fully recover the costs of hedges through the rates it is allowed to charge its customers, which could materially affect SCE's liquidity and results of operations, see \"Market Risk Exposures\" in the MD&A.Operating RisksDamage claims against SCE for wildfire-related losses may materially affect SCE's financial condition and results of operations.Prolonged drought conditions and shifting weather patterns in California resulting from climate change as well as, among other things, buildup of dry vegetation in areas severely impacted by years of historic drought and lack of adequate clearing of hazardous fuels by responsible parties have increased the duration of the wildfire season and the risk of severe wildfire events.Severe wildfires and increased urban development in high fire risk areas in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of utility practices and/or the failure of electric and other utility equipment.\"", "Reworded sentence: \"For further information, see \"Business—SCE—Purchased Power and Fuel Supply.\" SCE is also subject to the risks of unfavorable or untimely CPUC decisions about the compliance with SCE's procurement plan and the reasonableness of certain procurement-related costs.SCE may not be able to hedge its risk for commodities on economic terms or fully recover the costs of hedges through the rates it is allowed to charge its customers, which could materially affect SCE's liquidity and results of operations, see \"Market Risk Exposures\" in the MD&A.Operating RisksDamage claims against SCE for wildfire-related losses may materially affect SCE's financial condition and results of operations.Prolonged drought conditions and shifting weather patterns in California resulting from climate change as well as, among other things, buildup of dry vegetation in areas severely impacted by years of historic drought and lack of adequate clearing of hazardous fuels by responsible parties have increased the duration of the wildfire season and the risk of severe wildfire events.Severe wildfires and increased urban development in high fire risk areas in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of utility practices and/or the failure of electric and other utility equipment.\"" ], "current_body": "SCE operates in a highly regulated environment. SCE's business is subject to extensive federal, state and local energy, environmental and other laws and regulations. Among other things, the CPUC regulates SCE's retail rates and capital structure, and the FERC regulates SCE's wholesale rates and capital structure. The NRC regulates the decommissioning of San Onofre in addition to the local and state agencies that require permits. The construction, planning, siting and operation of SCE's power plants, energy storage projects, and transmission lines in California are also subject to regulation by the CPUC and other local, state and federal agencies. SCE must periodically apply for licenses and permits from these various regulatory authorities, including environmental regulatory authorities, and must abide by their respective rules, regulations and orders. Should SCE be unsuccessful in obtaining necessary licenses or permits or should these regulatory authorities initiate any investigations or enforcement actions or impose fines, penalties or disallowances on SCE, SCE may be prevented from executing its strategy and its business could be materially affected. The process of obtaining licenses and permits from regulatory authorities may be delayed or defeated by opponents and such delay or defeat could have a material effect on SCE's business. The Wildfire Insurance Fund and other provisions of AB 1054 not effectively mitigating the significant risk faced by California investor-owned utilities related to liability for damages arising from catastrophic wildfires where utility facilities are a substantial cause, could have a detrimental effect on SCE's business and financial condition. The effectiveness of AB 1054 to mitigate the wildfire-related risk faced by SCE is conditioned in part on the performance of OEIS and various entities formed under AB 1054 and related legislation to, among other things, administer the Wildfire Insurance Fund, approve WMPs, issue safety certifications, oversee and enforce compliance with wildfire safety 41 41 Table of Contentsstandards, and develop metrics to reduce risk and measure compliance with risk reduction. In addition, CPUC approval is required to recover the costs SCE is incurring to strengthen its wildfire mitigation and prevention efforts described in SCE's WMPs. See \"Business—Southern California Wildfires\" and \"Liquidity and Capital Resources—SCE—Regulatory Proceedings—Wildfire Related Regulatory Proceedings\" in the MD&A.In addition, existing regulations may be revised or re-interpreted and new laws and regulations may be adopted or become applicable to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs. In addition, regulations adopted via the public initiative or legislative process may apply to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs.SCE's energy procurement activities are subject to regulatory and market risks that could materially affect its financial condition and liquidity.SCE obtains energy, capacity, environmental credits and ancillary services needed to serve its customers from its own generating plants and through contracts with energy producers and sellers. California law and CPUC decisions allow SCE to recover, through the rates it is allowed to charge its customers, reasonable procurement costs incurred in compliance with an approved procurement plan. Nonetheless, SCE's cash flows remain subject to volatility primarily resulting from changes in commodity prices, including as a result of gas supply constraints. Additionally, significant and prolonged gas use restrictions may adversely impact the reliability of the electric grid if critical generation resources are limited in their operations. For further information, see \"Business—SCE—Purchased Power and Fuel Supply.\" SCE is also subject to the risks of unfavorable or untimely CPUC decisions about the compliance with SCE's procurement plan and the reasonableness of certain procurement-related costs.SCE may not be able to hedge its risk for commodities on economic terms or fully recover the costs of hedges through the rates it is allowed to charge its customers, which could materially affect SCE's liquidity and results of operations, see \"Market Risk Exposures\" in the MD&A.Operating RisksDamage claims against SCE for wildfire-related losses may materially affect SCE's financial condition and results of operations.Prolonged drought conditions and shifting weather patterns in California resulting from climate change as well as, among other things, buildup of dry vegetation in areas severely impacted by years of historic drought and lack of adequate clearing of hazardous fuels by responsible parties have increased the duration of the wildfire season and the risk of severe wildfire events.Severe wildfires and increased urban development in high fire risk areas in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of utility practices and/or the failure of electric and other utility equipment. Catastrophic wildfires can occur in SCE's service territory even if SCE effectively implements its WMPs. California courts have previously found utilities to be strictly liable for property damage, regardless of fault, by applying the theory of inverse condemnation when a utility's facilities were determined to be a substantial cause of a wildfire that caused the property damage. The rationale generally stated by these courts for applying this theory to investor-owned utilities is that property losses resulting from a public improvement, such as the distribution of electricity, can be spread across the larger community that benefited from such improvement. However, in November 2017, the CPUC issued a decision denying an investor-owned utility's request to include in its rates uninsured wildfire-related costs arising from several 2007 fires, finding that the investor-owned utility did not prudently manage and operate its facilities prior to or at the outset of the 2007 wildfires. An inability to recover uninsured wildfire-related costs could materially affect SCE's business, financial condition and results of operations. For example, if SCE is unable 42 Table of Contents Table of Contents Table of Contents standards, and develop metrics to reduce risk and measure compliance with risk reduction. In addition, CPUC approval is required to recover the costs SCE is incurring to strengthen its wildfire mitigation and prevention efforts described in SCE's WMPs. See \"Business—Southern California Wildfires\" and \"Liquidity and Capital Resources—SCE—Regulatory Proceedings—Wildfire Related Regulatory Proceedings\" in the MD&A.In addition, existing regulations may be revised or re-interpreted and new laws and regulations may be adopted or become applicable to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs. In addition, regulations adopted via the public initiative or legislative process may apply to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs.SCE's energy procurement activities are subject to regulatory and market risks that could materially affect its financial condition and liquidity.SCE obtains energy, capacity, environmental credits and ancillary services needed to serve its customers from its own generating plants and through contracts with energy producers and sellers. California law and CPUC decisions allow SCE to recover, through the rates it is allowed to charge its customers, reasonable procurement costs incurred in compliance with an approved procurement plan. Nonetheless, SCE's cash flows remain subject to volatility primarily resulting from changes in commodity prices, including as a result of gas supply constraints. Additionally, significant and prolonged gas use restrictions may adversely impact the reliability of the electric grid if critical generation resources are limited in their operations. For further information, see \"Business—SCE—Purchased Power and Fuel Supply.\" SCE is also subject to the risks of unfavorable or untimely CPUC decisions about the compliance with SCE's procurement plan and the reasonableness of certain procurement-related costs.SCE may not be able to hedge its risk for commodities on economic terms or fully recover the costs of hedges through the rates it is allowed to charge its customers, which could materially affect SCE's liquidity and results of operations, see \"Market Risk Exposures\" in the MD&A.Operating RisksDamage claims against SCE for wildfire-related losses may materially affect SCE's financial condition and results of operations.Prolonged drought conditions and shifting weather patterns in California resulting from climate change as well as, among other things, buildup of dry vegetation in areas severely impacted by years of historic drought and lack of adequate clearing of hazardous fuels by responsible parties have increased the duration of the wildfire season and the risk of severe wildfire events.Severe wildfires and increased urban development in high fire risk areas in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of utility practices and/or the failure of electric and other utility equipment. Catastrophic wildfires can occur in SCE's service territory even if SCE effectively implements its WMPs. California courts have previously found utilities to be strictly liable for property damage, regardless of fault, by applying the theory of inverse condemnation when a utility's facilities were determined to be a substantial cause of a wildfire that caused the property damage. The rationale generally stated by these courts for applying this theory to investor-owned utilities is that property losses resulting from a public improvement, such as the distribution of electricity, can be spread across the larger community that benefited from such improvement. However, in November 2017, the CPUC issued a decision denying an investor-owned utility's request to include in its rates uninsured wildfire-related costs arising from several 2007 fires, finding that the investor-owned utility did not prudently manage and operate its facilities prior to or at the outset of the 2007 wildfires. An inability to recover uninsured wildfire-related costs could materially affect SCE's business, financial condition and results of operations. For example, if SCE is unable standards, and develop metrics to reduce risk and measure compliance with risk reduction. In addition, CPUC approval is required to recover the costs SCE is incurring to strengthen its wildfire mitigation and prevention efforts described in SCE's WMPs. See \"Business—Southern California Wildfires\" and \"Liquidity and Capital Resources—SCE—Regulatory Proceedings—Wildfire Related Regulatory Proceedings\" in the MD&A. In addition, existing regulations may be revised or re-interpreted and new laws and regulations may be adopted or become applicable to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs. In addition, regulations adopted via the public initiative or legislative process may apply to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs.", "prior_body": "SCE operates in a highly regulated environment. SCE's business is subject to extensive federal, state and local energy, environmental and other laws and regulations. Among other things, the CPUC regulates SCE's retail rates and capital structure, and the FERC regulates SCE's wholesale rates and capital structure. The NRC regulates the decommissioning of San Onofre in addition to the local and state agencies that require permits. The construction, planning, siting and operation of SCE's power plants, energy storage projects, and transmission lines in California are also subject to regulation by the CPUC and other local, state and federal agencies. SCE must periodically apply for licenses and permits from these various regulatory authorities, including environmental regulatory authorities, and must abide by their respective rules, regulations and orders. Should SCE be unsuccessful in obtaining necessary licenses or permits or should these regulatory authorities initiate any investigations or enforcement 45 45 Table of Contentsactions or impose fines, penalties or disallowances on SCE, SCE may be prevented from executing its strategy and its business could be materially affected. The process of obtaining licenses and permits from regulatory authorities may be delayed or defeated by opponents and such delay or defeat could have a material effect on SCE's business.To the extent the Wildfire Insurance Fund and other provisions of AB 1054 do not effectively mitigate the significant risk faced by California investor-owned utilities related to liability for damages arising from catastrophic wildfires where utility facilities are a substantial cause, not achieving a more comprehensive solution could have a detrimental effect on SCE's business and financial condition. The effectiveness of AB 1054 to mitigate the wildfire-related risk faced by SCE is conditioned in part on the performance of OEIS and various entities formed under AB 1054 and related legislation to, among other things, administer the Wildfire Insurance Fund, approve WMPs, issue safety certifications, oversee and enforce compliance with wildfire safety standards, and develop metrics to reduce risk and measure compliance with risk reduction. In addition, CPUC approval is required to recover the costs SCE is incurring to strengthen its wildfire mitigation and prevention efforts described in SCE's WMPs. See \"Business—Southern California Wildfires\" and \"Liquidity and Capital Resources—SCE—Regulatory Proceedings—Wildfire Related Regulatory Proceedings\" in the MD&A.In addition, existing regulations may be revised or re-interpreted and new laws and regulations may be adopted or become applicable to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs. In addition, regulations adopted via the public initiative or legislative process may apply to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs.SCE's energy procurement activities are subject to regulatory and market risks that could materially affect its financial condition and liquidity.SCE obtains energy, capacity, environmental credits and ancillary services needed to serve its customers from its own generating plants and through contracts with energy producers and sellers. California law and CPUC decisions allow SCE to recover, through the rates it is allowed to charge its customers, reasonable procurement costs incurred in compliance with an approved procurement plan. Nonetheless, SCE's cash flows remain subject to volatility primarily resulting from changes in commodity prices, including as a result of gas supply constraints. Additionally, significant and prolonged gas use restrictions may adversely impact the reliability of the electric grid if critical generation resources are limited in their operations. For further information, see \"Business—SCE—Purchased Power and Fuel Supply.\" SCE is also subject to the risks of unfavorable or untimely CPUC decisions about the compliance with SCE's procurement plan and the reasonableness of certain procurement-related costs.SCE may not be able to hedge its risk for commodities on economic terms or fully recover the costs of hedges through the rates it is allowed to charge its customers, which could materially affect SCE's liquidity and results of operations, see \"Market Risk Exposures\" in the MD&A.Operating RisksDamage claims against SCE for wildfire-related losses may materially affect SCE's financial condition and results of operations.Prolonged drought conditions and shifting weather patterns in California resulting from climate change as well as, among other things, buildup of dry vegetation in areas severely impacted by years of historic drought and lack of adequate clearing of hazardous fuels by responsible parties have increased the duration of the wildfire season and the risk of severe wildfire events.Severe wildfires and increased urban development in high fire risk areas in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of utility practices and/or the failure of 46 Table of Contents Table of Contents Table of Contents actions or impose fines, penalties or disallowances on SCE, SCE may be prevented from executing its strategy and its business could be materially affected. The process of obtaining licenses and permits from regulatory authorities may be delayed or defeated by opponents and such delay or defeat could have a material effect on SCE's business.To the extent the Wildfire Insurance Fund and other provisions of AB 1054 do not effectively mitigate the significant risk faced by California investor-owned utilities related to liability for damages arising from catastrophic wildfires where utility facilities are a substantial cause, not achieving a more comprehensive solution could have a detrimental effect on SCE's business and financial condition. The effectiveness of AB 1054 to mitigate the wildfire-related risk faced by SCE is conditioned in part on the performance of OEIS and various entities formed under AB 1054 and related legislation to, among other things, administer the Wildfire Insurance Fund, approve WMPs, issue safety certifications, oversee and enforce compliance with wildfire safety standards, and develop metrics to reduce risk and measure compliance with risk reduction. In addition, CPUC approval is required to recover the costs SCE is incurring to strengthen its wildfire mitigation and prevention efforts described in SCE's WMPs. See \"Business—Southern California Wildfires\" and \"Liquidity and Capital Resources—SCE—Regulatory Proceedings—Wildfire Related Regulatory Proceedings\" in the MD&A.In addition, existing regulations may be revised or re-interpreted and new laws and regulations may be adopted or become applicable to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs. In addition, regulations adopted via the public initiative or legislative process may apply to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs.SCE's energy procurement activities are subject to regulatory and market risks that could materially affect its financial condition and liquidity.SCE obtains energy, capacity, environmental credits and ancillary services needed to serve its customers from its own generating plants and through contracts with energy producers and sellers. California law and CPUC decisions allow SCE to recover, through the rates it is allowed to charge its customers, reasonable procurement costs incurred in compliance with an approved procurement plan. Nonetheless, SCE's cash flows remain subject to volatility primarily resulting from changes in commodity prices, including as a result of gas supply constraints. Additionally, significant and prolonged gas use restrictions may adversely impact the reliability of the electric grid if critical generation resources are limited in their operations. For further information, see \"Business—SCE—Purchased Power and Fuel Supply.\" SCE is also subject to the risks of unfavorable or untimely CPUC decisions about the compliance with SCE's procurement plan and the reasonableness of certain procurement-related costs.SCE may not be able to hedge its risk for commodities on economic terms or fully recover the costs of hedges through the rates it is allowed to charge its customers, which could materially affect SCE's liquidity and results of operations, see \"Market Risk Exposures\" in the MD&A.Operating RisksDamage claims against SCE for wildfire-related losses may materially affect SCE's financial condition and results of operations.Prolonged drought conditions and shifting weather patterns in California resulting from climate change as well as, among other things, buildup of dry vegetation in areas severely impacted by years of historic drought and lack of adequate clearing of hazardous fuels by responsible parties have increased the duration of the wildfire season and the risk of severe wildfire events.Severe wildfires and increased urban development in high fire risk areas in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of utility practices and/or the failure of actions or impose fines, penalties or disallowances on SCE, SCE may be prevented from executing its strategy and its business could be materially affected. The process of obtaining licenses and permits from regulatory authorities may be delayed or defeated by opponents and such delay or defeat could have a material effect on SCE's business. To the extent the Wildfire Insurance Fund and other provisions of AB 1054 do not effectively mitigate the significant risk faced by California investor-owned utilities related to liability for damages arising from catastrophic wildfires where utility facilities are a substantial cause, not achieving a more comprehensive solution could have a detrimental effect on SCE's business and financial condition. The effectiveness of AB 1054 to mitigate the wildfire-related risk faced by SCE is conditioned in part on the performance of OEIS and various entities formed under AB 1054 and related legislation to, among other things, administer the Wildfire Insurance Fund, approve WMPs, issue safety certifications, oversee and enforce compliance with wildfire safety standards, and develop metrics to reduce risk and measure compliance with risk reduction. In addition, CPUC approval is required to recover the costs SCE is incurring to strengthen its wildfire mitigation and prevention efforts described in SCE's WMPs. See \"Business—Southern California Wildfires\" and \"Liquidity and Capital Resources—SCE—Regulatory Proceedings—Wildfire Related Regulatory Proceedings\" in the MD&A. In addition, existing regulations may be revised or re-interpreted and new laws and regulations may be adopted or become applicable to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs. In addition, regulations adopted via the public initiative or legislative process may apply to SCE, or its facilities or operations, in a manner that may have a detrimental effect on SCE's business or result in significant additional costs." }, { "status": "MODIFIED", "current_title": "Revenue Recognition", "prior_title": "Revenue Recognition", "similarity_score": 0.911, "confidence": "high", "key_changes": [ "Added sentence: \"76 76 Table of ContentsSCE's Revenue from Contracts with CustomersProvision of ElectricitySCE principally generates revenue through supplying and delivering electricity to its customers.\"", "Added sentence: \"Rates charged to customers are based on tariff rates, approved by the CPUC and FERC.\"", "Added sentence: \"Starting with SCE's 2021 GRC, revenue is authorized through quadrennial GRC proceedings, which are intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its CPUC-jurisdictional rate base.\"", "Added sentence: \"The CPUC sets an annual revenue requirement for the base year and the remaining three years are set by a methodology established in the GRC proceeding.\"", "Added sentence: \"As described above, SCE also earns revenue, with no return, to recover costs for power procurement, certain wildfire related expenses and other activities.Revenue is authorized by the FERC through a formula rate which is intended to provide SCE a reasonable opportunity to recover transmission capital and operating costs that are prudently incurred, including a return on its FERC-jurisdictional rate base.\"" ], "current_body": "Revenue is recognized by Edison International and SCE when a performance obligation to transfer control of the promised goods is satisfied or when services are rendered to customers. This typically occurs when electricity is delivered to customers, which includes amounts for services rendered but unbilled at the end of a reporting period. 76 76 Table of ContentsSCE's Revenue from Contracts with CustomersProvision of ElectricitySCE principally generates revenue through supplying and delivering electricity to its customers. Rates charged to customers are based on tariff rates, approved by the CPUC and FERC. Starting with SCE's 2021 GRC, revenue is authorized through quadrennial GRC proceedings, which are intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its CPUC-jurisdictional rate base. The CPUC sets an annual revenue requirement for the base year and the remaining three years are set by a methodology established in the GRC proceeding. As described above, SCE also earns revenue, with no return, to recover costs for power procurement, certain wildfire related expenses and other activities.Revenue is authorized by the FERC through a formula rate which is intended to provide SCE a reasonable opportunity to recover transmission capital and operating costs that are prudently incurred, including a return on its FERC-jurisdictional rate base. Under the operation of the formula rate, transmission revenue is updated to actual cost of service annually.For SCE's electricity sales for both residential and non-residential customers, SCE satisfies the performance obligation of delivering electricity over time as the customers simultaneously receive and consume the delivered electricity.Energy sales are typically on a month-to-month implied contract for transmission, distribution and generation services. Revenue is recognized over time as the energy is supplied and delivered to customers and the respective revenue is billed and paid on a monthly basis.CPUC and FERC rates decouple authorized revenue from the volume of electricity sales and the price of energy procured so that SCE receives revenue equal to amounts authorized by the relevant regulatory agencies. As a result, the volume of electricity sold to customers and specific customer classes does not have a direct impact on SCE's financial results. See Note 7 for further information on SCE's revenue.Sales and Use TaxesSCE bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which SCE pays to various municipalities (based on contracts with these municipalities) in order to operate within the limits of the municipality. SCE bills these franchise fees to its customers based on a CPUC-authorized rate. These franchise fees, which are required to be paid regardless of SCE's ability to collect from the customer, are accounted for on a gross basis. SCE's franchise fees billed to customers were $168 million, $172 million and $147 million for the years ended December 31, 2023, 2022 and 2021, respectively. When SCE acts as an agent for sales and use tax, the taxes are accounted for on a net basis. Amounts billed to and collected from customers for these taxes are remitted to the taxing authorities and are not recognized as electric utility revenue.SCE's Alternative Revenue ProgramsThe CPUC and FERC have authorized additional, alternative revenue programs which adjust billings for the effects of broad external factors or provide for additional billings if the utility achieves certain objectives. These alternative revenue programs allow SCE to recover costs that SCE has been authorized to pass on to customers, including costs of certain capital and operations and maintenance activities, costs to purchase electricity and natural gas, and to fund public purpose, demand response, and customer energy efficiency programs, and earn a reasonable return. In general, revenue is recognized for these alternative revenue programs at the time the costs are incurred, or at the time when specific events permitting billing of the additional revenues have been completed. SCE begins recognizing revenues for these programs when a program has been established by an order from either the CPUC or FERC that allows for automatic adjustment of future rates, the amount of revenue for the period is objectively determinable and probable of recovery and the revenue will be collected within 24 months following the end of the annual period.77 Table of Contents Table of Contents Table of Contents SCE's Revenue from Contracts with CustomersProvision of ElectricitySCE principally generates revenue through supplying and delivering electricity to its customers. Rates charged to customers are based on tariff rates, approved by the CPUC and FERC. Starting with SCE's 2021 GRC, revenue is authorized through quadrennial GRC proceedings, which are intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its CPUC-jurisdictional rate base. The CPUC sets an annual revenue requirement for the base year and the remaining three years are set by a methodology established in the GRC proceeding. As described above, SCE also earns revenue, with no return, to recover costs for power procurement, certain wildfire related expenses and other activities.Revenue is authorized by the FERC through a formula rate which is intended to provide SCE a reasonable opportunity to recover transmission capital and operating costs that are prudently incurred, including a return on its FERC-jurisdictional rate base. Under the operation of the formula rate, transmission revenue is updated to actual cost of service annually.For SCE's electricity sales for both residential and non-residential customers, SCE satisfies the performance obligation of delivering electricity over time as the customers simultaneously receive and consume the delivered electricity.Energy sales are typically on a month-to-month implied contract for transmission, distribution and generation services. Revenue is recognized over time as the energy is supplied and delivered to customers and the respective revenue is billed and paid on a monthly basis.CPUC and FERC rates decouple authorized revenue from the volume of electricity sales and the price of energy procured so that SCE receives revenue equal to amounts authorized by the relevant regulatory agencies. As a result, the volume of electricity sold to customers and specific customer classes does not have a direct impact on SCE's financial results. See Note 7 for further information on SCE's revenue.Sales and Use TaxesSCE bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which SCE pays to various municipalities (based on contracts with these municipalities) in order to operate within the limits of the municipality. SCE bills these franchise fees to its customers based on a CPUC-authorized rate. These franchise fees, which are required to be paid regardless of SCE's ability to collect from the customer, are accounted for on a gross basis. SCE's franchise fees billed to customers were $168 million, $172 million and $147 million for the years ended December 31, 2023, 2022 and 2021, respectively. When SCE acts as an agent for sales and use tax, the taxes are accounted for on a net basis. Amounts billed to and collected from customers for these taxes are remitted to the taxing authorities and are not recognized as electric utility revenue.SCE's Alternative Revenue ProgramsThe CPUC and FERC have authorized additional, alternative revenue programs which adjust billings for the effects of broad external factors or provide for additional billings if the utility achieves certain objectives. These alternative revenue programs allow SCE to recover costs that SCE has been authorized to pass on to customers, including costs of certain capital and operations and maintenance activities, costs to purchase electricity and natural gas, and to fund public purpose, demand response, and customer energy efficiency programs, and earn a reasonable return. In general, revenue is recognized for these alternative revenue programs at the time the costs are incurred, or at the time when specific events permitting billing of the additional revenues have been completed. SCE begins recognizing revenues for these programs when a program has been established by an order from either the CPUC or FERC that allows for automatic adjustment of future rates, the amount of revenue for the period is objectively determinable and probable of recovery and the revenue will be collected within 24 months following the end of the annual period. SCE's Revenue from Contracts with Customers Provision of Electricity SCE principally generates revenue through supplying and delivering electricity to its customers. Rates charged to customers are based on tariff rates, approved by the CPUC and FERC. Starting with SCE's 2021 GRC, revenue is authorized through quadrennial GRC proceedings, which are intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its CPUC-jurisdictional rate base. The CPUC sets an annual revenue requirement for the base year and the remaining three years are set by a methodology established in the GRC proceeding. As described above, SCE also earns revenue, with no return, to recover costs for power procurement, certain wildfire related expenses and other activities. Revenue is authorized by the FERC through a formula rate which is intended to provide SCE a reasonable opportunity to recover transmission capital and operating costs that are prudently incurred, including a return on its FERC-jurisdictional rate base. Under the operation of the formula rate, transmission revenue is updated to actual cost of service annually. For SCE's electricity sales for both residential and non-residential customers, SCE satisfies the performance obligation of delivering electricity over time as the customers simultaneously receive and consume the delivered electricity. Energy sales are typically on a month-to-month implied contract for transmission, distribution and generation services. Revenue is recognized over time as the energy is supplied and delivered to customers and the respective revenue is billed and paid on a monthly basis. CPUC and FERC rates decouple authorized revenue from the volume of electricity sales and the price of energy procured so that SCE receives revenue equal to amounts authorized by the relevant regulatory agencies. As a result, the volume of electricity sold to customers and specific customer classes does not have a direct impact on SCE's financial results. See Note 7 for further information on SCE's revenue. Sales and Use Taxes SCE bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which SCE pays to various municipalities (based on contracts with these municipalities) in order to operate within the limits of the municipality. SCE bills these franchise fees to its customers based on a CPUC-authorized rate. These franchise fees, which are required to be paid regardless of SCE's ability to collect from the customer, are accounted for on a gross basis. SCE's franchise fees billed to customers were $168 million, $172 million and $147 million for the years ended December 31, 2023, 2022 and 2021, respectively. When SCE acts as an agent for sales and use tax, the taxes are accounted for on a net basis. Amounts billed to and collected from customers for these taxes are remitted to the taxing authorities and are not recognized as electric utility revenue. SCE's Alternative Revenue Programs The CPUC and FERC have authorized additional, alternative revenue programs which adjust billings for the effects of broad external factors or provide for additional billings if the utility achieves certain objectives. These alternative revenue programs allow SCE to recover costs that SCE has been authorized to pass on to customers, including costs of certain capital and operations and maintenance activities, costs to purchase electricity and natural gas, and to fund public purpose, demand response, and customer energy efficiency programs, and earn a reasonable return. In general, revenue is recognized for these alternative revenue programs at the time the costs are incurred, or at the time when specific events permitting billing of the additional revenues have been completed. SCE begins recognizing revenues for these programs when a program has been established by an order from either the CPUC or FERC that allows for automatic adjustment of future rates, the amount of revenue for the period is objectively determinable and probable of recovery and the revenue will be collected within 24 months following the end of the annual period. 77 77 Table of ContentsPower Purchase AgreementsSCE enters into power purchase agreements (\"PPAs\") in the normal course of business. A power purchase agreement may be considered a variable interest in a variable interest entity (\"VIE\"). If SCE is the primary beneficiary in the VIE, SCE is required to consolidate the VIE. None of SCE's PPAs resulted in consolidation at December 31, 2023 and 2022. See Note 3 for further discussion of PPAs that are considered variable interests.A PPA may also contain a lease for accounting purposes. See \"Leases\" below and Note 12 and Note 13 for further discussion of SCE's PPAs. A PPA that does not contain a lease may be classified as a derivative which is recorded at fair value on the consolidated balance sheets, unless the PPA is eligible for an election to designate as a normal purchase or sale, which is accounted for on an accrual basis as an executory contract. PPAs that do not meet the above classifications are accounted for on an accrual basis.Derivative InstrumentsSCE records derivative instruments on its consolidated balance sheets as either assets or liabilities measured at fair value unless otherwise exempted from derivative treatment as normal purchases or sales. The normal purchases and sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business.Realized gains and losses from SCE's derivative instruments are expected to be recovered from or refunded to customers through regulatory mechanisms and, therefore, SCE's fair value changes have no impact on purchased power expense or earnings. SCE does not use hedge accounting for derivative transactions due to regulatory accounting treatment.Where SCE's derivative instruments are subject to a master netting agreement and certain criteria are met, SCE presents its derivative assets and liabilities on a net basis on its consolidated balance sheets. In addition, derivative positions are offset against margin and cash collateral deposits. The results of derivative activities are recorded as part of cash flows from operating activities on the consolidated statements of cash flows. See Note 6 for further information on derivative instruments.LeasesA lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. An entity controls the use when it has a right to obtain substantially all of the benefits from the use of the asset and has the right to direct the use. SCE determines if an arrangement is a lease at contract inception. For all classes of underlying assets, except battery storage assets where each component is separately accounted for, SCE accounts for lease and non-lease components as a single lease component. Lease liabilities are recognized based on the present value of the lease payments over the lease term at the commencement date. SCE calculates and uses the rate implicit in the lease if the information is readily available or if not available, SCE uses its incremental borrowing rate in determining the present value of lease payments. Incremental borrowing rates are comprised of underlying risk-free rates and secured credit spreads relative to first mortgage bonds with like tenors of lease term durations. Lease right-of-use (\"ROU\") assets are based on the liability, subject to adjustments, such as lease incentives. The ROU assets also include any lease payments made at or before the commencement date. SCE excludes variable lease payments in measuring lease assets and lease liabilities. SCE's lease terms include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. SCE elected to exclude from the balance sheet short-term leases of one year or less.SCE enters into power purchase agreements that may contain leases. This occurs when a power purchase agreement designates a specific power plant, SCE obtains substantially all of the economic benefits from the use of the plant and has the right to direct the use of the plant. SCE also enters into a number of agreements to lease property and equipment 78 Table of Contents Table of Contents Table of Contents Power Purchase AgreementsSCE enters into power purchase agreements (\"PPAs\") in the normal course of business. A power purchase agreement may be considered a variable interest in a variable interest entity (\"VIE\"). If SCE is the primary beneficiary in the VIE, SCE is required to consolidate the VIE. None of SCE's PPAs resulted in consolidation at December 31, 2023 and 2022. See Note 3 for further discussion of PPAs that are considered variable interests.A PPA may also contain a lease for accounting purposes. See \"Leases\" below and Note 12 and Note 13 for further discussion of SCE's PPAs. A PPA that does not contain a lease may be classified as a derivative which is recorded at fair value on the consolidated balance sheets, unless the PPA is eligible for an election to designate as a normal purchase or sale, which is accounted for on an accrual basis as an executory contract. PPAs that do not meet the above classifications are accounted for on an accrual basis.Derivative InstrumentsSCE records derivative instruments on its consolidated balance sheets as either assets or liabilities measured at fair value unless otherwise exempted from derivative treatment as normal purchases or sales. The normal purchases and sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business.Realized gains and losses from SCE's derivative instruments are expected to be recovered from or refunded to customers through regulatory mechanisms and, therefore, SCE's fair value changes have no impact on purchased power expense or earnings. SCE does not use hedge accounting for derivative transactions due to regulatory accounting treatment.Where SCE's derivative instruments are subject to a master netting agreement and certain criteria are met, SCE presents its derivative assets and liabilities on a net basis on its consolidated balance sheets. In addition, derivative positions are offset against margin and cash collateral deposits. The results of derivative activities are recorded as part of cash flows from operating activities on the consolidated statements of cash flows. See Note 6 for further information on derivative instruments.LeasesA lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. An entity controls the use when it has a right to obtain substantially all of the benefits from the use of the asset and has the right to direct the use. SCE determines if an arrangement is a lease at contract inception. For all classes of underlying assets, except battery storage assets where each component is separately accounted for, SCE accounts for lease and non-lease components as a single lease component. Lease liabilities are recognized based on the present value of the lease payments over the lease term at the commencement date. SCE calculates and uses the rate implicit in the lease if the information is readily available or if not available, SCE uses its incremental borrowing rate in determining the present value of lease payments. Incremental borrowing rates are comprised of underlying risk-free rates and secured credit spreads relative to first mortgage bonds with like tenors of lease term durations. Lease right-of-use (\"ROU\") assets are based on the liability, subject to adjustments, such as lease incentives. The ROU assets also include any lease payments made at or before the commencement date. SCE excludes variable lease payments in measuring lease assets and lease liabilities. SCE's lease terms include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. SCE elected to exclude from the balance sheet short-term leases of one year or less.SCE enters into power purchase agreements that may contain leases. This occurs when a power purchase agreement designates a specific power plant, SCE obtains substantially all of the economic benefits from the use of the plant and has the right to direct the use of the plant. SCE also enters into a number of agreements to lease property and equipment", "prior_body": "Revenue is recognized by Edison International and SCE when a performance obligation to transfer control of the promised goods is satisfied or when services are rendered to customers. This typically occurs when electricity is delivered to customers, which includes amounts for services rendered but unbilled at the end of a reporting period. SCE's Revenue from Contracts with Customers Provision of Electricity SCE principally generates revenue through supplying and delivering electricity to its customers. Rates charged to customers are based on tariff rates, approved by the CPUC and FERC. Starting with SCE's 2021 GRC, revenue will be authorized through quadrennial GRC proceedings, which are intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its CPUC-jurisdictional rate base. The CPUC sets an annual revenue requirement for the base year and the remaining three years are set by a methodology established in the GRC proceeding. Revenue was previously authorized by the CPUC in triennial GRC proceedings. As described above, SCE also earns revenue, with no return, to recover costs for power procurement, certain wildfire related expenses and other activities. Revenue is authorized by the FERC through a formula rate which is intended to provide SCE a reasonable opportunity to recover transmission capital and operating costs that are prudently incurred, including a return on its FERC-jurisdictional rate base. Under the operation of the formula rate, transmission revenue is updated to actual cost of service annually. For SCE's electricity sales for both residential and non-residential customers, SCE satisfies the performance obligation of delivering electricity over time as the customers simultaneously receive and consume the delivered electricity. Energy sales are typically on a month-to-month implied contract for transmission, distribution and generation services. Revenue is recognized over time as the energy is supplied and delivered to customers and the respective revenue is billed and paid on a monthly basis. CPUC and FERC rates decouple authorized revenue from the volume of electricity sales and the price of energy procured so that SCE receives revenue equal to amounts authorized by the relevant regulatory agencies. As a result, the volume of electricity sold to customers and specific customer classes does not have a direct impact on SCE's financial results. See Note 7 for further information on SCE's revenue. Sales and Use Taxes SCE bills certain sales and use taxes levied by state or local governments to its customers. Included in these sales and use taxes are franchise fees, which SCE pays to various municipalities (based on contracts with these municipalities) in order to operate within the limits of the municipality. SCE bills these franchise fees to its customers based on a CPUC-authorized rate. These franchise fees, which are required to be paid regardless of SCE's ability to collect from the customer, are accounted for on a gross basis. SCE's franchise fees billed to customers were $172 million, $147 million and $131 million for the years ended December 31, 2022, 2021, and 2020, respectively. When SCE acts as an agent for sales and use tax, the taxes are accounted for on a net basis. Amounts billed to and collected from customers for these taxes are remitted to the taxing authorities and are not recognized as electric utility revenue. 81 81 Table of ContentsSCE's Alternative Revenue ProgramsThe CPUC and FERC have authorized additional, alternative revenue programs which adjust billings for the effects of broad external factors. These alternative revenue programs allow SCE to recover costs that SCE has been authorized to pass on to customers, including costs of certain operations and maintenance activities, costs to purchase electricity and natural gas, and to fund public purpose, demand response, and customer energy efficiency programs. In general, revenue is recognized for these alternative revenue programs at the time the costs are incurred. SCE begins recognizing revenues for these programs when a program has been established by an order from either the CPUC or FERC that allows for automatic adjustment of future rates, the amount of revenue for the period is objectively determinable and probable of recovery and the revenue will be collected within 24 months following the end of the annual period.Power Purchase AgreementsSCE enters into power purchase agreements (\"PPAs\") in the normal course of business. A power purchase agreement may be considered a variable interest in a variable interest entity (\"VIE\"). If SCE is the primary beneficiary in the VIE, SCE should consolidate the VIE. None of SCE's PPAs resulted in consolidation at December 31, 2022 and 2021. See Note 3 for further discussion of PPAs that are considered variable interests.A PPA may also contain a lease for accounting purposes. See \"Leases\" below and Note 12 and Note 13 for further discussion of SCE's PPAs. A PPA that does not contain a lease may be classified as a derivative which is recorded at fair value on the consolidated balance sheets. These PPAs may be eligible for an election to designate as a normal purchase or sale, which is accounted for on an accrual basis as an executory contract. PPAs that do not meet the above classifications are accounted for on an accrual basis.Derivative InstrumentsSCE records derivative instruments on its consolidated balance sheets as either assets or liabilities measured at fair value unless otherwise exempted from derivative treatment as normal purchases or sales. The normal purchases and sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business.Realized gains and losses from SCE's derivative instruments are expected to be recovered from or refunded to customers through regulatory mechanisms and, therefore, SCE's fair value changes have no impact on purchased power expense or earnings. SCE does not use hedge accounting for derivative transactions due to regulatory accounting treatment.Where SCE's derivative instruments are subject to a master netting agreement and certain criteria are met, SCE presents its derivative assets and liabilities on a net basis on its consolidated balance sheets. In addition, derivative positions are offset against margin and cash collateral deposits. The results of derivative activities are recorded as part of cash flows from operating activities on the consolidated statements of cash flows. See Note 6 for further information on derivative instruments.LeasesA lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. An entity controls the use when it has a right to obtain substantially all of the benefits from the use of the identified asset and has the right to direct the use of the asset. SCE determines if an arrangement is a lease at contract inception. For all classes of underlying assets, except battery storage assets which were first contracted in 2020 and for which each component will be separately accounted for, SCE includes both the lease and non-lease components as a single component and accounts for it as a lease. Lease liabilities are recognized based on the present value of the lease payments over the lease term at the commencement date. SCE calculates and uses the rate implicit in the lease if the information is readily available or if not available, SCE uses its incremental borrowing rate in 82 Table of Contents Table of Contents Table of Contents SCE's Alternative Revenue ProgramsThe CPUC and FERC have authorized additional, alternative revenue programs which adjust billings for the effects of broad external factors. These alternative revenue programs allow SCE to recover costs that SCE has been authorized to pass on to customers, including costs of certain operations and maintenance activities, costs to purchase electricity and natural gas, and to fund public purpose, demand response, and customer energy efficiency programs. In general, revenue is recognized for these alternative revenue programs at the time the costs are incurred. SCE begins recognizing revenues for these programs when a program has been established by an order from either the CPUC or FERC that allows for automatic adjustment of future rates, the amount of revenue for the period is objectively determinable and probable of recovery and the revenue will be collected within 24 months following the end of the annual period.Power Purchase AgreementsSCE enters into power purchase agreements (\"PPAs\") in the normal course of business. A power purchase agreement may be considered a variable interest in a variable interest entity (\"VIE\"). If SCE is the primary beneficiary in the VIE, SCE should consolidate the VIE. None of SCE's PPAs resulted in consolidation at December 31, 2022 and 2021. See Note 3 for further discussion of PPAs that are considered variable interests.A PPA may also contain a lease for accounting purposes. See \"Leases\" below and Note 12 and Note 13 for further discussion of SCE's PPAs. A PPA that does not contain a lease may be classified as a derivative which is recorded at fair value on the consolidated balance sheets. These PPAs may be eligible for an election to designate as a normal purchase or sale, which is accounted for on an accrual basis as an executory contract. PPAs that do not meet the above classifications are accounted for on an accrual basis.Derivative InstrumentsSCE records derivative instruments on its consolidated balance sheets as either assets or liabilities measured at fair value unless otherwise exempted from derivative treatment as normal purchases or sales. The normal purchases and sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business.Realized gains and losses from SCE's derivative instruments are expected to be recovered from or refunded to customers through regulatory mechanisms and, therefore, SCE's fair value changes have no impact on purchased power expense or earnings. SCE does not use hedge accounting for derivative transactions due to regulatory accounting treatment.Where SCE's derivative instruments are subject to a master netting agreement and certain criteria are met, SCE presents its derivative assets and liabilities on a net basis on its consolidated balance sheets. In addition, derivative positions are offset against margin and cash collateral deposits. The results of derivative activities are recorded as part of cash flows from operating activities on the consolidated statements of cash flows. See Note 6 for further information on derivative instruments.LeasesA lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. An entity controls the use when it has a right to obtain substantially all of the benefits from the use of the identified asset and has the right to direct the use of the asset. SCE determines if an arrangement is a lease at contract inception. For all classes of underlying assets, except battery storage assets which were first contracted in 2020 and for which each component will be separately accounted for, SCE includes both the lease and non-lease components as a single component and accounts for it as a lease. Lease liabilities are recognized based on the present value of the lease payments over the lease term at the commencement date. SCE calculates and uses the rate implicit in the lease if the information is readily available or if not available, SCE uses its incremental borrowing rate in SCE's Alternative Revenue Programs The CPUC and FERC have authorized additional, alternative revenue programs which adjust billings for the effects of broad external factors. These alternative revenue programs allow SCE to recover costs that SCE has been authorized to pass on to customers, including costs of certain operations and maintenance activities, costs to purchase electricity and natural gas, and to fund public purpose, demand response, and customer energy efficiency programs. In general, revenue is recognized for these alternative revenue programs at the time the costs are incurred. SCE begins recognizing revenues for these programs when a program has been established by an order from either the CPUC or FERC that allows for automatic adjustment of future rates, the amount of revenue for the period is objectively determinable and probable of recovery and the revenue will be collected within 24 months following the end of the annual period." }, { "status": "MODIFIED", "current_title": "SCE may not effectively implement its wildfire mitigation plans.", "prior_title": "SCE may not effectively implement its wildfire mitigation plans.", "similarity_score": 0.91, "confidence": "high", "key_changes": [ "Reworded sentence: \"SCE's wildfire mitigation practices include PSPS and using fast-curve settings.\"", "Reworded sentence: \"Similarly, if SCE is prohibited by the CPUC from implementing its desired fast-curve settings, SCE will face a higher likelihood of catastrophic wildfires in its territory.\"", "Reworded sentence: \"For more information on the impact of the 2017/2018 Wildfire/Mudslide Events and Post-2018 Wildfires on SCE and Edison International, see \"Notes to Consolidated Financial Statements—Note 12.\"", "Reworded sentence: \"These occurrences could materially affect SCE's business, financial condition and results of operations, and the inability to restore power to SCE's customers could also materially damage the business reputation of SCE and Edison International.For additional information related to climate related risks, see “Business—Environmental Considerations—Environmental Risks.”The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to SCE's workforce and the general public.Electricity poses hazards for SCE's workforce and the general public should they come in contact with electrical current or equipment, including through energized downed power lines or if equipment malfunctions.\"", "Reworded sentence: \"For more information on the impact of the 2017/2018 Wildfire/Mudslide Events and Post-2018 Wildfires on SCE and Edison International, see \"Notes to Consolidated Financial Statements—Note 12.\"" ], "current_body": "SCE will face a higher likelihood of catastrophic wildfires in its service territory if it cannot effectively implement its WMPs. For example, SCE may not be able to effectively implement its WMPs if it experiences unanticipated difficulties relative to sourcing, engaging, and retaining effectively trained contract workers or procuring materials it needs to fulfill its mitigation obligations under the WMPs. In addition, if SCE does not have an approved WMP, SCE will not be issued a safety certification from the CPUC and will consequently not benefit from the presumption of prudency or the AB 1054 Liability Cap. The CPUC may assess penalties on SCE if it finds that SCE has failed to substantially comply with its WMP. In addition, SCE may be subject to mandated changes to, or restrictions on, its operational wildfire mitigation practices or be subject to regulatory fines and penalties or claims for damages and reputational harm if SCE does not execute its wildfire mitigation practices in compliance with applicable rules and regulations. SCE's wildfire mitigation practices include PSPS and using fast-curve settings. In addition, SCE has been and may be further subject to regulatory fines and penalties or claims for damages and reputational harm if it is determined that SCE has placed excessive or unreasonable reliance on PSPS or has failed to maintain compliance with notification and post event reporting requirements related to PSPS. SCE establishes the criteria under which it implements PSPS in its territory. To the extent SCE's criteria for implementing PSPS are not sufficient to mitigate the risk of wildfires during high wind events, SCE does not fully implement PSPS when criteria are met due to other overriding conditions or SCE's regulators or others mandate changes to, or restrictions on, its criteria or other operational PSPS practices, SCE will face a higher likelihood of catastrophic wildfires in its territory during high wind events. Similarly, if SCE is prohibited by the CPUC from implementing its desired fast-curve settings, SCE will face a higher likelihood of catastrophic wildfires in its territory. 43 43 Table of ContentsFor more information on AB 1054, see \"Business—Southern California Wildfires—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"SCE will not benefit from all of the features of AB 1054 if the Wildfire Insurance Fund is exhausted.Catastrophic wildfires could rapidly exhaust the Wildfire Insurance Fund and SCE will not be reimbursed by the Wildfire Insurance Fund or benefit from the AB 1054 Liability Cap if the fund has been exhausted as a result of damage claims previously incurred by SCE or the other participating utilities.For more information on AB 1054, see \"Business—Southern California Wildfires and Mudslides—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"Climate change exacerbated weather-related incidents and other natural disasters could materially affect SCE's financial condition and results of operations.Weather-related incidents, including storms and events caused, or exacerbated, by climate change, such as wildfires, flooding and debris flows, and other natural disasters such as earthquakes can disrupt the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver power to SCE's customers. The impacts of climate change continue to evolve and remain dynamic and unpredictable. Climate change has caused, and exacerbated, extreme weather events and wildfires in southern California, and wildfires could cause, among other things, public safety issues, property damage and operational issues. In addition, the risk of flooding and debris flows occurring as a result of rain may be heightened. For example, the 2017/2018 Wildfire/Mudslide Events resulted in, among other things, loss of life, property damage and loss of service. For more information on the impact of the 2017/2018 Wildfire/Mudslide Events and Post-2018 Wildfires on SCE and Edison International, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"Extreme heat events have and can continue to lead to prolonged widespread outages due to, among other things, state-wide capacity supply shortages or equipment failure. Extreme weather events can also lead to use of PSPS. Weather-related events, such as debris flows, flooding and melting of a significantly higher than normal snowpack, and earthquakes can cause over-topping or failure at an SCE dam resulting in a rapid release of water that could cause, among other things, public safety issues, property damage and operational issues.Weather-related incidents and other natural disasters can lead to lost revenue and increased expense, including higher maintenance and repair costs, which SCE may not be able to recover from its customers. These incidents can also result in regulatory penalties and disallowances, particularly if SCE encounters difficulties in restoring power to its customers on a timely basis or if fire-related losses are found to be the result of utility practices and/or the failure of electric and other utility equipment. In addition, these occurrences could lead to significant claims for damages, including for loss of life and property damage. These occurrences could materially affect SCE's business, financial condition and results of operations, and the inability to restore power to SCE's customers could also materially damage the business reputation of SCE and Edison International.For additional information related to climate related risks, see “Business—Environmental Considerations—Environmental Risks.”The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to SCE's workforce and the general public.Electricity poses hazards for SCE's workforce and the general public should they come in contact with electrical current or equipment, including through energized downed power lines or if equipment malfunctions. In addition, the risks 44 Table of Contents Table of Contents Table of Contents For more information on AB 1054, see \"Business—Southern California Wildfires—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"SCE will not benefit from all of the features of AB 1054 if the Wildfire Insurance Fund is exhausted.Catastrophic wildfires could rapidly exhaust the Wildfire Insurance Fund and SCE will not be reimbursed by the Wildfire Insurance Fund or benefit from the AB 1054 Liability Cap if the fund has been exhausted as a result of damage claims previously incurred by SCE or the other participating utilities.For more information on AB 1054, see \"Business—Southern California Wildfires and Mudslides—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"Climate change exacerbated weather-related incidents and other natural disasters could materially affect SCE's financial condition and results of operations.Weather-related incidents, including storms and events caused, or exacerbated, by climate change, such as wildfires, flooding and debris flows, and other natural disasters such as earthquakes can disrupt the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver power to SCE's customers. The impacts of climate change continue to evolve and remain dynamic and unpredictable. Climate change has caused, and exacerbated, extreme weather events and wildfires in southern California, and wildfires could cause, among other things, public safety issues, property damage and operational issues. In addition, the risk of flooding and debris flows occurring as a result of rain may be heightened. For example, the 2017/2018 Wildfire/Mudslide Events resulted in, among other things, loss of life, property damage and loss of service. For more information on the impact of the 2017/2018 Wildfire/Mudslide Events and Post-2018 Wildfires on SCE and Edison International, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"Extreme heat events have and can continue to lead to prolonged widespread outages due to, among other things, state-wide capacity supply shortages or equipment failure. Extreme weather events can also lead to use of PSPS. Weather-related events, such as debris flows, flooding and melting of a significantly higher than normal snowpack, and earthquakes can cause over-topping or failure at an SCE dam resulting in a rapid release of water that could cause, among other things, public safety issues, property damage and operational issues.Weather-related incidents and other natural disasters can lead to lost revenue and increased expense, including higher maintenance and repair costs, which SCE may not be able to recover from its customers. These incidents can also result in regulatory penalties and disallowances, particularly if SCE encounters difficulties in restoring power to its customers on a timely basis or if fire-related losses are found to be the result of utility practices and/or the failure of electric and other utility equipment. In addition, these occurrences could lead to significant claims for damages, including for loss of life and property damage. These occurrences could materially affect SCE's business, financial condition and results of operations, and the inability to restore power to SCE's customers could also materially damage the business reputation of SCE and Edison International.For additional information related to climate related risks, see “Business—Environmental Considerations—Environmental Risks.”The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to SCE's workforce and the general public.Electricity poses hazards for SCE's workforce and the general public should they come in contact with electrical current or equipment, including through energized downed power lines or if equipment malfunctions. In addition, the risks For more information on AB 1054, see \"Business—Southern California Wildfires—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"", "prior_body": "SCE will face a higher likelihood of catastrophic wildfires in its service territory if it cannot effectively implement its WMPs. For example, SCE may not be able to effectively implement its WMPs if it experiences unanticipated difficulties relative to sourcing, engaging, and retaining effectively trained contract workers or procuring materials it needs to fulfill its mitigation obligations under the WMPs. In addition, if SCE does not have an approved WMP, SCE will not be issued a safety certification from the CPUC and will consequently not benefit from the presumption of prudency or the AB 1054 Liability Cap. The CPUC may assess penalties on SCE if it finds that SCE has failed to substantially comply with its WMP. In addition, SCE may be subject to mandated changes to, or restrictions on, its operational wildfire mitigation practices or be subject to regulatory fines and penalties or claims for damages and reputational harm if SCE does not execute its wildfire mitigation practices in compliance with applicable rules and regulations. SCE’s wildfire mitigation practices 47 47 Table of Contentsinclude PSPS and using fast-curve settings. In addition, SCE may be subject to regulatory fines and penalties or claims for damages and reputational harm if it is determined that SCE has placed excessive or unreasonable reliance on PSPS.SCE establishes the criteria under which it implements PSPS in its territory. To the extent SCE's criteria for implementing PSPS are not sufficient to mitigate the risk of wildfires during high wind events, SCE does not fully implement PSPS when criteria are met due to other overriding conditions or SCE's regulators or others mandate changes to, or restrictions on, its criteria or other operational PSPS practices, SCE will face a higher likelihood of catastrophic wildfires in its territory during high wind events. Similarly, if SCE is prohibited from implementing its desired fast-curve settings, SCE will face a higher likelihood of catastrophic wildfires in its territory.For more information on AB 1054, see \"Business—Southern California Wildfires—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"SCE will not benefit from all of the features of AB 1054 if the Wildfire Insurance Fund is exhausted.Catastrophic wildfires could rapidly exhaust the Wildfire Insurance Fund and SCE will not be reimbursed by the Wildfire Insurance Fund or benefit from the AB 1054 Liability Cap if the fund has been exhausted as a result of damage claims previously incurred by SCE or the other participating utilities.For more information on AB 1054, see \"Business—Southern California Wildfires and Mudslides—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"Climate change exacerbated weather-related incidents and other natural disasters could materially affect SCE's financial condition and results of operations.Weather-related incidents, including storms and events caused, or exacerbated, by climate change, such as wildfires, flooding and debris flows, and other natural disasters such as earthquakes can disrupt the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver power to SCE's customers. The impacts of climate change continue to evolve and remain dynamic and unpredictable. Climate change has caused, and exacerbated, extreme weather events and wildfires in southern California, and wildfires could cause, among other things, public safety issues, property damage and operational issues. In addition, the risk of flooding and debris flows occurring as a result of rain may be heightened. For example, the 2017/2018 Wildfire/Mudslide Events resulted in, among other things, loss of life, property damage and loss of service. For more information on the impact of the 2017/2018 Wildfire/Mudslide Events on SCE and Edison International, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"Extreme heat events can lead to prolonged widespread outages due to, among other things, state-wide capacity supply shortages or equipment failure. Extreme weather events can also lead to use of PSPS. Weather-related events, such as debris flows, flooding and melting of a significantly higher than normal snowpack, and earthquakes can cause over-topping or failure at an SCE dam resulting in a rapid release of water that could cause, among other things, public safety issues, property damage and operational issues.Weather-related incidents and other natural disasters can lead to lost revenue and increased expense, including higher maintenance and repair costs, which SCE may not be able to recover from its customers. These incidents can also result in regulatory penalties and disallowances, particularly if SCE encounters difficulties in restoring power to its customers on a timely basis or if fire-related losses are found to be the result of utility practices and/or the failure of electric and other utility equipment. In addition, these occurrences could lead to significant claims for damages, including for loss of life and property damage. These occurrences could materially affect SCE's business, financial condition and results of 48 Table of Contents Table of Contents Table of Contents include PSPS and using fast-curve settings. In addition, SCE may be subject to regulatory fines and penalties or claims for damages and reputational harm if it is determined that SCE has placed excessive or unreasonable reliance on PSPS.SCE establishes the criteria under which it implements PSPS in its territory. To the extent SCE's criteria for implementing PSPS are not sufficient to mitigate the risk of wildfires during high wind events, SCE does not fully implement PSPS when criteria are met due to other overriding conditions or SCE's regulators or others mandate changes to, or restrictions on, its criteria or other operational PSPS practices, SCE will face a higher likelihood of catastrophic wildfires in its territory during high wind events. Similarly, if SCE is prohibited from implementing its desired fast-curve settings, SCE will face a higher likelihood of catastrophic wildfires in its territory.For more information on AB 1054, see \"Business—Southern California Wildfires—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"SCE will not benefit from all of the features of AB 1054 if the Wildfire Insurance Fund is exhausted.Catastrophic wildfires could rapidly exhaust the Wildfire Insurance Fund and SCE will not be reimbursed by the Wildfire Insurance Fund or benefit from the AB 1054 Liability Cap if the fund has been exhausted as a result of damage claims previously incurred by SCE or the other participating utilities.For more information on AB 1054, see \"Business—Southern California Wildfires and Mudslides—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"Climate change exacerbated weather-related incidents and other natural disasters could materially affect SCE's financial condition and results of operations.Weather-related incidents, including storms and events caused, or exacerbated, by climate change, such as wildfires, flooding and debris flows, and other natural disasters such as earthquakes can disrupt the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver power to SCE's customers. The impacts of climate change continue to evolve and remain dynamic and unpredictable. Climate change has caused, and exacerbated, extreme weather events and wildfires in southern California, and wildfires could cause, among other things, public safety issues, property damage and operational issues. In addition, the risk of flooding and debris flows occurring as a result of rain may be heightened. For example, the 2017/2018 Wildfire/Mudslide Events resulted in, among other things, loss of life, property damage and loss of service. For more information on the impact of the 2017/2018 Wildfire/Mudslide Events on SCE and Edison International, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"Extreme heat events can lead to prolonged widespread outages due to, among other things, state-wide capacity supply shortages or equipment failure. Extreme weather events can also lead to use of PSPS. Weather-related events, such as debris flows, flooding and melting of a significantly higher than normal snowpack, and earthquakes can cause over-topping or failure at an SCE dam resulting in a rapid release of water that could cause, among other things, public safety issues, property damage and operational issues.Weather-related incidents and other natural disasters can lead to lost revenue and increased expense, including higher maintenance and repair costs, which SCE may not be able to recover from its customers. These incidents can also result in regulatory penalties and disallowances, particularly if SCE encounters difficulties in restoring power to its customers on a timely basis or if fire-related losses are found to be the result of utility practices and/or the failure of electric and other utility equipment. In addition, these occurrences could lead to significant claims for damages, including for loss of life and property damage. These occurrences could materially affect SCE's business, financial condition and results of include PSPS and using fast-curve settings. In addition, SCE may be subject to regulatory fines and penalties or claims for damages and reputational harm if it is determined that SCE has placed excessive or unreasonable reliance on PSPS. SCE establishes the criteria under which it implements PSPS in its territory. To the extent SCE's criteria for implementing PSPS are not sufficient to mitigate the risk of wildfires during high wind events, SCE does not fully implement PSPS when criteria are met due to other overriding conditions or SCE's regulators or others mandate changes to, or restrictions on, its criteria or other operational PSPS practices, SCE will face a higher likelihood of catastrophic wildfires in its territory during high wind events. Similarly, if SCE is prohibited from implementing its desired fast-curve settings, SCE will face a higher likelihood of catastrophic wildfires in its territory. For more information on AB 1054, see \"Business—Southern California Wildfires—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"" }, { "status": "MODIFIED", "current_title": "Derivative Instruments", "prior_title": "Derivative Instruments", "similarity_score": 0.894, "confidence": "high", "key_changes": [ "Reworded sentence: \"An entity controls the use when it has a right to obtain substantially all of the benefits from the use of the asset and has the right to direct the use.\"", "Reworded sentence: \"For all classes of underlying assets, except battery storage assets where each component is separately accounted for, SCE accounts for lease and non-lease components as a single lease component.\"", "Reworded sentence: \"SCE calculates and uses the rate implicit in the lease if the information is readily available or if not available, SCE uses its incremental borrowing rate in determining the present value of lease payments.\"", "Reworded sentence: \"SCE excludes variable lease payments in measuring lease assets and lease liabilities.\"", "Reworded sentence: \"SCE elected to exclude from the balance sheet short-term leases of one year or less.\"" ], "current_body": "SCE records derivative instruments on its consolidated balance sheets as either assets or liabilities measured at fair value unless otherwise exempted from derivative treatment as normal purchases or sales. The normal purchases and sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business. Realized gains and losses from SCE's derivative instruments are expected to be recovered from or refunded to customers through regulatory mechanisms and, therefore, SCE's fair value changes have no impact on purchased power expense or earnings. SCE does not use hedge accounting for derivative transactions due to regulatory accounting treatment. Where SCE's derivative instruments are subject to a master netting agreement and certain criteria are met, SCE presents its derivative assets and liabilities on a net basis on its consolidated balance sheets. In addition, derivative positions are offset against margin and cash collateral deposits. The results of derivative activities are recorded as part of cash flows from operating activities on the consolidated statements of cash flows. See Note 6 for further information on derivative instruments. Leases A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. An entity controls the use when it has a right to obtain substantially all of the benefits from the use of the asset and has the right to direct the use. SCE determines if an arrangement is a lease at contract inception. For all classes of underlying assets, except battery storage assets where each component is separately accounted for, SCE accounts for lease and non-lease components as a single lease component. Lease liabilities are recognized based on the present value of the lease payments over the lease term at the commencement date. SCE calculates and uses the rate implicit in the lease if the information is readily available or if not available, SCE uses its incremental borrowing rate in determining the present value of lease payments. Incremental borrowing rates are comprised of underlying risk-free rates and secured credit spreads relative to first mortgage bonds with like tenors of lease term durations. Lease right-of-use (\"ROU\") assets are based on the liability, subject to adjustments, such as lease incentives. The ROU assets also include any lease payments made at or before the commencement date. SCE excludes variable lease payments in measuring lease assets and lease liabilities. SCE's lease terms include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. SCE elected to exclude from the balance sheet short-term leases of one year or less. SCE enters into power purchase agreements that may contain leases. This occurs when a power purchase agreement designates a specific power plant, SCE obtains substantially all of the economic benefits from the use of the plant and has the right to direct the use of the plant. SCE also enters into a number of agreements to lease property and equipment 78 78 Table of Contentsin the normal course of business, primarily related to vehicles, office space and other equipment. See Note 13 for further information on leases.Edison International Parent and Other's leases primarily relate to Edison Energy, which are immaterial to Edison International.Stock-Based CompensationStock options, performance shares, deferred stock units and restricted stock units have been granted under Edison International's long-term incentive compensation programs. For equity awards that are settled in common stock, Edison International either issues new common stock, or uses a third party to purchase shares from the market and deliver such shares for the settlement of the awards. Stock options, performance shares, deferred stock units and restricted stock units are settled in common stock. For awards that are otherwise settled entirely in common stock, Edison International substitutes cash awards to the extent necessary to satisfy applicable tax withholding obligations or government levies.Stock-based compensation expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period based on estimated fair values. For equity awards paid in common stock, fair value is determined at the grant date. For equity awards that have market conditions defined in the grants, expense is recognized based on grant date fair value if the requisite service period is fulfilled. However, with respect to the portion of the performance shares payable in common stock that are subject to financial performance conditions defined in the grants, the number of performance shares expected to be earned is subject to revision and updated at each reporting period, with a related adjustment to compensation expense.For awards granted to retirement-eligible participants, stock compensation expense is recognized on a prorated basis over the initial year. For awards granted to participants who become eligible for retirement during the requisite service period, stock compensation expense is recognized over the period between the date of grant and the date the participant first becomes eligible for retirement. Edison International and SCE estimate the number of awards that are expected to vest rather than account for forfeitures when they occur. Share-based payments may create a permanent difference between the amount of compensation expense recognized for book and tax purposes. The tax impact of this permanent difference is recognized in earnings in the period it is created. See Note 9 for further information.Employee Stock Purchase PlanThe Edison International Employee Stock Purchase Plan (\"ESPP\"), effective beginning July 2021, allows eligible employees to make purchases of Edison International's common stock. The maximum aggregate numbers of shares that may be issued under the ESPP is 3,000,000 shares. Eligible employees may authorize payroll deductions of between 1% and 10% of their compensation, up to a maximum of $25,000, to purchase shares of common stock at 97% of the market price on the last day of each six months offering period. The ESPP is considered noncompensatory and stock issuances under the ESPP are recorded directly in equity.SCE DividendsCPUC holding company rules require that SCE's dividend policy be established by SCE's Board of Directors on the same basis as if SCE were a stand-alone utility company, and that the capital requirements of SCE, as deemed to be necessary to meet SCE's electricity service obligations, shall receive first priority from the Boards of Directors of both Edison International and SCE. In addition, the CPUC regulates SCE's capital structure which limits the dividends it may pay to its shareholders.The common equity component of SCE's CPUC authorized capital structure is 52% on a weighted average basis over the January 1, 2023 to December 31, 2025 compliance period (\"Capital Structure Compliance Period\"). The CPUC authorized capital structure differs from the capital structure calculated based on GAAP due to certain exclusions 79 Table of Contents Table of Contents Table of Contents in the normal course of business, primarily related to vehicles, office space and other equipment. See Note 13 for further information on leases.Edison International Parent and Other's leases primarily relate to Edison Energy, which are immaterial to Edison International.Stock-Based CompensationStock options, performance shares, deferred stock units and restricted stock units have been granted under Edison International's long-term incentive compensation programs. For equity awards that are settled in common stock, Edison International either issues new common stock, or uses a third party to purchase shares from the market and deliver such shares for the settlement of the awards. Stock options, performance shares, deferred stock units and restricted stock units are settled in common stock. For awards that are otherwise settled entirely in common stock, Edison International substitutes cash awards to the extent necessary to satisfy applicable tax withholding obligations or government levies.Stock-based compensation expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period based on estimated fair values. For equity awards paid in common stock, fair value is determined at the grant date. For equity awards that have market conditions defined in the grants, expense is recognized based on grant date fair value if the requisite service period is fulfilled. However, with respect to the portion of the performance shares payable in common stock that are subject to financial performance conditions defined in the grants, the number of performance shares expected to be earned is subject to revision and updated at each reporting period, with a related adjustment to compensation expense.For awards granted to retirement-eligible participants, stock compensation expense is recognized on a prorated basis over the initial year. For awards granted to participants who become eligible for retirement during the requisite service period, stock compensation expense is recognized over the period between the date of grant and the date the participant first becomes eligible for retirement. Edison International and SCE estimate the number of awards that are expected to vest rather than account for forfeitures when they occur. Share-based payments may create a permanent difference between the amount of compensation expense recognized for book and tax purposes. The tax impact of this permanent difference is recognized in earnings in the period it is created. See Note 9 for further information.Employee Stock Purchase PlanThe Edison International Employee Stock Purchase Plan (\"ESPP\"), effective beginning July 2021, allows eligible employees to make purchases of Edison International's common stock. The maximum aggregate numbers of shares that may be issued under the ESPP is 3,000,000 shares. Eligible employees may authorize payroll deductions of between 1% and 10% of their compensation, up to a maximum of $25,000, to purchase shares of common stock at 97% of the market price on the last day of each six months offering period. The ESPP is considered noncompensatory and stock issuances under the ESPP are recorded directly in equity.SCE DividendsCPUC holding company rules require that SCE's dividend policy be established by SCE's Board of Directors on the same basis as if SCE were a stand-alone utility company, and that the capital requirements of SCE, as deemed to be necessary to meet SCE's electricity service obligations, shall receive first priority from the Boards of Directors of both Edison International and SCE. In addition, the CPUC regulates SCE's capital structure which limits the dividends it may pay to its shareholders.The common equity component of SCE's CPUC authorized capital structure is 52% on a weighted average basis over the January 1, 2023 to December 31, 2025 compliance period (\"Capital Structure Compliance Period\"). The CPUC authorized capital structure differs from the capital structure calculated based on GAAP due to certain exclusions in the normal course of business, primarily related to vehicles, office space and other equipment. See Note 13 for further information on leases. Edison International Parent and Other's leases primarily relate to Edison Energy, which are immaterial to Edison International.", "prior_body": "SCE records derivative instruments on its consolidated balance sheets as either assets or liabilities measured at fair value unless otherwise exempted from derivative treatment as normal purchases or sales. The normal purchases and sales exception requires, among other things, physical delivery in quantities expected to be used or sold over a reasonable period in the normal course of business. Realized gains and losses from SCE's derivative instruments are expected to be recovered from or refunded to customers through regulatory mechanisms and, therefore, SCE's fair value changes have no impact on purchased power expense or earnings. SCE does not use hedge accounting for derivative transactions due to regulatory accounting treatment. Where SCE's derivative instruments are subject to a master netting agreement and certain criteria are met, SCE presents its derivative assets and liabilities on a net basis on its consolidated balance sheets. In addition, derivative positions are offset against margin and cash collateral deposits. The results of derivative activities are recorded as part of cash flows from operating activities on the consolidated statements of cash flows. See Note 6 for further information on derivative instruments. Leases A lease is defined as a contract, or part of a contract, that conveys the right to control the use of identified assets for a period of time in exchange for consideration. An entity controls the use when it has a right to obtain substantially all of the benefits from the use of the identified asset and has the right to direct the use of the asset. SCE determines if an arrangement is a lease at contract inception. For all classes of underlying assets, except battery storage assets which were first contracted in 2020 and for which each component will be separately accounted for, SCE includes both the lease and non-lease components as a single component and accounts for it as a lease. Lease liabilities are recognized based on the present value of the lease payments over the lease term at the commencement date. SCE calculates and uses the rate implicit in the lease if the information is readily available or if not available, SCE uses its incremental borrowing rate in 82 82 Table of Contentsdetermining the present value of lease payments. Incremental borrowing rates are comprised of underlying risk-free rates and secured credit spreads relative to first mortgage bonds with like tenors of lease term durations. Lease right-of-use (\"ROU\") assets are based on the liability, subject to adjustments, such as lease incentives. The ROU assets also include any lease payments made at or before the commencement date. SCE excludes variable lease payments in measuring lease assets and lease liabilities, other than those that depend on an index or a rate or are in substance fixed payments. SCE's lease terms include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. SCE elected to exclude from the balance sheet short-term lease contracts of one year or less.SCE enters into power purchase agreements that may contain leases. This occurs when a power purchase agreement designates a specific power plant, SCE obtains substantially all of the economic benefits from the use of the plant and has the right to direct the use of the plant. SCE also enters into a number of agreements to lease property and equipment in the normal course of business, primarily related to vehicles, office space and other equipment. See Note 13 for further discussion of SCE's contracts that are classified as operating and finance leases.Edison International Parent and Other's leases primarily relate to Edison Energy Group. The leases for Edison International Parent and Other are immaterial to Edison International.Stock-Based CompensationStock options, performance shares, deferred stock units and restricted stock units have been granted under Edison International's long-term incentive compensation programs. For equity awards that are settled in common stock, Edison International either issues new common stock, or uses a third party to purchase shares from the market and deliver such shares for the settlement of the awards. Stock options, performance shares, deferred stock units and restricted stock units are settled in common stock. For awards that are otherwise settled entirely in common stock, Edison International substitutes cash awards to the extent necessary to satisfy applicable tax withholding obligations or government levies.Stock-based compensation expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period based on estimated fair values. For equity awards paid in common stock, fair value is determined at the grant date. For equity awards that have market conditions defined in the grants, expense is recognized based on grant date fair value if the requisite service period is fulfilled. However, with respect to the portion of the performance shares payable in common stock that are subject to financial performance conditions defined in the grants, the number of performance shares expected to be earned is subject to revision and updated at each reporting period, with a related adjustment to compensation expense.For awards granted to retirement-eligible participants, stock compensation expense is recognized on a prorated basis over the initial year. For awards granted to participants who become eligible for retirement during the requisite service period, stock compensation expense is recognized over the period between the date of grant and the date the participant first becomes eligible for retirement. Edison International and SCE estimate the number of awards that are expected to vest rather than account for forfeitures when they occur. Share-based payments may create a permanent difference between the amount of compensation expense recognized for book and tax purposes. The tax impact of this permanent difference is recognized in earnings in the period it is created. See Note 9 for further information.Employee Stock Purchase PlanThe Edison International Employee Stock Purchase Plan (\"ESPP\"), effective beginning July 2021, allows eligible employees to make purchases of Edison International’s common stock. The maximum aggregate numbers of shares that may be issued under the ESPP is 3,000,000 shares. Eligible employees may authorize payroll deductions of between 1% and 10% of their compensation, up to a maximum of $25,000, to purchase shares of common stock at 97% of the market price on the last day of each six months offering period. The ESPP is considered noncompensatory and stock issuances under the ESPP are recorded directly in equity.83 Table of Contents Table of Contents Table of Contents determining the present value of lease payments. Incremental borrowing rates are comprised of underlying risk-free rates and secured credit spreads relative to first mortgage bonds with like tenors of lease term durations. Lease right-of-use (\"ROU\") assets are based on the liability, subject to adjustments, such as lease incentives. The ROU assets also include any lease payments made at or before the commencement date. SCE excludes variable lease payments in measuring lease assets and lease liabilities, other than those that depend on an index or a rate or are in substance fixed payments. SCE's lease terms include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. SCE elected to exclude from the balance sheet short-term lease contracts of one year or less.SCE enters into power purchase agreements that may contain leases. This occurs when a power purchase agreement designates a specific power plant, SCE obtains substantially all of the economic benefits from the use of the plant and has the right to direct the use of the plant. SCE also enters into a number of agreements to lease property and equipment in the normal course of business, primarily related to vehicles, office space and other equipment. See Note 13 for further discussion of SCE's contracts that are classified as operating and finance leases.Edison International Parent and Other's leases primarily relate to Edison Energy Group. The leases for Edison International Parent and Other are immaterial to Edison International.Stock-Based CompensationStock options, performance shares, deferred stock units and restricted stock units have been granted under Edison International's long-term incentive compensation programs. For equity awards that are settled in common stock, Edison International either issues new common stock, or uses a third party to purchase shares from the market and deliver such shares for the settlement of the awards. Stock options, performance shares, deferred stock units and restricted stock units are settled in common stock. For awards that are otherwise settled entirely in common stock, Edison International substitutes cash awards to the extent necessary to satisfy applicable tax withholding obligations or government levies.Stock-based compensation expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period based on estimated fair values. For equity awards paid in common stock, fair value is determined at the grant date. For equity awards that have market conditions defined in the grants, expense is recognized based on grant date fair value if the requisite service period is fulfilled. However, with respect to the portion of the performance shares payable in common stock that are subject to financial performance conditions defined in the grants, the number of performance shares expected to be earned is subject to revision and updated at each reporting period, with a related adjustment to compensation expense.For awards granted to retirement-eligible participants, stock compensation expense is recognized on a prorated basis over the initial year. For awards granted to participants who become eligible for retirement during the requisite service period, stock compensation expense is recognized over the period between the date of grant and the date the participant first becomes eligible for retirement. Edison International and SCE estimate the number of awards that are expected to vest rather than account for forfeitures when they occur. Share-based payments may create a permanent difference between the amount of compensation expense recognized for book and tax purposes. The tax impact of this permanent difference is recognized in earnings in the period it is created. See Note 9 for further information.Employee Stock Purchase PlanThe Edison International Employee Stock Purchase Plan (\"ESPP\"), effective beginning July 2021, allows eligible employees to make purchases of Edison International’s common stock. The maximum aggregate numbers of shares that may be issued under the ESPP is 3,000,000 shares. Eligible employees may authorize payroll deductions of between 1% and 10% of their compensation, up to a maximum of $25,000, to purchase shares of common stock at 97% of the market price on the last day of each six months offering period. The ESPP is considered noncompensatory and stock issuances under the ESPP are recorded directly in equity. determining the present value of lease payments. Incremental borrowing rates are comprised of underlying risk-free rates and secured credit spreads relative to first mortgage bonds with like tenors of lease term durations. Lease right-of-use (\"ROU\") assets are based on the liability, subject to adjustments, such as lease incentives. The ROU assets also include any lease payments made at or before the commencement date. SCE excludes variable lease payments in measuring lease assets and lease liabilities, other than those that depend on an index or a rate or are in substance fixed payments. SCE's lease terms include options to extend or terminate the lease when it is reasonably certain that such options will be exercised. SCE elected to exclude from the balance sheet short-term lease contracts of one year or less. SCE enters into power purchase agreements that may contain leases. This occurs when a power purchase agreement designates a specific power plant, SCE obtains substantially all of the economic benefits from the use of the plant and has the right to direct the use of the plant. SCE also enters into a number of agreements to lease property and equipment in the normal course of business, primarily related to vehicles, office space and other equipment. See Note 13 for further discussion of SCE's contracts that are classified as operating and finance leases. Edison International Parent and Other's leases primarily relate to Edison Energy Group. The leases for Edison International Parent and Other are immaterial to Edison International." }, { "status": "MODIFIED", "current_title": "Critical Audit Matters", "prior_title": "Critical Audit Matters", "similarity_score": 0.893, "confidence": "high", "key_changes": [ "Reworded sentence: \"Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide Events As described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers.\"", "Reworded sentence: \"As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of occurring and when the amount of the loss can be reasonably estimated.\"", "Reworded sentence: \"For the year ended December 31, 2023 management recorded charges for wildfire claims of $630 million and expected revenue from FERC customers of $37 million.\"", "Reworded sentence: \"Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers.\"", "Reworded sentence: \"Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers.\"" ], "current_body": "The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide Events As described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of occurring and when the amount of the loss can be reasonably estimated. As of December 31, 2023, the Company had paid $8.7 billion under executed settlements, had $78 million to be paid under executed settlements, including $62 million to be paid under the Safety and Enforcement Division agreement, and had $637 million of estimated losses for remaining alleged and potential claims reflected on its consolidated balance sheets related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, the Company had assets for expected recoveries through Federal Energy Regulatory Commission (FERC) electric rates of $37 million on its consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events. Each reporting period, management reviews the Company’s loss estimates for remaining alleged and potential claims related to wildfire events. The process for estimating losses associated with alleged and potential wildfire related claims requires management to exercise significant judgment based on a number of assumptions and subjective factors, including, but not limited to: estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, the status of and developments in the course of litigation, and prior experience litigating and settling wildfire litigation claims. As additional information becomes available, management's estimates and assumptions regarding the causes and financial impact of wildfire events may change. For the year ended December 31, 2023 management recorded charges for wildfire claims of $630 million and expected revenue from FERC customers of $37 million. The resulting pre-tax charge to earnings was $593 million ($428 million after-tax). The principal considerations for our determination that performing procedures relating to the wildfire-related claims from the 2017/2018 Wildfire/Mudslide Events is a critical audit matter are (i) the significant judgment by management when determining whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated as well as in estimating losses associated with alleged and potential claims related to wildfire events and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to estimates of known and expected claims by third parties based on 52 52 Table of Contentscurrently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's assessment of loss contingencies associated with alleged and potential claims related to wildfire events. These procedures also included, among others (i) obtaining and evaluating the letters of audit inquiry with internal and external legal counsel; (ii) assessing the reasonableness of management's assessment regarding whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated; (iii) evaluating the appropriateness of the methods used by management in estimating losses associated with alleged and potential claims related to wildfire events; (iv) evaluating the reasonableness of the significant assumptions related to estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims; and (v) testing, on a sample basis, damage claim settlements. Evaluating management’s assumptions involved evaluating whether the assumptions used by management were reasonable considering (i) current damage claim settlements; (ii) past wildfire litigation history; and (iii) third-party source data.Accounting for the Effects of Rate RegulationAs described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the California Public Utility Commission (CPUC) and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of the Company’s operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost to the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2023, $11.4 billion was recorded in regulatory assets and $10.2 billion was recorded in regulatory liabilities. The principal considerations for our determination that performing procedures relating to the Company's accounting for the effects of rate regulation is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to (i) accounting for the effect of rate regulation on regulatory assets and liabilities and (ii) management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities. These procedures also included, among others (i) obtaining and evaluating the Company's correspondence with regulators; (ii) evaluating management's assessment regarding the probability of recovery of regulatory assets and settlement of regulatory liabilities at the balance sheet date; (iii) evaluating the appropriateness of the accounting for the effects of the rate regulation; (iv) evaluating the sufficiency of the disclosure; and (v) testing, on a sample basis, the calculation of regulatory assets and regulatory liabilities based on provisions outlined in the rate orders. 53 Table of Contents Table of Contents Table of Contents currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's assessment of loss contingencies associated with alleged and potential claims related to wildfire events. These procedures also included, among others (i) obtaining and evaluating the letters of audit inquiry with internal and external legal counsel; (ii) assessing the reasonableness of management's assessment regarding whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated; (iii) evaluating the appropriateness of the methods used by management in estimating losses associated with alleged and potential claims related to wildfire events; (iv) evaluating the reasonableness of the significant assumptions related to estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims; and (v) testing, on a sample basis, damage claim settlements. Evaluating management’s assumptions involved evaluating whether the assumptions used by management were reasonable considering (i) current damage claim settlements; (ii) past wildfire litigation history; and (iii) third-party source data.Accounting for the Effects of Rate RegulationAs described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the California Public Utility Commission (CPUC) and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of the Company’s operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost to the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2023, $11.4 billion was recorded in regulatory assets and $10.2 billion was recorded in regulatory liabilities. The principal considerations for our determination that performing procedures relating to the Company's accounting for the effects of rate regulation is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to (i) accounting for the effect of rate regulation on regulatory assets and liabilities and (ii) management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities. These procedures also included, among others (i) obtaining and evaluating the Company's correspondence with regulators; (ii) evaluating management's assessment regarding the probability of recovery of regulatory assets and settlement of regulatory liabilities at the balance sheet date; (iii) evaluating the appropriateness of the accounting for the effects of the rate regulation; (iv) evaluating the sufficiency of the disclosure; and (v) testing, on a sample basis, the calculation of regulatory assets and regulatory liabilities based on provisions outlined in the rate orders. currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's assessment of loss contingencies associated with alleged and potential claims related to wildfire events. These procedures also included, among others (i) obtaining and evaluating the letters of audit inquiry with internal and external legal counsel; (ii) assessing the reasonableness of management's assessment regarding whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated; (iii) evaluating the appropriateness of the methods used by management in estimating losses associated with alleged and potential claims related to wildfire events; (iv) evaluating the reasonableness of the significant assumptions related to estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims; and (v) testing, on a sample basis, damage claim settlements. Evaluating management’s assumptions involved evaluating whether the assumptions used by management were reasonable considering (i) current damage claim settlements; (ii) past wildfire litigation history; and (iii) third-party source data. Accounting for the Effects of Rate Regulation As described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the California Public Utility Commission (CPUC) and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of the Company’s operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost to the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2023, $11.4 billion was recorded in regulatory assets and $10.2 billion was recorded in regulatory liabilities. The principal considerations for our determination that performing procedures relating to the Company's accounting for the effects of rate regulation is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to (i) accounting for the effect of rate regulation on regulatory assets and liabilities and (ii) management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities. These procedures also included, among others (i) obtaining and evaluating the Company's correspondence with regulators; (ii) evaluating management's assessment regarding the probability of recovery of regulatory assets and settlement of regulatory liabilities at the balance sheet date; (iii) evaluating the appropriateness of the accounting for the effects of the rate regulation; (iv) evaluating the sufficiency of the disclosure; and (v) testing, on a sample basis, the calculation of regulatory assets and regulatory liabilities based on provisions outlined in the rate orders. 53 53 Table of Contents​​​/s/PricewaterhouseCoopers LLPLos Angeles, CaliforniaFebruary 22, 2024​We have served as the Company’s auditor since 2002. ​​54 Table of Contents Table of Contents Table of Contents ​​​/s/PricewaterhouseCoopers LLPLos Angeles, CaliforniaFebruary 22, 2024​We have served as the Company’s auditor since 2002. ​​ ​ ​ ​ /s/PricewaterhouseCoopers LLP Los Angeles, California February 22, 2024 ​ We have served as the Company’s auditor since 2002. ​ ​ 54 54 Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and Shareholders of Southern California Edison CompanyOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of 55 Table of Contents Table of Contents Table of Contents Report of Independent Registered Public Accounting FirmTo the Board of Directors and Shareholders of Southern California Edison CompanyOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of", "prior_body": "The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Contingent Liability – 2017/2018 Wildfire/Mudslide Events As described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for SCE customers in the Santa Barbara, Ventura, and Los Angeles Counties. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As of December 31, 2022, SCE had paid $7.6 billion under executed settlements, had $185 million to be paid under executed settlements, including $120 million to be paid under the SED executed Agreement, and had $934 million of estimated losses for remaining alleged and potential claims reflected on their consolidated balance sheets related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, SCE had assets for expected recoveries through FERC electric rates of $142 million on their consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events. Each reporting period, management reviews its loss estimates for remaining alleged and potential claims related to wildfire events. The process for estimating losses associated with alleged and potential wildfire related claims requires management to exercise significant judgment based on a number of assumptions and subjective factors, including, but not limited to: estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, the status of and developments in the course of litigation, and prior experience litigating and settling wildfire litigation claims. As additional information becomes available, management's estimates and assumptions regarding the causes and financial impact of wildfire events may change. For instance, as a result of additional information, in 2022 management accrued additional estimated losses of $1.3 billion for claims related to the 2017/2018 Wildfire/Mudslide Events, against which SCE has recorded expected recoveries through FERC electric rates of $76 million. The resulting net charge to earnings was $1.2 billion ($879 million after-tax). The principal considerations for our determination that performing procedures relating to the 2017/2018 Wildfire/Mudslide Events contingent liability is a critical audit matter are the significant judgment by management when determining the probability of a loss being incurred and the best estimate of expected potential loss for these 56 56 Table of Contentscontingencies related to assumptions and subjective factors based on currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's conclusion related to these loss contingencies.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's evaluation of loss contingencies associated with wildfires and mudslides. These procedures also included, among others, obtaining and evaluating the letters of audit inquiry with internal and external legal counsel, assessing the reasonableness of management's assessment regarding whether it is reasonably possible or probable and reasonably estimable that a loss has been incurred, evaluating the assumptions and methods used by management in developing the best estimate of expected potential losses, including currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases, and testing damage claim settlements. When assessing the assumptions related to the best estimate of expected potential losses, the assumptions used were evaluated for reasonableness considering (i) current damage claim settlements, (ii) past wildfire litigation history, and (iii) third-party source data.​Recoverability of Regulatory Assets That Are Not Currently Reflected In Rates​As described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the CPUC and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of its operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost of the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2022, $1.52 billion recorded in wildfire and drought restoration accounts and wildfire-related memorandum accounts represent wildfire and drought restoration costs that are probable of future recovery from customers.​The principal consideration for our determination that performing procedures relating to the Company's recoverability of regulatory assets that are not currently reflected in rates is a critical audit matter is the significant judgment by management in determining the costs probable of recovery and reported as an asset on the balance sheet. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's assessment of the recoverability of regulatory assets not currently reflected in rates.​57 Table of Contents Table of Contents Table of Contents contingencies related to assumptions and subjective factors based on currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's conclusion related to these loss contingencies.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's evaluation of loss contingencies associated with wildfires and mudslides. These procedures also included, among others, obtaining and evaluating the letters of audit inquiry with internal and external legal counsel, assessing the reasonableness of management's assessment regarding whether it is reasonably possible or probable and reasonably estimable that a loss has been incurred, evaluating the assumptions and methods used by management in developing the best estimate of expected potential losses, including currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases, and testing damage claim settlements. When assessing the assumptions related to the best estimate of expected potential losses, the assumptions used were evaluated for reasonableness considering (i) current damage claim settlements, (ii) past wildfire litigation history, and (iii) third-party source data.​Recoverability of Regulatory Assets That Are Not Currently Reflected In Rates​As described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the CPUC and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of its operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost of the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2022, $1.52 billion recorded in wildfire and drought restoration accounts and wildfire-related memorandum accounts represent wildfire and drought restoration costs that are probable of future recovery from customers.​The principal consideration for our determination that performing procedures relating to the Company's recoverability of regulatory assets that are not currently reflected in rates is a critical audit matter is the significant judgment by management in determining the costs probable of recovery and reported as an asset on the balance sheet. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's assessment of the recoverability of regulatory assets not currently reflected in rates.​ contingencies related to assumptions and subjective factors based on currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's conclusion related to these loss contingencies. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's evaluation of loss contingencies associated with wildfires and mudslides. These procedures also included, among others, obtaining and evaluating the letters of audit inquiry with internal and external legal counsel, assessing the reasonableness of management's assessment regarding whether it is reasonably possible or probable and reasonably estimable that a loss has been incurred, evaluating the assumptions and methods used by management in developing the best estimate of expected potential losses, including currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases, and testing damage claim settlements. When assessing the assumptions related to the best estimate of expected potential losses, the assumptions used were evaluated for reasonableness considering (i) current damage claim settlements, (ii) past wildfire litigation history, and (iii) third-party source data. ​ Recoverability of Regulatory Assets That Are Not Currently Reflected In Rates ​ As described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the CPUC and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of its operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost of the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2022, $1.52 billion recorded in wildfire and drought restoration accounts and wildfire-related memorandum accounts represent wildfire and drought restoration costs that are probable of future recovery from customers. ​ The principal consideration for our determination that performing procedures relating to the Company's recoverability of regulatory assets that are not currently reflected in rates is a critical audit matter is the significant judgment by management in determining the costs probable of recovery and reported as an asset on the balance sheet. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's assessment of the recoverability of regulatory assets not currently reflected in rates. ​ 57 57 Table of ContentsAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management's assessment of the probability of recovering regulatory assets not currently reflected in rates. These procedures also included, among others, obtaining the Company's correspondence with regulators, evaluating management's assessment regarding the probability of recovery of the regulatory assets at the balance sheet date, evaluating the accounting and disclosure implications, and calculating regulatory assets balances based on provisions outlined in the rate orders. This evidence included reference to historical precedence of similar items and accounting treatment utilized by comparable companies under similar regulatory jurisdictions as well as evaluating progress in discussions between management and the regulator.​​/s/PricewaterhouseCoopers LLPLos Angeles, CaliforniaFebruary 23, 2023​We have served as the Company’s auditor since 2002. ​​58 Table of Contents Table of Contents Table of Contents Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management's assessment of the probability of recovering regulatory assets not currently reflected in rates. These procedures also included, among others, obtaining the Company's correspondence with regulators, evaluating management's assessment regarding the probability of recovery of the regulatory assets at the balance sheet date, evaluating the accounting and disclosure implications, and calculating regulatory assets balances based on provisions outlined in the rate orders. This evidence included reference to historical precedence of similar items and accounting treatment utilized by comparable companies under similar regulatory jurisdictions as well as evaluating progress in discussions between management and the regulator.​​/s/PricewaterhouseCoopers LLPLos Angeles, CaliforniaFebruary 23, 2023​We have served as the Company’s auditor since 2002. ​​ Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management's assessment of the probability of recovering regulatory assets not currently reflected in rates. These procedures also included, among others, obtaining the Company's correspondence with regulators, evaluating management's assessment regarding the probability of recovery of the regulatory assets at the balance sheet date, evaluating the accounting and disclosure implications, and calculating regulatory assets balances based on provisions outlined in the rate orders. This evidence included reference to historical precedence of similar items and accounting treatment utilized by comparable companies under similar regulatory jurisdictions as well as evaluating progress in discussions between management and the regulator. ​ ​ /s/PricewaterhouseCoopers LLP Los Angeles, California February 23, 2023 ​ We have served as the Company’s auditor since 2002. ​ ​ 58 58 Table of ContentsReport of Independent Registered Public Accounting Firm​To the Board of Directors and Shareholders of Southern California Edison Company​Opinions on the Financial Statements and Internal Control over Financial Reporting​We have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). ​In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31,2022 in conformity with accounting principles generally accepted in the United States of America. ​Basis for Opinions​These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express opinions on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.​We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. ​Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinions.​Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Contingent Liability – 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for SCE 59 Table of Contents Table of Contents Table of Contents Report of Independent Registered Public Accounting Firm​To the Board of Directors and Shareholders of Southern California Edison Company​Opinions on the Financial Statements and Internal Control over Financial Reporting​We have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). ​In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31,2022 in conformity with accounting principles generally accepted in the United States of America. ​Basis for Opinions​These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express opinions on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.​We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. ​Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinions.​Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Contingent Liability – 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for SCE" }, { "status": "MODIFIED", "current_title": "Damage claims against SCE for wildfire-related losses may materially affect SCE's financial condition and results of operations.", "prior_title": "Damage claims against SCE for wildfire-related losses may materially affect SCE's financial condition and results of operations.", "similarity_score": 0.893, "confidence": "high", "key_changes": [ "Reworded sentence: \"Severe wildfires and increased urban development in high fire risk areas in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of utility practices and/or the failure of electric and other utility equipment.\"", "Reworded sentence: \"For example, if SCE is unable 42 42 Table of Contentsto, or believes that it may be unable to, recover damages related to catastrophic wildfires through insurance, the Wildfire Insurance Fund (which is only available for fires ignited after July 12, 2019) or electric rates, or access the bank and capital markets on reasonable terms, SCE may not have sufficient cash or equity to pay dividends or may be restricted from declaring such dividends because it does not meet CPUC or California law requirements related to the declaration of dividends.\"", "Reworded sentence: \"Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase further as a result of wildfire risk, including if Edison International's and/or SCE's credit ratings are downgraded or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of wildfires.SCE's insurance coverage for wildfires may not be sufficient.SCE may not be able to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) in electric rates.\"", "Reworded sentence: \"Losses which are not fully insured or cannot be recovered from contractors, through the Wildfire Insurance Fund or electric rates could materially affect Edison International's and SCE's financial condition and results of operations.\"", "Reworded sentence: \"Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" SCE may not effectively implement its wildfire mitigation plans.SCE will face a higher likelihood of catastrophic wildfires in its service territory if it cannot effectively implement its WMPs.\"" ], "current_body": "Prolonged drought conditions and shifting weather patterns in California resulting from climate change as well as, among other things, buildup of dry vegetation in areas severely impacted by years of historic drought and lack of adequate clearing of hazardous fuels by responsible parties have increased the duration of the wildfire season and the risk of severe wildfire events. Severe wildfires and increased urban development in high fire risk areas in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of utility practices and/or the failure of electric and other utility equipment. Catastrophic wildfires can occur in SCE's service territory even if SCE effectively implements its WMPs. California courts have previously found utilities to be strictly liable for property damage, regardless of fault, by applying the theory of inverse condemnation when a utility's facilities were determined to be a substantial cause of a wildfire that caused the property damage. The rationale generally stated by these courts for applying this theory to investor-owned utilities is that property losses resulting from a public improvement, such as the distribution of electricity, can be spread across the larger community that benefited from such improvement. However, in November 2017, the CPUC issued a decision denying an investor-owned utility's request to include in its rates uninsured wildfire-related costs arising from several 2007 fires, finding that the investor-owned utility did not prudently manage and operate its facilities prior to or at the outset of the 2007 wildfires. An inability to recover uninsured wildfire-related costs could materially affect SCE's business, financial condition and results of operations. For example, if SCE is unable 42 42 Table of Contentsto, or believes that it may be unable to, recover damages related to catastrophic wildfires through insurance, the Wildfire Insurance Fund (which is only available for fires ignited after July 12, 2019) or electric rates, or access the bank and capital markets on reasonable terms, SCE may not have sufficient cash or equity to pay dividends or may be restricted from declaring such dividends because it does not meet CPUC or California law requirements related to the declaration of dividends. For information on the California law requirements on the declaration of dividends, see \"Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—SCE Dividends.\" Also see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"Edison International's and SCE's costs of accessing capital markets has increased due to the risks associated with wildfires in Southern California. Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase further as a result of wildfire risk, including if Edison International's and/or SCE's credit ratings are downgraded or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of wildfires.SCE's insurance coverage for wildfires may not be sufficient.SCE may not be able to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) in electric rates. Additionally, SCE’s contractors may experience coverage reductions and/or increased wildfire insurance costs in future years. No assurance can be given that losses will not exceed the limits of SCE's or its contractors' insurance coverage. Losses which are not fully insured or cannot be recovered from contractors, through the Wildfire Insurance Fund or electric rates could materially affect Edison International's and SCE's financial condition and results of operations. For more information on wildfire insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" SCE may not effectively implement its wildfire mitigation plans.SCE will face a higher likelihood of catastrophic wildfires in its service territory if it cannot effectively implement its WMPs. For example, SCE may not be able to effectively implement its WMPs if it experiences unanticipated difficulties relative to sourcing, engaging, and retaining effectively trained contract workers or procuring materials it needs to fulfill its mitigation obligations under the WMPs. In addition, if SCE does not have an approved WMP, SCE will not be issued a safety certification from the CPUC and will consequently not benefit from the presumption of prudency or the AB 1054 Liability Cap.The CPUC may assess penalties on SCE if it finds that SCE has failed to substantially comply with its WMP. In addition, SCE may be subject to mandated changes to, or restrictions on, its operational wildfire mitigation practices or be subject to regulatory fines and penalties or claims for damages and reputational harm if SCE does not execute its wildfire mitigation practices in compliance with applicable rules and regulations. SCE's wildfire mitigation practices include PSPS and using fast-curve settings. In addition, SCE has been and may be further subject to regulatory fines and penalties or claims for damages and reputational harm if it is determined that SCE has placed excessive or unreasonable reliance on PSPS or has failed to maintain compliance with notification and post event reporting requirements related to PSPS.SCE establishes the criteria under which it implements PSPS in its territory. To the extent SCE's criteria for implementing PSPS are not sufficient to mitigate the risk of wildfires during high wind events, SCE does not fully implement PSPS when criteria are met due to other overriding conditions or SCE's regulators or others mandate changes to, or restrictions on, its criteria or other operational PSPS practices, SCE will face a higher likelihood of catastrophic wildfires in its territory during high wind events. Similarly, if SCE is prohibited by the CPUC from implementing its desired fast-curve settings, SCE will face a higher likelihood of catastrophic wildfires in its territory.43 Table of Contents Table of Contents Table of Contents to, or believes that it may be unable to, recover damages related to catastrophic wildfires through insurance, the Wildfire Insurance Fund (which is only available for fires ignited after July 12, 2019) or electric rates, or access the bank and capital markets on reasonable terms, SCE may not have sufficient cash or equity to pay dividends or may be restricted from declaring such dividends because it does not meet CPUC or California law requirements related to the declaration of dividends. For information on the California law requirements on the declaration of dividends, see \"Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—SCE Dividends.\" Also see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"Edison International's and SCE's costs of accessing capital markets has increased due to the risks associated with wildfires in Southern California. Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase further as a result of wildfire risk, including if Edison International's and/or SCE's credit ratings are downgraded or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of wildfires.SCE's insurance coverage for wildfires may not be sufficient.SCE may not be able to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) in electric rates. Additionally, SCE’s contractors may experience coverage reductions and/or increased wildfire insurance costs in future years. No assurance can be given that losses will not exceed the limits of SCE's or its contractors' insurance coverage. Losses which are not fully insured or cannot be recovered from contractors, through the Wildfire Insurance Fund or electric rates could materially affect Edison International's and SCE's financial condition and results of operations. For more information on wildfire insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" SCE may not effectively implement its wildfire mitigation plans.SCE will face a higher likelihood of catastrophic wildfires in its service territory if it cannot effectively implement its WMPs. For example, SCE may not be able to effectively implement its WMPs if it experiences unanticipated difficulties relative to sourcing, engaging, and retaining effectively trained contract workers or procuring materials it needs to fulfill its mitigation obligations under the WMPs. In addition, if SCE does not have an approved WMP, SCE will not be issued a safety certification from the CPUC and will consequently not benefit from the presumption of prudency or the AB 1054 Liability Cap.The CPUC may assess penalties on SCE if it finds that SCE has failed to substantially comply with its WMP. In addition, SCE may be subject to mandated changes to, or restrictions on, its operational wildfire mitigation practices or be subject to regulatory fines and penalties or claims for damages and reputational harm if SCE does not execute its wildfire mitigation practices in compliance with applicable rules and regulations. SCE's wildfire mitigation practices include PSPS and using fast-curve settings. In addition, SCE has been and may be further subject to regulatory fines and penalties or claims for damages and reputational harm if it is determined that SCE has placed excessive or unreasonable reliance on PSPS or has failed to maintain compliance with notification and post event reporting requirements related to PSPS.SCE establishes the criteria under which it implements PSPS in its territory. To the extent SCE's criteria for implementing PSPS are not sufficient to mitigate the risk of wildfires during high wind events, SCE does not fully implement PSPS when criteria are met due to other overriding conditions or SCE's regulators or others mandate changes to, or restrictions on, its criteria or other operational PSPS practices, SCE will face a higher likelihood of catastrophic wildfires in its territory during high wind events. Similarly, if SCE is prohibited by the CPUC from implementing its desired fast-curve settings, SCE will face a higher likelihood of catastrophic wildfires in its territory. to, or believes that it may be unable to, recover damages related to catastrophic wildfires through insurance, the Wildfire Insurance Fund (which is only available for fires ignited after July 12, 2019) or electric rates, or access the bank and capital markets on reasonable terms, SCE may not have sufficient cash or equity to pay dividends or may be restricted from declaring such dividends because it does not meet CPUC or California law requirements related to the declaration of dividends. For information on the California law requirements on the declaration of dividends, see \"Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—SCE Dividends.\" Also see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" Edison International's and SCE's costs of accessing capital markets has increased due to the risks associated with wildfires in Southern California. Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase further as a result of wildfire risk, including if Edison International's and/or SCE's credit ratings are downgraded or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of wildfires.", "prior_body": "Prolonged drought conditions and shifting weather patterns in California resulting from climate change as well as, among other things, buildup of dry vegetation in areas severely impacted by years of historic drought and lack of adequate clearing of hazardous fuels by responsible parties have increased the duration of the wildfire season and the risk of severe wildfire events. Severe wildfires and increased urban development in high fire risk areas in California have given rise to large damage claims against California utilities for fire-related losses alleged to be the result of utility practices and/or the failure of 46 46 Table of Contentselectric and other utility equipment. Catastrophic wildfires can occur in SCE's service territory even if SCE effectively implements its WMPs. California courts have previously found utilities to be strictly liable for property damage, regardless of fault, by applying the theory of inverse condemnation when a utility's facilities were determined to be a substantial cause of a wildfire that caused the property damage. The rationale generally stated by these courts for applying this theory to investor-owned utilities is that property losses resulting from a public improvement, such as the distribution of electricity, can be spread across the larger community that benefited from such improvement. However, in November 2017, the CPUC issued a decision denying an investor-owned utility's request to include in its rates uninsured wildfire-related costs arising from several 2007 fires, finding that the investor-owned utility did not prudently manage and operate its facilities prior to or at the outset of the 2007 wildfires. An inability to recover uninsured wildfire-related costs could materially affect SCE's business, financial condition and results of operations. For example, if SCE is unable to, or believes that it may be unable to, recover damages related to catastrophic wildfires through insurance, the Wildfire Insurance Fund (which is only available for fires ignited after July 12, 2019) or electric rates, or access the bank and capital markets on reasonable terms, SCE may not have sufficient cash or equity to pay dividends or may be restricted from declaring such dividends because it does not meet CPUC or California law requirements related to the declaration of dividends. For information on the California law requirements on the declaration of dividends, see \"Liquidity and Capital Resources—SCE—SCE Dividends\" in the MD&A. Also see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"Edison International's and SCE's costs of accessing capital markets has increased due to the risks associated with wildfires in Southern California. Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase further as a result of wildfire risk, including if Edison International's and/or SCE's credit ratings are downgraded or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of wildfires.SCE's insurance coverage for wildfires may not be sufficient.Edison International has experienced increased costs and difficulties in obtaining insurance coverage for wildfires that could arise in connection with SCE's ordinary operations. Edison International, SCE and its contractors may experience coverage reductions and/or increased wildfire insurance costs in future years. No assurance can be given that losses will not exceed the limits of SCE's or its contractors' insurance coverage. SCE may not be able to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) and increases in the cost of insurance in electric rates. Losses which are not fully insured or cannot be recovered through the Wildfire Insurance Fund or electric rates could materially affect Edison International's and SCE's financial condition and results of operations. For more information on wildfire insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"SCE may not effectively implement its wildfire mitigation plans.SCE will face a higher likelihood of catastrophic wildfires in its service territory if it cannot effectively implement its WMPs. For example, SCE may not be able to effectively implement its WMPs if it experiences unanticipated difficulties relative to sourcing, engaging, and retaining effectively trained contract workers or procuring materials it needs to fulfill its mitigation obligations under the WMPs. In addition, if SCE does not have an approved WMP, SCE will not be issued a safety certification from the CPUC and will consequently not benefit from the presumption of prudency or the AB 1054 Liability Cap.The CPUC may assess penalties on SCE if it finds that SCE has failed to substantially comply with its WMP. In addition, SCE may be subject to mandated changes to, or restrictions on, its operational wildfire mitigation practices or be subject to regulatory fines and penalties or claims for damages and reputational harm if SCE does not execute its wildfire mitigation practices in compliance with applicable rules and regulations. SCE’s wildfire mitigation practices 47 Table of Contents Table of Contents Table of Contents electric and other utility equipment. Catastrophic wildfires can occur in SCE's service territory even if SCE effectively implements its WMPs. California courts have previously found utilities to be strictly liable for property damage, regardless of fault, by applying the theory of inverse condemnation when a utility's facilities were determined to be a substantial cause of a wildfire that caused the property damage. The rationale generally stated by these courts for applying this theory to investor-owned utilities is that property losses resulting from a public improvement, such as the distribution of electricity, can be spread across the larger community that benefited from such improvement. However, in November 2017, the CPUC issued a decision denying an investor-owned utility's request to include in its rates uninsured wildfire-related costs arising from several 2007 fires, finding that the investor-owned utility did not prudently manage and operate its facilities prior to or at the outset of the 2007 wildfires. An inability to recover uninsured wildfire-related costs could materially affect SCE's business, financial condition and results of operations. For example, if SCE is unable to, or believes that it may be unable to, recover damages related to catastrophic wildfires through insurance, the Wildfire Insurance Fund (which is only available for fires ignited after July 12, 2019) or electric rates, or access the bank and capital markets on reasonable terms, SCE may not have sufficient cash or equity to pay dividends or may be restricted from declaring such dividends because it does not meet CPUC or California law requirements related to the declaration of dividends. For information on the California law requirements on the declaration of dividends, see \"Liquidity and Capital Resources—SCE—SCE Dividends\" in the MD&A. Also see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"Edison International's and SCE's costs of accessing capital markets has increased due to the risks associated with wildfires in Southern California. Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase further as a result of wildfire risk, including if Edison International's and/or SCE's credit ratings are downgraded or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of wildfires.SCE's insurance coverage for wildfires may not be sufficient.Edison International has experienced increased costs and difficulties in obtaining insurance coverage for wildfires that could arise in connection with SCE's ordinary operations. Edison International, SCE and its contractors may experience coverage reductions and/or increased wildfire insurance costs in future years. No assurance can be given that losses will not exceed the limits of SCE's or its contractors' insurance coverage. SCE may not be able to recover uninsured losses (including amounts paid for self-insured retention and co-insurance) and increases in the cost of insurance in electric rates. Losses which are not fully insured or cannot be recovered through the Wildfire Insurance Fund or electric rates could materially affect Edison International's and SCE's financial condition and results of operations. For more information on wildfire insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"SCE may not effectively implement its wildfire mitigation plans.SCE will face a higher likelihood of catastrophic wildfires in its service territory if it cannot effectively implement its WMPs. For example, SCE may not be able to effectively implement its WMPs if it experiences unanticipated difficulties relative to sourcing, engaging, and retaining effectively trained contract workers or procuring materials it needs to fulfill its mitigation obligations under the WMPs. In addition, if SCE does not have an approved WMP, SCE will not be issued a safety certification from the CPUC and will consequently not benefit from the presumption of prudency or the AB 1054 Liability Cap.The CPUC may assess penalties on SCE if it finds that SCE has failed to substantially comply with its WMP. In addition, SCE may be subject to mandated changes to, or restrictions on, its operational wildfire mitigation practices or be subject to regulatory fines and penalties or claims for damages and reputational harm if SCE does not execute its wildfire mitigation practices in compliance with applicable rules and regulations. SCE’s wildfire mitigation practices electric and other utility equipment. Catastrophic wildfires can occur in SCE's service territory even if SCE effectively implements its WMPs. California courts have previously found utilities to be strictly liable for property damage, regardless of fault, by applying the theory of inverse condemnation when a utility's facilities were determined to be a substantial cause of a wildfire that caused the property damage. The rationale generally stated by these courts for applying this theory to investor-owned utilities is that property losses resulting from a public improvement, such as the distribution of electricity, can be spread across the larger community that benefited from such improvement. However, in November 2017, the CPUC issued a decision denying an investor-owned utility's request to include in its rates uninsured wildfire-related costs arising from several 2007 fires, finding that the investor-owned utility did not prudently manage and operate its facilities prior to or at the outset of the 2007 wildfires. An inability to recover uninsured wildfire-related costs could materially affect SCE's business, financial condition and results of operations. For example, if SCE is unable to, or believes that it may be unable to, recover damages related to catastrophic wildfires through insurance, the Wildfire Insurance Fund (which is only available for fires ignited after July 12, 2019) or electric rates, or access the bank and capital markets on reasonable terms, SCE may not have sufficient cash or equity to pay dividends or may be restricted from declaring such dividends because it does not meet CPUC or California law requirements related to the declaration of dividends. For information on the California law requirements on the declaration of dividends, see \"Liquidity and Capital Resources—SCE—SCE Dividends\" in the MD&A. Also see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" Edison International's and SCE's costs of accessing capital markets has increased due to the risks associated with wildfires in Southern California. Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase further as a result of wildfire risk, including if Edison International's and/or SCE's credit ratings are downgraded or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of wildfires." }, { "status": "MODIFIED", "current_title": "Definition and Limitations of Internal Control over Financial Reporting", "prior_title": "Basis for Opinions", "similarity_score": 0.888, "confidence": "high", "key_changes": [ "Reworded sentence: \"A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.\"", "Reworded sentence: \"The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers.\"", "Reworded sentence: \"As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of occurring and when the amount of the loss can be reasonably estimated.\"", "Reworded sentence: \"For the year ended December 31, 2023 management recorded charges for wildfire claims of $630 million and expected revenue from FERC customers of $37 million.\"", "Reworded sentence: \"The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers.\"" ], "current_body": "A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies 51 51 Table of Contentsand procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.​Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of occurring and when the amount of the loss can be reasonably estimated. As of December 31, 2023, the Company had paid $8.7 billion under executed settlements, had $78 million to be paid under executed settlements, including $62 million to be paid under the Safety and Enforcement Division agreement, and had $637 million of estimated losses for remaining alleged and potential claims reflected on its consolidated balance sheets related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, the Company had assets for expected recoveries through Federal Energy Regulatory Commission (FERC) electric rates of $37 million on its consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events. Each reporting period, management reviews the Company’s loss estimates for remaining alleged and potential claims related to wildfire events. The process for estimating losses associated with alleged and potential wildfire related claims requires management to exercise significant judgment based on a number of assumptions and subjective factors, including, but not limited to: estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, the status of and developments in the course of litigation, and prior experience litigating and settling wildfire litigation claims. As additional information becomes available, management's estimates and assumptions regarding the causes and financial impact of wildfire events may change. For the year ended December 31, 2023 management recorded charges for wildfire claims of $630 million and expected revenue from FERC customers of $37 million. The resulting pre-tax charge to earnings was $593 million ($428 million after-tax). The principal considerations for our determination that performing procedures relating to the wildfire-related claims from the 2017/2018 Wildfire/Mudslide Events is a critical audit matter are (i) the significant judgment by management when determining whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated as well as in estimating losses associated with alleged and potential claims related to wildfire events and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to estimates of known and expected claims by third parties based on 52 Table of Contents Table of Contents Table of Contents and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.​Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of occurring and when the amount of the loss can be reasonably estimated. As of December 31, 2023, the Company had paid $8.7 billion under executed settlements, had $78 million to be paid under executed settlements, including $62 million to be paid under the Safety and Enforcement Division agreement, and had $637 million of estimated losses for remaining alleged and potential claims reflected on its consolidated balance sheets related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, the Company had assets for expected recoveries through Federal Energy Regulatory Commission (FERC) electric rates of $37 million on its consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events. Each reporting period, management reviews the Company’s loss estimates for remaining alleged and potential claims related to wildfire events. The process for estimating losses associated with alleged and potential wildfire related claims requires management to exercise significant judgment based on a number of assumptions and subjective factors, including, but not limited to: estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, the status of and developments in the course of litigation, and prior experience litigating and settling wildfire litigation claims. As additional information becomes available, management's estimates and assumptions regarding the causes and financial impact of wildfire events may change. For the year ended December 31, 2023 management recorded charges for wildfire claims of $630 million and expected revenue from FERC customers of $37 million. The resulting pre-tax charge to earnings was $593 million ($428 million after-tax). The principal considerations for our determination that performing procedures relating to the wildfire-related claims from the 2017/2018 Wildfire/Mudslide Events is a critical audit matter are (i) the significant judgment by management when determining whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated as well as in estimating losses associated with alleged and potential claims related to wildfire events and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to estimates of known and expected claims by third parties based on and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​", "prior_body": "​ The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ​ We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. ​ Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. ​ 55 55 Table of ContentsDefinition and Limitations of Internal Control over Financial Reporting​A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.​Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.​Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Contingent Liability – 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for SCE customers in the Santa Barbara, Ventura, and Los Angeles Counties. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As of December 31, 2022, SCE had paid $7.6 billion under executed settlements, had $185 million to be paid under executed settlements, including $120 million to be paid under the SED executed Agreement, and had $934 million of estimated losses for remaining alleged and potential claims reflected on their consolidated balance sheets related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, SCE had assets for expected recoveries through FERC electric rates of $142 million on their consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events. Each reporting period, management reviews its loss estimates for remaining alleged and potential claims related to wildfire events. The process for estimating losses associated with alleged and potential wildfire related claims requires management to exercise significant judgment based on a number of assumptions and subjective factors, including, but not limited to: estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, the status of and developments in the course of litigation, and prior experience litigating and settling wildfire litigation claims. As additional information becomes available, management's estimates and assumptions regarding the causes and financial impact of wildfire events may change. For instance, as a result of additional information, in 2022 management accrued additional estimated losses of $1.3 billion for claims related to the 2017/2018 Wildfire/Mudslide Events, against which SCE has recorded expected recoveries through FERC electric rates of $76 million. The resulting net charge to earnings was $1.2 billion ($879 million after-tax).The principal considerations for our determination that performing procedures relating to the 2017/2018 Wildfire/Mudslide Events contingent liability is a critical audit matter are the significant judgment by management when determining the probability of a loss being incurred and the best estimate of expected potential loss for these 56 Table of Contents Table of Contents Table of Contents Definition and Limitations of Internal Control over Financial Reporting​A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.​Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.​Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Contingent Liability – 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for SCE customers in the Santa Barbara, Ventura, and Los Angeles Counties. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As of December 31, 2022, SCE had paid $7.6 billion under executed settlements, had $185 million to be paid under executed settlements, including $120 million to be paid under the SED executed Agreement, and had $934 million of estimated losses for remaining alleged and potential claims reflected on their consolidated balance sheets related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, SCE had assets for expected recoveries through FERC electric rates of $142 million on their consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events. Each reporting period, management reviews its loss estimates for remaining alleged and potential claims related to wildfire events. The process for estimating losses associated with alleged and potential wildfire related claims requires management to exercise significant judgment based on a number of assumptions and subjective factors, including, but not limited to: estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, the status of and developments in the course of litigation, and prior experience litigating and settling wildfire litigation claims. As additional information becomes available, management's estimates and assumptions regarding the causes and financial impact of wildfire events may change. For instance, as a result of additional information, in 2022 management accrued additional estimated losses of $1.3 billion for claims related to the 2017/2018 Wildfire/Mudslide Events, against which SCE has recorded expected recoveries through FERC electric rates of $76 million. The resulting net charge to earnings was $1.2 billion ($879 million after-tax).The principal considerations for our determination that performing procedures relating to the 2017/2018 Wildfire/Mudslide Events contingent liability is a critical audit matter are the significant judgment by management when determining the probability of a loss being incurred and the best estimate of expected potential loss for these" }, { "status": "MODIFIED", "current_title": "Edison International", "prior_title": "Edison International", "similarity_score": 0.888, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions, except share amounts) ​ 2023 2022\"" ], "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) ​ 2023 2022 2021", "prior_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) 2022 2021 2020" }, { "status": "MODIFIED", "current_title": "Edison International", "prior_title": "Edison International", "similarity_score": 0.886, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) ​ 2023 2022 2021\"" ], "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) ​ 2023 2022 2021", "prior_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) 2022 2021 2020" }, { "status": "MODIFIED", "current_title": "There are inherent risks associated with owning and decommissioning nuclear power generation facilities and obtaining cost reimbursement, including, among other things, insufficiency of nuclear decommissioning trust funds, costs exceeding current estimates, execution risks, potential harmful effects on the environment and human health and the hazards of storage, handling and disposal of radioactive materials. Existing insurance and ratemaking arrangements may not protect SCE fully against losses from a nuclear incident.", "prior_title": "There are inherent risks associated with owning and decommissioning nuclear power generation facilities and obtaining cost reimbursement, including, among other things, insufficiency of nuclear decommissioning trust funds, costs exceeding current estimates, execution risks, potential harmful effects on the environment and human health and the hazards of storage, handling and disposal of radioactive materials. Existing insurance and ratemaking arrangements may not protect SCE fully against losses from a nuclear incident.", "similarity_score": 0.881, "confidence": "high", "key_changes": [ "Reworded sentence: \"Based upon the financial performance of the nuclear decommissioning trust fund investments, as well as the resolution of a number of other uncertainties, assumptions and estimates, additional contributions to the nuclear decommissioning trust's funds may be required.\"", "Reworded sentence: \"Even though San Onofre is being decommissioned, the presence of spent nuclear fuel still poses a potential risk of a nuclear incident.\"", "Reworded sentence: \"In the case of San Onofre, the balance is covered by a U.S.\"", "Reworded sentence: \"If this public liability limit of $16.2 billion is insufficient, federal law contemplates that additional funds may be appropriated by Congress.\"", "Reworded sentence: \"Commitments and Contingencies—Contingencies—Nuclear Insurance.\" 46 46 Table of ContentsSCE's distribution of water and propane gas on Catalina Island involves inherent risks of damage to private property and the environment and injury to employees and the general public.SCE owns and operates the water distribution system that serves Catalina Island, California and a propane gas distribution system that serves the City of Avalon on Catalina Island, California.\"" ], "current_body": "SCE funds decommissioning costs with assets that are currently held in nuclear decommissioning trusts. Based upon the financial performance of the nuclear decommissioning trust fund investments, as well as the resolution of a number of other uncertainties, assumptions and estimates, additional contributions to the nuclear decommissioning trust's funds may be required. If additional contributions to the nuclear decommissioning trust funds become necessary, recovery of any such additional funds through electric rates is subject to the CPUC's review and approval. The costs of decommissioning San Onofre are subject to reasonableness reviews by the CPUC. These costs may not be recoverable through regulatory processes or otherwise unless SCE can establish that the costs were reasonably incurred. In addition, SCE faces inherent execution risks including such matters as the risks of human performance, workforce capabilities, public opposition, permitting delays, and governmental approvals. Decommissioning costs ultimately incurred could exceed the current estimates and cost increases resulting from contractual disputes, delays in performance by the contractor, elevated levels of inflation, or permitting delays, among other things, could cause SCE to materially overrun current decommissioning cost estimates and could materially impact the sufficiency of trust funds. See \"Liquidity and Capital Resources—SCE—Decommissioning of San Onofre\" in the MD&A. Even though San Onofre is being decommissioned, the presence of spent nuclear fuel still poses a potential risk of a nuclear incident. Federal law limits public liability claims from a nuclear incident to the amount of available financial protection, which is currently approximately $16.2 billion for Palo Verde and $560 million for San Onofre. SCE and other owners of San Onofre and Palo Verde have purchased the maximum private primary insurance available of $450 million per site. In the case of San Onofre, the balance is covered by a U.S. Government indemnity. In the case of Palo Verde, the balance is covered by a loss sharing program among nuclear reactor licensees. There is no assurance that the CPUC would allow SCE to recover the required contribution made pursuant to this loss sharing program in the case of one or more nuclear incidents with claims that exceeded $450 million at a nuclear reactor which is participating in the program. If this public liability limit of $16.2 billion is insufficient, federal law contemplates that additional funds may be appropriated by Congress. There can be no assurance of SCE's ability to recover uninsured costs in the event the additional federal appropriations are insufficient. For more information on nuclear insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Nuclear Insurance.\" 46 46 Table of ContentsSCE's distribution of water and propane gas on Catalina Island involves inherent risks of damage to private property and the environment and injury to employees and the general public.SCE owns and operates the water distribution system that serves Catalina Island, California and a propane gas distribution system that serves the City of Avalon on Catalina Island, California. Production, storage, treatment and distribution of water for human use and the transportation, storage, distribution and use of gas can be hazardous, and can cause damage to private property and the environment and injury to employees and the general public if equipment fails or does not perform as anticipated. For example, the risks of operating a water distribution system include the potential for burst pipes and water contamination and the risks of operating gas distribution system include the potential for gas leaks, fire or explosion. The risks related to SCE's operation of its water and gas distribution systems may be exacerbated due to aging infrastructure. SCE has, in the past, requested that the CPUC allow SCE to include certain water system costs in electric rates and may make similar requests for the water and gas systems in the future. If such requests are denied, significant costs may not be recoverable from customers. In addition, SCE may have to pay fines, penalties and remediation costs if it does not comply with laws and regulations in the operation of the water and gas distribution systems. An inability to recover costs associated with any such damages or injuries or any fines, penalties or remediation costs, from insurance or through electric rates, could materially affect SCE's business, financial condition and results of operations.Financing RisksAs a capital-intensive company, SCE relies on access to the capital markets. If SCE were unable to access the capital markets or the cost of financing were to substantially increase, its liquidity and operations could be materially affected.SCE regularly accesses the capital markets to finance its activities and is expected to do so by its regulators as part of its obligation to serve as a regulated utility. SCE needs substantial capital for its ongoing infrastructure investment program and for financing wildfire related losses. SCE's ability to obtain financing, as well as its ability to refinance debt and make scheduled payments of principal and interest, are dependent on numerous factors, including SCE's levels of indebtedness, maintenance of acceptable credit ratings, financial performance, liquidity and cash flow, increases in interest rates and credit spreads due to inflationary pressures, and other market conditions. In addition, the actions of other California investor-owned utilities and legal, regulatory and legislative decisions impacting investor-owned utilities can affect market conditions and therefore, SCE's ability to obtain financing. SCE's inability to obtain additional capital from time to time could have a material effect on SCE's liquidity and operations.Competitive and Market RisksIf SCE is unable to operate efficiently and to effectively and timely respond to the changes that the electricity industry is undergoing, as a result of increased load requirements, competition, technological advances, and changes to the regulatory environment, SCE's business model, financial condition and results of operations could be materially impacted.SCE’s ability to efficiently operate and implement process changes has a direct impact on its ability to execute its strategy, its customer rates and affordability of electricity. Even if SCE’s costs are recoverable, the necessary costs of operations and investments supporting safety, reliability, resilience and being ready to meet California’s clean energy goals will negatively impact the affordability of SCE’s customer rates, may cause reputational harm and cause increased load departures.Customers and third parties are increasingly deploying DERs, such as solar generation, energy storage, energy efficiency and demand response technologies. California's environmental policy objectives are accelerating the pace and scope of industry change. This change will require modernization of the electric distribution grid to, among other things, 47 Table of Contents Table of Contents Table of Contents SCE's distribution of water and propane gas on Catalina Island involves inherent risks of damage to private property and the environment and injury to employees and the general public.SCE owns and operates the water distribution system that serves Catalina Island, California and a propane gas distribution system that serves the City of Avalon on Catalina Island, California. Production, storage, treatment and distribution of water for human use and the transportation, storage, distribution and use of gas can be hazardous, and can cause damage to private property and the environment and injury to employees and the general public if equipment fails or does not perform as anticipated. For example, the risks of operating a water distribution system include the potential for burst pipes and water contamination and the risks of operating gas distribution system include the potential for gas leaks, fire or explosion. The risks related to SCE's operation of its water and gas distribution systems may be exacerbated due to aging infrastructure. SCE has, in the past, requested that the CPUC allow SCE to include certain water system costs in electric rates and may make similar requests for the water and gas systems in the future. If such requests are denied, significant costs may not be recoverable from customers. In addition, SCE may have to pay fines, penalties and remediation costs if it does not comply with laws and regulations in the operation of the water and gas distribution systems. An inability to recover costs associated with any such damages or injuries or any fines, penalties or remediation costs, from insurance or through electric rates, could materially affect SCE's business, financial condition and results of operations.Financing RisksAs a capital-intensive company, SCE relies on access to the capital markets. If SCE were unable to access the capital markets or the cost of financing were to substantially increase, its liquidity and operations could be materially affected.SCE regularly accesses the capital markets to finance its activities and is expected to do so by its regulators as part of its obligation to serve as a regulated utility. SCE needs substantial capital for its ongoing infrastructure investment program and for financing wildfire related losses. SCE's ability to obtain financing, as well as its ability to refinance debt and make scheduled payments of principal and interest, are dependent on numerous factors, including SCE's levels of indebtedness, maintenance of acceptable credit ratings, financial performance, liquidity and cash flow, increases in interest rates and credit spreads due to inflationary pressures, and other market conditions. In addition, the actions of other California investor-owned utilities and legal, regulatory and legislative decisions impacting investor-owned utilities can affect market conditions and therefore, SCE's ability to obtain financing. SCE's inability to obtain additional capital from time to time could have a material effect on SCE's liquidity and operations.Competitive and Market RisksIf SCE is unable to operate efficiently and to effectively and timely respond to the changes that the electricity industry is undergoing, as a result of increased load requirements, competition, technological advances, and changes to the regulatory environment, SCE's business model, financial condition and results of operations could be materially impacted.SCE’s ability to efficiently operate and implement process changes has a direct impact on its ability to execute its strategy, its customer rates and affordability of electricity. Even if SCE’s costs are recoverable, the necessary costs of operations and investments supporting safety, reliability, resilience and being ready to meet California’s clean energy goals will negatively impact the affordability of SCE’s customer rates, may cause reputational harm and cause increased load departures.Customers and third parties are increasingly deploying DERs, such as solar generation, energy storage, energy efficiency and demand response technologies. California's environmental policy objectives are accelerating the pace and scope of industry change. This change will require modernization of the electric distribution grid to, among other things,", "prior_body": "SCE funds decommissioning costs with assets that are currently held in nuclear decommissioning trusts. Based upon the financial performance of the nuclear decommissioning trust fund investments, as well as the resolution of a number of other uncertainties, assumptions and estimates, additional contributions to the nuclear decommissioning trust’s funds may be required. If additional contributions to the nuclear decommissioning trust funds become necessary, recovery of any such additional funds through electric rates is subject to the CPUC's review and approval. The costs of decommissioning San Onofre are subject to reasonableness reviews by the CPUC. These costs may not be recoverable through regulatory processes or otherwise unless SCE can establish that the costs were reasonably incurred. In addition, SCE faces inherent execution risks including such matters as the risks of human performance, workforce capabilities, public opposition, permitting delays, and governmental approvals. Decommissioning costs ultimately incurred could exceed the current estimates and cost increases resulting from contractual disputes, delays in performance by the contractor, elevated levels of inflation, or permitting delays, among other things, could cause SCE to materially overrun current decommissioning cost estimates and could materially impact the sufficiency of trust funds. See \"Liquidity and Capital Resources—SCE—Decommissioning of San Onofre\" in the MD&A. 50 50 Table of ContentsEven though San Onofre is being decommissioned, the presence of spent nuclear fuel still poses a potential risk of a nuclear incident. Federal law limits public liability claims from a nuclear incident to the amount of available financial protection, which is currently approximately $13.7 billion for Palo Verde and $560 million for San Onofre. SCE and other owners of San Onofre and Palo Verde have purchased the maximum private primary insurance available of $450 million per site. In the case of San Onofre, the balance is covered by a US Government indemnity. In the case of Palo Verde, the balance is covered by a loss sharing program among nuclear reactor licensees. There is no assurance that the CPUC would allow SCE to recover the required contribution made pursuant to this loss sharing program in the case of one or more nuclear incidents with claims that exceeded $450 million at a nuclear reactor which is participating in the program. If this public liability limit of $13.7 billion is insufficient, federal law contemplates that additional funds may be appropriated by Congress. There can be no assurance of SCE's ability to recover uninsured costs in the event the additional federal appropriations are insufficient. For more information on nuclear insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Nuclear Insurance.\"SCE's distribution of water and propane gas on Catalina Island involves inherent risks of damage to private property and the environment and injury to employees and the general public.SCE owns and operates the water distribution system that serves Catalina Island, California and a propane gas distribution system that serves the City of Avalon on Catalina Island, California. Production, storage, treatment and distribution of water for human use and the transportation, storage, distribution and use of gas can be hazardous, and can cause damage to private property and the environment and injury to employees and the general public if equipment fails or does not perform as anticipated. For example, the risks of operating a water distribution system include the potential for burst pipes and water contamination and the risks of operating gas distribution system include the potential for gas leaks, fire or explosion. The risks related to SCE's operation of its water and gas distribution systems may be exacerbated due to aging infrastructure. SCE has requested that the CPUC allow SCE to include certain water system costs in electric rates and may make similar requests for the water and gas systems in the future. If such requests are denied, significant costs may not be recoverable from customers. In addition, SCE may have to pay fines, penalties and remediation costs if it does not comply with laws and regulations in the operation of the water and gas distribution systems. An inability to recover costs associated with any such damages or injuries or any fines, penalties or remediation costs, from insurance or through electric rates, could materially affect SCE's business, financial condition and results of operations.Financing RisksAs a capital-intensive company, SCE relies on access to the capital markets. If SCE were unable to access the capital markets or the cost of financing were to substantially increase, its liquidity and operations could be materially affected.SCE regularly accesses the capital markets to finance its activities and is expected to do so by its regulators as part of its obligation to serve as a regulated utility. SCE's needs for capital for its ongoing infrastructure investment program are substantial. SCE's ability to obtain financing, as well as its ability to refinance debt and make scheduled payments of principal and interest, are dependent on numerous factors, including SCE's levels of indebtedness, maintenance of acceptable credit ratings, financial performance, liquidity and cash flow, and other market conditions. In addition, the actions of other California investor-owned utilities and legal, regulatory and legislative decisions impacting investor-owned utilities can affect market conditions and therefore, SCE's ability to obtain financing. SCE's inability to obtain additional capital from time to time could have a material effect on SCE's liquidity and operations.51 Table of Contents Table of Contents Table of Contents Even though San Onofre is being decommissioned, the presence of spent nuclear fuel still poses a potential risk of a nuclear incident. Federal law limits public liability claims from a nuclear incident to the amount of available financial protection, which is currently approximately $13.7 billion for Palo Verde and $560 million for San Onofre. SCE and other owners of San Onofre and Palo Verde have purchased the maximum private primary insurance available of $450 million per site. In the case of San Onofre, the balance is covered by a US Government indemnity. In the case of Palo Verde, the balance is covered by a loss sharing program among nuclear reactor licensees. There is no assurance that the CPUC would allow SCE to recover the required contribution made pursuant to this loss sharing program in the case of one or more nuclear incidents with claims that exceeded $450 million at a nuclear reactor which is participating in the program. If this public liability limit of $13.7 billion is insufficient, federal law contemplates that additional funds may be appropriated by Congress. There can be no assurance of SCE's ability to recover uninsured costs in the event the additional federal appropriations are insufficient. For more information on nuclear insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Nuclear Insurance.\"SCE's distribution of water and propane gas on Catalina Island involves inherent risks of damage to private property and the environment and injury to employees and the general public.SCE owns and operates the water distribution system that serves Catalina Island, California and a propane gas distribution system that serves the City of Avalon on Catalina Island, California. Production, storage, treatment and distribution of water for human use and the transportation, storage, distribution and use of gas can be hazardous, and can cause damage to private property and the environment and injury to employees and the general public if equipment fails or does not perform as anticipated. For example, the risks of operating a water distribution system include the potential for burst pipes and water contamination and the risks of operating gas distribution system include the potential for gas leaks, fire or explosion. The risks related to SCE's operation of its water and gas distribution systems may be exacerbated due to aging infrastructure. SCE has requested that the CPUC allow SCE to include certain water system costs in electric rates and may make similar requests for the water and gas systems in the future. If such requests are denied, significant costs may not be recoverable from customers. In addition, SCE may have to pay fines, penalties and remediation costs if it does not comply with laws and regulations in the operation of the water and gas distribution systems. An inability to recover costs associated with any such damages or injuries or any fines, penalties or remediation costs, from insurance or through electric rates, could materially affect SCE's business, financial condition and results of operations.Financing RisksAs a capital-intensive company, SCE relies on access to the capital markets. If SCE were unable to access the capital markets or the cost of financing were to substantially increase, its liquidity and operations could be materially affected.SCE regularly accesses the capital markets to finance its activities and is expected to do so by its regulators as part of its obligation to serve as a regulated utility. SCE's needs for capital for its ongoing infrastructure investment program are substantial. SCE's ability to obtain financing, as well as its ability to refinance debt and make scheduled payments of principal and interest, are dependent on numerous factors, including SCE's levels of indebtedness, maintenance of acceptable credit ratings, financial performance, liquidity and cash flow, and other market conditions. In addition, the actions of other California investor-owned utilities and legal, regulatory and legislative decisions impacting investor-owned utilities can affect market conditions and therefore, SCE's ability to obtain financing. SCE's inability to obtain additional capital from time to time could have a material effect on SCE's liquidity and operations. Even though San Onofre is being decommissioned, the presence of spent nuclear fuel still poses a potential risk of a nuclear incident. Federal law limits public liability claims from a nuclear incident to the amount of available financial protection, which is currently approximately $13.7 billion for Palo Verde and $560 million for San Onofre. SCE and other owners of San Onofre and Palo Verde have purchased the maximum private primary insurance available of $450 million per site. In the case of San Onofre, the balance is covered by a US Government indemnity. In the case of Palo Verde, the balance is covered by a loss sharing program among nuclear reactor licensees. There is no assurance that the CPUC would allow SCE to recover the required contribution made pursuant to this loss sharing program in the case of one or more nuclear incidents with claims that exceeded $450 million at a nuclear reactor which is participating in the program. If this public liability limit of $13.7 billion is insufficient, federal law contemplates that additional funds may be appropriated by Congress. There can be no assurance of SCE's ability to recover uninsured costs in the event the additional federal appropriations are insufficient. For more information on nuclear insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Nuclear Insurance.\"" }, { "status": "MODIFIED", "current_title": "Edison International", "prior_title": "Edison International", "similarity_score": 0.879, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) ​ 2023 2022 2021\"" ], "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) ​ 2023 2022 2021", "prior_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) 2022 2021 2020" }, { "status": "MODIFIED", "current_title": "Earnings Per Share", "prior_title": "Earnings Per Share", "similarity_score": 0.877, "confidence": "high", "key_changes": [ "Reworded sentence: \"EPS attributable to Edison International common shareholders was computed as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) ​ 2023 2022 2021 Basic earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders ​ $ 1,197 ​ $ 612 ​ $ 759 Net income available to common shareholders ​ $ 1,197 ​ $ 612 ​ $ 759 Weighted average common shares outstanding ​ ​ 383 ​ ​ 381 ​ ​ 380 Basic earnings per share ​ $ 3.12 ​ $ 1.61 ​ $ 2.00 Diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders ​ $ 1,197 ​ $ 612 ​ $ 759 Net income available to common shareholders ​ $ 1,197 ​ $ 612 ​ $ 759 Income impact of assumed conversions ​ ​ 1 ​ ​ 1 ​ ​ 1 Net income available to common shareholders and assumed conversions ​ $ 1,198 ​ $ 613 ​ $ 760 Weighted average common shares outstanding ​ ​ 383 ​ ​ 381 ​ ​ 380 Incremental shares from assumed conversions ​ ​ 2 ​ ​ 2 ​ ​ — Adjusted weighted average shares – diluted ​ ​ 385 ​ ​ 383 ​ ​ 380 Diluted earnings per share ​ $ 3.11 ​ $ 1.60 ​ $ 2.00 ​ In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation.\"" ], "current_body": "Edison International computes earnings per common share (\"EPS\") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards, payable in common shares, which earn dividend equivalents on an equal basis with common shares once the awards are vested. See Note 9 and Note 14 for further information. EPS attributable to Edison International common shareholders was computed as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) ​ 2023 2022 2021 Basic earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders ​ $ 1,197 ​ $ 612 ​ $ 759 Net income available to common shareholders ​ $ 1,197 ​ $ 612 ​ $ 759 Weighted average common shares outstanding ​ ​ 383 ​ ​ 381 ​ ​ 380 Basic earnings per share ​ $ 3.12 ​ $ 1.61 ​ $ 2.00 Diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders ​ $ 1,197 ​ $ 612 ​ $ 759 Net income available to common shareholders ​ $ 1,197 ​ $ 612 ​ $ 759 Income impact of assumed conversions ​ ​ 1 ​ ​ 1 ​ ​ 1 Net income available to common shareholders and assumed conversions ​ $ 1,198 ​ $ 613 ​ $ 760 Weighted average common shares outstanding ​ ​ 383 ​ ​ 381 ​ ​ 380 Incremental shares from assumed conversions ​ ​ 2 ​ ​ 2 ​ ​ — Adjusted weighted average shares – diluted ​ ​ 385 ​ ​ 383 ​ ​ 380 Diluted earnings per share ​ $ 3.11 ​ $ 1.60 ​ $ 2.00 ​ In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase 3,771,766, 5,839,549 and 10,239,501, of common stock for the years ended December 31, 2023, 2022 and 2021, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been antidilutive.", "prior_body": "Edison International computes earnings per common share (\"EPS\") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards, payable in common shares, which earn dividend equivalents on an equal basis with common shares once the awards are vested. See Note 9 and Note 14 for further information. EPS attributable to Edison International common shareholders was computed as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) 2022 2021 2020 Basic earnings per share: ​ ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders ​ $ 612 ​ $ 759 ​ $ 739 Net income available to common shareholders ​ $ 612 ​ $ 759 ​ $ 739 Weighted average common shares outstanding ​ ​ 381 ​ ​ 380 ​ ​ 373 Basic earnings per share ​ $ 1.61 ​ $ 2.00 ​ $ 1.98 Diluted earnings per share: ​ ​ ​ ​ ​ ​ ​ Net income attributable to common shareholders ​ $ 612 ​ $ 759 ​ $ 739 Net income available to common shareholders ​ $ 612 ​ $ 759 ​ $ 739 Income impact of assumed conversions ​ ​ 1 ​ ​ 1 ​ ​ — Net income available to common shareholders and assumed conversions ​ $ 613 ​ $ 760 ​ $ 739 Weighted average common shares outstanding ​ ​ 381 ​ ​ 380 ​ ​ 373 Incremental shares from assumed conversions ​ ​ 2 ​ ​ — ​ ​ 1 Adjusted weighted average shares – diluted ​ ​ 383 ​ ​ 380 ​ ​ 374 Diluted earnings per share ​ $ 1.60 ​ $ 2.00 ​ $ 1.98 ​ In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase 5,839,549, 10,239,501, and 9,066,753 shares of common stock for the years ended December 31, 2022, 2021, and 2020, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been antidilutive." }, { "status": "MODIFIED", "current_title": "The common equity component of SCE's CPUC authorized capital structure is 52% on a weighted average basis over the January 1, 2023 to December 31, 2025 compliance period (\"Capital Structure Compliance Period\"). The CPUC authorized capital structure differs from the capital structure calculated based on GAAP due to certain exclusions", "prior_title": "Stock-Based Compensation", "similarity_score": 0.871, "confidence": "high", "key_changes": [ "Reworded sentence: \"79 79 Table of Contentsallowed by CPUC, including the impact of SCE's contributions to the Wildfire Insurance Fund under AB 1054.In August 2023, the CPUC issued a decision on SCE's application to the CPUC for an extension of the waiver of compliance with its equity ratio requirement that allows SCE to exclude from its equity ratio calculations (i) net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events and (ii) debt issued for the purpose of paying claims, and associated expenses, related to the 2017/2018 Wildfire/Mudslide Events up to an amount equal to the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events.\"", "Reworded sentence: \"SCE expects to be compliant with its CPUC authorized capital structure at the end of the Capital Structure Compliance Period.SCE's ability to declare and pay common dividends may be restricted under the terms of its outstanding series of preference stock.\"", "Reworded sentence: \"Prior to declaring dividends, SCE's Board of Directors evaluates available information, including when applicable, information pertaining to the 2017/2018 Wildfire/Mudslide Events, to ensure that the California law requirements for the declarations are met.\"", "Reworded sentence: \"SCE expects to be compliant with its CPUC authorized capital structure at the end of the Capital Structure Compliance Period.SCE's ability to declare and pay common dividends may be restricted under the terms of its outstanding series of preference stock.\"", "Reworded sentence: \"Prior to declaring dividends, SCE's Board of Directors evaluates available information, including when applicable, information pertaining to the 2017/2018 Wildfire/Mudslide Events, to ensure that the California law requirements for the declarations are met.\"" ], "current_body": "79 79 Table of Contentsallowed by CPUC, including the impact of SCE's contributions to the Wildfire Insurance Fund under AB 1054.In August 2023, the CPUC issued a decision on SCE's application to the CPUC for an extension of the waiver of compliance with its equity ratio requirement that allows SCE to exclude from its equity ratio calculations (i) net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events and (ii) debt issued for the purpose of paying claims, and associated expenses, related to the 2017/2018 Wildfire/Mudslide Events up to an amount equal to the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events. Under the decision, effective as of the beginning of the new cost of capital cycle on January 1, 2023, the CPUC also authorized SCE to exclude from its equity ratio calculations debt that exceeds the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events due to the timing difference between the wildfire claims payment and the realization of the cash tax benefits. The temporary exclusion will lapse on August 31, 2025 or when determinations regarding cost recovery for the 2017/2018 Wildfire/Mudslide Events are made, whichever comes earlier. If the CPUC has not made determinations regarding cost recovery by August 31, 2025, SCE is permitted to file another application for a waiver of compliance with its equity ratio requirement. While the exclusion is in place, SCE is required to notify the CPUC if an adverse financial event reduces SCE's spot equity ratio by more than one percent from the level most recently filed with the CPUC in the proceeding. The last spot equity ratio SCE filed with the CPUC in the proceeding did not exclude the then $1.8 billion net charge and was 45.2% as of December 31, 2018 (at the time the common equity component of SCE's CPUC authorized capital structure was required to remain at or above 48% on a weighted average basis over the applicable 37-month period). SCE's spot equity ratio on December 31, 2018 would have been 48.7% had the $1.8 billion net charge at December 31, 2018 been excluded, therefore SCE will notify the CPUC if its spot ratio drops below 47.7% in any quarter. For further information, see \"Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" SCE monitors its compliance with the CPUC's equity ratio requirement based on the weighted average of the common equity component of SCE's CPUC authorized capital structure over the Capital Structure Compliance Period using its actual capital structure from the beginning of the Capital Structure Compliance Period through the reporting date together with forecasted performance and expected financing activities for the remainder of the Capital Structure Compliance Period. SCE expects to be compliant with its CPUC authorized capital structure at the end of the Capital Structure Compliance Period.SCE's ability to declare and pay common dividends may be restricted under the terms of its outstanding series of preference stock. For further information see Note 14.As a California corporation, SCE's ability to pay dividends is also governed by the California General Corporation Law. California law requires that for a dividend to be declared: (a) retained earnings must equal or exceed the proposed dividend, or (b) immediately after the dividend is made, the value of the corporation's assets must exceed the value of its liabilities plus amounts required to be paid, if any, in order to liquidate stock senior to the shares receiving the dividend. Additionally, a California corporation may not declare a dividend if it is, or as a result of the dividend would be, likely to be unable to meet its liabilities as they mature. Prior to declaring dividends, SCE's Board of Directors evaluates available information, including when applicable, information pertaining to the 2017/2018 Wildfire/Mudslide Events, to ensure that the California law requirements for the declarations are met. On February 22, 2024, SCE declared a dividend to Edison International of $360 million.The timing and amount of future dividends are also dependent on a number of other factors including SCE's requirements to fund other obligations and capital expenditures, and its ability to access the capital markets and generate operating cash flows and earnings. If SCE incurs significant costs related to catastrophic wildfires and is unable to recover such costs through insurance, the Wildfire Insurance Fund (for fires after July 12, 2019), or from customers or is unable to access capital markets on reasonable terms, SCE may be limited in its ability to pay future dividends to Edison International and its preference shareholders.80 Table of Contents Table of Contents Table of Contents allowed by CPUC, including the impact of SCE's contributions to the Wildfire Insurance Fund under AB 1054.In August 2023, the CPUC issued a decision on SCE's application to the CPUC for an extension of the waiver of compliance with its equity ratio requirement that allows SCE to exclude from its equity ratio calculations (i) net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events and (ii) debt issued for the purpose of paying claims, and associated expenses, related to the 2017/2018 Wildfire/Mudslide Events up to an amount equal to the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events. Under the decision, effective as of the beginning of the new cost of capital cycle on January 1, 2023, the CPUC also authorized SCE to exclude from its equity ratio calculations debt that exceeds the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events due to the timing difference between the wildfire claims payment and the realization of the cash tax benefits. The temporary exclusion will lapse on August 31, 2025 or when determinations regarding cost recovery for the 2017/2018 Wildfire/Mudslide Events are made, whichever comes earlier. If the CPUC has not made determinations regarding cost recovery by August 31, 2025, SCE is permitted to file another application for a waiver of compliance with its equity ratio requirement. While the exclusion is in place, SCE is required to notify the CPUC if an adverse financial event reduces SCE's spot equity ratio by more than one percent from the level most recently filed with the CPUC in the proceeding. The last spot equity ratio SCE filed with the CPUC in the proceeding did not exclude the then $1.8 billion net charge and was 45.2% as of December 31, 2018 (at the time the common equity component of SCE's CPUC authorized capital structure was required to remain at or above 48% on a weighted average basis over the applicable 37-month period). SCE's spot equity ratio on December 31, 2018 would have been 48.7% had the $1.8 billion net charge at December 31, 2018 been excluded, therefore SCE will notify the CPUC if its spot ratio drops below 47.7% in any quarter. For further information, see \"Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" SCE monitors its compliance with the CPUC's equity ratio requirement based on the weighted average of the common equity component of SCE's CPUC authorized capital structure over the Capital Structure Compliance Period using its actual capital structure from the beginning of the Capital Structure Compliance Period through the reporting date together with forecasted performance and expected financing activities for the remainder of the Capital Structure Compliance Period. SCE expects to be compliant with its CPUC authorized capital structure at the end of the Capital Structure Compliance Period.SCE's ability to declare and pay common dividends may be restricted under the terms of its outstanding series of preference stock. For further information see Note 14.As a California corporation, SCE's ability to pay dividends is also governed by the California General Corporation Law. California law requires that for a dividend to be declared: (a) retained earnings must equal or exceed the proposed dividend, or (b) immediately after the dividend is made, the value of the corporation's assets must exceed the value of its liabilities plus amounts required to be paid, if any, in order to liquidate stock senior to the shares receiving the dividend. Additionally, a California corporation may not declare a dividend if it is, or as a result of the dividend would be, likely to be unable to meet its liabilities as they mature. Prior to declaring dividends, SCE's Board of Directors evaluates available information, including when applicable, information pertaining to the 2017/2018 Wildfire/Mudslide Events, to ensure that the California law requirements for the declarations are met. On February 22, 2024, SCE declared a dividend to Edison International of $360 million.The timing and amount of future dividends are also dependent on a number of other factors including SCE's requirements to fund other obligations and capital expenditures, and its ability to access the capital markets and generate operating cash flows and earnings. If SCE incurs significant costs related to catastrophic wildfires and is unable to recover such costs through insurance, the Wildfire Insurance Fund (for fires after July 12, 2019), or from customers or is unable to access capital markets on reasonable terms, SCE may be limited in its ability to pay future dividends to Edison International and its preference shareholders.", "prior_body": "Stock options, performance shares, deferred stock units and restricted stock units have been granted under Edison International's long-term incentive compensation programs. For equity awards that are settled in common stock, Edison International either issues new common stock, or uses a third party to purchase shares from the market and deliver such shares for the settlement of the awards. Stock options, performance shares, deferred stock units and restricted stock units are settled in common stock. For awards that are otherwise settled entirely in common stock, Edison International substitutes cash awards to the extent necessary to satisfy applicable tax withholding obligations or government levies. Stock-based compensation expense is recognized, net of estimated forfeitures, on a straight-line basis over the requisite service period based on estimated fair values. For equity awards paid in common stock, fair value is determined at the grant date. For equity awards that have market conditions defined in the grants, expense is recognized based on grant date fair value if the requisite service period is fulfilled. However, with respect to the portion of the performance shares payable in common stock that are subject to financial performance conditions defined in the grants, the number of performance shares expected to be earned is subject to revision and updated at each reporting period, with a related adjustment to compensation expense. For awards granted to retirement-eligible participants, stock compensation expense is recognized on a prorated basis over the initial year. For awards granted to participants who become eligible for retirement during the requisite service period, stock compensation expense is recognized over the period between the date of grant and the date the participant first becomes eligible for retirement. Edison International and SCE estimate the number of awards that are expected to vest rather than account for forfeitures when they occur. Share-based payments may create a permanent difference between the amount of compensation expense recognized for book and tax purposes. The tax impact of this permanent difference is recognized in earnings in the period it is created. See Note 9 for further information. Employee Stock Purchase Plan The Edison International Employee Stock Purchase Plan (\"ESPP\"), effective beginning July 2021, allows eligible employees to make purchases of Edison International’s common stock. The maximum aggregate numbers of shares that may be issued under the ESPP is 3,000,000 shares. Eligible employees may authorize payroll deductions of between 1% and 10% of their compensation, up to a maximum of $25,000, to purchase shares of common stock at 97% of the market price on the last day of each six months offering period. The ESPP is considered noncompensatory and stock issuances under the ESPP are recorded directly in equity. 83 83 Table of ContentsSCE DividendsCPUC holding company rules require that SCE's dividend policy be established by SCE's Board of Directors on the same basis as if SCE were a stand-alone utility company, and that the capital requirements of SCE, as deemed to be necessary to meet SCE's electricity service obligations, shall receive first priority from the Boards of Directors of both Edison International and SCE. In addition, the CPUC regulates SCE's capital structure which limits the dividends it may pay to its shareholders.The common equity component of SCE's CPUC authorized capital structure is 52% on a weighted average basis over the January 1, 2023 to December 31, 2025 compliance period (\"Capital Structure Compliance Period\"). This is unchanged from the January 1, 2020 to December 31, 2022 compliance period. The CPUC authorized capital structure differs from the capital structure calculated based on GAAP due to certain exclusions allowed by CPUC, including the impact of SCE's contributions to the Wildfire Insurance Fund under AB 1054. For further information, see \"Business—SCE—Overview of Ratemaking Process\" and \"Business—Southern California Wildfires.\"In May 2020, the CPUC issued a decision on SCE's application to the CPUC for waiver of compliance with its equity ratio requirement, that allows SCE to exclude from its equity ratio calculations (i) net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events and (ii) debt issued for the purpose of paying claims related to the 2017/2018 Wildfire/Mudslide Events up to an amount equal to the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events. With these exclusions, SCE was in compliance with its authorized capital structure for the compliance period from January 1, 2020 to December 31, 2022. The temporary exclusion lapsed on May 7, 2022. In April 2022, SCE filed another application requesting continued waiver of compliance with its equity ratio requirement. Under the CPUC's rules, SCE will not be deemed to be in violation of the equity ratio requirement while the waiver application is pending resolution. While the exclusion is in place, SCE is required to notify the CPUC if an adverse financial event reduces SCE's spot equity ratio by more than one percent from the level most recently filed with the CPUC in the proceeding. The last spot equity ratio SCE filed with the CPUC in the proceeding did not exclude the then $1.8 billion net charge and was 45.2% as of December 31, 2018 (at the time the common equity component of SCE's CPUC authorized capital structure was required to remain at or above 48% on a weighted average basis over the applicable 37-month period). SCE's spot equity ratio on December 31, 2018 would have been 48.7% had the $1.8 billion net charge at December 31, 2018 been excluded, therefore SCE will notify the CPUC if its spot ratio drops below 47.7% in any quarter. For further information, see \"Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" SCE monitors its compliance with the CPUC's equity ratio requirement based on the weighted average of the common equity component of SCE's CPUC authorized capital structure over the Capital Structure Compliance Period using its actual capital structure from the beginning of the Capital Structure Compliance Period through the reporting date together with forecasted performance and expected financing activities for the remainder of the Capital Structure Compliance Period. SCE expects to be compliant with its CPUC authorized capital structure at the end of its current compliance period, December 31, 2025.SCE's ability to declare and pay common dividends may be restricted under the terms of its outstanding series of preference stock. For further information see Note 14.As a California corporation, SCE's ability to pay dividends is also governed by the California General Corporation Law. California law requires that for a dividend to be declared: (a) retained earnings must equal or exceed the proposed dividend, or (b) immediately after the dividend is made, the value of the corporation's assets must exceed the value of its liabilities plus amounts required to be paid, if any, in order to liquidate stock senior to the shares receiving the dividend. Additionally, a California corporation may not declare a dividend if it is, or as a result of the dividend would be, likely to be unable to meet its liabilities as they mature. Prior to declaring dividends, SCE's Board of Directors evaluates available information, including when applicable, information pertaining to the 2017/2018 Wildfire/Mudslide Events, to ensure 84 Table of Contents Table of Contents Table of Contents SCE DividendsCPUC holding company rules require that SCE's dividend policy be established by SCE's Board of Directors on the same basis as if SCE were a stand-alone utility company, and that the capital requirements of SCE, as deemed to be necessary to meet SCE's electricity service obligations, shall receive first priority from the Boards of Directors of both Edison International and SCE. In addition, the CPUC regulates SCE's capital structure which limits the dividends it may pay to its shareholders.The common equity component of SCE's CPUC authorized capital structure is 52% on a weighted average basis over the January 1, 2023 to December 31, 2025 compliance period (\"Capital Structure Compliance Period\"). This is unchanged from the January 1, 2020 to December 31, 2022 compliance period. The CPUC authorized capital structure differs from the capital structure calculated based on GAAP due to certain exclusions allowed by CPUC, including the impact of SCE's contributions to the Wildfire Insurance Fund under AB 1054. For further information, see \"Business—SCE—Overview of Ratemaking Process\" and \"Business—Southern California Wildfires.\"In May 2020, the CPUC issued a decision on SCE's application to the CPUC for waiver of compliance with its equity ratio requirement, that allows SCE to exclude from its equity ratio calculations (i) net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events and (ii) debt issued for the purpose of paying claims related to the 2017/2018 Wildfire/Mudslide Events up to an amount equal to the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events. With these exclusions, SCE was in compliance with its authorized capital structure for the compliance period from January 1, 2020 to December 31, 2022. The temporary exclusion lapsed on May 7, 2022. In April 2022, SCE filed another application requesting continued waiver of compliance with its equity ratio requirement. Under the CPUC's rules, SCE will not be deemed to be in violation of the equity ratio requirement while the waiver application is pending resolution. While the exclusion is in place, SCE is required to notify the CPUC if an adverse financial event reduces SCE's spot equity ratio by more than one percent from the level most recently filed with the CPUC in the proceeding. The last spot equity ratio SCE filed with the CPUC in the proceeding did not exclude the then $1.8 billion net charge and was 45.2% as of December 31, 2018 (at the time the common equity component of SCE's CPUC authorized capital structure was required to remain at or above 48% on a weighted average basis over the applicable 37-month period). SCE's spot equity ratio on December 31, 2018 would have been 48.7% had the $1.8 billion net charge at December 31, 2018 been excluded, therefore SCE will notify the CPUC if its spot ratio drops below 47.7% in any quarter. For further information, see \"Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" SCE monitors its compliance with the CPUC's equity ratio requirement based on the weighted average of the common equity component of SCE's CPUC authorized capital structure over the Capital Structure Compliance Period using its actual capital structure from the beginning of the Capital Structure Compliance Period through the reporting date together with forecasted performance and expected financing activities for the remainder of the Capital Structure Compliance Period. SCE expects to be compliant with its CPUC authorized capital structure at the end of its current compliance period, December 31, 2025.SCE's ability to declare and pay common dividends may be restricted under the terms of its outstanding series of preference stock. For further information see Note 14.As a California corporation, SCE's ability to pay dividends is also governed by the California General Corporation Law. California law requires that for a dividend to be declared: (a) retained earnings must equal or exceed the proposed dividend, or (b) immediately after the dividend is made, the value of the corporation's assets must exceed the value of its liabilities plus amounts required to be paid, if any, in order to liquidate stock senior to the shares receiving the dividend. Additionally, a California corporation may not declare a dividend if it is, or as a result of the dividend would be, likely to be unable to meet its liabilities as they mature. Prior to declaring dividends, SCE's Board of Directors evaluates available information, including when applicable, information pertaining to the 2017/2018 Wildfire/Mudslide Events, to ensure" }, { "status": "MODIFIED", "current_title": "Total Edison International's shareholders' equity", "prior_title": "Total Edison International's shareholders' equity", "similarity_score": 0.871, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ 15,501 ​ 15,621 Noncontrolling interests – preference stock of SCE ​ 2,443 ​ 1,901\"" ], "current_body": "​ 15,501 ​ 15,621 Noncontrolling interests – preference stock of SCE ​ 2,443 ​ 1,901", "prior_body": "​ 15,621 ​ 15,888 Noncontrolling interests – preference stock of SCE ​ 1,901 ​ 1,901" }, { "status": "MODIFIED", "current_title": "Cash, cash equivalents and restricted cash at end of year", "prior_title": "Cash, cash equivalents and restricted cash at end of year", "similarity_score": 0.862, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ $ 398 ​ $ 766 ​ $ 280 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.68 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ $ 532 ​ $ 917 ​ $ 394 ​ The accompanying notes are an integral part of these consolidated financial statements.62 The accompanying notes are an integral part of these consolidated financial statements. 62 Table of Contents​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Consolidated Statements of Changes in Equity​​​​​​​Edison International​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Noncontrolling​​​​ Equity Attributable to Edison International Shareholders Interests​​​​​​​​​​​Accumulated ​​​​​​​​​​​​​​​​​​​Other ​​​​​​​​​​​​​Preferred​Common ​Comprehensive​Retained ​​​​Preference ​Total (in millions, except per share amounts)​Stock​Stock​Loss​Earnings​Subtotal​Stock​EquityBalance at December 31, 2020 $ —​$ 5,962​$ (69)​$ 8,155​$ 14,048​$ 1,901​$ 15,949Net income​​ —​ —​ —​ 819​ 819​ 106​ 925Other comprehensive income​​ —​ —​ 15​ —​ 15​ —​ 15Common stock issued​​ —​ 71​ —​ —​​ 71​ —​​ 71Preferred stock issued, net ​​ 1,977​​ —​​ —​​ —​​ 1,977​​ —​​ 1,977Common stock dividends declared ($2.6875 per share)​​ —​ —​ —​ (1,021)​ (1,021)​ —​ (1,021)Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B)​​ —​​ —​​ —​​ (60)​​ (60)​​ —​​ (60)Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (106)​ (106)Noncash stock-based compensation​​ —​ 38​ —​ 1​ 39​ —​ 39Balance at December 31, 2021​$ 1,977​$ 6,071​$ (54)​$ 7,894​$ 15,888​$ 1,901​$ 17,789Net income​​ —​ —​ —​ 717​ 717​ 107​ 824Other comprehensive income​​ —​ —​ 43​ —​ 43​ —​ 43Common stock issued​​ —​ 87​ —​ —​ 87​ —​ 87Common stock dividends declared ($2.8375 per share)​​ —​ —​ —​ (1,083)​ (1,083)​ —​ (1,083)Preferred stock dividend declared ($53.75 per share for Series A and $42.08333 per share for Series B)​​ —​​ —​​ —​​ (74)​​ (74)​​ —​​ (74)Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (107)​ (107)Noncash stock-based compensation​​ —​ 42​ —​ —​ 42​ —​ 42Other​​ 1​​ —​​ —​​ —​​ 1​​ —​​ 1Balance at December 31, 2022​$ 1,978​$ 6,200​$ (11)​$ 7,454​$ 15,621​$ 1,901​$ 17,522Net income​​ —​ —​ —​ 1,284​ 1,284​ 123​ 1,407Other comprehensive income​​ —​ —​ 2​ —​ 2​ —​ 2Common stock issued​​ —​ 92​ —​ —​ 92​ —​ 92Common stock dividends declared ($2.9925 per share)​​ —​ —​ —​ (1,147)​ (1,147)​ —​ (1,147)Preferred stock dividend declared ($53.75 per share for Series A and $50.00 per share for Series B)​​ —​​ —​​ —​​ (108)​​ (108)​​ —​​ (108)Dividends to noncontrolling interests ($96.823 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (123)​ (123)Noncash stock-based compensation​​ —​ 46​ —​ —​ 46​ —​ 46Preference stock issued, net of issuance cost​​ —​​ —​​ —​​ —​​ —​​ 542​​ 542Preferred stock repurchased​​ (305)​​ —​​ —​​ 16​​ (289)​​ —​​ (289)Balance at December 31, 2023​$ 1,673​$ 6,338​$ (9)​$ 7,499​$ 15,501​$ 2,443​$ 17,944​​​The accompanying notes are an integral part of these consolidated financial statements.63 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Consolidated Statements of Changes in Equity​​​​​​​Edison International​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Noncontrolling​​​​ Equity Attributable to Edison International Shareholders Interests​​​​​​​​​​​Accumulated ​​​​​​​​​​​​​​​​​​​Other ​​​​​​​​​​​​​Preferred​Common ​Comprehensive​Retained ​​​​Preference ​Total (in millions, except per share amounts)​Stock​Stock​Loss​Earnings​Subtotal​Stock​EquityBalance at December 31, 2020 $ —​$ 5,962​$ (69)​$ 8,155​$ 14,048​$ 1,901​$ 15,949Net income​​ —​ —​ —​ 819​ 819​ 106​ 925Other comprehensive income​​ —​ —​ 15​ —​ 15​ —​ 15Common stock issued​​ —​ 71​ —​ —​​ 71​ —​​ 71Preferred stock issued, net ​​ 1,977​​ —​​ —​​ —​​ 1,977​​ —​​ 1,977Common stock dividends declared ($2.6875 per share)​​ —​ —​ —​ (1,021)​ (1,021)​ —​ (1,021)Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B)​​ —​​ —​​ —​​ (60)​​ (60)​​ —​​ (60)Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (106)​ (106)Noncash stock-based compensation​​ —​ 38​ —​ 1​ 39​ —​ 39Balance at December 31, 2021​$ 1,977​$ 6,071​$ (54)​$ 7,894​$ 15,888​$ 1,901​$ 17,789Net income​​ —​ —​ —​ 717​ 717​ 107​ 824Other comprehensive income​​ —​ —​ 43​ —​ 43​ —​ 43Common stock issued​​ —​ 87​ —​ —​ 87​ —​ 87Common stock dividends declared ($2.8375 per share)​​ —​ —​ —​ (1,083)​ (1,083)​ —​ (1,083)Preferred stock dividend declared ($53.75 per share for Series A and $42.08333 per share for Series B)​​ —​​ —​​ —​​ (74)​​ (74)​​ —​​ (74)Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (107)​ (107)Noncash stock-based compensation​​ —​ 42​ —​ —​ 42​ —​ 42Other​​ 1​​ —​​ —​​ —​​ 1​​ —​​ 1Balance at December 31, 2022​$ 1,978​$ 6,200​$ (11)​$ 7,454​$ 15,621​$ 1,901​$ 17,522Net income​​ —​ —​ —​ 1,284​ 1,284​ 123​ 1,407Other comprehensive income​​ —​ —​ 2​ —​ 2​ —​ 2Common stock issued​​ —​ 92​ —​ —​ 92​ —​ 92Common stock dividends declared ($2.9925 per share)​​ —​ —​ —​ (1,147)​ (1,147)​ —​ (1,147)Preferred stock dividend declared ($53.75 per share for Series A and $50.00 per share for Series B)​​ —​​ —​​ —​​ (108)​​ (108)​​ —​​ (108)Dividends to noncontrolling interests ($96.823 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (123)​ (123)Noncash stock-based compensation​​ —​ 46​ —​ —​ 46​ —​ 46Preference stock issued, net of issuance cost​​ —​​ —​​ —​​ —​​ —​​ 542​​ 542Preferred stock repurchased​​ (305)​​ —​​ —​​ 16​​ (289)​​ —​​ (289)Balance at December 31, 2023​$ 1,673​$ 6,338​$ (9)​$ 7,499​$ 15,501​$ 2,443​$ 17,944​​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​", "prior_body": "​ $ 917 ​ $ 394 ​ $ 89 ​ ​ The accompanying notes are an integral part of these consolidated financial statements.66 The accompanying notes are an integral part of these consolidated financial statements. 66 Table of Contents​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Consolidated Statements of Changes in Equity​​​​​​​Edison International​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Noncontrolling​​​​ Equity Attributable to Edison International Shareholders Interests​​​​​​​​​​​Accumulated ​​​​​​​Preferred ​​​​​​​​​​​Other ​​​​​​​and ​​​​​Preferred​Common ​Comprehensive​Retained ​​​​Preference ​Total (in millions, except per share amounts)​Stock​Stock​Loss​Earnings​Subtotal​Stock​EquityBalance at December 31, 2019 $ —​$ 4,990​$ (69)​$ 8,382​$ 13,303​$ 2,193​$ 15,496Net income​​ —​ —​ —​ 739​ 739​ 132​ 871Common stock issued, net of issuance cost ​​ —​ 942​ —​ —​​ 942​ —​​ 942Common stock dividends declared ($2.5750 per share)​​ —​ —​ —​ (965)​ (965)​ —​ (965)Dividends to noncontrolling interests ($0.757 - $0.886 per share for preferred stock; $62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (117)​ (117)Noncash stock-based compensation​​ —​ 30​ —​ (1)​ 29​ 1​ 30Redemption of preferred and preference stock​​ —​​ —​​ —​​ —​​ —​​ (308)​​ (308)Balance at December 31, 2020​$ —​$ 5,962​$ (69)​$ 8,155​$ 14,048​$ 1,901​$ 15,949Net income​​ —​ —​ —​ 819​ 819​ 106​ 925Other comprehensive income​​ —​ —​ 15​ —​ 15​ —​ 15Common stock issued, net of issuance cost ​​ —​ 71​ —​ —​ 71​ —​ 71Preferred stock issued, net of issuance cost​​ 1,977​​ —​​ —​​ —​​ 1,977​​ —​​ 1,977Common stock dividends declared ($2.6875 per share)​​ —​ —​ —​ (1,021)​ (1,021)​ —​ (1,021)Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B)​​ —​​ —​​ —​​ (60)​​ (60)​​ —​​ (60)Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (106)​ (106)Noncash stock-based compensation​​ —​ 38​ —​ 1​ 39​ —​ 39Balance at December 31, 2021​$ 1,977​$ 6,071​$ (54)​$ 7,894​$ 15,888​$ 1,901​$ 17,789Net income​​ —​ —​ —​ 717​ 717​ 107​ 824Other comprehensive income​​ —​ —​ 43​ —​ 43​ —​ 43Common stock issued, net of issuance cost​​ —​ 87​ —​ —​ 87​ —​ 87Common stock dividends declared ($2.8375 per share)​​ —​ —​ —​ (1,083)​ (1,083)​ —​ (1,083)Preferred stock dividend declared ($53.750 per share for Series A and $42.08333 per share for Series B)​​ —​​ —​​ —​​ (74)​​ (74)​​ —​​ (74)Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (107)​ (107)Noncash stock-based compensation​​ —​ 42​ —​ —​ 42​ —​ 42Other​​ 1​​ —​​ —​​ —​​ 1​​ —​​ 1Balance at December 31, 2022​$ 1,978​$ 6,200​$ (11)​$ 7,454​$ 15,621​$ 1,901​$ 17,522​​​The accompanying notes are an integral part of these consolidated financial statements.67 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Consolidated Statements of Changes in Equity​​​​​​​Edison International​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Noncontrolling​​​​ Equity Attributable to Edison International Shareholders Interests​​​​​​​​​​​Accumulated ​​​​​​​Preferred ​​​​​​​​​​​Other ​​​​​​​and ​​​​​Preferred​Common ​Comprehensive​Retained ​​​​Preference ​Total (in millions, except per share amounts)​Stock​Stock​Loss​Earnings​Subtotal​Stock​EquityBalance at December 31, 2019 $ —​$ 4,990​$ (69)​$ 8,382​$ 13,303​$ 2,193​$ 15,496Net income​​ —​ —​ —​ 739​ 739​ 132​ 871Common stock issued, net of issuance cost ​​ —​ 942​ —​ —​​ 942​ —​​ 942Common stock dividends declared ($2.5750 per share)​​ —​ —​ —​ (965)​ (965)​ —​ (965)Dividends to noncontrolling interests ($0.757 - $0.886 per share for preferred stock; $62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (117)​ (117)Noncash stock-based compensation​​ —​ 30​ —​ (1)​ 29​ 1​ 30Redemption of preferred and preference stock​​ —​​ —​​ —​​ —​​ —​​ (308)​​ (308)Balance at December 31, 2020​$ —​$ 5,962​$ (69)​$ 8,155​$ 14,048​$ 1,901​$ 15,949Net income​​ —​ —​ —​ 819​ 819​ 106​ 925Other comprehensive income​​ —​ —​ 15​ —​ 15​ —​ 15Common stock issued, net of issuance cost ​​ —​ 71​ —​ —​ 71​ —​ 71Preferred stock issued, net of issuance cost​​ 1,977​​ —​​ —​​ —​​ 1,977​​ —​​ 1,977Common stock dividends declared ($2.6875 per share)​​ —​ —​ —​ (1,021)​ (1,021)​ —​ (1,021)Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B)​​ —​​ —​​ —​​ (60)​​ (60)​​ —​​ (60)Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (106)​ (106)Noncash stock-based compensation​​ —​ 38​ —​ 1​ 39​ —​ 39Balance at December 31, 2021​$ 1,977​$ 6,071​$ (54)​$ 7,894​$ 15,888​$ 1,901​$ 17,789Net income​​ —​ —​ —​ 717​ 717​ 107​ 824Other comprehensive income​​ —​ —​ 43​ —​ 43​ —​ 43Common stock issued, net of issuance cost​​ —​ 87​ —​ —​ 87​ —​ 87Common stock dividends declared ($2.8375 per share)​​ —​ —​ —​ (1,083)​ (1,083)​ —​ (1,083)Preferred stock dividend declared ($53.750 per share for Series A and $42.08333 per share for Series B)​​ —​​ —​​ —​​ (74)​​ (74)​​ —​​ (74)Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (107)​ (107)Noncash stock-based compensation​​ —​ 42​ —​ —​ 42​ —​ 42Other​​ 1​​ —​​ —​​ —​​ 1​​ —​​ 1Balance at December 31, 2022​$ 1,978​$ 6,200​$ (11)​$ 7,454​$ 15,621​$ 1,901​$ 17,522​​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "MODIFIED", "current_title": "The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to SCE's workforce and the general public.", "prior_title": "Climate change exacerbated weather-related incidents and other natural disasters could materially affect SCE's financial condition and results of operations.", "similarity_score": 0.862, "confidence": "high", "key_changes": [ "Reworded sentence: \"Electricity poses hazards for SCE's workforce and the general public should they come in contact with electrical current or equipment, including through energized downed power lines or if equipment malfunctions.\"", "Added sentence: \"Litigation and other legal processes are subject to inherent uncertainties, including, costs of litigation, unpredictable court or jury decisions, and the differing laws and sentiments regarding damage awards in regions where SCE operates.\"", "Reworded sentence: \"SCE is also constructing utility owned storage to mitigate possible state-wide capacity shortages in 2024 and later years, and any delays in construction may result in those facilities being unavailable to reduce the impact of any capacity shortages in summer 2024.\"", "Reworded sentence: \"SCE's inherent operating risks include such matters as the risks of human performance, availability of skilled workforce and workforce capabilities, contractor management, data and records accuracy, public opposition to infrastructure projects, delays, environmental remediation and mitigation costs, difficulty in estimating costs or in recovering costs that are above original estimates, system limitations and degradation, maintaining physical security of workforce and assets, maintaining cybersecurity of data and assets, and delays and interruptions in necessary supplies, including key components necessary for the timely construction of utility owned storage.\"", "Reworded sentence: \"SCE's financial condition may also be materially affected as a result of data or records inaccuracies, for example, inaccurate records could lead to missing or delayed compliance with SCE's policies and regulatory requirements, and could contribute to safety incidents.\"" ], "current_body": "Electricity poses hazards for SCE's workforce and the general public should they come in contact with electrical current or equipment, including through energized downed power lines or if equipment malfunctions. In addition, the risks 44 44 Table of Contentsassociated with the operation of transmission and distribution assets and power generation and storage facilities include public and workforce safety issues and the risk of utility assets causing or contributing to wildfires.Injuries and property damage caused by such events can subject SCE to liability that, despite the existence of insurance coverage, can be significant. In addition, SCE may be held responsible for the actions of its contractors and from time to time, SCE is named as a party in legal proceedings involving claims related to its contractors and their employees. No assurance can be given that future losses will not exceed the limits of SCE's or its contractors' insurance coverage. Litigation and other legal processes are subject to inherent uncertainties, including, costs of litigation, unpredictable court or jury decisions, and the differing laws and sentiments regarding damage awards in regions where SCE operates. The CPUC has increased its focus on public safety with an emphasis on heightened compliance with construction and operating standards and the potential for penalties being imposed on utilities. Additionally, the CPUC has delegated to its staff the authority to issue citations to electric utilities, which can impose fines of up to $100,000 per violation per day (capped at a maximum of $8 million), pursuant to the CPUC's jurisdiction for violations of safety rules found in statutes, regulations, and the CPUC's General Orders. The CPUC also can issue fines greater than $8 million outside of the citation program. Such penalties and liabilities could be significant and materially affect SCE's liquidity and results of operations. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage the risks inherent in constructing, operating, and maintaining its facilities and workforce.SCE's infrastructure is aging and could pose a risk to system reliability. SCE is also constructing utility owned storage to mitigate possible state-wide capacity shortages in 2024 and later years, and any delays in construction may result in those facilities being unavailable to reduce the impact of any capacity shortages in summer 2024. In addition, as described above, wildfires in SCE's service territory can cause significant public safety issues, property damage and operational issues.In order to mitigate these risks and execute on its strategy, SCE is engaged in a significant and ongoing infrastructure investment program. This investment program, which includes transmission projects, has inherent operational risks and elevates the need for effective execution in SCE's activities. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage these risks as well as the risks inherent in constructing, operating, and maintaining its facilities, the operation of which can be hazardous and important for system reliability. SCE's inherent operating risks include such matters as the risks of human performance, availability of skilled workforce and workforce capabilities, contractor management, data and records accuracy, public opposition to infrastructure projects, delays, environmental remediation and mitigation costs, difficulty in estimating costs or in recovering costs that are above original estimates, system limitations and degradation, maintaining physical security of workforce and assets, maintaining cybersecurity of data and assets, and delays and interruptions in necessary supplies, including key components necessary for the timely construction of utility owned storage. For example, SCE's financial condition may be materially affected as a result of safety incidents, delays, permitting violations and violations of regulatory requirements, among other things, caused by SCE's failure to appropriately manage its contractor workforce or from contractual violations by SCE's contractors and the inability for SCE to recover through contractual indemnities or insurance held by the contractor. SCE's financial condition may also be materially affected as a result of data or records inaccuracies, for example, inaccurate records could lead to missing or delayed compliance with SCE's policies and regulatory requirements, and could contribute to safety incidents. SCE's financial condition and results of operations could also be materially affected if SCE is unable to attract, train and retain a qualified workforce, including due to the constrained labor market in California and nationally and SCE's relations with its unionized workforce. For example, the increased electrification efforts in California and nationally have led to greater competition for certain skilled workers. 45 Table of Contents Table of Contents Table of Contents associated with the operation of transmission and distribution assets and power generation and storage facilities include public and workforce safety issues and the risk of utility assets causing or contributing to wildfires.Injuries and property damage caused by such events can subject SCE to liability that, despite the existence of insurance coverage, can be significant. In addition, SCE may be held responsible for the actions of its contractors and from time to time, SCE is named as a party in legal proceedings involving claims related to its contractors and their employees. No assurance can be given that future losses will not exceed the limits of SCE's or its contractors' insurance coverage. Litigation and other legal processes are subject to inherent uncertainties, including, costs of litigation, unpredictable court or jury decisions, and the differing laws and sentiments regarding damage awards in regions where SCE operates. The CPUC has increased its focus on public safety with an emphasis on heightened compliance with construction and operating standards and the potential for penalties being imposed on utilities. Additionally, the CPUC has delegated to its staff the authority to issue citations to electric utilities, which can impose fines of up to $100,000 per violation per day (capped at a maximum of $8 million), pursuant to the CPUC's jurisdiction for violations of safety rules found in statutes, regulations, and the CPUC's General Orders. The CPUC also can issue fines greater than $8 million outside of the citation program. Such penalties and liabilities could be significant and materially affect SCE's liquidity and results of operations. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage the risks inherent in constructing, operating, and maintaining its facilities and workforce.SCE's infrastructure is aging and could pose a risk to system reliability. SCE is also constructing utility owned storage to mitigate possible state-wide capacity shortages in 2024 and later years, and any delays in construction may result in those facilities being unavailable to reduce the impact of any capacity shortages in summer 2024. In addition, as described above, wildfires in SCE's service territory can cause significant public safety issues, property damage and operational issues.In order to mitigate these risks and execute on its strategy, SCE is engaged in a significant and ongoing infrastructure investment program. This investment program, which includes transmission projects, has inherent operational risks and elevates the need for effective execution in SCE's activities. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage these risks as well as the risks inherent in constructing, operating, and maintaining its facilities, the operation of which can be hazardous and important for system reliability. SCE's inherent operating risks include such matters as the risks of human performance, availability of skilled workforce and workforce capabilities, contractor management, data and records accuracy, public opposition to infrastructure projects, delays, environmental remediation and mitigation costs, difficulty in estimating costs or in recovering costs that are above original estimates, system limitations and degradation, maintaining physical security of workforce and assets, maintaining cybersecurity of data and assets, and delays and interruptions in necessary supplies, including key components necessary for the timely construction of utility owned storage. For example, SCE's financial condition may be materially affected as a result of safety incidents, delays, permitting violations and violations of regulatory requirements, among other things, caused by SCE's failure to appropriately manage its contractor workforce or from contractual violations by SCE's contractors and the inability for SCE to recover through contractual indemnities or insurance held by the contractor. SCE's financial condition may also be materially affected as a result of data or records inaccuracies, for example, inaccurate records could lead to missing or delayed compliance with SCE's policies and regulatory requirements, and could contribute to safety incidents. SCE's financial condition and results of operations could also be materially affected if SCE is unable to attract, train and retain a qualified workforce, including due to the constrained labor market in California and nationally and SCE's relations with its unionized workforce. For example, the increased electrification efforts in California and nationally have led to greater competition for certain skilled workers. associated with the operation of transmission and distribution assets and power generation and storage facilities include public and workforce safety issues and the risk of utility assets causing or contributing to wildfires. Injuries and property damage caused by such events can subject SCE to liability that, despite the existence of insurance coverage, can be significant. In addition, SCE may be held responsible for the actions of its contractors and from time to time, SCE is named as a party in legal proceedings involving claims related to its contractors and their employees. No assurance can be given that future losses will not exceed the limits of SCE's or its contractors' insurance coverage. Litigation and other legal processes are subject to inherent uncertainties, including, costs of litigation, unpredictable court or jury decisions, and the differing laws and sentiments regarding damage awards in regions where SCE operates. The CPUC has increased its focus on public safety with an emphasis on heightened compliance with construction and operating standards and the potential for penalties being imposed on utilities. Additionally, the CPUC has delegated to its staff the authority to issue citations to electric utilities, which can impose fines of up to $100,000 per violation per day (capped at a maximum of $8 million), pursuant to the CPUC's jurisdiction for violations of safety rules found in statutes, regulations, and the CPUC's General Orders. The CPUC also can issue fines greater than $8 million outside of the citation program. Such penalties and liabilities could be significant and materially affect SCE's liquidity and results of operations.", "prior_body": "Weather-related incidents, including storms and events caused, or exacerbated, by climate change, such as wildfires, flooding and debris flows, and other natural disasters such as earthquakes can disrupt the generation and transmission of electricity, and can seriously damage the infrastructure necessary to deliver power to SCE's customers. The impacts of climate change continue to evolve and remain dynamic and unpredictable. Climate change has caused, and exacerbated, extreme weather events and wildfires in southern California, and wildfires could cause, among other things, public safety issues, property damage and operational issues. In addition, the risk of flooding and debris flows occurring as a result of rain may be heightened. For example, the 2017/2018 Wildfire/Mudslide Events resulted in, among other things, loss of life, property damage and loss of service. For more information on the impact of the 2017/2018 Wildfire/Mudslide Events on SCE and Edison International, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" Extreme heat events can lead to prolonged widespread outages due to, among other things, state-wide capacity supply shortages or equipment failure. Extreme weather events can also lead to use of PSPS. Weather-related events, such as debris flows, flooding and melting of a significantly higher than normal snowpack, and earthquakes can cause over-topping or failure at an SCE dam resulting in a rapid release of water that could cause, among other things, public safety issues, property damage and operational issues. Weather-related incidents and other natural disasters can lead to lost revenue and increased expense, including higher maintenance and repair costs, which SCE may not be able to recover from its customers. These incidents can also result in regulatory penalties and disallowances, particularly if SCE encounters difficulties in restoring power to its customers on a timely basis or if fire-related losses are found to be the result of utility practices and/or the failure of electric and other utility equipment. In addition, these occurrences could lead to significant claims for damages, including for loss of life and property damage. These occurrences could materially affect SCE's business, financial condition and results of 48 48 Table of Contentsoperations, and the inability to restore power to SCE's customers could also materially damage the business reputation of SCE and Edison International.For additional information related to climate related risks, see “Business—Environmental Considerations—Environmental Risks.”The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to SCE’s workforce and the general public.Electricity poses hazards for SCE’s workforce and the general public should they come in contact with electrical current or equipment, including through energized downed power lines or if equipment malfunctions. In addition, the risks associated with the operation of transmission and distribution assets and power generation and storage facilities include public and workforce safety issues and the risk of utility assets causing or contributing to wildfires.Injuries and property damage caused by such events can subject SCE to liability that, despite the existence of insurance coverage, can be significant. In addition, SCE may be held responsible for the actions of its contractors. No assurance can be given that future losses will not exceed the limits of SCE's or its contractors' insurance coverage. The CPUC has increased its focus on public safety with an emphasis on heightened compliance with construction and operating standards and the potential for penalties being imposed on utilities. Additionally, the CPUC has delegated to its staff the authority to issue citations to electric utilities, which can impose fines of up to $100,000 per violation per day (capped at a maximum of $8 million), pursuant to the CPUC's jurisdiction for violations of safety rules found in statutes, regulations, and the CPUC's General Orders. The CPUC also can issue fines greater than $8 million outside of the citation program. Such penalties and liabilities could be significant and materially affect SCE's liquidity and results of operations. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage the risks inherent in constructing, operating, and maintaining its facilities and workforce.SCE's infrastructure is aging and could pose a risk to system reliability. SCE is also constructing utility owned storage to mitigate possible state-wide capacity shortages in 2023 and later years, and any delays in construction may result in those facilities being unavailable to reduce the impact of any capacity shortages in summer 2023. In addition, as described above, wildfires in SCE's service territory can cause significant public safety issues, property damage and operational issues. In order to mitigate these risks, SCE is engaged in a significant and ongoing infrastructure investment program. This substantial investment program has inherent operational risks and elevates the need for superior execution in SCE's activities. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage these risks as well as the risks inherent in constructing, operating, and maintaining its facilities, the operation of which can be hazardous and important for system reliability. SCE's inherent operating risks include such matters as the risks of human performance, workforce capabilities, contractor management, data and records accuracy, public opposition to infrastructure projects, delays, environmental remediation and mitigation costs, difficulty in estimating costs or in recovering costs that are above original estimates, system limitations and degradation, maintaining physical security of workforce and assets, maintaining cybersecurity of data and assets, and delays and interruptions in necessary supplies, including key components necessary for the timely construction of utility owned storage. For example, SCE's financial condition may be materially affected as a result of safety incidents, delays, permitting violations and violations of regulatory requirements, among other things, caused by SCE's failure to appropriately manage its contractor workforce or from contractual violations by SCE's contractors and the inability for SCE to recover through contractual indemnities or insurance held by the contractor. SCE's financial condition may also be materially affected as a result of data or records inaccuracies, for example inaccurate records could lead to missing or delayed compliance with SCE's policies and regulatory requirements, and could contribute to safety incidents. SCE's financial condition and results of 49 Table of Contents Table of Contents Table of Contents operations, and the inability to restore power to SCE's customers could also materially damage the business reputation of SCE and Edison International.For additional information related to climate related risks, see “Business—Environmental Considerations—Environmental Risks.”The generation, transmission and distribution of electricity are dangerous and involve inherent risks of damage to private property and injury to SCE’s workforce and the general public.Electricity poses hazards for SCE’s workforce and the general public should they come in contact with electrical current or equipment, including through energized downed power lines or if equipment malfunctions. In addition, the risks associated with the operation of transmission and distribution assets and power generation and storage facilities include public and workforce safety issues and the risk of utility assets causing or contributing to wildfires.Injuries and property damage caused by such events can subject SCE to liability that, despite the existence of insurance coverage, can be significant. In addition, SCE may be held responsible for the actions of its contractors. No assurance can be given that future losses will not exceed the limits of SCE's or its contractors' insurance coverage. The CPUC has increased its focus on public safety with an emphasis on heightened compliance with construction and operating standards and the potential for penalties being imposed on utilities. Additionally, the CPUC has delegated to its staff the authority to issue citations to electric utilities, which can impose fines of up to $100,000 per violation per day (capped at a maximum of $8 million), pursuant to the CPUC's jurisdiction for violations of safety rules found in statutes, regulations, and the CPUC's General Orders. The CPUC also can issue fines greater than $8 million outside of the citation program. Such penalties and liabilities could be significant and materially affect SCE's liquidity and results of operations. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage the risks inherent in constructing, operating, and maintaining its facilities and workforce.SCE's infrastructure is aging and could pose a risk to system reliability. SCE is also constructing utility owned storage to mitigate possible state-wide capacity shortages in 2023 and later years, and any delays in construction may result in those facilities being unavailable to reduce the impact of any capacity shortages in summer 2023. In addition, as described above, wildfires in SCE's service territory can cause significant public safety issues, property damage and operational issues. In order to mitigate these risks, SCE is engaged in a significant and ongoing infrastructure investment program. This substantial investment program has inherent operational risks and elevates the need for superior execution in SCE's activities. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage these risks as well as the risks inherent in constructing, operating, and maintaining its facilities, the operation of which can be hazardous and important for system reliability. SCE's inherent operating risks include such matters as the risks of human performance, workforce capabilities, contractor management, data and records accuracy, public opposition to infrastructure projects, delays, environmental remediation and mitigation costs, difficulty in estimating costs or in recovering costs that are above original estimates, system limitations and degradation, maintaining physical security of workforce and assets, maintaining cybersecurity of data and assets, and delays and interruptions in necessary supplies, including key components necessary for the timely construction of utility owned storage. For example, SCE's financial condition may be materially affected as a result of safety incidents, delays, permitting violations and violations of regulatory requirements, among other things, caused by SCE's failure to appropriately manage its contractor workforce or from contractual violations by SCE's contractors and the inability for SCE to recover through contractual indemnities or insurance held by the contractor. SCE's financial condition may also be materially affected as a result of data or records inaccuracies, for example inaccurate records could lead to missing or delayed compliance with SCE's policies and regulatory requirements, and could contribute to safety incidents. SCE's financial condition and results of operations, and the inability to restore power to SCE's customers could also materially damage the business reputation of SCE and Edison International. For additional information related to climate related risks, see “Business—Environmental Considerations—Environmental Risks.”" }, { "status": "MODIFIED", "current_title": "Edison International Dividend", "prior_title": "Edison International Dividend", "similarity_score": 0.857, "confidence": "high", "key_changes": [ "Reworded sentence: \"In December 2023, Edison International declared a 5.8% increase to the annual dividend rate from $2.95 per share to $3.12 per share.\"" ], "current_body": "In December 2023, Edison International declared a 5.8% increase to the annual dividend rate from $2.95 per share to $3.12 per share. On February 22, 2024, Edison International declared a dividend of $0.78 per share to be paid on April 30, 2024. Edison International intends to maintain its target payout ratio of 45% – 55% of SCE's core earnings.", "prior_body": "In December 2022, Edison International declared a 5% increase to the annual dividend rate from $2.80 per share to $2.95 per share. On February 23, 2023, Edison International declared a dividend of $0.7375 per share to be paid on April 30, 2023. Edison International intends to maintain its target payout ratio of 45% – 55% of SCE's core earnings." }, { "status": "MODIFIED", "current_title": "Consolidated Statements of Comprehensive Income", "prior_title": "Consolidated Statements of Comprehensive Income", "similarity_score": 0.854, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) ​ 2023 2022 2021 Net income ​ $ 1,597 ​ $ 954 ​ $ 935 Other comprehensive (loss) income, net of tax: ​ ​ ​ Pension and postretirement benefits other than pensions ​ (4) ​ 24 ​ 9\"" ], "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) ​ 2023 2022 2021 Net income ​ $ 1,597 ​ $ 954 ​ $ 935 Other comprehensive (loss) income, net of tax: ​ ​ ​ Pension and postretirement benefits other than pensions ​ (4) ​ 24 ​ 9", "prior_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) 2022 2021 2020 Net income ​ $ 954 ​ $ 935 ​ $ 942 Other comprehensive income (loss), net of tax: ​ ​ ​ ​ Pension and postretirement benefits other than pensions ​ 24 ​ 9 ​ (2)" }, { "status": "MODIFIED", "current_title": "Cash, cash equivalents and restricted cash at end of year", "prior_title": "Cash, cash equivalents and restricted cash at end of year", "similarity_score": 0.852, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ $ 532 ​ $ 917 ​ $ 394 ​ The accompanying notes are an integral part of these consolidated financial statements.62 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ $ 532 ​ $ 917 ​ $ 394 ​ The accompanying notes are an integral part of these consolidated financial statements.62 The accompanying notes are an integral part of these consolidated financial statements. 62 Table of Contents​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Consolidated Statements of Changes in Equity​​​​​​​Edison International​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Noncontrolling​​​​ Equity Attributable to Edison International Shareholders Interests​​​​​​​​​​​Accumulated ​​​​​​​​​​​​​​​​​​​Other ​​​​​​​​​​​​​Preferred​Common ​Comprehensive​Retained ​​​​Preference ​Total (in millions, except per share amounts)​Stock​Stock​Loss​Earnings​Subtotal​Stock​EquityBalance at December 31, 2020 $ —​$ 5,962​$ (69)​$ 8,155​$ 14,048​$ 1,901​$ 15,949Net income​​ —​ —​ —​ 819​ 819​ 106​ 925Other comprehensive income​​ —​ —​ 15​ —​ 15​ —​ 15Common stock issued​​ —​ 71​ —​ —​​ 71​ —​​ 71Preferred stock issued, net ​​ 1,977​​ —​​ —​​ —​​ 1,977​​ —​​ 1,977Common stock dividends declared ($2.6875 per share)​​ —​ —​ —​ (1,021)​ (1,021)​ —​ (1,021)Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B)​​ —​​ —​​ —​​ (60)​​ (60)​​ —​​ (60)Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (106)​ (106)Noncash stock-based compensation​​ —​ 38​ —​ 1​ 39​ —​ 39Balance at December 31, 2021​$ 1,977​$ 6,071​$ (54)​$ 7,894​$ 15,888​$ 1,901​$ 17,789Net income​​ —​ —​ —​ 717​ 717​ 107​ 824Other comprehensive income​​ —​ —​ 43​ —​ 43​ —​ 43Common stock issued​​ —​ 87​ —​ —​ 87​ —​ 87Common stock dividends declared ($2.8375 per share)​​ —​ —​ —​ (1,083)​ (1,083)​ —​ (1,083)Preferred stock dividend declared ($53.75 per share for Series A and $42.08333 per share for Series B)​​ —​​ —​​ —​​ (74)​​ (74)​​ —​​ (74)Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (107)​ (107)Noncash stock-based compensation​​ —​ 42​ —​ —​ 42​ —​ 42Other​​ 1​​ —​​ —​​ —​​ 1​​ —​​ 1Balance at December 31, 2022​$ 1,978​$ 6,200​$ (11)​$ 7,454​$ 15,621​$ 1,901​$ 17,522Net income​​ —​ —​ —​ 1,284​ 1,284​ 123​ 1,407Other comprehensive income​​ —​ —​ 2​ —​ 2​ —​ 2Common stock issued​​ —​ 92​ —​ —​ 92​ —​ 92Common stock dividends declared ($2.9925 per share)​​ —​ —​ —​ (1,147)​ (1,147)​ —​ (1,147)Preferred stock dividend declared ($53.75 per share for Series A and $50.00 per share for Series B)​​ —​​ —​​ —​​ (108)​​ (108)​​ —​​ (108)Dividends to noncontrolling interests ($96.823 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (123)​ (123)Noncash stock-based compensation​​ —​ 46​ —​ —​ 46​ —​ 46Preference stock issued, net of issuance cost​​ —​​ —​​ —​​ —​​ —​​ 542​​ 542Preferred stock repurchased​​ (305)​​ —​​ —​​ 16​​ (289)​​ —​​ (289)Balance at December 31, 2023​$ 1,673​$ 6,338​$ (9)​$ 7,499​$ 15,501​$ 2,443​$ 17,944​​​The accompanying notes are an integral part of these consolidated financial statements.63 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Consolidated Statements of Changes in Equity​​​​​​​Edison International​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Noncontrolling​​​​ Equity Attributable to Edison International Shareholders Interests​​​​​​​​​​​Accumulated ​​​​​​​​​​​​​​​​​​​Other ​​​​​​​​​​​​​Preferred​Common ​Comprehensive​Retained ​​​​Preference ​Total (in millions, except per share amounts)​Stock​Stock​Loss​Earnings​Subtotal​Stock​EquityBalance at December 31, 2020 $ —​$ 5,962​$ (69)​$ 8,155​$ 14,048​$ 1,901​$ 15,949Net income​​ —​ —​ —​ 819​ 819​ 106​ 925Other comprehensive income​​ —​ —​ 15​ —​ 15​ —​ 15Common stock issued​​ —​ 71​ —​ —​​ 71​ —​​ 71Preferred stock issued, net ​​ 1,977​​ —​​ —​​ —​​ 1,977​​ —​​ 1,977Common stock dividends declared ($2.6875 per share)​​ —​ —​ —​ (1,021)​ (1,021)​ —​ (1,021)Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B)​​ —​​ —​​ —​​ (60)​​ (60)​​ —​​ (60)Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (106)​ (106)Noncash stock-based compensation​​ —​ 38​ —​ 1​ 39​ —​ 39Balance at December 31, 2021​$ 1,977​$ 6,071​$ (54)​$ 7,894​$ 15,888​$ 1,901​$ 17,789Net income​​ —​ —​ —​ 717​ 717​ 107​ 824Other comprehensive income​​ —​ —​ 43​ —​ 43​ —​ 43Common stock issued​​ —​ 87​ —​ —​ 87​ —​ 87Common stock dividends declared ($2.8375 per share)​​ —​ —​ —​ (1,083)​ (1,083)​ —​ (1,083)Preferred stock dividend declared ($53.75 per share for Series A and $42.08333 per share for Series B)​​ —​​ —​​ —​​ (74)​​ (74)​​ —​​ (74)Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (107)​ (107)Noncash stock-based compensation​​ —​ 42​ —​ —​ 42​ —​ 42Other​​ 1​​ —​​ —​​ —​​ 1​​ —​​ 1Balance at December 31, 2022​$ 1,978​$ 6,200​$ (11)​$ 7,454​$ 15,621​$ 1,901​$ 17,522Net income​​ —​ —​ —​ 1,284​ 1,284​ 123​ 1,407Other comprehensive income​​ —​ —​ 2​ —​ 2​ —​ 2Common stock issued​​ —​ 92​ —​ —​ 92​ —​ 92Common stock dividends declared ($2.9925 per share)​​ —​ —​ —​ (1,147)​ (1,147)​ —​ (1,147)Preferred stock dividend declared ($53.75 per share for Series A and $50.00 per share for Series B)​​ —​​ —​​ —​​ (108)​​ (108)​​ —​​ (108)Dividends to noncontrolling interests ($96.823 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (123)​ (123)Noncash stock-based compensation​​ —​ 46​ —​ —​ 46​ —​ 46Preference stock issued, net of issuance cost​​ —​​ —​​ —​​ —​​ —​​ 542​​ 542Preferred stock repurchased​​ (305)​​ —​​ —​​ 16​​ (289)​​ —​​ (289)Balance at December 31, 2023​$ 1,673​$ 6,338​$ (9)​$ 7,499​$ 15,501​$ 2,443​$ 17,944​​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​", "prior_body": "​ $ 917 ​ $ 394 ​ $ 89 ​ ​ The accompanying notes are an integral part of these consolidated financial statements.66 The accompanying notes are an integral part of these consolidated financial statements. 66 Table of Contents​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Consolidated Statements of Changes in Equity​​​​​​​Edison International​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Noncontrolling​​​​ Equity Attributable to Edison International Shareholders Interests​​​​​​​​​​​Accumulated ​​​​​​​Preferred ​​​​​​​​​​​Other ​​​​​​​and ​​​​​Preferred​Common ​Comprehensive​Retained ​​​​Preference ​Total (in millions, except per share amounts)​Stock​Stock​Loss​Earnings​Subtotal​Stock​EquityBalance at December 31, 2019 $ —​$ 4,990​$ (69)​$ 8,382​$ 13,303​$ 2,193​$ 15,496Net income​​ —​ —​ —​ 739​ 739​ 132​ 871Common stock issued, net of issuance cost ​​ —​ 942​ —​ —​​ 942​ —​​ 942Common stock dividends declared ($2.5750 per share)​​ —​ —​ —​ (965)​ (965)​ —​ (965)Dividends to noncontrolling interests ($0.757 - $0.886 per share for preferred stock; $62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (117)​ (117)Noncash stock-based compensation​​ —​ 30​ —​ (1)​ 29​ 1​ 30Redemption of preferred and preference stock​​ —​​ —​​ —​​ —​​ —​​ (308)​​ (308)Balance at December 31, 2020​$ —​$ 5,962​$ (69)​$ 8,155​$ 14,048​$ 1,901​$ 15,949Net income​​ —​ —​ —​ 819​ 819​ 106​ 925Other comprehensive income​​ —​ —​ 15​ —​ 15​ —​ 15Common stock issued, net of issuance cost ​​ —​ 71​ —​ —​ 71​ —​ 71Preferred stock issued, net of issuance cost​​ 1,977​​ —​​ —​​ —​​ 1,977​​ —​​ 1,977Common stock dividends declared ($2.6875 per share)​​ —​ —​ —​ (1,021)​ (1,021)​ —​ (1,021)Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B)​​ —​​ —​​ —​​ (60)​​ (60)​​ —​​ (60)Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (106)​ (106)Noncash stock-based compensation​​ —​ 38​ —​ 1​ 39​ —​ 39Balance at December 31, 2021​$ 1,977​$ 6,071​$ (54)​$ 7,894​$ 15,888​$ 1,901​$ 17,789Net income​​ —​ —​ —​ 717​ 717​ 107​ 824Other comprehensive income​​ —​ —​ 43​ —​ 43​ —​ 43Common stock issued, net of issuance cost​​ —​ 87​ —​ —​ 87​ —​ 87Common stock dividends declared ($2.8375 per share)​​ —​ —​ —​ (1,083)​ (1,083)​ —​ (1,083)Preferred stock dividend declared ($53.750 per share for Series A and $42.08333 per share for Series B)​​ —​​ —​​ —​​ (74)​​ (74)​​ —​​ (74)Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (107)​ (107)Noncash stock-based compensation​​ —​ 42​ —​ —​ 42​ —​ 42Other​​ 1​​ —​​ —​​ —​​ 1​​ —​​ 1Balance at December 31, 2022​$ 1,978​$ 6,200​$ (11)​$ 7,454​$ 15,621​$ 1,901​$ 17,522​​​The accompanying notes are an integral part of these consolidated financial statements.67 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Consolidated Statements of Changes in Equity​​​​​​​Edison International​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Noncontrolling​​​​ Equity Attributable to Edison International Shareholders Interests​​​​​​​​​​​Accumulated ​​​​​​​Preferred ​​​​​​​​​​​Other ​​​​​​​and ​​​​​Preferred​Common ​Comprehensive​Retained ​​​​Preference ​Total (in millions, except per share amounts)​Stock​Stock​Loss​Earnings​Subtotal​Stock​EquityBalance at December 31, 2019 $ —​$ 4,990​$ (69)​$ 8,382​$ 13,303​$ 2,193​$ 15,496Net income​​ —​ —​ —​ 739​ 739​ 132​ 871Common stock issued, net of issuance cost ​​ —​ 942​ —​ —​​ 942​ —​​ 942Common stock dividends declared ($2.5750 per share)​​ —​ —​ —​ (965)​ (965)​ —​ (965)Dividends to noncontrolling interests ($0.757 - $0.886 per share for preferred stock; $62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (117)​ (117)Noncash stock-based compensation​​ —​ 30​ —​ (1)​ 29​ 1​ 30Redemption of preferred and preference stock​​ —​​ —​​ —​​ —​​ —​​ (308)​​ (308)Balance at December 31, 2020​$ —​$ 5,962​$ (69)​$ 8,155​$ 14,048​$ 1,901​$ 15,949Net income​​ —​ —​ —​ 819​ 819​ 106​ 925Other comprehensive income​​ —​ —​ 15​ —​ 15​ —​ 15Common stock issued, net of issuance cost ​​ —​ 71​ —​ —​ 71​ —​ 71Preferred stock issued, net of issuance cost​​ 1,977​​ —​​ —​​ —​​ 1,977​​ —​​ 1,977Common stock dividends declared ($2.6875 per share)​​ —​ —​ —​ (1,021)​ (1,021)​ —​ (1,021)Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B)​​ —​​ —​​ —​​ (60)​​ (60)​​ —​​ (60)Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (106)​ (106)Noncash stock-based compensation​​ —​ 38​ —​ 1​ 39​ —​ 39Balance at December 31, 2021​$ 1,977​$ 6,071​$ (54)​$ 7,894​$ 15,888​$ 1,901​$ 17,789Net income​​ —​ —​ —​ 717​ 717​ 107​ 824Other comprehensive income​​ —​ —​ 43​ —​ 43​ —​ 43Common stock issued, net of issuance cost​​ —​ 87​ —​ —​ 87​ —​ 87Common stock dividends declared ($2.8375 per share)​​ —​ —​ —​ (1,083)​ (1,083)​ —​ (1,083)Preferred stock dividend declared ($53.750 per share for Series A and $42.08333 per share for Series B)​​ —​​ —​​ —​​ (74)​​ (74)​​ —​​ (74)Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock)​​ —​ —​ —​ —​ —​ (107)​ (107)Noncash stock-based compensation​​ —​ 42​ —​ —​ 42​ —​ 42Other​​ 1​​ —​​ —​​ —​​ 1​​ —​​ 1Balance at December 31, 2022​$ 1,978​$ 6,200​$ (11)​$ 7,454​$ 15,621​$ 1,901​$ 17,522​​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "MODIFIED", "current_title": "Jointly Owned Utility Projects", "prior_title": "Jointly Owned Utility Projects", "similarity_score": 0.841, "confidence": "high", "key_changes": [ "Reworded sentence: \"The following is SCE's investment in each asset as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plant in Work in Accumulated Nuclear Fuel ​ Ownership (in millions) ​ Service ​ Progress ​ Depreciation ​ (at amortized cost) ​ Total ​ Interest Transmission systems: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Eldorado ​ $ 355 ​ $ 123 ​ $ (63) ​ $ — ​ $ 415 ​ 76 % Pacific Intertie ​ 356 ​ 3 ​ (90) ​ — ​ 269 50 % Generating station: ​ ​ ​ ​ ​ ​ ​ Palo Verde (nuclear) ​ 2,211 ​ 58 ​ (1,670) ​ 122 ​ 721 16 % Total ​ $ 2,922 ​ $ 184 ​ $ (1,823) ​ $ 122 ​ $ 1,405 ​ ​ In addition to the jointly owned assets in the table above, SCE has ownership interests in jointly owned power poles with other companies.\"" ], "current_body": "SCE owns undivided interests in transmission and generating assets for which each participant provides its own financing. SCE's proportionate share of these assets is reflected in the consolidated balance sheets and included in the above table. SCE's proportionate share of expenses for each project is reflected in the consolidated statements of income. The following is SCE's investment in each asset as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plant in Work in Accumulated Nuclear Fuel ​ Ownership (in millions) ​ Service ​ Progress ​ Depreciation ​ (at amortized cost) ​ Total ​ Interest Transmission systems: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Eldorado ​ $ 355 ​ $ 123 ​ $ (63) ​ $ — ​ $ 415 ​ 76 % Pacific Intertie ​ 356 ​ 3 ​ (90) ​ — ​ 269 50 % Generating station: ​ ​ ​ ​ ​ ​ ​ Palo Verde (nuclear) ​ 2,211 ​ 58 ​ (1,670) ​ 122 ​ 721 16 % Total ​ $ 2,922 ​ $ 184 ​ $ (1,823) ​ $ 122 ​ $ 1,405 ​ ​ In addition to the jointly owned assets in the table above, SCE has ownership interests in jointly owned power poles with other companies.", "prior_body": "SCE owns undivided interests in transmission and generating assets for which each participant provides its own financing. SCE's proportionate share of these assets is reflected in the consolidated balance sheets and included in the above table. SCE's proportionate share of expenses for each project is reflected in the consolidated statements of income. The following is SCE's investment in each asset as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Construction ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plant in Work in Accumulated Nuclear Fuel Net Book Ownership (in millions) ​ Service ​ Progress ​ Depreciation ​ (at amortized cost) ​ Value ​ Interest Transmission systems: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Eldorado ​ $ 351 ​ $ 107 ​ $ (56) ​ $ — ​ $ 402 ​ 77 % Pacific Intertie ​ 354 ​ 2 ​ (82) ​ — ​ 274 50 % Generating station: ​ ​ ​ ​ ​ ​ Palo Verde (nuclear) ​ 2,180 ​ 56 ​ (1,653) ​ 122 ​ 705 16 % Total ​ $ 2,885 ​ $ 165 ​ $ (1,791) ​ $ 122 ​ $ 1,381 ​ ​ In addition to the jointly owned assets in the table above, SCE has ownership interests in jointly owned power poles with other companies." }, { "status": "MODIFIED", "current_title": "Critical Audit Matters", "prior_title": "Critical Audit Matters", "similarity_score": 0.834, "confidence": "high", "key_changes": [ "Reworded sentence: \"Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide Events As described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers.\"", "Reworded sentence: \"As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of 55 55 Table of Contentsoccurring and when the amount of the loss can be reasonably estimated.\"", "Reworded sentence: \"For the year ended December 31, 2023 management recorded charges for wildfire claims of $630 million and expected revenue from FERC customers of $37 million.\"", "Reworded sentence: \"These procedures included testing the effectiveness of controls relating to management's assessment of loss contingencies associated with alleged and potential claims related to wildfire events.\"", "Reworded sentence: \"Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers.\"" ], "current_body": "The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide Events As described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of occurring and when the amount of the loss can be reasonably estimated. As of December 31, 2023, the Company had paid $8.7 billion under executed settlements, had $78 million to be paid under executed settlements, including $62 million to be paid under the Safety and Enforcement Division agreement, and had $637 million of estimated losses for remaining alleged and potential claims reflected on its consolidated balance sheets related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, the Company had assets for expected recoveries through Federal Energy Regulatory Commission (FERC) electric rates of $37 million on its consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events. Each reporting period, management reviews the Company’s loss estimates for remaining alleged and potential claims related to wildfire events. The process for estimating losses associated with alleged and potential wildfire related claims requires management to exercise significant judgment based on a number of assumptions and subjective factors, including, but not limited to: estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, the status of and developments in the course of litigation, and prior experience litigating and settling wildfire litigation claims. As additional information becomes available, management's estimates and assumptions regarding the causes and financial impact of wildfire events may change. For the year ended December 31, 2023 management recorded charges for wildfire claims of $630 million and expected revenue from FERC customers of $37 million. The resulting pre-tax charge to earnings was $593 million ($428 million after-tax). The principal considerations for our determination that performing procedures relating to the wildfire-related claims from the 2017/2018 Wildfire/Mudslide Events is a critical audit matter are (i) the significant judgment by management when determining whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated as well as in estimating losses associated with alleged and potential claims related to wildfire events and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to estimates of known and expected claims by third parties based on 52 52 Table of Contentscurrently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's assessment of loss contingencies associated with alleged and potential claims related to wildfire events. These procedures also included, among others (i) obtaining and evaluating the letters of audit inquiry with internal and external legal counsel; (ii) assessing the reasonableness of management's assessment regarding whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated; (iii) evaluating the appropriateness of the methods used by management in estimating losses associated with alleged and potential claims related to wildfire events; (iv) evaluating the reasonableness of the significant assumptions related to estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims; and (v) testing, on a sample basis, damage claim settlements. Evaluating management’s assumptions involved evaluating whether the assumptions used by management were reasonable considering (i) current damage claim settlements; (ii) past wildfire litigation history; and (iii) third-party source data.Accounting for the Effects of Rate RegulationAs described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the California Public Utility Commission (CPUC) and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of the Company’s operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost to the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2023, $11.4 billion was recorded in regulatory assets and $10.2 billion was recorded in regulatory liabilities. The principal considerations for our determination that performing procedures relating to the Company's accounting for the effects of rate regulation is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to (i) accounting for the effect of rate regulation on regulatory assets and liabilities and (ii) management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities. These procedures also included, among others (i) obtaining and evaluating the Company's correspondence with regulators; (ii) evaluating management's assessment regarding the probability of recovery of regulatory assets and settlement of regulatory liabilities at the balance sheet date; (iii) evaluating the appropriateness of the accounting for the effects of the rate regulation; (iv) evaluating the sufficiency of the disclosure; and (v) testing, on a sample basis, the calculation of regulatory assets and regulatory liabilities based on provisions outlined in the rate orders. 53 Table of Contents Table of Contents Table of Contents currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's assessment of loss contingencies associated with alleged and potential claims related to wildfire events. These procedures also included, among others (i) obtaining and evaluating the letters of audit inquiry with internal and external legal counsel; (ii) assessing the reasonableness of management's assessment regarding whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated; (iii) evaluating the appropriateness of the methods used by management in estimating losses associated with alleged and potential claims related to wildfire events; (iv) evaluating the reasonableness of the significant assumptions related to estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims; and (v) testing, on a sample basis, damage claim settlements. Evaluating management’s assumptions involved evaluating whether the assumptions used by management were reasonable considering (i) current damage claim settlements; (ii) past wildfire litigation history; and (iii) third-party source data.Accounting for the Effects of Rate RegulationAs described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the California Public Utility Commission (CPUC) and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of the Company’s operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost to the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2023, $11.4 billion was recorded in regulatory assets and $10.2 billion was recorded in regulatory liabilities. The principal considerations for our determination that performing procedures relating to the Company's accounting for the effects of rate regulation is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to (i) accounting for the effect of rate regulation on regulatory assets and liabilities and (ii) management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities. These procedures also included, among others (i) obtaining and evaluating the Company's correspondence with regulators; (ii) evaluating management's assessment regarding the probability of recovery of regulatory assets and settlement of regulatory liabilities at the balance sheet date; (iii) evaluating the appropriateness of the accounting for the effects of the rate regulation; (iv) evaluating the sufficiency of the disclosure; and (v) testing, on a sample basis, the calculation of regulatory assets and regulatory liabilities based on provisions outlined in the rate orders. currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's assessment of loss contingencies associated with alleged and potential claims related to wildfire events. These procedures also included, among others (i) obtaining and evaluating the letters of audit inquiry with internal and external legal counsel; (ii) assessing the reasonableness of management's assessment regarding whether the outcome of future events is probable of occurring and whether the amount of the loss can be reasonably estimated; (iii) evaluating the appropriateness of the methods used by management in estimating losses associated with alleged and potential claims related to wildfire events; (iv) evaluating the reasonableness of the significant assumptions related to estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, and prior experience litigating and settling wildfire litigation claims; and (v) testing, on a sample basis, damage claim settlements. Evaluating management’s assumptions involved evaluating whether the assumptions used by management were reasonable considering (i) current damage claim settlements; (ii) past wildfire litigation history; and (iii) third-party source data. Accounting for the Effects of Rate Regulation As described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the California Public Utility Commission (CPUC) and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of the Company’s operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost to the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2023, $11.4 billion was recorded in regulatory assets and $10.2 billion was recorded in regulatory liabilities. The principal considerations for our determination that performing procedures relating to the Company's accounting for the effects of rate regulation is a critical audit matter are a high degree of auditor effort in performing procedures and evaluating audit evidence related to (i) accounting for the effect of rate regulation on regulatory assets and liabilities and (ii) management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management’s assessment of the recoverability and settlement of existing and new regulatory assets and liabilities. These procedures also included, among others (i) obtaining and evaluating the Company's correspondence with regulators; (ii) evaluating management's assessment regarding the probability of recovery of regulatory assets and settlement of regulatory liabilities at the balance sheet date; (iii) evaluating the appropriateness of the accounting for the effects of the rate regulation; (iv) evaluating the sufficiency of the disclosure; and (v) testing, on a sample basis, the calculation of regulatory assets and regulatory liabilities based on provisions outlined in the rate orders. 53 53 Table of Contents​​​/s/PricewaterhouseCoopers LLPLos Angeles, CaliforniaFebruary 22, 2024​We have served as the Company’s auditor since 2002. ​​54 Table of Contents Table of Contents Table of Contents ​​​/s/PricewaterhouseCoopers LLPLos Angeles, CaliforniaFebruary 22, 2024​We have served as the Company’s auditor since 2002. ​​ ​ ​ ​ /s/PricewaterhouseCoopers LLP Los Angeles, California February 22, 2024 ​ We have served as the Company’s auditor since 2002. ​ ​ 54 54 Table of ContentsReport of Independent Registered Public Accounting FirmTo the Board of Directors and Shareholders of Southern California Edison CompanyOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of 55 Table of Contents Table of Contents Table of Contents Report of Independent Registered Public Accounting FirmTo the Board of Directors and Shareholders of Southern California Edison CompanyOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Wildfire-Related Claims - 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for the Company's customers. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As disclosed by management, management records loss contingencies when it determines that the outcome of future events is probable of", "prior_body": "The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Contingent Liability – 2017/2018 Wildfire/Mudslide Events As described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for SCE customers in the Santa Barbara, Ventura, and Los Angeles Counties. Numerous claims related to wildfire events have been initiated against the Company. The Company has incurred material losses in connection with the 2017/2018 Wildfire/Mudslide Events. As of December 31, 2022, SCE had paid $7.6 billion under executed settlements, had $185 million to be paid under executed settlements, including $120 million to be paid under the SED executed Agreement, and had $934 million of estimated losses for remaining alleged and potential claims reflected on their consolidated balance sheets related to the 2017/2018 Wildfire/Mudslide Events. As of the same date, SCE had assets for expected recoveries through FERC electric rates of $142 million on their consolidated balance sheets and had exhausted expected insurance recoveries related to the 2017/2018 Wildfire/Mudslide Events. Each reporting period, management reviews its loss estimates for remaining alleged and potential claims related to wildfire events. The process for estimating losses associated with alleged and potential wildfire related claims requires management to exercise significant judgment based on a number of assumptions and subjective factors, including, but not limited to: estimates of known and expected claims by third parties based on currently available information, opinions of counsel regarding litigation risk, the status of and developments in the course of litigation, and prior experience litigating and settling wildfire litigation claims. As additional information becomes available, management's estimates and assumptions regarding the causes and financial impact of wildfire events may change. For instance, as a result of additional information, in 2022 management accrued additional estimated losses of $1.3 billion for claims related to the 2017/2018 Wildfire/Mudslide Events, against which SCE has recorded expected recoveries through FERC electric rates of $76 million. The resulting net charge to earnings was $1.2 billion ($879 million after-tax). The principal considerations for our determination that performing procedures relating to the 2017/2018 Wildfire/Mudslide Events contingent liability is a critical audit matter are the significant judgment by management when determining the probability of a loss being incurred and the best estimate of expected potential loss for these 56 56 Table of Contentscontingencies related to assumptions and subjective factors based on currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's conclusion related to these loss contingencies.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's evaluation of loss contingencies associated with wildfires and mudslides. These procedures also included, among others, obtaining and evaluating the letters of audit inquiry with internal and external legal counsel, assessing the reasonableness of management's assessment regarding whether it is reasonably possible or probable and reasonably estimable that a loss has been incurred, evaluating the assumptions and methods used by management in developing the best estimate of expected potential losses, including currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases, and testing damage claim settlements. When assessing the assumptions related to the best estimate of expected potential losses, the assumptions used were evaluated for reasonableness considering (i) current damage claim settlements, (ii) past wildfire litigation history, and (iii) third-party source data.​Recoverability of Regulatory Assets That Are Not Currently Reflected In Rates​As described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the CPUC and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of its operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost of the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2022, $1.52 billion recorded in wildfire and drought restoration accounts and wildfire-related memorandum accounts represent wildfire and drought restoration costs that are probable of future recovery from customers.​The principal consideration for our determination that performing procedures relating to the Company's recoverability of regulatory assets that are not currently reflected in rates is a critical audit matter is the significant judgment by management in determining the costs probable of recovery and reported as an asset on the balance sheet. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's assessment of the recoverability of regulatory assets not currently reflected in rates.​57 Table of Contents Table of Contents Table of Contents contingencies related to assumptions and subjective factors based on currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's conclusion related to these loss contingencies.Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's evaluation of loss contingencies associated with wildfires and mudslides. These procedures also included, among others, obtaining and evaluating the letters of audit inquiry with internal and external legal counsel, assessing the reasonableness of management's assessment regarding whether it is reasonably possible or probable and reasonably estimable that a loss has been incurred, evaluating the assumptions and methods used by management in developing the best estimate of expected potential losses, including currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases, and testing damage claim settlements. When assessing the assumptions related to the best estimate of expected potential losses, the assumptions used were evaluated for reasonableness considering (i) current damage claim settlements, (ii) past wildfire litigation history, and (iii) third-party source data.​Recoverability of Regulatory Assets That Are Not Currently Reflected In Rates​As described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the CPUC and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of its operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost of the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2022, $1.52 billion recorded in wildfire and drought restoration accounts and wildfire-related memorandum accounts represent wildfire and drought restoration costs that are probable of future recovery from customers.​The principal consideration for our determination that performing procedures relating to the Company's recoverability of regulatory assets that are not currently reflected in rates is a critical audit matter is the significant judgment by management in determining the costs probable of recovery and reported as an asset on the balance sheet. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's assessment of the recoverability of regulatory assets not currently reflected in rates.​ contingencies related to assumptions and subjective factors based on currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's conclusion related to these loss contingencies. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's evaluation of loss contingencies associated with wildfires and mudslides. These procedures also included, among others, obtaining and evaluating the letters of audit inquiry with internal and external legal counsel, assessing the reasonableness of management's assessment regarding whether it is reasonably possible or probable and reasonably estimable that a loss has been incurred, evaluating the assumptions and methods used by management in developing the best estimate of expected potential losses, including currently available information and assessments, opinions regarding litigation risk, and prior experience with litigating and settling other wildfire cases, and testing damage claim settlements. When assessing the assumptions related to the best estimate of expected potential losses, the assumptions used were evaluated for reasonableness considering (i) current damage claim settlements, (ii) past wildfire litigation history, and (iii) third-party source data. ​ Recoverability of Regulatory Assets That Are Not Currently Reflected In Rates ​ As described in Notes 1 and 11 to the consolidated financial statements, the Company's accounting policies conform to accounting principles generally accepted in the United States of America, including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the CPUC and the FERC. Management applies authoritative guidance for rate-regulated enterprises to the portion of its operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates. As disclosed by management, management assesses at the end of each reporting period whether regulatory assets are probable of future recovery by considering factors such as the current regulatory environment, the issuance of rate orders on recovery of the specific or a similar incurred cost of the Company or other rate-regulated entities, and other factors that would indicate that the regulator will treat an incurred cost as allowable for ratemaking purposes. As of December 31, 2022, $1.52 billion recorded in wildfire and drought restoration accounts and wildfire-related memorandum accounts represent wildfire and drought restoration costs that are probable of future recovery from customers. ​ The principal consideration for our determination that performing procedures relating to the Company's recoverability of regulatory assets that are not currently reflected in rates is a critical audit matter is the significant judgment by management in determining the costs probable of recovery and reported as an asset on the balance sheet. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's assessment of the recoverability of regulatory assets not currently reflected in rates. ​ 57 57 Table of ContentsAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management's assessment of the probability of recovering regulatory assets not currently reflected in rates. These procedures also included, among others, obtaining the Company's correspondence with regulators, evaluating management's assessment regarding the probability of recovery of the regulatory assets at the balance sheet date, evaluating the accounting and disclosure implications, and calculating regulatory assets balances based on provisions outlined in the rate orders. This evidence included reference to historical precedence of similar items and accounting treatment utilized by comparable companies under similar regulatory jurisdictions as well as evaluating progress in discussions between management and the regulator.​​/s/PricewaterhouseCoopers LLPLos Angeles, CaliforniaFebruary 23, 2023​We have served as the Company’s auditor since 2002. ​​58 Table of Contents Table of Contents Table of Contents Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management's assessment of the probability of recovering regulatory assets not currently reflected in rates. These procedures also included, among others, obtaining the Company's correspondence with regulators, evaluating management's assessment regarding the probability of recovery of the regulatory assets at the balance sheet date, evaluating the accounting and disclosure implications, and calculating regulatory assets balances based on provisions outlined in the rate orders. This evidence included reference to historical precedence of similar items and accounting treatment utilized by comparable companies under similar regulatory jurisdictions as well as evaluating progress in discussions between management and the regulator.​​/s/PricewaterhouseCoopers LLPLos Angeles, CaliforniaFebruary 23, 2023​We have served as the Company’s auditor since 2002. ​​ Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the Company's regulatory accounting process, including controls over management's assessment of the probability of recovering regulatory assets not currently reflected in rates. These procedures also included, among others, obtaining the Company's correspondence with regulators, evaluating management's assessment regarding the probability of recovery of the regulatory assets at the balance sheet date, evaluating the accounting and disclosure implications, and calculating regulatory assets balances based on provisions outlined in the rate orders. This evidence included reference to historical precedence of similar items and accounting treatment utilized by comparable companies under similar regulatory jurisdictions as well as evaluating progress in discussions between management and the regulator. ​ ​ /s/PricewaterhouseCoopers LLP Los Angeles, California February 23, 2023 ​ We have served as the Company’s auditor since 2002. ​ ​ 58 58 Table of ContentsReport of Independent Registered Public Accounting Firm​To the Board of Directors and Shareholders of Southern California Edison Company​Opinions on the Financial Statements and Internal Control over Financial Reporting​We have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). ​In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31,2022 in conformity with accounting principles generally accepted in the United States of America. ​Basis for Opinions​These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express opinions on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.​We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. ​Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinions.​Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Contingent Liability – 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for SCE 59 Table of Contents Table of Contents Table of Contents Report of Independent Registered Public Accounting Firm​To the Board of Directors and Shareholders of Southern California Edison Company​Opinions on the Financial Statements and Internal Control over Financial Reporting​We have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes (collectively referred to as the “consolidated financial statements”). ​In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31,2022 in conformity with accounting principles generally accepted in the United States of America. ​Basis for Opinions​These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express opinions on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.​We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. ​Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinions.​Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Contingent Liability – 2017/2018 Wildfire/Mudslide EventsAs described in Note 12 to the consolidated financial statements, the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire (collectively, the \"2017/2018 Wildfire/Mudslide Events\") within the Company's service territory caused loss of life, substantial damage to both residential and business properties, and service outages for SCE" }, { "status": "MODIFIED", "current_title": "Net (decrease) increase in cash, cash equivalents and restricted cash", "prior_title": "Net increase in cash, cash equivalents and restricted cash", "similarity_score": 0.824, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ (385) ​ 523 ​ 305 Cash, cash equivalents and restricted cash at beginning of year ​ 917 ​ 394 ​ 89\"" ], "current_body": "​ (385) ​ 523 ​ 305 Cash, cash equivalents and restricted cash at beginning of year ​ 917 ​ 394 ​ 89", "prior_body": "​ 523 ​ 305 ​ 19 Cash, cash equivalents and restricted cash at beginning of year ​ 394 ​ 89 ​ 70" }, { "status": "MODIFIED", "current_title": "Cash flows from investing activities:", "prior_title": "Cash flows from investing activities:", "similarity_score": 0.815, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ ​ ​ Capital expenditures ​ (5,446) ​ (5,776) ​ (5,503) Proceeds from sale of nuclear decommissioning trust investments ​ 4,597 ​ 4,177 ​ 3,961 Purchases of nuclear decommissioning trust investments ​ (4,417) ​ (4,054) ​ (3,705) Other ​ 35 ​ 96 ​ 95\"" ], "current_body": "​ ​ ​ Capital expenditures ​ (5,448) ​ (5,778) ​ (5,505) Proceeds from sale of nuclear decommissioning trust investments ​ 4,597 ​ 4,177 ​ 3,961 Purchases of nuclear decommissioning trust investments ​ (4,417) ​ (4,054) ​ (3,705) Other ​ 35 ​ 81 ​ 98", "prior_body": "​ ​ ​ Capital expenditures ​ (5,778) ​ (5,505) ​ (5,484) Proceeds from sale of nuclear decommissioning trust investments ​ 4,177 ​ 3,961 ​ 5,927 Purchases of nuclear decommissioning trust investments ​ (4,054) ​ (3,705) ​ (5,730) Other ​ 81 ​ 98 ​ 316" }, { "status": "MODIFIED", "current_title": "Cash flows from investing activities:", "prior_title": "Cash flows from investing activities:", "similarity_score": 0.81, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ ​ ​ Capital expenditures ​ (5,448) ​ (5,778) ​ (5,505) Proceeds from sale of nuclear decommissioning trust investments ​ 4,597 ​ 4,177 ​ 3,961 Purchases of nuclear decommissioning trust investments ​ (4,417) ​ (4,054) ​ (3,705) Other ​ 35 ​ 81 ​ 98\"" ], "current_body": "​ ​ ​ Capital expenditures ​ (5,448) ​ (5,778) ​ (5,505) Proceeds from sale of nuclear decommissioning trust investments ​ 4,597 ​ 4,177 ​ 3,961 Purchases of nuclear decommissioning trust investments ​ (4,417) ​ (4,054) ​ (3,705) Other ​ 35 ​ 81 ​ 98", "prior_body": "​ ​ ​ Capital expenditures ​ (5,778) ​ (5,505) ​ (5,484) Proceeds from sale of nuclear decommissioning trust investments ​ 4,177 ​ 3,961 ​ 5,927 Purchases of nuclear decommissioning trust investments ​ (4,054) ​ (3,705) ​ (5,730) Other ​ 81 ​ 98 ​ 316" }, { "status": "MODIFIED", "current_title": "SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage the risks inherent in constructing, operating, and maintaining its facilities and workforce.", "prior_title": "SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage the risks inherent in constructing, operating, and maintaining its facilities and workforce.", "similarity_score": 0.805, "confidence": "high", "key_changes": [ "Reworded sentence: \"SCE is also constructing utility owned storage to mitigate possible state-wide capacity shortages in 2024 and later years, and any delays in construction may result in those facilities being unavailable to reduce the impact of any capacity shortages in summer 2024.\"", "Reworded sentence: \"In order to mitigate these risks and execute on its strategy, SCE is engaged in a significant and ongoing infrastructure investment program.\"", "Reworded sentence: \"SCE's inherent operating risks include such matters as the risks of human performance, availability of skilled workforce and workforce capabilities, contractor management, data and records accuracy, public opposition to infrastructure projects, delays, environmental remediation and mitigation costs, difficulty in estimating costs or in recovering costs that are above original estimates, system limitations and degradation, maintaining physical security of workforce and assets, maintaining cybersecurity of data and assets, and delays and interruptions in necessary supplies, including key components necessary for the timely construction of utility owned storage.\"", "Reworded sentence: \"SCE's financial condition may also be materially affected as a result of data or records inaccuracies, for example, inaccurate records could lead to missing or delayed compliance with SCE's policies and regulatory requirements, and could contribute to safety incidents.\"", "Reworded sentence: \"Based upon the financial performance of the nuclear decommissioning trust fund investments, as well as the resolution of a number of other uncertainties, assumptions and estimates, additional contributions to the nuclear decommissioning trust's funds may be required.\"" ], "current_body": "SCE's infrastructure is aging and could pose a risk to system reliability. SCE is also constructing utility owned storage to mitigate possible state-wide capacity shortages in 2024 and later years, and any delays in construction may result in those facilities being unavailable to reduce the impact of any capacity shortages in summer 2024. In addition, as described above, wildfires in SCE's service territory can cause significant public safety issues, property damage and operational issues. In order to mitigate these risks and execute on its strategy, SCE is engaged in a significant and ongoing infrastructure investment program. This investment program, which includes transmission projects, has inherent operational risks and elevates the need for effective execution in SCE's activities. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage these risks as well as the risks inherent in constructing, operating, and maintaining its facilities, the operation of which can be hazardous and important for system reliability. SCE's inherent operating risks include such matters as the risks of human performance, availability of skilled workforce and workforce capabilities, contractor management, data and records accuracy, public opposition to infrastructure projects, delays, environmental remediation and mitigation costs, difficulty in estimating costs or in recovering costs that are above original estimates, system limitations and degradation, maintaining physical security of workforce and assets, maintaining cybersecurity of data and assets, and delays and interruptions in necessary supplies, including key components necessary for the timely construction of utility owned storage. For example, SCE's financial condition may be materially affected as a result of safety incidents, delays, permitting violations and violations of regulatory requirements, among other things, caused by SCE's failure to appropriately manage its contractor workforce or from contractual violations by SCE's contractors and the inability for SCE to recover through contractual indemnities or insurance held by the contractor. SCE's financial condition may also be materially affected as a result of data or records inaccuracies, for example, inaccurate records could lead to missing or delayed compliance with SCE's policies and regulatory requirements, and could contribute to safety incidents. SCE's financial condition and results of operations could also be materially affected if SCE is unable to attract, train and retain a qualified workforce, including due to the constrained labor market in California and nationally and SCE's relations with its unionized workforce. For example, the increased electrification efforts in California and nationally have led to greater competition for certain skilled workers. 45 45 Table of ContentsThere are inherent risks associated with owning and decommissioning nuclear power generation facilities and obtaining cost reimbursement, including, among other things, insufficiency of nuclear decommissioning trust funds, costs exceeding current estimates, execution risks, potential harmful effects on the environment and human health and the hazards of storage, handling and disposal of radioactive materials. Existing insurance and ratemaking arrangements may not protect SCE fully against losses from a nuclear incident.SCE funds decommissioning costs with assets that are currently held in nuclear decommissioning trusts. Based upon the financial performance of the nuclear decommissioning trust fund investments, as well as the resolution of a number of other uncertainties, assumptions and estimates, additional contributions to the nuclear decommissioning trust's funds may be required. If additional contributions to the nuclear decommissioning trust funds become necessary, recovery of any such additional funds through electric rates is subject to the CPUC's review and approval.The costs of decommissioning San Onofre are subject to reasonableness reviews by the CPUC. These costs may not be recoverable through regulatory processes or otherwise unless SCE can establish that the costs were reasonably incurred. In addition, SCE faces inherent execution risks including such matters as the risks of human performance, workforce capabilities, public opposition, permitting delays, and governmental approvals. Decommissioning costs ultimately incurred could exceed the current estimates and cost increases resulting from contractual disputes, delays in performance by the contractor, elevated levels of inflation, or permitting delays, among other things, could cause SCE to materially overrun current decommissioning cost estimates and could materially impact the sufficiency of trust funds. See \"Liquidity and Capital Resources—SCE—Decommissioning of San Onofre\" in the MD&A.Even though San Onofre is being decommissioned, the presence of spent nuclear fuel still poses a potential risk of a nuclear incident. Federal law limits public liability claims from a nuclear incident to the amount of available financial protection, which is currently approximately $16.2 billion for Palo Verde and $560 million for San Onofre. SCE and other owners of San Onofre and Palo Verde have purchased the maximum private primary insurance available of $450 million per site. In the case of San Onofre, the balance is covered by a U.S. Government indemnity. In the case of Palo Verde, the balance is covered by a loss sharing program among nuclear reactor licensees. There is no assurance that the CPUC would allow SCE to recover the required contribution made pursuant to this loss sharing program in the case of one or more nuclear incidents with claims that exceeded $450 million at a nuclear reactor which is participating in the program. If this public liability limit of $16.2 billion is insufficient, federal law contemplates that additional funds may be appropriated by Congress. There can be no assurance of SCE's ability to recover uninsured costs in the event the additional federal appropriations are insufficient. For more information on nuclear insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Nuclear Insurance.\"46 Table of Contents Table of Contents Table of Contents There are inherent risks associated with owning and decommissioning nuclear power generation facilities and obtaining cost reimbursement, including, among other things, insufficiency of nuclear decommissioning trust funds, costs exceeding current estimates, execution risks, potential harmful effects on the environment and human health and the hazards of storage, handling and disposal of radioactive materials. Existing insurance and ratemaking arrangements may not protect SCE fully against losses from a nuclear incident.SCE funds decommissioning costs with assets that are currently held in nuclear decommissioning trusts. Based upon the financial performance of the nuclear decommissioning trust fund investments, as well as the resolution of a number of other uncertainties, assumptions and estimates, additional contributions to the nuclear decommissioning trust's funds may be required. If additional contributions to the nuclear decommissioning trust funds become necessary, recovery of any such additional funds through electric rates is subject to the CPUC's review and approval.The costs of decommissioning San Onofre are subject to reasonableness reviews by the CPUC. These costs may not be recoverable through regulatory processes or otherwise unless SCE can establish that the costs were reasonably incurred. In addition, SCE faces inherent execution risks including such matters as the risks of human performance, workforce capabilities, public opposition, permitting delays, and governmental approvals. Decommissioning costs ultimately incurred could exceed the current estimates and cost increases resulting from contractual disputes, delays in performance by the contractor, elevated levels of inflation, or permitting delays, among other things, could cause SCE to materially overrun current decommissioning cost estimates and could materially impact the sufficiency of trust funds. See \"Liquidity and Capital Resources—SCE—Decommissioning of San Onofre\" in the MD&A.Even though San Onofre is being decommissioned, the presence of spent nuclear fuel still poses a potential risk of a nuclear incident. Federal law limits public liability claims from a nuclear incident to the amount of available financial protection, which is currently approximately $16.2 billion for Palo Verde and $560 million for San Onofre. SCE and other owners of San Onofre and Palo Verde have purchased the maximum private primary insurance available of $450 million per site. In the case of San Onofre, the balance is covered by a U.S. Government indemnity. In the case of Palo Verde, the balance is covered by a loss sharing program among nuclear reactor licensees. There is no assurance that the CPUC would allow SCE to recover the required contribution made pursuant to this loss sharing program in the case of one or more nuclear incidents with claims that exceeded $450 million at a nuclear reactor which is participating in the program. If this public liability limit of $16.2 billion is insufficient, federal law contemplates that additional funds may be appropriated by Congress. There can be no assurance of SCE's ability to recover uninsured costs in the event the additional federal appropriations are insufficient. For more information on nuclear insurance risk, see \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Nuclear Insurance.\"", "prior_body": "SCE's infrastructure is aging and could pose a risk to system reliability. SCE is also constructing utility owned storage to mitigate possible state-wide capacity shortages in 2023 and later years, and any delays in construction may result in those facilities being unavailable to reduce the impact of any capacity shortages in summer 2023. In addition, as described above, wildfires in SCE's service territory can cause significant public safety issues, property damage and operational issues. In order to mitigate these risks, SCE is engaged in a significant and ongoing infrastructure investment program. This substantial investment program has inherent operational risks and elevates the need for superior execution in SCE's activities. SCE's financial condition and results of operations could be materially affected if it is unable to successfully manage these risks as well as the risks inherent in constructing, operating, and maintaining its facilities, the operation of which can be hazardous and important for system reliability. SCE's inherent operating risks include such matters as the risks of human performance, workforce capabilities, contractor management, data and records accuracy, public opposition to infrastructure projects, delays, environmental remediation and mitigation costs, difficulty in estimating costs or in recovering costs that are above original estimates, system limitations and degradation, maintaining physical security of workforce and assets, maintaining cybersecurity of data and assets, and delays and interruptions in necessary supplies, including key components necessary for the timely construction of utility owned storage. For example, SCE's financial condition may be materially affected as a result of safety incidents, delays, permitting violations and violations of regulatory requirements, among other things, caused by SCE's failure to appropriately manage its contractor workforce or from contractual violations by SCE's contractors and the inability for SCE to recover through contractual indemnities or insurance held by the contractor. SCE's financial condition may also be materially affected as a result of data or records inaccuracies, for example inaccurate records could lead to missing or delayed compliance with SCE's policies and regulatory requirements, and could contribute to safety incidents. SCE's financial condition and results of 49 49 Table of Contentsoperations could also be materially affected if SCE is unable to attract, train and retain a qualified and diverse workforce, including due to the constrained labor market in California and nationally and SCE's relations with its unionized workforce. SCE's financial condition and results of operations could also be materially affected as a result of atypical resolutions to litigation proceedings arising from its operations, including atypical settlements and verdicts. For instance, SCE was subject to an atypical jury verdict in a recent employment litigation matter. There are inherent risks associated with owning and decommissioning nuclear power generation facilities and obtaining cost reimbursement, including, among other things, insufficiency of nuclear decommissioning trust funds, costs exceeding current estimates, execution risks, potential harmful effects on the environment and human health and the hazards of storage, handling and disposal of radioactive materials. Existing insurance and ratemaking arrangements may not protect SCE fully against losses from a nuclear incident.SCE funds decommissioning costs with assets that are currently held in nuclear decommissioning trusts. Based upon the financial performance of the nuclear decommissioning trust fund investments, as well as the resolution of a number of other uncertainties, assumptions and estimates, additional contributions to the nuclear decommissioning trust’s funds may be required. If additional contributions to the nuclear decommissioning trust funds become necessary, recovery of any such additional funds through electric rates is subject to the CPUC's review and approval.The costs of decommissioning San Onofre are subject to reasonableness reviews by the CPUC. These costs may not be recoverable through regulatory processes or otherwise unless SCE can establish that the costs were reasonably incurred. In addition, SCE faces inherent execution risks including such matters as the risks of human performance, workforce capabilities, public opposition, permitting delays, and governmental approvals. Decommissioning costs ultimately incurred could exceed the current estimates and cost increases resulting from contractual disputes, delays in performance by the contractor, elevated levels of inflation, or permitting delays, among other things, could cause SCE to materially overrun current decommissioning cost estimates and could materially impact the sufficiency of trust funds. See \"Liquidity and Capital Resources—SCE—Decommissioning of San Onofre\" in the MD&A.50 Table of Contents Table of Contents Table of Contents operations could also be materially affected if SCE is unable to attract, train and retain a qualified and diverse workforce, including due to the constrained labor market in California and nationally and SCE's relations with its unionized workforce. SCE's financial condition and results of operations could also be materially affected as a result of atypical resolutions to litigation proceedings arising from its operations, including atypical settlements and verdicts. For instance, SCE was subject to an atypical jury verdict in a recent employment litigation matter. There are inherent risks associated with owning and decommissioning nuclear power generation facilities and obtaining cost reimbursement, including, among other things, insufficiency of nuclear decommissioning trust funds, costs exceeding current estimates, execution risks, potential harmful effects on the environment and human health and the hazards of storage, handling and disposal of radioactive materials. Existing insurance and ratemaking arrangements may not protect SCE fully against losses from a nuclear incident.SCE funds decommissioning costs with assets that are currently held in nuclear decommissioning trusts. Based upon the financial performance of the nuclear decommissioning trust fund investments, as well as the resolution of a number of other uncertainties, assumptions and estimates, additional contributions to the nuclear decommissioning trust’s funds may be required. If additional contributions to the nuclear decommissioning trust funds become necessary, recovery of any such additional funds through electric rates is subject to the CPUC's review and approval.The costs of decommissioning San Onofre are subject to reasonableness reviews by the CPUC. These costs may not be recoverable through regulatory processes or otherwise unless SCE can establish that the costs were reasonably incurred. In addition, SCE faces inherent execution risks including such matters as the risks of human performance, workforce capabilities, public opposition, permitting delays, and governmental approvals. Decommissioning costs ultimately incurred could exceed the current estimates and cost increases resulting from contractual disputes, delays in performance by the contractor, elevated levels of inflation, or permitting delays, among other things, could cause SCE to materially overrun current decommissioning cost estimates and could materially impact the sufficiency of trust funds. See \"Liquidity and Capital Resources—SCE—Decommissioning of San Onofre\" in the MD&A. operations could also be materially affected if SCE is unable to attract, train and retain a qualified and diverse workforce, including due to the constrained labor market in California and nationally and SCE's relations with its unionized workforce. SCE's financial condition and results of operations could also be materially affected as a result of atypical resolutions to litigation proceedings arising from its operations, including atypical settlements and verdicts. For instance, SCE was subject to an atypical jury verdict in a recent employment litigation matter." }, { "status": "MODIFIED", "current_title": "Recurring Fair Value Measurements", "prior_title": "Recurring Fair Value Measurements", "similarity_score": 0.803, "confidence": "high", "key_changes": [ "Reworded sentence: \"As of December 31, 2023 and 2022, nonperformance risk was not material for Edison International and SCE.\"", "Reworded sentence: \"treasury securities, mutual funds, and money market funds.\"", "Reworded sentence: \"government and agency bonds, municipal bonds and corporate bonds, and over-the-counter commodity derivatives.\"", "Reworded sentence: \"The fair value of SCE's over-the-counter commodity derivative contracts is determined using an income approach.\"", "Reworded sentence: \"Inputs to the pricing 85 85 Table of Contentsmodels include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates.\"" ], "current_body": "Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an \"exit price\"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of December 31, 2023 and 2022, nonperformance risk was not material for Edison International and SCE. Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value. Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds, and money market funds. Level 2 – Edison International's and SCE's Level 2 assets and liabilities include fixed income securities, primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter commodity derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument. The fair value of SCE's over-the-counter commodity derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing 85 85 Table of Contentsmodels include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity.Level 3 – This level includes congestion revenue rights (\"CRRs\"), which are derivative contracts that trade infrequently with significant unobservable inputs (CAISO CRR auction prices). SCE employs a market valuation approach of utilizing historical CRR prices as a proxy for forward prices. Edison International Parent and Other does not have any Level 3 assets and liabilities.Assumptions are made in order to value derivative contracts in which observable inputs are not available. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs, and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of derivative instruments.SCEThe following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:​​​​​​​​​​​​​​​​​​ December 31, 2023​​​​​​​​​​​Netting​​​​​​​​​​​​​​ and ​​ (in millions) Level 1 Level 2 Level 3 Collateral1 TotalAssets at fair value​​​​​​​​​​​​​​​Derivative contracts​$ —​$ 3​$ 91​$ (3)​$ 91Money market funds and other​ 78​​ 22​​ —​​ — ​ 100Nuclear decommissioning trusts:​ ​​​​​​​​​​ ​​Stocks2​ 1,658​​ —​​ —​​ — ​ 1,658Fixed Income3​ 923​​ 1,421​​ —​​ — ​ 2,344Short-term investments, primarily cash equivalents​ 169​​ 104​​ —​​ — ​ 273Subtotal of nuclear decommissioning trusts4​ 2,750​ 1,525​ —​ — ​ 4,275Total assets​ 2,828​ 1,550​ 91​ (3) ​ 4,466Liabilities at fair value​ ​ ​ ​ ​ Derivative contracts​ —​​ 77​​ —​​ (77) ​ —Total liabilities​ —​ 77​ —​ (77) ​ —Net assets ​$ 2,828​$ 1,473​$ 91​$ 74​$ 4,466​86 Table of Contents Table of Contents Table of Contents models include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity.Level 3 – This level includes congestion revenue rights (\"CRRs\"), which are derivative contracts that trade infrequently with significant unobservable inputs (CAISO CRR auction prices). SCE employs a market valuation approach of utilizing historical CRR prices as a proxy for forward prices. Edison International Parent and Other does not have any Level 3 assets and liabilities.Assumptions are made in order to value derivative contracts in which observable inputs are not available. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs, and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of derivative instruments.SCEThe following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:​​​​​​​​​​​​​​​​​​ December 31, 2023​​​​​​​​​​​Netting​​​​​​​​​​​​​​ and ​​ (in millions) Level 1 Level 2 Level 3 Collateral1 TotalAssets at fair value​​​​​​​​​​​​​​​Derivative contracts​$ —​$ 3​$ 91​$ (3)​$ 91Money market funds and other​ 78​​ 22​​ —​​ — ​ 100Nuclear decommissioning trusts:​ ​​​​​​​​​​ ​​Stocks2​ 1,658​​ —​​ —​​ — ​ 1,658Fixed Income3​ 923​​ 1,421​​ —​​ — ​ 2,344Short-term investments, primarily cash equivalents​ 169​​ 104​​ —​​ — ​ 273Subtotal of nuclear decommissioning trusts4​ 2,750​ 1,525​ —​ — ​ 4,275Total assets​ 2,828​ 1,550​ 91​ (3) ​ 4,466Liabilities at fair value​ ​ ​ ​ ​ Derivative contracts​ —​​ 77​​ —​​ (77) ​ —Total liabilities​ —​ 77​ —​ (77) ​ —Net assets ​$ 2,828​$ 1,473​$ 91​$ 74​$ 4,466​ models include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity. Level 3 – This level includes congestion revenue rights (\"CRRs\"), which are derivative contracts that trade infrequently with significant unobservable inputs (CAISO CRR auction prices). SCE employs a market valuation approach of utilizing historical CRR prices as a proxy for forward prices. Edison International Parent and Other does not have any Level 3 assets and liabilities. Assumptions are made in order to value derivative contracts in which observable inputs are not available. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs, and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of derivative instruments. SCE The following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Netting ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and ​ ​ (in millions) Level 1 Level 2 Level 3 Collateral1 Total Assets at fair value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative contracts ​ $ — ​ $ 3 ​ $ 91 ​ $ (3) ​ $ 91 Money market funds and other ​ 78 ​ ​ 22 ​ ​ — ​ ​ — ​ 100 Nuclear decommissioning trusts: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stocks2 ​ 1,658 ​ ​ — ​ ​ — ​ ​ — ​ 1,658 Fixed Income3 ​ 923 ​ ​ 1,421 ​ ​ — ​ ​ — ​ 2,344 Short-term investments, primarily cash equivalents ​ 169 ​ ​ 104 ​ ​ — ​ ​ — ​ 273 Subtotal of nuclear decommissioning trusts4 ​ 2,750 ​ 1,525 ​ — ​ — ​ 4,275 Total assets ​ 2,828 ​ 1,550 ​ 91 ​ (3) ​ 4,466 Liabilities at fair value ​ ​ ​ ​ ​ Derivative contracts ​ — ​ ​ 77 ​ ​ — ​ ​ (77) ​ — Total liabilities ​ — ​ 77 ​ — ​ (77) ​ — Net assets ​ $ 2,828 ​ $ 1,473 ​ $ 91 ​ $ 74 ​ $ 4,466 ​ 86 86 Table of Contents​​​​​​​​​​​​​​​​​ December 31, 2022​​​​​​​​​​​Netting​​​​​​​​​​​​​​ and ​​ (in millions) Level 1 Level 2 Level 3 Collateral1 ​TotalAssets at fair value​​​​​​​​​​​​​​​Derivative contracts​$ —​$ 392​$ 67​$ (218)​$ 241Money market funds and other​ 647​ 22​ —​ —​ 669Nuclear decommissioning trusts:​ ​ ​ ​ ​ Stocks2​ 1,610​ —​ —​ —​ 1,610Fixed Income3​ 941​ 1,281​ —​ —​ 2,222Short-term investments, primarily cash equivalents​ 137​ 64​ —​ —​ 201Subtotal of nuclear decommissioning trusts4​ 2,688​ 1,345​ —​ —​ 4,033Total assets​ 3,335​ 1,759​ 67​ (218)​ 4,943Liabilities at fair value​ ​ ​ ​ ​ Derivative contracts​ —​ 116​ 4​ (119)​ 1Total liabilities​ —​ 116​ 4​ (119)​ 1Net assets​$ 3,335​$ 1,643​$ 63​$ (99)​$ 4,9421Represents the netting of assets and liabilities under master netting agreements and cash collateral.2Approximately 75% and 74% of SCE's equity investments were in companies located in the United States at December 31, 2023 and 2022, respectively.3Includes corporate bonds, which were diversified by the inclusion of collateralized mortgage obligations and other asset backed securities of $106 million and $49 million at December 31, 2023 and 2022, respectively.4Excludes net payables of $102 million and $85 million at December 31, 2023 and 2022, respectively, which consist of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases.SCE Fair Value of Level 3The following table sets forth a summary of changes in SCE's fair value of Level 3 net derivative assets and liabilities:​​​​​​​Years ended December 31, (in millions)2023​2022Fair value of net assets at beginning of period$ 63​$ 44Sales​ (1)​​ (8)Settlements (40)​ (54)Total realized/unrealized gains1 69​ 81Fair value of net assets at end of period$ 91​$ 631Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities.There were no material transfers into or out of Level 3 during 2023 and 2022.The following table sets forth the significant unobservable inputs used to determine fair value for Level 3 assets and liabilities:​​​​​​​​​​​​​​​ Fair Value​Significant​​​Weighted​​(in millions)​ Unobservable​Range​Average​ Assets Liabilities Input (per MWh) (per MWh)Congestion revenue rights​ ​​ ​​ ​ ​ ​December 31, 2023​$ 91​$ — CAISO CRR auction prices $(6.44) - $16,574.36​$ 2.74December 31, 2022​ 67​ 4 CAISO CRR auction prices (7.91) - 3,856.67​​ 1.64​87 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​​​​ December 31, 2022​​​​​​​​​​​Netting​​​​​​​​​​​​​​ and ​​ (in millions) Level 1 Level 2 Level 3 Collateral1 ​TotalAssets at fair value​​​​​​​​​​​​​​​Derivative contracts​$ —​$ 392​$ 67​$ (218)​$ 241Money market funds and other​ 647​ 22​ —​ —​ 669Nuclear decommissioning trusts:​ ​ ​ ​ ​ Stocks2​ 1,610​ —​ —​ —​ 1,610Fixed Income3​ 941​ 1,281​ —​ —​ 2,222Short-term investments, primarily cash equivalents​ 137​ 64​ —​ —​ 201Subtotal of nuclear decommissioning trusts4​ 2,688​ 1,345​ —​ —​ 4,033Total assets​ 3,335​ 1,759​ 67​ (218)​ 4,943Liabilities at fair value​ ​ ​ ​ ​ Derivative contracts​ —​ 116​ 4​ (119)​ 1Total liabilities​ —​ 116​ 4​ (119)​ 1Net assets​$ 3,335​$ 1,643​$ 63​$ (99)​$ 4,9421Represents the netting of assets and liabilities under master netting agreements and cash collateral.2Approximately 75% and 74% of SCE's equity investments were in companies located in the United States at December 31, 2023 and 2022, respectively.3Includes corporate bonds, which were diversified by the inclusion of collateralized mortgage obligations and other asset backed securities of $106 million and $49 million at December 31, 2023 and 2022, respectively.4Excludes net payables of $102 million and $85 million at December 31, 2023 and 2022, respectively, which consist of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases.SCE Fair Value of Level 3The following table sets forth a summary of changes in SCE's fair value of Level 3 net derivative assets and liabilities:​​​​​​​Years ended December 31, (in millions)2023​2022Fair value of net assets at beginning of period$ 63​$ 44Sales​ (1)​​ (8)Settlements (40)​ (54)Total realized/unrealized gains1 69​ 81Fair value of net assets at end of period$ 91​$ 631Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities.There were no material transfers into or out of Level 3 during 2023 and 2022.The following table sets forth the significant unobservable inputs used to determine fair value for Level 3 assets and liabilities:​​​​​​​​​​​​​​​ Fair Value​Significant​​​Weighted​​(in millions)​ Unobservable​Range​Average​ Assets Liabilities Input (per MWh) (per MWh)Congestion revenue rights​ ​​ ​​ ​ ​ ​December 31, 2023​$ 91​$ — CAISO CRR auction prices $(6.44) - $16,574.36​$ 2.74December 31, 2022​ 67​ 4 CAISO CRR auction prices (7.91) - 3,856.67​​ 1.64​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Netting ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and ​ ​ (in millions) Level 1 Level 2 Level 3 Collateral1 ​ Total Assets at fair value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative contracts ​ $ — ​ $ 392 ​ $ 67 ​ $ (218) ​ $ 241 Money market funds and other ​ 647 ​ 22 ​ — ​ — ​ 669 Nuclear decommissioning trusts: ​ ​ ​ ​ ​ Stocks2 ​ 1,610 ​ — ​ — ​ — ​ 1,610 Fixed Income3 ​ 941 ​ 1,281 ​ — ​ — ​ 2,222 Short-term investments, primarily cash equivalents ​ 137 ​ 64 ​ — ​ — ​ 201 Subtotal of nuclear decommissioning trusts4 ​ 2,688 ​ 1,345 ​ — ​ — ​ 4,033 Total assets ​ 3,335 ​ 1,759 ​ 67 ​ (218) ​ 4,943 Liabilities at fair value ​ ​ ​ ​ ​ Derivative contracts ​ — ​ 116 ​ 4 ​ (119) ​ 1 Total liabilities ​ — ​ 116 ​ 4 ​ (119) ​ 1 Net assets ​ $ 3,335 ​ $ 1,643 ​ $ 63 ​ $ (99) ​ $ 4,942 SCE Fair Value of Level 3 The following table sets forth a summary of changes in SCE's fair value of Level 3 net derivative assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) 2023 ​ 2022 Fair value of net assets at beginning of period $ 63 ​ $ 44 Sales ​ (1) ​ ​ (8) Settlements (40) ​ (54) Total realized/unrealized gains1 69 ​ 81 Fair value of net assets at end of period $ 91 ​ $ 63 1 Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities. There were no material transfers into or out of Level 3 during 2023 and 2022. The following table sets forth the significant unobservable inputs used to determine fair value for Level 3 assets and liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Fair Value ​ Significant ​ ​ ​ Weighted ​ ​ (in millions) ​ Unobservable ​ Range ​ Average ​ Assets Liabilities Input (per MWh) (per MWh) Congestion revenue rights ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2023 ​ $ 91 ​ $ — CAISO CRR auction prices $(6.44) - $16,574.36 ​ $ 2.74 December 31, 2022 ​ 67 ​ 4 CAISO CRR auction prices (7.91) - 3,856.67 ​ ​ 1.64 ​ 87 87", "prior_body": "Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (referred to as an \"exit price\"). Fair value of an asset or liability considers assumptions that market participants would use in pricing the asset or liability, including assumptions about nonperformance risk. As of December 31, 2022 and 2021, nonperformance risk was not material for Edison International and SCE. Assets and liabilities are categorized into a three-level fair value hierarchy based on valuation inputs used to determine fair value. Level 1 – The fair value of Edison International's and SCE's Level 1 assets and liabilities is determined using unadjusted quoted prices in active markets that are available at the measurement date for identical assets and liabilities. This level includes exchange-traded equity securities, U.S. treasury securities, mutual funds and money market funds. Level 2 – Edison International's and SCE's Level 2 assets and liabilities include fixed income securities, primarily consisting of U.S. government and agency bonds, municipal bonds and corporate bonds, and over-the-counter derivatives. The fair value of fixed income securities is determined using a market approach by obtaining quoted prices for similar assets and liabilities in active markets and inputs that are observable, either directly or indirectly, for substantially the full term of the instrument. The fair value of SCE's over-the-counter derivative contracts is determined using an income approach. SCE uses standard pricing models to determine the net present value of estimated future cash flows. Inputs to the pricing models include forward published or posted clearing prices from an exchange (Intercontinental Exchange) for similar instruments and discount rates. A primary price source that best represents trade activity for each market is used to develop observable forward market prices in determining the fair value of these positions. Broker quotes, prices from exchanges or comparison to executed trades are used to validate and corroborate the primary price source. These price quotations reflect mid-market prices (average of bid and ask) and are obtained from sources believed to provide the most liquid market for the commodity. Level 3 – The fair value of SCE's Level 3 assets and liabilities is determined using the income approach through various models and techniques that require significant unobservable inputs. This level includes derivative contracts that trade infrequently such as congestion revenue rights (\"CRRs\"). Edison International Parent and Other does not have any Level 3 assets and liabilities. Assumptions are made in order to value derivative contracts in which observable inputs are not available. In circumstances where fair value cannot be verified with observable market transactions, it is possible that a different valuation model could produce a materially different estimate of fair value. Modeling methodologies, inputs, and techniques are reviewed and assessed as markets continue to develop and more pricing information becomes available and the fair value is adjusted when it is concluded that a change in inputs or techniques would result in a new valuation that better reflects the fair value of those derivative contracts. See Note 6 for a discussion of derivative instruments. 90 90 Table of ContentsSCEThe following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:​​​​​​​​​​​​​​​​​​ December 31, 2022​​​​​​​​​​​Netting​​​​​​​​​​​​​​ and ​​ (in millions) Level 1 Level 2 Level 3 Collateral1 TotalAssets at fair value​​​​​​​​​​​​​​​Derivative contracts​$ —​​ 392​​ 67​​ (218)​$ 241Money market funds and other​ 647​​ 22​​ —​​ — ​ 669Nuclear decommissioning trusts:​ ​​​​​​​​​​ ​​Stocks2​ 1,610​​ —​​ —​​ — ​ 1,610Fixed Income3​ 941​​ 1,281​​ —​​ — ​ 2,222Short-term investments, primarily cash equivalents​ 137​​ 64​​ —​​ — ​ 201Subtotal of nuclear decommissioning trusts4​ 2,688​ 1,345​ —​ — ​ 4,033Total assets​ 3,335​ 1,759​ 67​ (218) ​ 4,943Liabilities at fair value​ ​ ​ ​ ​ Derivative contracts​ —​​ 116​​ 4​​ (119) ​ 1Total liabilities​ —​ 116​ 4​ (119) ​ 1Net assets ​$ 3,335​$ 1,643​$ 63​$ (99)​$ 4,942​​​​​​​​​​​​​​​​​​ December 31, 2021​​​​​​​​​​​Netting​​​​​​​​​​​​​​ and ​​ (in millions) Level 1 Level 2 Level 3 Collateral1 ​TotalAssets at fair value​​​​​​​​​​​​​​​Derivative contracts​$ —​$ 26​$ 49​$ (31)​$ 44Money market funds and other​ 230​ 23​ —​ —​ 253Nuclear decommissioning trusts:​ ​ ​ ​ ​ Stocks2​ 1,972​ —​ —​ —​ 1,972Fixed Income3​ 1,083​ 1,607​ —​ —​ 2,690Short-term investments, primarily cash equivalents​ 102​ 125​ —​ —​ 227Subtotal of nuclear decommissioning trusts4​ 3,157​ 1,732​ —​ —​ 4,889Total assets​ 3,387​ 1,781​ 49​ (31)​ 5,186Liabilities at fair value​ ​ ​ ​ ​ Derivative contracts​ —​ 42​ 5​ (47)​ —Total liabilities​ —​ 42​ 5​ (47)​ —Net assets​$ 3,387​$ 1,739​$ 44​$ 16​$ 5,1861Represents the netting of assets and liabilities under master netting agreements and cash collateral.2Approximately 74% and 75% of SCE's equity investments were in companies located in the United States at December 31, 2022 and 2021, respectively.3Includes corporate bonds, which were diversified by the inclusion of collateralized mortgage obligations and other asset backed securities of $49 million and $30 million at December 31, 2022 and 2021, respectively.4Excludes net payables of $85 million and $19 million at December 31, 2022 and 2021, respectively, which consist of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases.91 Table of Contents Table of Contents Table of Contents SCEThe following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy:​​​​​​​​​​​​​​​​​​ December 31, 2022​​​​​​​​​​​Netting​​​​​​​​​​​​​​ and ​​ (in millions) Level 1 Level 2 Level 3 Collateral1 TotalAssets at fair value​​​​​​​​​​​​​​​Derivative contracts​$ —​​ 392​​ 67​​ (218)​$ 241Money market funds and other​ 647​​ 22​​ —​​ — ​ 669Nuclear decommissioning trusts:​ ​​​​​​​​​​ ​​Stocks2​ 1,610​​ —​​ —​​ — ​ 1,610Fixed Income3​ 941​​ 1,281​​ —​​ — ​ 2,222Short-term investments, primarily cash equivalents​ 137​​ 64​​ —​​ — ​ 201Subtotal of nuclear decommissioning trusts4​ 2,688​ 1,345​ —​ — ​ 4,033Total assets​ 3,335​ 1,759​ 67​ (218) ​ 4,943Liabilities at fair value​ ​ ​ ​ ​ Derivative contracts​ —​​ 116​​ 4​​ (119) ​ 1Total liabilities​ —​ 116​ 4​ (119) ​ 1Net assets ​$ 3,335​$ 1,643​$ 63​$ (99)​$ 4,942​​​​​​​​​​​​​​​​​​ December 31, 2021​​​​​​​​​​​Netting​​​​​​​​​​​​​​ and ​​ (in millions) Level 1 Level 2 Level 3 Collateral1 ​TotalAssets at fair value​​​​​​​​​​​​​​​Derivative contracts​$ —​$ 26​$ 49​$ (31)​$ 44Money market funds and other​ 230​ 23​ —​ —​ 253Nuclear decommissioning trusts:​ ​ ​ ​ ​ Stocks2​ 1,972​ —​ —​ —​ 1,972Fixed Income3​ 1,083​ 1,607​ —​ —​ 2,690Short-term investments, primarily cash equivalents​ 102​ 125​ —​ —​ 227Subtotal of nuclear decommissioning trusts4​ 3,157​ 1,732​ —​ —​ 4,889Total assets​ 3,387​ 1,781​ 49​ (31)​ 5,186Liabilities at fair value​ ​ ​ ​ ​ Derivative contracts​ —​ 42​ 5​ (47)​ —Total liabilities​ —​ 42​ 5​ (47)​ —Net assets​$ 3,387​$ 1,739​$ 44​$ 16​$ 5,1861Represents the netting of assets and liabilities under master netting agreements and cash collateral.2Approximately 74% and 75% of SCE's equity investments were in companies located in the United States at December 31, 2022 and 2021, respectively.3Includes corporate bonds, which were diversified by the inclusion of collateralized mortgage obligations and other asset backed securities of $49 million and $30 million at December 31, 2022 and 2021, respectively.4Excludes net payables of $85 million and $19 million at December 31, 2022 and 2021, respectively, which consist of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases. SCE The following table sets forth assets and liabilities of SCE that were accounted for at fair value by level within the fair value hierarchy: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Netting ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and ​ ​ (in millions) Level 1 Level 2 Level 3 Collateral1 Total Assets at fair value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative contracts ​ $ — ​ ​ 392 ​ ​ 67 ​ ​ (218) ​ $ 241 Money market funds and other ​ 647 ​ ​ 22 ​ ​ — ​ ​ — ​ 669 Nuclear decommissioning trusts: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stocks2 ​ 1,610 ​ ​ — ​ ​ — ​ ​ — ​ 1,610 Fixed Income3 ​ 941 ​ ​ 1,281 ​ ​ — ​ ​ — ​ 2,222 Short-term investments, primarily cash equivalents ​ 137 ​ ​ 64 ​ ​ — ​ ​ — ​ 201 Subtotal of nuclear decommissioning trusts4 ​ 2,688 ​ 1,345 ​ — ​ — ​ 4,033 Total assets ​ 3,335 ​ 1,759 ​ 67 ​ (218) ​ 4,943 Liabilities at fair value ​ ​ ​ ​ ​ Derivative contracts ​ — ​ ​ 116 ​ ​ 4 ​ ​ (119) ​ 1 Total liabilities ​ — ​ 116 ​ 4 ​ (119) ​ 1 Net assets ​ $ 3,335 ​ $ 1,643 ​ $ 63 ​ $ (99) ​ $ 4,942 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Netting ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ and ​ ​ (in millions) Level 1 Level 2 Level 3 Collateral1 ​ Total Assets at fair value ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Derivative contracts ​ $ — ​ $ 26 ​ $ 49 ​ $ (31) ​ $ 44 Money market funds and other ​ 230 ​ 23 ​ — ​ — ​ 253 Nuclear decommissioning trusts: ​ ​ ​ ​ ​ Stocks2 ​ 1,972 ​ — ​ — ​ — ​ 1,972 Fixed Income3 ​ 1,083 ​ 1,607 ​ — ​ — ​ 2,690 Short-term investments, primarily cash equivalents ​ 102 ​ 125 ​ — ​ — ​ 227 Subtotal of nuclear decommissioning trusts4 ​ 3,157 ​ 1,732 ​ — ​ — ​ 4,889 Total assets ​ 3,387 ​ 1,781 ​ 49 ​ (31) ​ 5,186 Liabilities at fair value ​ ​ ​ ​ ​ Derivative contracts ​ — ​ 42 ​ 5 ​ (47) ​ — Total liabilities ​ — ​ 42 ​ 5 ​ (47) ​ — Net assets ​ $ 3,387 ​ $ 1,739 ​ $ 44 ​ $ 16 ​ $ 5,186 91 91" }, { "status": "MODIFIED", "current_title": "Cash, Cash Equivalents and Restricted Cash", "prior_title": "Cash, Cash Equivalents and Restricted Cash", "similarity_score": 0.802, "confidence": "high", "key_changes": [ "Reworded sentence: \"The cash equivalents were as follows: ​ 70 70 Table of Contents​​​​​​​​​​​​​​ Edison International​SCE​​December 31, (in millions) 2023 2022 2023 2022Money market funds​$ 199​$ 784​$ 78​$ 647​Cash is temporarily invested until required for check clearing.\"", "Reworded sentence: \"The following table sets forth the cash, cash equivalents and restricted cash included in the consolidated statements of cash flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions) 2023 2022 Edison International: ​ ​ ​ ​ Cash and cash equivalents ​ $ 345 ​ $ 914 Short-term restricted cash1 Short-term restricted cash ​ 35 ​ 3 Long-term restricted cash2 Long-term restricted cash ​ ​ 152 ​ ​ — Total cash, cash equivalents and restricted cash ​ $ 532 ​ $ 917 SCE: ​ ​ ​ ​ Cash and cash equivalents ​ $ 214 ​ $ 766 Short-term restricted cash1 Short-term restricted cash ​ 33 ​ — Long-term restricted cash2 Long-term restricted cash ​ ​ 151 ​ ​ — Total cash, cash equivalents and restricted cash ​ $ 398 ​ $ 766\"" ], "current_body": "Cash equivalents consist of investments in money market funds. Generally, the carrying value of cash equivalents equals the fair value, as these investments have original maturities of three months or less. The cash equivalents were as follows: ​ 70 70 Table of Contents​​​​​​​​​​​​​​ Edison International​SCE​​December 31, (in millions) 2023 2022 2023 2022Money market funds​$ 199​$ 784​$ 78​$ 647​Cash is temporarily invested until required for check clearing. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period.The following table sets forth the cash, cash equivalents and restricted cash included in the consolidated statements of cash flows:​​​​​​​​​December 31, (in millions) 2023 2022Edison International:​ ​​ ​Cash and cash equivalents​$ 345​$ 914Short-term restricted cash1​ 35​ 3Long-term restricted cash2​​ 152​​ —Total cash, cash equivalents and restricted cash​$ 532​$ 917SCE:​ ​​ ​Cash and cash equivalents​$ 214​$ 766Short-term restricted cash1​ 33​ —Long-term restricted cash2​​ 151​​ —Total cash, cash equivalents and restricted cash​$ 398​$ 7661Includes SCE Recovery Funding LLC's restricted cash for payments of senior secured recovery bonds and is reflected in \"Other current assets\" on Edison International's and SCE's consolidated balance sheets.2The SCE amount represents cash collected for customer-funded wildfire self-insurance and is reflected in \"Other long-term assets\" on Edison International's and SCE's consolidated balance sheets. See Note 12 for further information.Allowance for Uncollectible AccountsThe allowance for uncollectible accounts is recorded based on SCE's estimate of expected credit losses and adjusted over the life of the receivables as needed. Since the customer base of SCE is concentrated in Southern California and exposes SCE to a homogeneous set of economic conditions, the allowance is measured on a collective basis on the historical amounts written-off, assessment of customer collectibility and current economic trends, including unemployment rates and any likelihood of recession for the region. 71 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​ Edison International​SCE​​December 31, (in millions) 2023 2022 2023 2022Money market funds​$ 199​$ 784​$ 78​$ 647​Cash is temporarily invested until required for check clearing. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period.The following table sets forth the cash, cash equivalents and restricted cash included in the consolidated statements of cash flows:​​​​​​​​​December 31, (in millions) 2023 2022Edison International:​ ​​ ​Cash and cash equivalents​$ 345​$ 914Short-term restricted cash1​ 35​ 3Long-term restricted cash2​​ 152​​ —Total cash, cash equivalents and restricted cash​$ 532​$ 917SCE:​ ​​ ​Cash and cash equivalents​$ 214​$ 766Short-term restricted cash1​ 33​ —Long-term restricted cash2​​ 151​​ —Total cash, cash equivalents and restricted cash​$ 398​$ 7661Includes SCE Recovery Funding LLC's restricted cash for payments of senior secured recovery bonds and is reflected in \"Other current assets\" on Edison International's and SCE's consolidated balance sheets.2The SCE amount represents cash collected for customer-funded wildfire self-insurance and is reflected in \"Other long-term assets\" on Edison International's and SCE's consolidated balance sheets. See Note 12 for further information.Allowance for Uncollectible AccountsThe allowance for uncollectible accounts is recorded based on SCE's estimate of expected credit losses and adjusted over the life of the receivables as needed. Since the customer base of SCE is concentrated in Southern California and exposes SCE to a homogeneous set of economic conditions, the allowance is measured on a collective basis on the historical amounts written-off, assessment of customer collectibility and current economic trends, including unemployment rates and any likelihood of recession for the region. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Edison International ​ SCE ​ ​ December 31, (in millions) 2023 2022 2023 2022 Money market funds ​ $ 199 ​ $ 784 ​ $ 78 ​ $ 647 ​ Cash is temporarily invested until required for check clearing. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period. The following table sets forth the cash, cash equivalents and restricted cash included in the consolidated statements of cash flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions) 2023 2022 Edison International: ​ ​ ​ ​ Cash and cash equivalents ​ $ 345 ​ $ 914 Short-term restricted cash1 Short-term restricted cash ​ 35 ​ 3 Long-term restricted cash2 Long-term restricted cash ​ ​ 152 ​ ​ — Total cash, cash equivalents and restricted cash ​ $ 532 ​ $ 917 SCE: ​ ​ ​ ​ Cash and cash equivalents ​ $ 214 ​ $ 766 Short-term restricted cash1 Short-term restricted cash ​ 33 ​ — Long-term restricted cash2 Long-term restricted cash ​ ​ 151 ​ ​ — Total cash, cash equivalents and restricted cash ​ $ 398 ​ $ 766", "prior_body": "Cash equivalents consist of investments in money market funds. Generally, the carrying value of cash equivalents equals the fair value, as these investments have original maturities of three months or less. The cash equivalents were as follows: ​ 74 74 Table of Contents​​​​​​​​​​​​​​ Edison International​SCE​​December 31, (in millions) 2022 2021 2022 2021Money market funds​$ 784​$ 329​$ 647​$ 230​Cash is temporarily invested until required for check clearing. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period.The following table sets forth the cash, cash equivalents and restricted cash included in the consolidated statements of cash flows:​​​​​​​​​December 31, December 31, (in millions) 2022 2021Edison International:​ ​​ ​Cash and cash equivalents​$ 914​$ 390Short-term restricted cash1​ 3​ 4Total cash, cash equivalents and restricted cash​$ 917​$ 394SCE:​ ​​ Cash and cash equivalents​$ 766​$ 279Short-term restricted cash1​ —​ 1Total cash, cash equivalents and restricted cash​$ 766​$ 2801Reflected in \"Other current assets\" on Edison International's and SCE's consolidated balance sheets.Allowance for Uncollectible AccountsThe allowance for uncollectible accounts is recorded based on SCE's estimate of expected credit losses and adjusted over the life of the receivables as needed. Since the customer base of SCE is concentrated in Southern California and exposes SCE to a homogeneous set of economic conditions, the allowance is measured on a collective basis on the historical amounts written-off, assessment of customer collectibility and current economic trends, including unemployment rates and likelihood of recession for the region. At December 31, 2022, this included the estimated impacts of the COVID-19 pandemic. In addition, in June 2022, California's state assembly passed legislation to authorize, fund and implement the California Arrearage Payment Program (\"CAPP\") 2022, which reduced customer arrearages for certain residential customers. The allowance for uncollectible accounts recorded against qualified arrearages was reduced by $83 million based on the receipt of CAPP in the fourth quarter of 2022.75 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​ Edison International​SCE​​December 31, (in millions) 2022 2021 2022 2021Money market funds​$ 784​$ 329​$ 647​$ 230​Cash is temporarily invested until required for check clearing. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period.The following table sets forth the cash, cash equivalents and restricted cash included in the consolidated statements of cash flows:​​​​​​​​​December 31, December 31, (in millions) 2022 2021Edison International:​ ​​ ​Cash and cash equivalents​$ 914​$ 390Short-term restricted cash1​ 3​ 4Total cash, cash equivalents and restricted cash​$ 917​$ 394SCE:​ ​​ Cash and cash equivalents​$ 766​$ 279Short-term restricted cash1​ —​ 1Total cash, cash equivalents and restricted cash​$ 766​$ 2801Reflected in \"Other current assets\" on Edison International's and SCE's consolidated balance sheets.Allowance for Uncollectible AccountsThe allowance for uncollectible accounts is recorded based on SCE's estimate of expected credit losses and adjusted over the life of the receivables as needed. Since the customer base of SCE is concentrated in Southern California and exposes SCE to a homogeneous set of economic conditions, the allowance is measured on a collective basis on the historical amounts written-off, assessment of customer collectibility and current economic trends, including unemployment rates and likelihood of recession for the region. At December 31, 2022, this included the estimated impacts of the COVID-19 pandemic. In addition, in June 2022, California's state assembly passed legislation to authorize, fund and implement the California Arrearage Payment Program (\"CAPP\") 2022, which reduced customer arrearages for certain residential customers. The allowance for uncollectible accounts recorded against qualified arrearages was reduced by $83 million based on the receipt of CAPP in the fourth quarter of 2022. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Edison International ​ SCE ​ ​ December 31, (in millions) 2022 2021 2022 2021 Money market funds ​ $ 784 ​ $ 329 ​ $ 647 ​ $ 230 ​ Cash is temporarily invested until required for check clearing. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period. The following table sets forth the cash, cash equivalents and restricted cash included in the consolidated statements of cash flows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, December 31, (in millions) 2022 2021 Edison International: ​ ​ ​ ​ Cash and cash equivalents ​ $ 914 ​ $ 390 Short-term restricted cash1 Short-term restricted cash ​ 3 ​ 4 Total cash, cash equivalents and restricted cash ​ $ 917 ​ $ 394 SCE: ​ ​ ​ Cash and cash equivalents ​ $ 766 ​ $ 279 Short-term restricted cash1 Short-term restricted cash ​ — ​ 1 Total cash, cash equivalents and restricted cash ​ $ 766 ​ $ 280" }, { "status": "MODIFIED", "current_title": "SCE monitors its compliance with the CPUC's equity ratio requirement based on the weighted average of the common equity component of SCE's CPUC authorized capital structure over the Capital Structure Compliance Period using its actual capital structure from the beginning of the Capital Structure Compliance Period through the reporting date together with forecasted performance and expected financing activities for the remainder of the Capital Structure Compliance Period. SCE expects to be compliant with its CPUC authorized capital structure at the end of the Capital Structure Compliance Period.", "prior_title": "SCE Dividends", "similarity_score": 0.795, "confidence": "high", "key_changes": [ "Removed sentence: \"CPUC holding company rules require that SCE's dividend policy be established by SCE's Board of Directors on the same basis as if SCE were a stand-alone utility company, and that the capital requirements of SCE, as deemed to be necessary to meet SCE's electricity service obligations, shall receive first priority from the Boards of Directors of both Edison International and SCE.\"", "Removed sentence: \"In addition, the CPUC regulates SCE's capital structure which limits the dividends it may pay to its shareholders.\"", "Removed sentence: \"The common equity component of SCE's CPUC authorized capital structure is 52% on a weighted average basis over the January 1, 2023 to December 31, 2025 compliance period (\"Capital Structure Compliance Period\").\"", "Removed sentence: \"This is unchanged from the January 1, 2020 to December 31, 2022 compliance period.\"", "Removed sentence: \"The CPUC authorized capital structure differs from the capital structure calculated based on GAAP due to certain exclusions allowed by CPUC, including the impact of SCE's contributions to the Wildfire Insurance Fund under AB 1054.\"" ], "current_body": "SCE's ability to declare and pay common dividends may be restricted under the terms of its outstanding series of preference stock. For further information see Note 14. As a California corporation, SCE's ability to pay dividends is also governed by the California General Corporation Law. California law requires that for a dividend to be declared: (a) retained earnings must equal or exceed the proposed dividend, or (b) immediately after the dividend is made, the value of the corporation's assets must exceed the value of its liabilities plus amounts required to be paid, if any, in order to liquidate stock senior to the shares receiving the dividend. Additionally, a California corporation may not declare a dividend if it is, or as a result of the dividend would be, likely to be unable to meet its liabilities as they mature. Prior to declaring dividends, SCE's Board of Directors evaluates available information, including when applicable, information pertaining to the 2017/2018 Wildfire/Mudslide Events, to ensure that the California law requirements for the declarations are met. On February 22, 2024, SCE declared a dividend to Edison International of $360 million. The timing and amount of future dividends are also dependent on a number of other factors including SCE's requirements to fund other obligations and capital expenditures, and its ability to access the capital markets and generate operating cash flows and earnings. If SCE incurs significant costs related to catastrophic wildfires and is unable to recover such costs through insurance, the Wildfire Insurance Fund (for fires after July 12, 2019), or from customers or is unable to access capital markets on reasonable terms, SCE may be limited in its ability to pay future dividends to Edison International and its preference shareholders. 80 80 Table of ContentsEdison International Dividend In December 2023, Edison International declared a 5.8% increase to the annual dividend rate from $2.95 per share to $3.12 per share. On February 22, 2024, Edison International declared a dividend of $0.78 per share to be paid on April 30, 2024. Edison International intends to maintain its target payout ratio of 45% – 55% of SCE's core earnings.Earnings Per ShareEdison International computes earnings per common share (\"EPS\") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards, payable in common shares, which earn dividend equivalents on an equal basis with common shares once the awards are vested. See Note 9 and Note 14 for further information.EPS attributable to Edison International common shareholders was computed as follows:​​​​​​​​​​​​Years ended December 31, (in millions, except per-share amounts)​2023 2022 2021Basic earnings per share:​​​​​​​ ​Net income attributable to common shareholders​$ 1,197​$ 612​$ 759Net income available to common shareholders​$ 1,197​$ 612​$ 759Weighted average common shares outstanding​​ 383​​ 381​​ 380Basic earnings per share​$ 3.12​$ 1.61​$ 2.00Diluted earnings per share:​​​​​ ​​ Net income attributable to common shareholders​$ 1,197​$ 612​$ 759Net income available to common shareholders​$ 1,197​$ 612​$ 759Income impact of assumed conversions​​ 1​​ 1​​ 1Net income available to common shareholders and assumed conversions​$ 1,198​$ 613​$ 760Weighted average common shares outstanding​​ 383​​ 381​​ 380Incremental shares from assumed conversions​​ 2​​ 2​​ —Adjusted weighted average shares – diluted​​ 385​​ 383​​ 380Diluted earnings per share​$ 3.11​$ 1.60​$ 2.00​In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase 3,771,766, 5,839,549 and 10,239,501, of common stock for the years ended December 31, 2023, 2022 and 2021, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been antidilutive.Income TaxesEdison International and SCE estimate their income taxes for each jurisdiction in which they operate. This involves estimating current period tax expense along with assessing temporary differences resulting from the differing treatment of items (such as depreciation) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheets.Income tax expense includes the current tax liability from operations and the change in deferred income taxes during the year. Interest income, interest expense, and penalties associated with income taxes are generally reflected in \"Income tax expense (benefit)\" on the consolidated statements of income.Edison International's eligible subsidiaries are included in Edison International's consolidated federal income tax and combined state tax returns. Edison International has tax-allocation and payment agreements with certain of its 81 Table of Contents Table of Contents Table of Contents Edison International Dividend In December 2023, Edison International declared a 5.8% increase to the annual dividend rate from $2.95 per share to $3.12 per share. On February 22, 2024, Edison International declared a dividend of $0.78 per share to be paid on April 30, 2024. Edison International intends to maintain its target payout ratio of 45% – 55% of SCE's core earnings.Earnings Per ShareEdison International computes earnings per common share (\"EPS\") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards, payable in common shares, which earn dividend equivalents on an equal basis with common shares once the awards are vested. See Note 9 and Note 14 for further information.EPS attributable to Edison International common shareholders was computed as follows:​​​​​​​​​​​​Years ended December 31, (in millions, except per-share amounts)​2023 2022 2021Basic earnings per share:​​​​​​​ ​Net income attributable to common shareholders​$ 1,197​$ 612​$ 759Net income available to common shareholders​$ 1,197​$ 612​$ 759Weighted average common shares outstanding​​ 383​​ 381​​ 380Basic earnings per share​$ 3.12​$ 1.61​$ 2.00Diluted earnings per share:​​​​​ ​​ Net income attributable to common shareholders​$ 1,197​$ 612​$ 759Net income available to common shareholders​$ 1,197​$ 612​$ 759Income impact of assumed conversions​​ 1​​ 1​​ 1Net income available to common shareholders and assumed conversions​$ 1,198​$ 613​$ 760Weighted average common shares outstanding​​ 383​​ 381​​ 380Incremental shares from assumed conversions​​ 2​​ 2​​ —Adjusted weighted average shares – diluted​​ 385​​ 383​​ 380Diluted earnings per share​$ 3.11​$ 1.60​$ 2.00​In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase 3,771,766, 5,839,549 and 10,239,501, of common stock for the years ended December 31, 2023, 2022 and 2021, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been antidilutive.Income TaxesEdison International and SCE estimate their income taxes for each jurisdiction in which they operate. This involves estimating current period tax expense along with assessing temporary differences resulting from the differing treatment of items (such as depreciation) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheets.Income tax expense includes the current tax liability from operations and the change in deferred income taxes during the year. Interest income, interest expense, and penalties associated with income taxes are generally reflected in \"Income tax expense (benefit)\" on the consolidated statements of income.Edison International's eligible subsidiaries are included in Edison International's consolidated federal income tax and combined state tax returns. Edison International has tax-allocation and payment agreements with certain of its", "prior_body": "CPUC holding company rules require that SCE's dividend policy be established by SCE's Board of Directors on the same basis as if SCE were a stand-alone utility company, and that the capital requirements of SCE, as deemed to be necessary to meet SCE's electricity service obligations, shall receive first priority from the Boards of Directors of both Edison International and SCE. In addition, the CPUC regulates SCE's capital structure which limits the dividends it may pay to its shareholders. The common equity component of SCE's CPUC authorized capital structure is 52% on a weighted average basis over the January 1, 2023 to December 31, 2025 compliance period (\"Capital Structure Compliance Period\"). This is unchanged from the January 1, 2020 to December 31, 2022 compliance period. The CPUC authorized capital structure differs from the capital structure calculated based on GAAP due to certain exclusions allowed by CPUC, including the impact of SCE's contributions to the Wildfire Insurance Fund under AB 1054. For further information, see \"Business—SCE—Overview of Ratemaking Process\" and \"Business—Southern California Wildfires.\" In May 2020, the CPUC issued a decision on SCE's application to the CPUC for waiver of compliance with its equity ratio requirement, that allows SCE to exclude from its equity ratio calculations (i) net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events and (ii) debt issued for the purpose of paying claims related to the 2017/2018 Wildfire/Mudslide Events up to an amount equal to the net charges accrued in connection with the 2017/2018 Wildfire/Mudslide Events. With these exclusions, SCE was in compliance with its authorized capital structure for the compliance period from January 1, 2020 to December 31, 2022. The temporary exclusion lapsed on May 7, 2022. In April 2022, SCE filed another application requesting continued waiver of compliance with its equity ratio requirement. Under the CPUC's rules, SCE will not be deemed to be in violation of the equity ratio requirement while the waiver application is pending resolution. While the exclusion is in place, SCE is required to notify the CPUC if an adverse financial event reduces SCE's spot equity ratio by more than one percent from the level most recently filed with the CPUC in the proceeding. The last spot equity ratio SCE filed with the CPUC in the proceeding did not exclude the then $1.8 billion net charge and was 45.2% as of December 31, 2018 (at the time the common equity component of SCE's CPUC authorized capital structure was required to remain at or above 48% on a weighted average basis over the applicable 37-month period). SCE's spot equity ratio on December 31, 2018 would have been 48.7% had the $1.8 billion net charge at December 31, 2018 been excluded, therefore SCE will notify the CPUC if its spot ratio drops below 47.7% in any quarter. For further information, see \"Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" 37-month SCE monitors its compliance with the CPUC's equity ratio requirement based on the weighted average of the common equity component of SCE's CPUC authorized capital structure over the Capital Structure Compliance Period using its actual capital structure from the beginning of the Capital Structure Compliance Period through the reporting date together with forecasted performance and expected financing activities for the remainder of the Capital Structure Compliance Period. SCE expects to be compliant with its CPUC authorized capital structure at the end of its current compliance period, December 31, 2025. SCE's ability to declare and pay common dividends may be restricted under the terms of its outstanding series of preference stock. For further information see Note 14. As a California corporation, SCE's ability to pay dividends is also governed by the California General Corporation Law. California law requires that for a dividend to be declared: (a) retained earnings must equal or exceed the proposed dividend, or (b) immediately after the dividend is made, the value of the corporation's assets must exceed the value of its liabilities plus amounts required to be paid, if any, in order to liquidate stock senior to the shares receiving the dividend. Additionally, a California corporation may not declare a dividend if it is, or as a result of the dividend would be, likely to be unable to meet its liabilities as they mature. Prior to declaring dividends, SCE's Board of Directors evaluates available information, including when applicable, information pertaining to the 2017/2018 Wildfire/Mudslide Events, to ensure 84 84 Table of Contentsthat the California law requirements for the declarations are met. On February 23, 2023, SCE declared a dividend to Edison International of $350 million.The timing and amount of future dividends are also dependent on a number of other factors including SCE's requirements to fund other obligations and capital expenditures, and its ability to access the capital markets and generate operating cash flows and earnings. If SCE incurs significant costs related to catastrophic wildfires and is unable to recover such costs through insurance, the Wildfire Insurance Fund (for fires after July 12, 2019), or from customers or is unable to access capital markets on reasonable terms, SCE may be limited in its ability to pay future dividends to Edison International and its preference shareholders.Edison International Dividend In December 2022, Edison International declared a 5% increase to the annual dividend rate from $2.80 per share to $2.95 per share. On February 23, 2023, Edison International declared a dividend of $0.7375 per share to be paid on April 30, 2023. Edison International intends to maintain its target payout ratio of 45% – 55% of SCE's core earnings. Earnings Per ShareEdison International computes earnings per common share (\"EPS\") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards, payable in common shares, which earn dividend equivalents on an equal basis with common shares once the awards are vested. See Note 9 and Note 14 for further information.EPS attributable to Edison International common shareholders was computed as follows:​​​​​​​​​​​ Years ended December 31, (in millions, except per-share amounts) 2022 2021 2020Basic earnings per share:​​​​​​​ ​Net income attributable to common shareholders​$ 612​$ 759​$ 739Net income available to common shareholders​$ 612​$ 759​$ 739Weighted average common shares outstanding​​ 381​​ 380​​ 373Basic earnings per share​$ 1.61​$ 2.00​$ 1.98Diluted earnings per share:​​​​​ ​​ Net income attributable to common shareholders​$ 612​$ 759​$ 739Net income available to common shareholders​$ 612​$ 759​$ 739Income impact of assumed conversions​​ 1​​ 1​​ —Net income available to common shareholders and assumed conversions​$ 613​$ 760​$ 739Weighted average common shares outstanding​​ 381​​ 380​​ 373Incremental shares from assumed conversions​​ 2​​ —​​ 1Adjusted weighted average shares – diluted​​ 383​​ 380​​ 374Diluted earnings per share​$ 1.60​$ 2.00​$ 1.98​In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase 5,839,549, 10,239,501, and 9,066,753 shares of common stock for the years ended December 31, 2022, 2021, and 2020, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been antidilutive.Income TaxesEdison International and SCE estimate their income taxes for each jurisdiction in which they operate. This involves estimating current period tax expense along with assessing temporary differences resulting from differing treatment of 85 Table of Contents Table of Contents Table of Contents that the California law requirements for the declarations are met. On February 23, 2023, SCE declared a dividend to Edison International of $350 million.The timing and amount of future dividends are also dependent on a number of other factors including SCE's requirements to fund other obligations and capital expenditures, and its ability to access the capital markets and generate operating cash flows and earnings. If SCE incurs significant costs related to catastrophic wildfires and is unable to recover such costs through insurance, the Wildfire Insurance Fund (for fires after July 12, 2019), or from customers or is unable to access capital markets on reasonable terms, SCE may be limited in its ability to pay future dividends to Edison International and its preference shareholders.Edison International Dividend In December 2022, Edison International declared a 5% increase to the annual dividend rate from $2.80 per share to $2.95 per share. On February 23, 2023, Edison International declared a dividend of $0.7375 per share to be paid on April 30, 2023. Edison International intends to maintain its target payout ratio of 45% – 55% of SCE's core earnings. Earnings Per ShareEdison International computes earnings per common share (\"EPS\") using the two-class method, which is an earnings allocation formula that determines EPS for each class of common stock and participating security. Edison International's participating securities are stock-based compensation awards, payable in common shares, which earn dividend equivalents on an equal basis with common shares once the awards are vested. See Note 9 and Note 14 for further information.EPS attributable to Edison International common shareholders was computed as follows:​​​​​​​​​​​ Years ended December 31, (in millions, except per-share amounts) 2022 2021 2020Basic earnings per share:​​​​​​​ ​Net income attributable to common shareholders​$ 612​$ 759​$ 739Net income available to common shareholders​$ 612​$ 759​$ 739Weighted average common shares outstanding​​ 381​​ 380​​ 373Basic earnings per share​$ 1.61​$ 2.00​$ 1.98Diluted earnings per share:​​​​​ ​​ Net income attributable to common shareholders​$ 612​$ 759​$ 739Net income available to common shareholders​$ 612​$ 759​$ 739Income impact of assumed conversions​​ 1​​ 1​​ —Net income available to common shareholders and assumed conversions​$ 613​$ 760​$ 739Weighted average common shares outstanding​​ 381​​ 380​​ 373Incremental shares from assumed conversions​​ 2​​ —​​ 1Adjusted weighted average shares – diluted​​ 383​​ 380​​ 374Diluted earnings per share​$ 1.60​$ 2.00​$ 1.98​In addition to the participating securities discussed above, Edison International also may award stock options, which are payable in common shares and are included in the diluted earnings per share calculation. Stock option awards to purchase 5,839,549, 10,239,501, and 9,066,753 shares of common stock for the years ended December 31, 2022, 2021, and 2020, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the effect would have been antidilutive.Income TaxesEdison International and SCE estimate their income taxes for each jurisdiction in which they operate. This involves estimating current period tax expense along with assessing temporary differences resulting from differing treatment of that the California law requirements for the declarations are met. On February 23, 2023, SCE declared a dividend to Edison International of $350 million. The timing and amount of future dividends are also dependent on a number of other factors including SCE's requirements to fund other obligations and capital expenditures, and its ability to access the capital markets and generate operating cash flows and earnings. If SCE incurs significant costs related to catastrophic wildfires and is unable to recover such costs through insurance, the Wildfire Insurance Fund (for fires after July 12, 2019), or from customers or is unable to access capital markets on reasonable terms, SCE may be limited in its ability to pay future dividends to Edison International and its preference shareholders." }, { "status": "MODIFIED", "current_title": "If SCE is unable to operate efficiently and to effectively and timely respond to the changes that the electricity industry is undergoing, as a result of increased load requirements, competition, technological advances, and changes to the regulatory environment, SCE's business model, financial condition and results of operations could be materially impacted.", "prior_title": "As a capital-intensive company, SCE relies on access to the capital markets. If SCE were unable to access the capital markets or the cost of financing were to substantially increase, its liquidity and operations could be materially affected.", "similarity_score": 0.79, "confidence": "high", "key_changes": [ "Reworded sentence: \"SCE’s ability to efficiently operate and implement process changes has a direct impact on its ability to execute its strategy, its customer rates and affordability of electricity.\"", "Reworded sentence: \"This change will require modernization of the electric distribution grid to, among other things, 47 47 Table of Contentsaccommodate two-way flows of electricity and increase the grid's capacity to interconnect DERs.\"", "Reworded sentence: \"If SCE is unable to operate efficiently and adapt to these changes, its business model, its ability to execute on its strategy, and ultimately its financial condition and results of operations could be materially impacted.Customer-owned generation and load departures to CCAs or Electric Service Providers each reduce the amount of electricity that customers purchase from utilities and have the effect of increasing utility rates unless customer rates are designed to allocate the costs of the distribution grid across all customers that benefit from its use.\"", "Reworded sentence: \"If regulations aren't changed such that customers pay their share of transmission and distribution costs and non-bypassable charges, for example through a fixed charge, and the demand for electricity reduces so significantly that SCE is no longer effectively able to recover such costs from its customers, SCE's business, financial condition and results of operations will be materially impacted.In addition, the FERC has opened transmission development to competition from independent developers, allowing such developers to compete with incumbent utilities for the construction and operation of transmission facilities.\"", "Reworded sentence: \"If SCE is unable to operate efficiently and adapt to these changes, its business model, its ability to execute on its strategy, and ultimately its financial condition and results of operations could be materially impacted.Customer-owned generation and load departures to CCAs or Electric Service Providers each reduce the amount of electricity that customers purchase from utilities and have the effect of increasing utility rates unless customer rates are designed to allocate the costs of the distribution grid across all customers that benefit from its use.\"" ], "current_body": "SCE’s ability to efficiently operate and implement process changes has a direct impact on its ability to execute its strategy, its customer rates and affordability of electricity. Even if SCE’s costs are recoverable, the necessary costs of operations and investments supporting safety, reliability, resilience and being ready to meet California’s clean energy goals will negatively impact the affordability of SCE’s customer rates, may cause reputational harm and cause increased load departures. Customers and third parties are increasingly deploying DERs, such as solar generation, energy storage, energy efficiency and demand response technologies. California's environmental policy objectives are accelerating the pace and scope of industry change. This change will require modernization of the electric distribution grid to, among other things, 47 47 Table of Contentsaccommodate two-way flows of electricity and increase the grid's capacity to interconnect DERs. In addition, enabling California's clean energy economy goals will require sustained investments in grid modernization, renewable integration projects, energy efficiency programs, energy storage options and electric vehicle infrastructure. If SCE is unable to operate efficiently and adapt to these changes, its business model, its ability to execute on its strategy, and ultimately its financial condition and results of operations could be materially impacted.Customer-owned generation and load departures to CCAs or Electric Service Providers each reduce the amount of electricity that customers purchase from utilities and have the effect of increasing utility rates unless customer rates are designed to allocate the costs of the distribution grid across all customers that benefit from its use. For example, some customers in California who generate their own power are not currently required to pay all transmission and distribution charges and non-bypassable charges, subject to limitations, which results in increased costs for those customers who do not own their generation. If regulations aren't changed such that customers pay their share of transmission and distribution costs and non-bypassable charges, for example through a fixed charge, and the demand for electricity reduces so significantly that SCE is no longer effectively able to recover such costs from its customers, SCE's business, financial condition and results of operations will be materially impacted.In addition, the FERC has opened transmission development to competition from independent developers, allowing such developers to compete with incumbent utilities for the construction and operation of transmission facilities. For more information. See \"Business—SCE—Competition.\"RISKS RELATING TO EDISON INTERNATIONAL AND SOUTHERN CALIFORNIA EDISON COMPANYCybersecurity and Physical Security RisksSuccessful attacks on SCE information and operational technology systems and infrastructure could have a material impact on SCE's operations or financial condition Edison International and SCE systems are targets for physical and cyber attacks. Regulators such as NERC and U.S. Government agencies, including the Departments of Defense, Homeland Security, and Energy, have increasingly stressed that threat sources continue to seek to identify and exploit vulnerabilities in the U.S. national electric grid and other critical energy infrastructures, and that such attacks and disruptions, both physical and cyber, are highly sophisticated and dynamic. Several U.S. Government agencies have highlighted the increasing risks related to physical and cybersecurity attacks, including ransomware attacks, related to the electric sector, including its supply chain, and that the risks may escalate during periods of heightened geopolitical tensions.SCE requires the uninterrupted use of sophisticated information and operational technology systems and infrastructure to monitor and operate the electric grid. In the regular course of SCE’s business, it also handles a range of sensitive infrastructure, security, employee, customer, and business systems information. If SCE's information technology and operational technology systems' security were to be compromised by physical or electronic means or a critical system or technology failure were to occur without timely recovery, including failure of new technology to be implemented as designed, SCE could be unable to fulfill critical business functions and/or sensitive information could be misappropriated or compromised. Such events could result in violations of privacy and other laws, material financial loss to SCE and/or to its customers, loss of confidence in SCE's security risk management, customer dissatisfaction, and significant litigation and/or regulatory exposure, all of which could materially affect Edison International’s and SCE's financial condition, operations, and the business reputation of Edison International and SCE.SCE's security program cannot prevent all attacks SCE's systems have experienced, and will continue to face, cyber and physical security events involving vandalism, malicious code, unauthorized access attempts, and other illicit activities. No security program can completely shield its 48 Table of Contents Table of Contents Table of Contents accommodate two-way flows of electricity and increase the grid's capacity to interconnect DERs. In addition, enabling California's clean energy economy goals will require sustained investments in grid modernization, renewable integration projects, energy efficiency programs, energy storage options and electric vehicle infrastructure. If SCE is unable to operate efficiently and adapt to these changes, its business model, its ability to execute on its strategy, and ultimately its financial condition and results of operations could be materially impacted.Customer-owned generation and load departures to CCAs or Electric Service Providers each reduce the amount of electricity that customers purchase from utilities and have the effect of increasing utility rates unless customer rates are designed to allocate the costs of the distribution grid across all customers that benefit from its use. For example, some customers in California who generate their own power are not currently required to pay all transmission and distribution charges and non-bypassable charges, subject to limitations, which results in increased costs for those customers who do not own their generation. If regulations aren't changed such that customers pay their share of transmission and distribution costs and non-bypassable charges, for example through a fixed charge, and the demand for electricity reduces so significantly that SCE is no longer effectively able to recover such costs from its customers, SCE's business, financial condition and results of operations will be materially impacted.In addition, the FERC has opened transmission development to competition from independent developers, allowing such developers to compete with incumbent utilities for the construction and operation of transmission facilities. For more information. See \"Business—SCE—Competition.\"RISKS RELATING TO EDISON INTERNATIONAL AND SOUTHERN CALIFORNIA EDISON COMPANYCybersecurity and Physical Security RisksSuccessful attacks on SCE information and operational technology systems and infrastructure could have a material impact on SCE's operations or financial condition Edison International and SCE systems are targets for physical and cyber attacks. Regulators such as NERC and U.S. Government agencies, including the Departments of Defense, Homeland Security, and Energy, have increasingly stressed that threat sources continue to seek to identify and exploit vulnerabilities in the U.S. national electric grid and other critical energy infrastructures, and that such attacks and disruptions, both physical and cyber, are highly sophisticated and dynamic. Several U.S. Government agencies have highlighted the increasing risks related to physical and cybersecurity attacks, including ransomware attacks, related to the electric sector, including its supply chain, and that the risks may escalate during periods of heightened geopolitical tensions.SCE requires the uninterrupted use of sophisticated information and operational technology systems and infrastructure to monitor and operate the electric grid. In the regular course of SCE’s business, it also handles a range of sensitive infrastructure, security, employee, customer, and business systems information. If SCE's information technology and operational technology systems' security were to be compromised by physical or electronic means or a critical system or technology failure were to occur without timely recovery, including failure of new technology to be implemented as designed, SCE could be unable to fulfill critical business functions and/or sensitive information could be misappropriated or compromised. Such events could result in violations of privacy and other laws, material financial loss to SCE and/or to its customers, loss of confidence in SCE's security risk management, customer dissatisfaction, and significant litigation and/or regulatory exposure, all of which could materially affect Edison International’s and SCE's financial condition, operations, and the business reputation of Edison International and SCE.SCE's security program cannot prevent all attacks SCE's systems have experienced, and will continue to face, cyber and physical security events involving vandalism, malicious code, unauthorized access attempts, and other illicit activities. No security program can completely shield its accommodate two-way flows of electricity and increase the grid's capacity to interconnect DERs. In addition, enabling California's clean energy economy goals will require sustained investments in grid modernization, renewable integration projects, energy efficiency programs, energy storage options and electric vehicle infrastructure. If SCE is unable to operate efficiently and adapt to these changes, its business model, its ability to execute on its strategy, and ultimately its financial condition and results of operations could be materially impacted. Customer-owned generation and load departures to CCAs or Electric Service Providers each reduce the amount of electricity that customers purchase from utilities and have the effect of increasing utility rates unless customer rates are designed to allocate the costs of the distribution grid across all customers that benefit from its use. For example, some customers in California who generate their own power are not currently required to pay all transmission and distribution charges and non-bypassable charges, subject to limitations, which results in increased costs for those customers who do not own their generation. If regulations aren't changed such that customers pay their share of transmission and distribution costs and non-bypassable charges, for example through a fixed charge, and the demand for electricity reduces so significantly that SCE is no longer effectively able to recover such costs from its customers, SCE's business, financial condition and results of operations will be materially impacted. In addition, the FERC has opened transmission development to competition from independent developers, allowing such developers to compete with incumbent utilities for the construction and operation of transmission facilities. For more information. See \"Business—SCE—Competition.\"", "prior_body": "SCE regularly accesses the capital markets to finance its activities and is expected to do so by its regulators as part of its obligation to serve as a regulated utility. SCE's needs for capital for its ongoing infrastructure investment program are substantial. SCE's ability to obtain financing, as well as its ability to refinance debt and make scheduled payments of principal and interest, are dependent on numerous factors, including SCE's levels of indebtedness, maintenance of acceptable credit ratings, financial performance, liquidity and cash flow, and other market conditions. In addition, the actions of other California investor-owned utilities and legal, regulatory and legislative decisions impacting investor-owned utilities can affect market conditions and therefore, SCE's ability to obtain financing. SCE's inability to obtain additional capital from time to time could have a material effect on SCE's liquidity and operations. 51 51 Table of ContentsCompetitive and Market RisksSCE's inability to effectively and timely respond to the changes that the electricity industry is undergoing, as a result of increased competition, technological advances, and changes to the regulatory environment, could materially impact SCE's business model, financial condition and results of operations.Customers and third parties are increasingly deploying distributed energy resources (\"DERs\"), such as solar generation, energy storage, energy efficiency and demand response technologies. California's environmental policy objectives are accelerating the pace and scope of industry change. This change will require modernization of the electric distribution grid to, among other things, accommodate two-way flows of electricity and increase the grid's capacity to interconnect DERs. In addition, enabling California's clean energy economy goals will require sustained investments in grid modernization, renewable integration projects, energy efficiency programs, energy storage options and electric vehicle infrastructure. If SCE is unable to effectively adapt to these changes, its business model, its ability to execute on its strategy, and ultimately its financial condition and results of operations could be materially impacted.Customer-owned generation and load departures to CCAs or Electric Service Providers each reduce the amount of electricity that customers purchase from utilities and have the effect of increasing utility rates unless customer rates are designed to allocate the costs of the distribution grid across all customers that benefit from its use. For example, some customers in California who generate their own power are not currently required to pay all transmission and distribution charges and non-bypassable charges, subject to limitations, which results in increased costs for those customers who do not own their generation. If regulations aren't changed such that customers pay their share of transmission and distribution costs and non-bypassable charges and the demand for electricity reduces so significantly that SCE is no longer effectively able to recover such costs from its customers, SCE's business, financial condition and results of operations will be materially impacted.In addition, the FERC has opened transmission development to competition from independent developers, allowing such developers to compete with incumbent utilities for the construction and operation of transmission facilities.For more information. See \"Business—SCE—Competition.\"Cybersecurity and Physical Security RisksSCE's systems and network infrastructure are targets for physical and cyber attacks, intrusions or other catastrophic events that could result in their failure or reduced functionality.Regulators such as NERC and U.S. Government agencies, including the Departments of Defense, Homeland Security and Energy, have increasingly stressed that threat sources continue to seek to exploit potential vulnerabilities in the U.S. national electric grid and other energy infrastructures, and that such attacks and disruptions, both physical and cyber, are highly sophisticated and dynamic. Several U.S. Government agencies have highlighted the increasing risks related to physical attacks, ransomware attacks and cybersecurity risks related to the electric sector, including its supply chains, and that the risks may escalate during periods of heightened geopolitical tensions. SCE's operations require the continuous availability of critical information technology systems, sensitive customer and employee data and network infrastructure and information, all of which are targets for malicious actors. New cyber and physical threats arise as SCE moves from an analog to a digital electric grid. For example, SCE's grid modernization efforts and the move to a network-connected grid increases the number of “threat surfaces” and potential vulnerabilities that an adversary can target. SCE system data and architecture are also disclosed, either intentionally or unintentionally, to third parties and the public by regulators, employees, contractors and vendors. This system information may be used by malicious actors to understand SCE’s systems to prepare for a cyber or physical attack.52 Table of Contents Table of Contents Table of Contents Competitive and Market RisksSCE's inability to effectively and timely respond to the changes that the electricity industry is undergoing, as a result of increased competition, technological advances, and changes to the regulatory environment, could materially impact SCE's business model, financial condition and results of operations.Customers and third parties are increasingly deploying distributed energy resources (\"DERs\"), such as solar generation, energy storage, energy efficiency and demand response technologies. California's environmental policy objectives are accelerating the pace and scope of industry change. This change will require modernization of the electric distribution grid to, among other things, accommodate two-way flows of electricity and increase the grid's capacity to interconnect DERs. In addition, enabling California's clean energy economy goals will require sustained investments in grid modernization, renewable integration projects, energy efficiency programs, energy storage options and electric vehicle infrastructure. If SCE is unable to effectively adapt to these changes, its business model, its ability to execute on its strategy, and ultimately its financial condition and results of operations could be materially impacted.Customer-owned generation and load departures to CCAs or Electric Service Providers each reduce the amount of electricity that customers purchase from utilities and have the effect of increasing utility rates unless customer rates are designed to allocate the costs of the distribution grid across all customers that benefit from its use. For example, some customers in California who generate their own power are not currently required to pay all transmission and distribution charges and non-bypassable charges, subject to limitations, which results in increased costs for those customers who do not own their generation. If regulations aren't changed such that customers pay their share of transmission and distribution costs and non-bypassable charges and the demand for electricity reduces so significantly that SCE is no longer effectively able to recover such costs from its customers, SCE's business, financial condition and results of operations will be materially impacted.In addition, the FERC has opened transmission development to competition from independent developers, allowing such developers to compete with incumbent utilities for the construction and operation of transmission facilities.For more information. See \"Business—SCE—Competition.\"Cybersecurity and Physical Security RisksSCE's systems and network infrastructure are targets for physical and cyber attacks, intrusions or other catastrophic events that could result in their failure or reduced functionality.Regulators such as NERC and U.S. Government agencies, including the Departments of Defense, Homeland Security and Energy, have increasingly stressed that threat sources continue to seek to exploit potential vulnerabilities in the U.S. national electric grid and other energy infrastructures, and that such attacks and disruptions, both physical and cyber, are highly sophisticated and dynamic. Several U.S. Government agencies have highlighted the increasing risks related to physical attacks, ransomware attacks and cybersecurity risks related to the electric sector, including its supply chains, and that the risks may escalate during periods of heightened geopolitical tensions. SCE's operations require the continuous availability of critical information technology systems, sensitive customer and employee data and network infrastructure and information, all of which are targets for malicious actors. New cyber and physical threats arise as SCE moves from an analog to a digital electric grid. For example, SCE's grid modernization efforts and the move to a network-connected grid increases the number of “threat surfaces” and potential vulnerabilities that an adversary can target. SCE system data and architecture are also disclosed, either intentionally or unintentionally, to third parties and the public by regulators, employees, contractors and vendors. This system information may be used by malicious actors to understand SCE’s systems to prepare for a cyber or physical attack." }, { "status": "MODIFIED", "current_title": "Opinion on the Financial Statements", "prior_title": "Opinions on the Financial Statements and Internal Control over Financial Reporting", "similarity_score": 0.776, "confidence": "high", "key_changes": [ "Reworded sentence: \"We have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).\"" ], "current_body": "We have audited the accompanying consolidated balance sheets of Southern California Edison Company and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.", "prior_body": "​ We have audited the accompanying consolidated balance sheets of Edison International and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2022, including the related notes and schedule of condensed financial information of parent as of December 31, 2022 and 2021 and for each of the three years in the period ended December 31, 2022 appearing under Item 15 (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). ​ In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. ​" }, { "status": "MODIFIED", "current_title": "Comprehensive income", "prior_title": "Comprehensive income", "similarity_score": 0.774, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ 1,409 ​ 867 ​ 940 Less: Comprehensive income attributable to noncontrolling interests ​ 123 ​ 107 ​ 106\"" ], "current_body": "​ 1,409 ​ 867 ​ 940 Less: Comprehensive income attributable to noncontrolling interests ​ 123 ​ 107 ​ 106", "prior_body": "​ 867 ​ 940 ​ 871 Less: Comprehensive income attributable to noncontrolling interests ​ 107 ​ 106 ​ 132" }, { "status": "MODIFIED", "current_title": "Total liabilities", "prior_title": "Total liabilities", "similarity_score": 0.767, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ 63,814 ​ 60,519 Commitments and contingencies (Note 12) ​ ​ Preferred stock (50,000,000 shares authorized; 1,159,317 and 1,250,000 shares of Series A and 532,454 and 750,000 shares of Series B issued and outstanding at respective dates) Series A outstanding ​ ​ 1,673 ​ ​ 1,978 Common stock, no par value (800,000,000 shares authorized; 383,924,912 and 382,208,498 shares issued and outstanding at respective dates) issued outstanding ​ 6,338 ​ 6,200 Accumulated other comprehensive loss ​ (9) ​ (11) Retained earnings ​ 7,499 ​ 7,454\"" ], "current_body": "​ 63,814 ​ 60,519 Commitments and contingencies (Note 12) ​ ​ Preferred stock (50,000,000 shares authorized; 1,159,317 and 1,250,000 shares of Series A and 532,454 and 750,000 shares of Series B issued and outstanding at respective dates) Series A outstanding ​ ​ 1,673 ​ ​ 1,978 Common stock, no par value (800,000,000 shares authorized; 383,924,912 and 382,208,498 shares issued and outstanding at respective dates) issued outstanding ​ 6,338 ​ 6,200 Accumulated other comprehensive loss ​ (9) ​ (11) Retained earnings ​ 7,499 ​ 7,454", "prior_body": "​ 60,519 ​ 56,956 Commitments and contingencies (Note 12) ​ ​ Preferred stock (50,000,000 shares authorized; 1,250,000 shares of Series A and 750,000 shares of Series B issued and outstanding at respective dates) ​ ​ 1,978 ​ ​ 1,977 Common stock, no par value (800,000,000 shares authorized; 382,208,498 and 380,378,145 shares issued and outstanding at respective dates) issued outstanding ​ 6,200 ​ 6,071 Accumulated other comprehensive loss ​ (11) ​ (54) Retained earnings ​ 7,454 ​ 7,894" }, { "status": "MODIFIED", "current_title": "Vendors and other third parties may be used to target and attack SCE", "prior_title": "Edison International's and SCE's financial condition and results of operations could be materially impacted by events, like the COVID-19 pandemic, that cause significant disruption to workforces, supply chains, economies, or societies on a regional, statewide, national or global basis.", "similarity_score": 0.76, "confidence": "high", "key_changes": [ "Reworded sentence: \"SCE interacts with a wide array of third parties and depends on vendors to provide it with products and services.\"", "Reworded sentence: \"Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"​QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInformation responding to this section is included in the MD&A under the heading \"Market Risk Exposures.\"​FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA​50 Table of Contents Table of Contents Table of Contents Global and Regional RisksEdison International's and SCE's financial condition and results of operations could be materially impacted by catastrophic, macroeconomic and geopolitical events that cause significant disruption to workforces, supply chains, economies, or societies on a regional, statewide, national or global basis.Edison International and SCE could be materially and adversely impacted by catastrophic, macroeconomic and geopolitical events, such as the effects of increased inflationary pressures and interest rates, potential economic downturns or recessions, geopolitical pressures, and pandemics and regional health emergencies.\"", "Reworded sentence: \"Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"​QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInformation responding to this section is included in the MD&A under the heading \"Market Risk Exposures.\"​FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA​\"" ], "current_body": "SCE interacts with a wide array of third parties and depends on vendors to provide it with products and services. Malicious actors may attack vendors to disrupt the services they provide to SCE, or to use those vendors as a conduit to attack SCE. SCE system data and architecture are also disclosed, either voluntarily or by mandate, to third parties and the public by regulators, employees, contractors, and vendors. This system data may be used by malicious actors to understand SCE’s systems to prepare for a cyber or physical attack. The products and services provided by SCE's vendors may contain vulnerabilities or otherwise not adhere to SCE's enterprise cybersecurity standards (e.g., lack of encryption). Additionally, SCE's operational technology vendors have increasingly been targeted by threat actors. A compromise of equipment and/or exfiltration of SCE data, whether by physical or by electronic means, could result in loss or changes to confidential or sensitive information and interruption of business processes. For example, compromises to widely-used products and services such as MOVEit affected the supply chains of many industries, including companies in SCE’s supply chain. While SCE vendors have experienced cybersecurity incidents, such incidents have not, to SCE's knowledge, resulted in a material impact to SCE to date. 49 49 Table of ContentsGlobal and Regional RisksEdison International's and SCE's financial condition and results of operations could be materially impacted by catastrophic, macroeconomic and geopolitical events that cause significant disruption to workforces, supply chains, economies, or societies on a regional, statewide, national or global basis.Edison International and SCE could be materially and adversely impacted by catastrophic, macroeconomic and geopolitical events, such as the effects of increased inflationary pressures and interest rates, potential economic downturns or recessions, geopolitical pressures, and pandemics and regional health emergencies. For example, the global spread of COVID-19, which was declared a pandemic by the World Health Organization in March 2020, created significant uncertainty, volatility and disruption globally that resulted in, among other things, disruption to supply chains, economies, and workforce and impacted the operations of Edison International and SCE. Additionally, the geopolitical developments involving the Russia-Ukraine conflict, China and the Middle East, could cause delays and disruptions in the supply chain and the availability and timely delivery of services, materials and components used in SCE’s operations.Many of the risks and uncertainties identified in this Form 10-K have, and will be, exacerbated by the impacts of a catastrophic event and the actions taken by governmental entities, businesses, individuals and others in response to such an event. In addition, impacts of international conflict, recession, pandemic or similar events on SCE's customers and third parties could also result in SCE facing, among other things, significant reductions in demand for electricity and payment delays and/or defaults from customers which could result in significant under-collections. Edison International and SCE access to the bank and capital markets and/or the costs of accessing those markets could be constrained and could also face payment delays and/or defaults from insurers and other counterparties. These impacts, among others, could materially and adversely impact Edison International's and SCE's business, operations, cash flows, liquidity and financial results.Edison International's and SCE's business activities are concentrated in one industry and in one region.Substantially all of Edison International's and all of SCE's business activities are concentrated in the electric utility industry. Edison International's principal subsidiary, SCE, serves customers only in southern and central California. As a result, Edison International's and SCE's future performance may be affected by events and economic factors unique to California or by regional regulation, legislation or judicial decisions. For example, California courts have applied strict liability to investor-owned utilities in wildfire and other litigation matters. See \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"​QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInformation responding to this section is included in the MD&A under the heading \"Market Risk Exposures.\"​FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA​50 Table of Contents Table of Contents Table of Contents Global and Regional RisksEdison International's and SCE's financial condition and results of operations could be materially impacted by catastrophic, macroeconomic and geopolitical events that cause significant disruption to workforces, supply chains, economies, or societies on a regional, statewide, national or global basis.Edison International and SCE could be materially and adversely impacted by catastrophic, macroeconomic and geopolitical events, such as the effects of increased inflationary pressures and interest rates, potential economic downturns or recessions, geopolitical pressures, and pandemics and regional health emergencies. For example, the global spread of COVID-19, which was declared a pandemic by the World Health Organization in March 2020, created significant uncertainty, volatility and disruption globally that resulted in, among other things, disruption to supply chains, economies, and workforce and impacted the operations of Edison International and SCE. Additionally, the geopolitical developments involving the Russia-Ukraine conflict, China and the Middle East, could cause delays and disruptions in the supply chain and the availability and timely delivery of services, materials and components used in SCE’s operations.Many of the risks and uncertainties identified in this Form 10-K have, and will be, exacerbated by the impacts of a catastrophic event and the actions taken by governmental entities, businesses, individuals and others in response to such an event. In addition, impacts of international conflict, recession, pandemic or similar events on SCE's customers and third parties could also result in SCE facing, among other things, significant reductions in demand for electricity and payment delays and/or defaults from customers which could result in significant under-collections. Edison International and SCE access to the bank and capital markets and/or the costs of accessing those markets could be constrained and could also face payment delays and/or defaults from insurers and other counterparties. These impacts, among others, could materially and adversely impact Edison International's and SCE's business, operations, cash flows, liquidity and financial results.Edison International's and SCE's business activities are concentrated in one industry and in one region.Substantially all of Edison International's and all of SCE's business activities are concentrated in the electric utility industry. Edison International's principal subsidiary, SCE, serves customers only in southern and central California. As a result, Edison International's and SCE's future performance may be affected by events and economic factors unique to California or by regional regulation, legislation or judicial decisions. For example, California courts have applied strict liability to investor-owned utilities in wildfire and other litigation matters. See \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"​QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInformation responding to this section is included in the MD&A under the heading \"Market Risk Exposures.\"​FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA​", "prior_body": "Edison International and SCE could be materially and adversely impacted by events, such as the widespread outbreak of a communicable disease, that result in, among other things, significant disruption to supply chains, economies, societies or workforces on a regional, statewide, national or global basis. For example, the global spread of COVID-19, which was declared a pandemic by the World Health Organization in March 2020, created significant uncertainty, volatility and disruption globally and has impacted the operations of Edison International and SCE. Many of the risks and uncertainties identified in this Form 10-K are, and will be, exacerbated by the impacts of an event like a pandemic and the actions being taken by governmental entities, businesses, individuals and others in response to such an event. For example, SCE may be unable to effectively execute its PSPS program due to, among other things, requests from local and State authorities not to shut off the power during a pandemic or other event, and thereby may increase the risk of SCE equipment being associated with the ignition of wildfires. In addition, impacts of a pandemic or similar event on SCE's customers and third parties could also result in SCE facing, among other things, significant reductions in demand for electricity and payment delays and/or defaults from customers which could result in significant under-collections. In addition, Edison International and SCE could also face payment delays and/or defaults from insurers and other counterparties. Furthermore, Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase as a result of a pandemic or similar event, including if Edison International's and/or SCE's credit ratings are downgraded, or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of the impacts of the pandemic. SCE may also incur significant incremental costs as a result of actions it is taking in response to a pandemic or a similar event, including costs being incurred to maintain its operations and assist its employees who are required to telework or are otherwise impacted by the event. SCE could also face delays in important legal and 53 53 Table of Contentsregulatory proceedings. These impacts, among others, could materially and adversely impact Edison International's and SCE's business, operations, cash flows, liquidity and financial results.Edison International's and SCE's business activities are concentrated in one industry and in one region.Edison International's and SCE's business activities are concentrated in the electric utility industry. Edison International's principal subsidiary, SCE, serves customers only in southern and central California. As a result, Edison International's and SCE's future performance may be affected by events and economic factors unique to California or by regional regulation, legislation or judicial decisions. For example, California courts have applied strict liability to investor-owned utilities in wildfire and other litigation matters. See \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"​QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInformation responding to this section is included in the MD&A under the heading \"Market Risk Exposures.\"​FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA​54 Table of Contents Table of Contents Table of Contents regulatory proceedings. These impacts, among others, could materially and adversely impact Edison International's and SCE's business, operations, cash flows, liquidity and financial results.Edison International's and SCE's business activities are concentrated in one industry and in one region.Edison International's and SCE's business activities are concentrated in the electric utility industry. Edison International's principal subsidiary, SCE, serves customers only in southern and central California. As a result, Edison International's and SCE's future performance may be affected by events and economic factors unique to California or by regional regulation, legislation or judicial decisions. For example, California courts have applied strict liability to investor-owned utilities in wildfire and other litigation matters. See \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\"​QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKInformation responding to this section is included in the MD&A under the heading \"Market Risk Exposures.\"​FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA​ regulatory proceedings. These impacts, among others, could materially and adversely impact Edison International's and SCE's business, operations, cash flows, liquidity and financial results." }, { "status": "MODIFIED", "current_title": "Total liabilities", "prior_title": "Total liabilities", "similarity_score": 0.757, "confidence": "high", "key_changes": [ "Reworded sentence: \"​ 60,079 ​ 57,018 Commitments and contingencies (Note 12) ​ ​ Preference stock ​ 2,495 ​ 1,945 Common stock, no par value (560,000,000 shares authorized; 434,888,104 shares issued and outstanding at respective dates) ​ 2,168 ​ 2,168 Additional paid-in capital ​ 8,446 ​ 8,441 Accumulated other comprehensive loss ​ (12) ​ (8) Retained earnings ​ 8,307 ​ 8,243\"" ], "current_body": "​ 63,814 ​ 60,519 Commitments and contingencies (Note 12) ​ ​ Preferred stock (50,000,000 shares authorized; 1,159,317 and 1,250,000 shares of Series A and 532,454 and 750,000 shares of Series B issued and outstanding at respective dates) Series A outstanding ​ ​ 1,673 ​ ​ 1,978 Common stock, no par value (800,000,000 shares authorized; 383,924,912 and 382,208,498 shares issued and outstanding at respective dates) issued outstanding ​ 6,338 ​ 6,200 Accumulated other comprehensive loss ​ (9) ​ (11) Retained earnings ​ 7,499 ​ 7,454", "prior_body": "​ 60,519 ​ 56,956 Commitments and contingencies (Note 12) ​ ​ Preferred stock (50,000,000 shares authorized; 1,250,000 shares of Series A and 750,000 shares of Series B issued and outstanding at respective dates) ​ ​ 1,978 ​ ​ 1,977 Common stock, no par value (800,000,000 shares authorized; 382,208,498 and 380,378,145 shares issued and outstanding at respective dates) issued outstanding ​ 6,200 ​ 6,071 Accumulated other comprehensive loss ​ (11) ​ (54) Retained earnings ​ 7,454 ​ 7,894" }, { "status": "MODIFIED", "current_title": "Capitalized Software Costs", "prior_title": "Note 3.Variable Interest Entities", "similarity_score": 0.75, "confidence": "high", "key_changes": [ "Reworded sentence: \"SCE capitalizes costs incurred during the application development stage of internal use software projects to property, plant and equipment.\"", "Reworded sentence: \"SCE Recovery Funding LLC was formed in 2021 for the purpose of issuing and servicing securitized bonds related to SCE's AB 1054 Excluded Capital Expenditures.SCE Recovery Funding LLC has issued a total of $1.6 billion of securitized bonds.\"", "Reworded sentence: \"For further details, see Note 5.The following table summarizes the impact of SCE Recovery Funding LLC on SCE's and Edison International's consolidated balance sheets.​83 Table of Contents Table of Contents Table of Contents Jointly Owned Utility ProjectsSCE owns undivided interests in transmission and generating assets for which each participant provides its own financing.\"", "Reworded sentence: \"SCE Recovery Funding LLC was formed in 2021 for the purpose of issuing and servicing securitized bonds related to SCE's AB 1054 Excluded Capital Expenditures.SCE Recovery Funding LLC has issued a total of $1.6 billion of securitized bonds.\"", "Reworded sentence: \"For further details, see Note 5.The following table summarizes the impact of SCE Recovery Funding LLC on SCE's and Edison International's consolidated balance sheets.​\"" ], "current_body": "SCE capitalizes costs incurred during the application development stage of internal use software projects to property, plant and equipment. SCE amortizes capitalized software costs ratably over their useful lives, primarily 5 and 7 year lives, commencing upon operational use. Capitalized software costs, included in general plant and other above, was $2.1 billion and $2.0 billion at December 31, 2023 and 2022, and accumulated amortization was $0.9 billion and $0.7 billion, at December 31, 2023 and 2022, respectively. Amortization expense for capitalized software was $358 million, $344 million and $311 million in 2023, 2022 and 2021, respectively. At December 31, 2023, amortization expense is estimated to be $359 million, $317 million, $253 million, $168 million and $61 million for 2024 through 2028, respectively. 5 82 82 Table of ContentsJointly Owned Utility ProjectsSCE owns undivided interests in transmission and generating assets for which each participant provides its own financing. SCE's proportionate share of these assets is reflected in the consolidated balance sheets and included in the above table. SCE's proportionate share of expenses for each project is reflected in the consolidated statements of income.The following is SCE's investment in each asset as of December 31, 2023:​​​​​​​​​​​​​​​​​​​​​​​​Construction​​​​​​​​​​​​​ Plant in Work in Accumulated Nuclear Fuel ​ Ownership (in millions) ​ Service ​Progress ​Depreciation ​ (at amortized cost) ​Total ​Interest Transmission systems:​ ​​ ​​ ​​ ​​ ​​ Eldorado​$ 355​$ 123​$ (63)​$ —​$ 415​ 76%Pacific Intertie ​ 356 ​ 3 ​ (90) ​ — ​ 269 50%Generating station: ​ ​ ​ ​ ​​ ​Palo Verde (nuclear) ​ 2,211 ​ 58 ​ (1,670) ​ 122 ​ 721 16%Total​$ 2,922​$ 184​$ (1,823)​$ 122​$ 1,405 ​​In addition to the jointly owned assets in the table above, SCE has ownership interests in jointly owned power poles with other companies.Note 3.Variable Interest EntitiesA VIE is defined as a legal entity that meets one of two conditions: (1) the equity owners do not have sufficient equity at risk, or (2) the holders of the equity investment at risk, as a group, lack any of the following three characteristics: decision-making rights, the obligation to absorb losses or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. Commercial and operating activities are generally the factors that most significantly impact the economic performance of such VIEs. Commercial and operating activities include construction, operation and maintenance, fuel procurement, dispatch and compliance with regulatory and contractual requirements.Variable Interest in VIEs that are ConsolidatedSCE Recovery Funding LLC is a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE. SCE Recovery Funding LLC is a VIE and SCE is the primary beneficiary. SCE Recovery Funding LLC was formed in 2021 for the purpose of issuing and servicing securitized bonds related to SCE's AB 1054 Excluded Capital Expenditures.SCE Recovery Funding LLC has issued a total of $1.6 billion of securitized bonds. The proceeds were used to acquire SCE's right, title and interest in and to non-bypassable rates and other charges to be collected from certain existing and future customers in SCE's service territory (\"Recovery Property\"), associated with the AB 1054 Excluded Capital Expenditures, until the bonds are paid in full, and all financing costs have been recovered. The securitized bonds are secured by the Recovery Property and cash collections from the non-bypassable rates and other charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to SCE. For further details, see Note 5.The following table summarizes the impact of SCE Recovery Funding LLC on SCE's and Edison International's consolidated balance sheets.​83 Table of Contents Table of Contents Table of Contents Jointly Owned Utility ProjectsSCE owns undivided interests in transmission and generating assets for which each participant provides its own financing. SCE's proportionate share of these assets is reflected in the consolidated balance sheets and included in the above table. SCE's proportionate share of expenses for each project is reflected in the consolidated statements of income.The following is SCE's investment in each asset as of December 31, 2023:​​​​​​​​​​​​​​​​​​​​​​​​Construction​​​​​​​​​​​​​ Plant in Work in Accumulated Nuclear Fuel ​ Ownership (in millions) ​ Service ​Progress ​Depreciation ​ (at amortized cost) ​Total ​Interest Transmission systems:​ ​​ ​​ ​​ ​​ ​​ Eldorado​$ 355​$ 123​$ (63)​$ —​$ 415​ 76%Pacific Intertie ​ 356 ​ 3 ​ (90) ​ — ​ 269 50%Generating station: ​ ​ ​ ​ ​​ ​Palo Verde (nuclear) ​ 2,211 ​ 58 ​ (1,670) ​ 122 ​ 721 16%Total​$ 2,922​$ 184​$ (1,823)​$ 122​$ 1,405 ​​In addition to the jointly owned assets in the table above, SCE has ownership interests in jointly owned power poles with other companies.Note 3.Variable Interest EntitiesA VIE is defined as a legal entity that meets one of two conditions: (1) the equity owners do not have sufficient equity at risk, or (2) the holders of the equity investment at risk, as a group, lack any of the following three characteristics: decision-making rights, the obligation to absorb losses or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. Commercial and operating activities are generally the factors that most significantly impact the economic performance of such VIEs. Commercial and operating activities include construction, operation and maintenance, fuel procurement, dispatch and compliance with regulatory and contractual requirements.Variable Interest in VIEs that are ConsolidatedSCE Recovery Funding LLC is a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE. SCE Recovery Funding LLC is a VIE and SCE is the primary beneficiary. SCE Recovery Funding LLC was formed in 2021 for the purpose of issuing and servicing securitized bonds related to SCE's AB 1054 Excluded Capital Expenditures.SCE Recovery Funding LLC has issued a total of $1.6 billion of securitized bonds. The proceeds were used to acquire SCE's right, title and interest in and to non-bypassable rates and other charges to be collected from certain existing and future customers in SCE's service territory (\"Recovery Property\"), associated with the AB 1054 Excluded Capital Expenditures, until the bonds are paid in full, and all financing costs have been recovered. The securitized bonds are secured by the Recovery Property and cash collections from the non-bypassable rates and other charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to SCE. For further details, see Note 5.The following table summarizes the impact of SCE Recovery Funding LLC on SCE's and Edison International's consolidated balance sheets.​", "prior_body": "A VIE is defined as a legal entity that meets one of two conditions: (1) the equity owners do not have sufficient equity at risk, or (2) the holders of the equity investment at risk, as a group, lack any of the following three characteristics: decision-making rights, the obligation to absorb losses or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the 87 87 Table of ContentsVIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. Commercial and operating activities are generally the factors that most significantly impact the economic performance of such VIEs. Commercial and operating activities include construction, operation and maintenance, fuel procurement, dispatch and compliance with regulatory and contractual requirements.Variable Interest in VIEs that are ConsolidatedSCE Recovery Funding LLC is a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE. SCE Recovery Funding LLC is a VIE and SCE is the primary beneficiary. SCE Recovery Funding LLC was formed in 2021 for the purpose of issuing and servicing securitized bonds related to SCE's AB 1054 Excluded Capital Expenditures.In February 2022 and 2021, SCE Recovery Funding LLC issued $533 million and $338 million of securitized bonds, respectively, and used the proceeds to acquire SCE's right, title and interest in and to non-bypassable rates and other charges to be collected from certain existing and future customers in SCE's service territory, associated with the AB 1054 Excluded Capital Expenditures (\"Recovery Property\"), until the bonds are paid in full and all financing costs have been recovered. The securitized bonds are secured by the Recovery Property and cash collections from the non-bypassable rates and other charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to SCE. For further details, see Note 5.The following table summarizes the impact of SCE Recovery Funding LLC on SCE's and Edison International's consolidated balance sheets.​​​​​​​​​December 31, ​​December 31, (in millions)​2022​​2021Other current assets$ 45​$ 19Regulatory assets: non-current​ 834​​ 325Regulatory liabilities: current​ 33​​ 14Current portion of long-term debt​ 29​​ 14Other current liabilities​ 4​​ 1Long-term debt1 809​​ 3141The bondholders have no recourse to SCE. Balance is net of unamortized debt issuance costs.Variable Interest in VIEs that are not ConsolidatedPower Purchase AgreementsSCE has PPAs that are classified as variable interests in VIEs, including agreements through which SCE provides the natural gas to fuel the plants, fixed price contracts for renewable energy, and resource adequacy agreements that, upon the seller's election, include the purchase of energy at fixed prices. SCE has concluded that it is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of these entities. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants. As of the balance sheet date, the carrying amount of assets and liabilities in SCE's consolidated balance sheet that relate to involvement with VIEs that are not consolidated result from amounts due under the PPAs. Under these contracts, SCE recovers the costs incurred through demonstration of compliance with its CPUC-approved long-term power procurement plans. SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 12. As a result, there is no significant potential exposure to loss to SCE from its variable 88 Table of Contents Table of Contents Table of Contents VIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. Commercial and operating activities are generally the factors that most significantly impact the economic performance of such VIEs. Commercial and operating activities include construction, operation and maintenance, fuel procurement, dispatch and compliance with regulatory and contractual requirements.Variable Interest in VIEs that are ConsolidatedSCE Recovery Funding LLC is a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE. SCE Recovery Funding LLC is a VIE and SCE is the primary beneficiary. SCE Recovery Funding LLC was formed in 2021 for the purpose of issuing and servicing securitized bonds related to SCE's AB 1054 Excluded Capital Expenditures.In February 2022 and 2021, SCE Recovery Funding LLC issued $533 million and $338 million of securitized bonds, respectively, and used the proceeds to acquire SCE's right, title and interest in and to non-bypassable rates and other charges to be collected from certain existing and future customers in SCE's service territory, associated with the AB 1054 Excluded Capital Expenditures (\"Recovery Property\"), until the bonds are paid in full and all financing costs have been recovered. The securitized bonds are secured by the Recovery Property and cash collections from the non-bypassable rates and other charges are the sole source of funds to satisfy the debt obligation. The bondholders have no recourse to SCE. For further details, see Note 5.The following table summarizes the impact of SCE Recovery Funding LLC on SCE's and Edison International's consolidated balance sheets.​​​​​​​​​December 31, ​​December 31, (in millions)​2022​​2021Other current assets$ 45​$ 19Regulatory assets: non-current​ 834​​ 325Regulatory liabilities: current​ 33​​ 14Current portion of long-term debt​ 29​​ 14Other current liabilities​ 4​​ 1Long-term debt1 809​​ 3141The bondholders have no recourse to SCE. Balance is net of unamortized debt issuance costs.Variable Interest in VIEs that are not ConsolidatedPower Purchase AgreementsSCE has PPAs that are classified as variable interests in VIEs, including agreements through which SCE provides the natural gas to fuel the plants, fixed price contracts for renewable energy, and resource adequacy agreements that, upon the seller's election, include the purchase of energy at fixed prices. SCE has concluded that it is not the primary beneficiary of these VIEs since it does not control the commercial and operating activities of these entities. Since payments for capacity are the primary source of income, the most significant economic activity for these VIEs is the operation and maintenance of the power plants. As of the balance sheet date, the carrying amount of assets and liabilities in SCE's consolidated balance sheet that relate to involvement with VIEs that are not consolidated result from amounts due under the PPAs. Under these contracts, SCE recovers the costs incurred through demonstration of compliance with its CPUC-approved long-term power procurement plans. SCE has no residual interest in the entities and has not provided or guaranteed any debt or equity support, liquidity arrangements, performance guarantees or other commitments associated with these contracts other than the purchase commitments described in Note 12. As a result, there is no significant potential exposure to loss to SCE from its variable VIE that most significantly impact the entity's economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE. Commercial and operating activities are generally the factors that most significantly impact the economic performance of such VIEs. Commercial and operating activities include construction, operation and maintenance, fuel procurement, dispatch and compliance with regulatory and contractual requirements." }, { "status": "MODIFIED", "current_title": "Income before income taxes", "prior_title": "Income before income taxes", "similarity_score": 0.737, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ 1,515 ​ 662 ​ 789 Income tax expense (benefit) ​ 108 ​ (162) ​ (136) Net income ​ 1,407 ​ 824 ​ 925 Less: Preference stock dividend requirements of SCE ​ 123 ​ 107 ​ 106 Preferred stock dividend requirements of Edison International ​ ​ 87 ​ ​ 105 ​ ​ 60\"" ], "current_body": "​ 1,515 ​ 662 ​ 789 Income tax expense (benefit) ​ 108 ​ (162) ​ (136) Net income ​ 1,407 ​ 824 ​ 925 Less: Preference stock dividend requirements of SCE ​ 123 ​ 107 ​ 106 Preferred stock dividend requirements of Edison International ​ ​ 87 ​ ​ 105 ​ ​ 60", "prior_body": "​ 662 ​ 789 ​ 566 Income tax benefit ​ (162) ​ (136) ​ (305) Net income ​ 824 ​ 925 ​ 871 Less: Preference stock dividend requirements of SCE ​ 107 ​ 106 ​ 132 Less: Preferred stock dividend requirement of Edison International ​ ​ 105 ​ ​ 60 ​ ​ —" }, { "status": "MODIFIED", "current_title": "Note 2.Property, Plant and Equipment", "prior_title": "Note 2.Property, Plant and Equipment", "similarity_score": 0.737, "confidence": "medium", "key_changes": [ "Reworded sentence: \"SCE's utility property, plant and equipment included in the consolidated balance sheets is composed of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions) 2023 2022 Distribution ​ $ 34,573 ​ $ 32,754 Transmission ​ 18,526 ​ 18,106 Generation ​ 3,593 ​ 3,880 General plant and other ​ 6,383 ​ 6,121 Accumulated depreciation ​ (12,910) ​ (12,260) ​ ​ 50,165 ​ 48,601 Construction work in progress ​ 5,590 ​ 4,551 Nuclear fuel, at amortized cost ​ 122 ​ 122 Total utility property, plant and equipment ​ $ 55,877 ​ $ 53,274 ​\"" ], "current_body": "SCE's utility property, plant and equipment included in the consolidated balance sheets is composed of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions) 2023 2022 Distribution ​ $ 34,573 ​ $ 32,754 Transmission ​ 18,526 ​ 18,106 Generation ​ 3,593 ​ 3,880 General plant and other ​ 6,383 ​ 6,121 Accumulated depreciation ​ (12,910) ​ (12,260) ​ ​ 50,165 ​ 48,601 Construction work in progress ​ 5,590 ​ 4,551 Nuclear fuel, at amortized cost ​ 122 ​ 122 Total utility property, plant and equipment ​ $ 55,877 ​ $ 53,274 ​", "prior_body": "SCE's utility property, plant and equipment included in the consolidated balance sheets is composed of the following: ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions) 2022 2021 Distribution ​ $ 32,754 ​ $ 30,821 Transmission ​ 18,106 ​ 17,016 Generation ​ 3,880 ​ 3,769 General plant and other ​ 6,121 ​ 6,108 Accumulated depreciation ​ (12,260) ​ (11,407) ​ ​ 48,601 ​ 46,307 Construction work in progress ​ 4,551 ​ 4,067 Nuclear fuel, at amortized cost ​ 122 ​ 123 Total utility property, plant and equipment ​ $ 53,274 ​ $ 50,497 ​" }, { "status": "MODIFIED", "current_title": "Diluted earnings per common share attributable to Edison International common shareholders", "prior_title": "Diluted earnings per common share attributable to Edison International common shareholders", "similarity_score": 0.721, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ $ 3.11 ​ $ 1.60 ​ $ 2.00 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.58 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ $ 3.11 ​ $ 1.60 ​ $ 2.00 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.58 The accompanying notes are an integral part of these consolidated financial statements. 58 Table of Contents​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​Edison International​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Net income​$ 1,407​$ 824​$ 925Other comprehensive (loss) income, net of tax:​ ​ ​ Pension and postretirement benefits other than pensions​ (1)​ 43​ 15Foreign currency translation adjustments​​ 3​​ —​​ —Other comprehensive income, net of tax​ 2​ 43​ 15Comprehensive income​ 1,409​ 867​ 940Less: Comprehensive income attributable to noncontrolling interests​ 123​ 107​ 106Comprehensive income attributable to Edison International​$ 1,286​$ 760​$ 834​​​​The accompanying notes are an integral part of these consolidated financial statements.59 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​Edison International​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Net income​$ 1,407​$ 824​$ 925Other comprehensive (loss) income, net of tax:​ ​ ​ Pension and postretirement benefits other than pensions​ (1)​ 43​ 15Foreign currency translation adjustments​​ 3​​ —​​ —Other comprehensive income, net of tax​ 2​ 43​ 15Comprehensive income​ 1,409​ 867​ 940Less: Comprehensive income attributable to noncontrolling interests​ 123​ 107​ 106Comprehensive income attributable to Edison International​$ 1,286​$ 760​$ 834​​​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​", "prior_body": "​ $ 1.60 ​ $ 2.00 ​ $ 1.98 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.62 The accompanying notes are an integral part of these consolidated financial statements. 62 Table of Contents​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​Edison International​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Net income ​$ 824​$ 925​$ 871Other comprehensive income, net of tax:​ ​ ​ Pension and postretirement benefits other than pensions​ 43​ 15​ —Other comprehensive income, net of tax​ 43​ 15​ —Comprehensive income ​ 867​ 940​ 871Less: Comprehensive income attributable to noncontrolling interests​ 107​ 106​ 132Comprehensive income attributable to Edison International​$ 760​$ 834​$ 739​​​​The accompanying notes are an integral part of these consolidated financial statements.63 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​Edison International​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Net income ​$ 824​$ 925​$ 871Other comprehensive income, net of tax:​ ​ ​ Pension and postretirement benefits other than pensions​ 43​ 15​ —Other comprehensive income, net of tax​ 43​ 15​ —Comprehensive income ​ 867​ 940​ 871Less: Comprehensive income attributable to noncontrolling interests​ 107​ 106​ 132Comprehensive income attributable to Edison International​$ 760​$ 834​$ 739​​​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "MODIFIED", "current_title": "Total investments", "prior_title": "Total investments", "similarity_score": 0.712, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ 4,211 ​ 3,984 Utility property, plant and equipment, less accumulated depreciation and amortization of $12,910 and $12,260 at respective dates ​ 55,877 ​ 53,274 Nonutility property, plant and equipment, less accumulated depreciation of $100 and $94 at respective dates ​ 201 ​ 206\"" ], "current_body": "​ 4,227 ​ 4,003 Utility property, plant and equipment, less accumulated depreciation and amortization of $12,910 and $12,260 at respective dates ​ 55,877 ​ 53,274 Nonutility property, plant and equipment, less accumulated depreciation of $114 and $106 at respective dates ​ 207 ​ 212", "prior_body": "​ 4,003 ​ 4,921 Utility property, plant and equipment, less accumulated depreciation and amortization of $12,260 and $11,407 at respective dates ​ 53,274 ​ 50,497 Nonutility property, plant and equipment, less accumulated depreciation of $106 and $98 at respective dates ​ 212 ​ 203" }, { "status": "MODIFIED", "current_title": "Cash flows from operating activities:", "prior_title": "Cash flows from operating activities:", "similarity_score": 0.712, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ ​ ​ Net income ​ $ 1,597 ​ $ 954 ​ $ 935 Adjustments to reconcile to net cash provided by operating activities: ​ ​ ​ Depreciation and amortization ​ 2,710 ​ 2,626 ​ 2,280 Allowance for equity during construction ​ (157) ​ (137) ​ (118) Impairment and other expense ​ 1 ​ 50 ​ 67 Deferred income taxes ​ 179 ​ (111) ​ 62 Wildfire Insurance Fund amortization expense ​ 213 ​ 214 ​ 215 Other ​ 33 ​ 59 ​ 28 Nuclear decommissioning trusts ​ (180) ​ (123) ​ (256) Proceeds from Morongo Transmission LLC ​ ​ — ​ ​ — ​ ​ 400 Contributions to Wildfire Insurance Fund ​ (95) ​ (95) ​ (95) Changes in operating assets and liabilities: ​ ​ ​ ​ Receivables ​ (336) ​ (245) ​ (513) Inventory ​ (63) ​ (58) ​ (21) Accounts payable ​ (413) ​ 366 ​ 131 Tax receivables and payables ​ 4 ​ (1) ​ 31 Other current assets and liabilities ​ 220 ​ 150 ​ (321) Derivative assets and liabilities, net ​ ​ (174) ​ ​ 115 ​ ​ (12) Regulatory assets and liabilities, net ​ 576 ​ (51) ​ (720) Wildfire-related insurance receivable ​ (39) ​ (398) ​ 708 Wildfire-related claims ​ (410) ​ (56) ​ (2,648) Other noncurrent assets and liabilities ​ 15 ​ 60 ​ 5\"" ], "current_body": "​ ​ ​ Net income ​ $ 1,407 ​ $ 824 ​ $ 925 Adjustments to reconcile to net cash provided by operating activities: ​ ​ ​ ​ ​ Depreciation and amortization ​ 2,721 ​ 2,633 ​ 2,288 Allowance for equity during construction ​ (157) ​ (137) ​ (118) Impairment and other expense ​ 1 ​ 54 ​ 71 Deferred income taxes ​ 108 ​ (177) ​ 43 Wildfire Insurance Fund amortization expense ​ 213 ​ 214 ​ 215 Other ​ 57 ​ 75 ​ 38 Nuclear decommissioning trusts ​ (180) ​ (123) ​ (256) Proceeds from Morongo Transmission LLC ​ ​ — ​ ​ — ​ ​ 400 Contributions to Wildfire Insurance Fund ​ (95) ​ (95) ​ (95) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ Receivables ​ (349) ​ (252) ​ (514) Inventory ​ (63) ​ (58) ​ (21) Accounts payable ​ (408) ​ 367 ​ 138 Tax receivables and payables ​ 9 ​ 18 ​ 13 Other current assets and liabilities ​ 185 ​ 207 ​ (321) Derivative assets and liabilities, net ​ ​ (174) ​ ​ 115 ​ ​ (12) Regulatory assets and liabilities, net ​ 576 ​ (51) ​ (720) Wildfire-related insurance receivable ​ (36) ​ (390) ​ 708 Wildfire-related claims ​ (410) ​ (56) ​ (2,648) Other noncurrent assets and liabilities ​ (4) ​ 48 ​ (123)", "prior_body": "​ ​ ​ Net income ​ $ 824 ​ $ 925 ​ $ 871 Adjustments to reconcile to net cash provided by operating activities: ​ ​ ​ ​ Depreciation and amortization ​ 2,633 ​ 2,288 ​ 2,029 Allowance for equity during construction ​ (137) ​ (118) ​ (121) Impairment and other expense (income) ​ 54 ​ 71 ​ (116) Gain on sale of lease interest and other operating income ​ ​ (5) ​ ​ (2) ​ ​ (133) Deferred income taxes ​ (177) ​ 43 ​ (296) Wildfire Insurance Fund amortization expense ​ 214 ​ 215 ​ 336 Other ​ 80 ​ 40 ​ 36 Nuclear decommissioning trusts ​ (123) ​ (256) ​ (197) Proceeds from Morongo Transmission LLC ​ ​ — ​ ​ 400 ​ ​ — Contributions to Wildfire Insurance Fund ​ (95) ​ (95) ​ (95) Changes in operating assets and liabilities: ​ ​ ​ ​ Receivables ​ (252) ​ (514) ​ (283) Inventory ​ (58) ​ (21) ​ (43) Accounts payable ​ 367 ​ 138 ​ 87 Tax receivables and payables ​ 18 ​ 13 ​ 113 Other current assets and liabilities ​ 322 ​ (333) ​ 4 Regulatory assets and liabilities, net ​ (51) ​ (720) ​ (1,799) Wildfire-related insurance receivable ​ (390) ​ 708 ​ 932 Wildfire-related claims ​ (56) ​ (2,648) ​ (56) Other noncurrent assets and liabilities ​ 48 ​ (123) ​ (6)" }, { "status": "MODIFIED", "current_title": "Total investments", "prior_title": "Total investments", "similarity_score": 0.709, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ 4,227 ​ 4,003 Utility property, plant and equipment, less accumulated depreciation and amortization of $12,910 and $12,260 at respective dates ​ 55,877 ​ 53,274 Nonutility property, plant and equipment, less accumulated depreciation of $114 and $106 at respective dates ​ 207 ​ 212\"" ], "current_body": "​ 4,227 ​ 4,003 Utility property, plant and equipment, less accumulated depreciation and amortization of $12,910 and $12,260 at respective dates ​ 55,877 ​ 53,274 Nonutility property, plant and equipment, less accumulated depreciation of $114 and $106 at respective dates ​ 207 ​ 212", "prior_body": "​ 4,003 ​ 4,921 Utility property, plant and equipment, less accumulated depreciation and amortization of $12,260 and $11,407 at respective dates ​ 53,274 ​ 50,497 Nonutility property, plant and equipment, less accumulated depreciation of $106 and $98 at respective dates ​ 212 ​ 203" }, { "status": "MODIFIED", "current_title": "Cash flows from financing activities:", "prior_title": "Cash flows from financing activities:", "similarity_score": 0.703, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ ​ ​ Long-term debt issued, net of discount and issuance costs of $54, $62, and $43 for the respective years ​ 5,121 ​ 5,971 ​ 5,412 Long-term debt repaid ​ (2,498) ​ (1,085) ​ (1,037) Short-term debt issued ​ 1,076 ​ 1,000 ​ 2,654 Short-term debt repaid ​ (2,407) ​ (1,543) ​ (2,255) Common stock issued ​ 20 ​ 13 ​ 32 Preferred and preference stock issued, net of issuance cost ​ 542 ​ — ​ 1,977 Preferred stock repurchased ​ (289) ​ — ​ — Commercial paper borrowing (repayments), net ​ 1,102 ​ (317) ​ (254) Dividends and distribution to noncontrolling interests ​ (117) ​ (110) ​ (106) Common stock dividends paid ​ (1,112) ​ (1,050) ​ (988) Preferred stock dividends paid ​ ​ (108) ​ ​ (99) ​ ​ (35) Other ​ 117 ​ 101 ​ 45\"" ], "current_body": "​ ​ ​ Long-term debt issued, net of discount and issuance costs of $54, $62, and $43 for the respective years ​ 5,121 ​ 5,971 ​ 5,412 Long-term debt repaid ​ (2,498) ​ (1,085) ​ (1,037) Short-term debt issued ​ 1,076 ​ 1,000 ​ 2,654 Short-term debt repaid ​ (2,407) ​ (1,543) ​ (2,255) Common stock issued ​ 20 ​ 13 ​ 32 Preferred and preference stock issued, net of issuance cost ​ 542 ​ — ​ 1,977 Preferred stock repurchased ​ (289) ​ — ​ — Commercial paper borrowing (repayments), net ​ 1,102 ​ (317) ​ (254) Dividends and distribution to noncontrolling interests ​ (117) ​ (110) ​ (106) Common stock dividends paid ​ (1,112) ​ (1,050) ​ (988) Preferred stock dividends paid ​ ​ (108) ​ ​ (99) ​ ​ (35) Other ​ 117 ​ 101 ​ 45", "prior_body": "​ ​ ​ Long-term debt issued, plus premium and net of discount and issuance costs of $(62), $(43) and $23 for the respective years ​ 5,971 ​ 5,412 ​ 3,073 Long-term debt repaid ​ (1,085) ​ (1,037) ​ (1,099) Short-term debt issued ​ 1,000 ​ 2,654 ​ 2,994 Short-term debt repaid ​ (1,543) ​ (2,255) ​ (1,126) Common stock issued ​ 13 ​ 32 ​ 912 Preferred stock issued, net ​ — ​ 1,977 ​ — Preferred and preference stock redeemed ​ — ​ — ​ (308) Commercial paper borrowing (repayments), net ​ (317) ​ (254) ​ 304 Dividends and distribution to noncontrolling interests ​ (110) ​ (106) ​ (118) Common stock dividends paid ​ (1,050) ​ (988) ​ (928) Preferred stock dividends paid ​ ​ (99) ​ ​ (35) ​ ​ — Other ​ 101 ​ 45 ​ 23" }, { "status": "MODIFIED", "current_title": "Edison International", "prior_title": "Edison International", "similarity_score": 0.696, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) ​ 2023 2022 2021 Net income ​ $ 1,407 ​ $ 824 ​ $ 925 Other comprehensive (loss) income, net of tax: ​ ​ ​ Pension and postretirement benefits other than pensions ​ (1) ​ 43 ​ 15 Foreign currency translation adjustments ​ ​ 3 ​ ​ — ​ ​ —\"" ], "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) ​ 2023 2022 2021", "prior_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) 2022 2021 2020" }, { "status": "MODIFIED", "current_title": "Cash flows from operating activities:", "prior_title": "Cash flows from operating activities:", "similarity_score": 0.695, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ ​ ​ Net income ​ $ 1,407 ​ $ 824 ​ $ 925 Adjustments to reconcile to net cash provided by operating activities: ​ ​ ​ ​ ​ Depreciation and amortization ​ 2,721 ​ 2,633 ​ 2,288 Allowance for equity during construction ​ (157) ​ (137) ​ (118) Impairment and other expense ​ 1 ​ 54 ​ 71 Deferred income taxes ​ 108 ​ (177) ​ 43 Wildfire Insurance Fund amortization expense ​ 213 ​ 214 ​ 215 Other ​ 57 ​ 75 ​ 38 Nuclear decommissioning trusts ​ (180) ​ (123) ​ (256) Proceeds from Morongo Transmission LLC ​ ​ — ​ ​ — ​ ​ 400 Contributions to Wildfire Insurance Fund ​ (95) ​ (95) ​ (95) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ Receivables ​ (349) ​ (252) ​ (514) Inventory ​ (63) ​ (58) ​ (21) Accounts payable ​ (408) ​ 367 ​ 138 Tax receivables and payables ​ 9 ​ 18 ​ 13 Other current assets and liabilities ​ 185 ​ 207 ​ (321) Derivative assets and liabilities, net ​ ​ (174) ​ ​ 115 ​ ​ (12) Regulatory assets and liabilities, net ​ 576 ​ (51) ​ (720) Wildfire-related insurance receivable ​ (36) ​ (390) ​ 708 Wildfire-related claims ​ (410) ​ (56) ​ (2,648) Other noncurrent assets and liabilities ​ (4) ​ 48 ​ (123)\"" ], "current_body": "​ ​ ​ Net income ​ $ 1,407 ​ $ 824 ​ $ 925 Adjustments to reconcile to net cash provided by operating activities: ​ ​ ​ ​ ​ Depreciation and amortization ​ 2,721 ​ 2,633 ​ 2,288 Allowance for equity during construction ​ (157) ​ (137) ​ (118) Impairment and other expense ​ 1 ​ 54 ​ 71 Deferred income taxes ​ 108 ​ (177) ​ 43 Wildfire Insurance Fund amortization expense ​ 213 ​ 214 ​ 215 Other ​ 57 ​ 75 ​ 38 Nuclear decommissioning trusts ​ (180) ​ (123) ​ (256) Proceeds from Morongo Transmission LLC ​ ​ — ​ ​ — ​ ​ 400 Contributions to Wildfire Insurance Fund ​ (95) ​ (95) ​ (95) Changes in operating assets and liabilities: ​ ​ ​ ​ ​ Receivables ​ (349) ​ (252) ​ (514) Inventory ​ (63) ​ (58) ​ (21) Accounts payable ​ (408) ​ 367 ​ 138 Tax receivables and payables ​ 9 ​ 18 ​ 13 Other current assets and liabilities ​ 185 ​ 207 ​ (321) Derivative assets and liabilities, net ​ ​ (174) ​ ​ 115 ​ ​ (12) Regulatory assets and liabilities, net ​ 576 ​ (51) ​ (720) Wildfire-related insurance receivable ​ (36) ​ (390) ​ 708 Wildfire-related claims ​ (410) ​ (56) ​ (2,648) Other noncurrent assets and liabilities ​ (4) ​ 48 ​ (123)", "prior_body": "​ ​ ​ Net income ​ $ 824 ​ $ 925 ​ $ 871 Adjustments to reconcile to net cash provided by operating activities: ​ ​ ​ ​ Depreciation and amortization ​ 2,633 ​ 2,288 ​ 2,029 Allowance for equity during construction ​ (137) ​ (118) ​ (121) Impairment and other expense (income) ​ 54 ​ 71 ​ (116) Gain on sale of lease interest and other operating income ​ ​ (5) ​ ​ (2) ​ ​ (133) Deferred income taxes ​ (177) ​ 43 ​ (296) Wildfire Insurance Fund amortization expense ​ 214 ​ 215 ​ 336 Other ​ 80 ​ 40 ​ 36 Nuclear decommissioning trusts ​ (123) ​ (256) ​ (197) Proceeds from Morongo Transmission LLC ​ ​ — ​ ​ 400 ​ ​ — Contributions to Wildfire Insurance Fund ​ (95) ​ (95) ​ (95) Changes in operating assets and liabilities: ​ ​ ​ ​ Receivables ​ (252) ​ (514) ​ (283) Inventory ​ (58) ​ (21) ​ (43) Accounts payable ​ 367 ​ 138 ​ 87 Tax receivables and payables ​ 18 ​ 13 ​ 113 Other current assets and liabilities ​ 322 ​ (333) ​ 4 Regulatory assets and liabilities, net ​ (51) ​ (720) ​ (1,799) Wildfire-related insurance receivable ​ (390) ​ 708 ​ 932 Wildfire-related claims ​ (56) ​ (2,648) ​ (56) Other noncurrent assets and liabilities ​ 48 ​ (123) ​ (6)" }, { "status": "MODIFIED", "current_title": "Total current assets", "prior_title": "Total current assets", "similarity_score": 0.682, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ 6,633 ​ 6,930 Nuclear decommissioning trusts ​ 4,173 ​ 3,948 Other investments ​ 38 ​ 36\"" ], "current_body": "​ 6,811 ​ 7,070 Nuclear decommissioning trusts ​ 4,173 ​ 3,948 Other investments ​ 54 ​ 55", "prior_body": "​ 7,070 ​ 5,491 Nuclear decommissioning trusts ​ 3,948 ​ 4,870 Marketable securities ​ ​ 5 ​ ​ 12 Other investments ​ 50 ​ 39" }, { "status": "MODIFIED", "current_title": "Cash flows from financing activities:", "prior_title": "Cash flows from financing activities:", "similarity_score": 0.662, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ ​ ​ Long-term debt issued, net of discount and issuance costs of $37, $51 and $43 for the respective years ​ 3,588 ​ 5,032 ​ 5,411 Long-term debt repaid ​ ​ (2,098) ​ ​ (385) ​ ​ (1,037) Short-term debt borrowed ​ 706 ​ — ​ 2,654 Short-term debt repaid ​ (1,051) ​ (1,543) ​ (2,255) Capital contributions from Edison International Parent ​ — ​ 1,400 ​ 1,633 Preference stock issued, net of issuance cost ​ 542 ​ — ​ — Commercial paper borrowing (repayments), net ​ 963 ​ (406) ​ (124) Common stock dividends paid ​ ​ (1,400) ​ ​ (1,300) ​ ​ (975) Preference stock dividends paid ​ (117) ​ (110) ​ (106) Other ​ 49 ​ 36 ​ 17\"" ], "current_body": "​ ​ ​ Long-term debt issued, net of discount and issuance costs of $54, $62, and $43 for the respective years ​ 5,121 ​ 5,971 ​ 5,412 Long-term debt repaid ​ (2,498) ​ (1,085) ​ (1,037) Short-term debt issued ​ 1,076 ​ 1,000 ​ 2,654 Short-term debt repaid ​ (2,407) ​ (1,543) ​ (2,255) Common stock issued ​ 20 ​ 13 ​ 32 Preferred and preference stock issued, net of issuance cost ​ 542 ​ — ​ 1,977 Preferred stock repurchased ​ (289) ​ — ​ — Commercial paper borrowing (repayments), net ​ 1,102 ​ (317) ​ (254) Dividends and distribution to noncontrolling interests ​ (117) ​ (110) ​ (106) Common stock dividends paid ​ (1,112) ​ (1,050) ​ (988) Preferred stock dividends paid ​ ​ (108) ​ ​ (99) ​ ​ (35) Other ​ 117 ​ 101 ​ 45", "prior_body": "​ ​ ​ Long-term debt issued, plus premium and net of discount and issuance costs of $(62), $(43) and $23 for the respective years ​ 5,971 ​ 5,412 ​ 3,073 Long-term debt repaid ​ (1,085) ​ (1,037) ​ (1,099) Short-term debt issued ​ 1,000 ​ 2,654 ​ 2,994 Short-term debt repaid ​ (1,543) ​ (2,255) ​ (1,126) Common stock issued ​ 13 ​ 32 ​ 912 Preferred stock issued, net ​ — ​ 1,977 ​ — Preferred and preference stock redeemed ​ — ​ — ​ (308) Commercial paper borrowing (repayments), net ​ (317) ​ (254) ​ 304 Dividends and distribution to noncontrolling interests ​ (110) ​ (106) ​ (118) Common stock dividends paid ​ (1,050) ​ (988) ​ (928) Preferred stock dividends paid ​ ​ (99) ​ ​ (35) ​ ​ — Other ​ 101 ​ 45 ​ 23" }, { "status": "MODIFIED", "current_title": "Allowance for Uncollectible Accounts", "prior_title": "Allowance for Uncollectible Accounts", "similarity_score": 0.661, "confidence": "medium", "key_changes": [ "Reworded sentence: \"Since the customer base of SCE is concentrated in Southern California and exposes SCE to a homogeneous set of economic conditions, the allowance is measured on a collective basis on the historical amounts written-off, assessment of customer collectibility and current economic trends, including unemployment rates and any likelihood of recession for the region.\"", "Reworded sentence: \"SCE had GHG allowances held for use of $128 million and $87 million at December 31, 2023 and 2022, respectively.\"", "Reworded sentence: \"SCE had GHG allowances held for use of $128 million and $87 million at December 31, 2023 and 2022, respectively.\"" ], "current_body": "The allowance for uncollectible accounts is recorded based on SCE's estimate of expected credit losses and adjusted over the life of the receivables as needed. Since the customer base of SCE is concentrated in Southern California and exposes SCE to a homogeneous set of economic conditions, the allowance is measured on a collective basis on the historical amounts written-off, assessment of customer collectibility and current economic trends, including unemployment rates and any likelihood of recession for the region. 71 71 Table of ContentsThe following table sets forth the changes in allowance for uncollectible accounts for SCE:​​​​​​​​​​(in millions)​Customers​All others​TotalBalance at December 31, 2020 $ 175 $ 13​$ 188Current period provision for uncollectible accounts1​​124​​11​​ 135Write-offs, net of recoveries​ (6)​ (8)​ (14)Balance at December 31, 2021 $ 293 $ 16​$ 309Current period provision for uncollectible accounts1​​111​​ 11​​ 122Write-offs, net of recoveries​ (70)​ (7)​ (77)Balance at December 31, 2022²​$ 334 $ 20​$ 354Current period provision for uncollectible accounts1​​ 109​​ 6​​ 115Write-offs, net of recoveries​ (96)​ (9)​ (105)Balance at December 31, 2023²​$ 347 $ 17​$ 3641This includes $78 million, $40 million and $91 million of incremental costs for the years ended December 31, 2023, 2022 and 2021, respectively, which were probable of recovery from customers and recorded as regulatory assets.2Approximately $4 million and $7 million of allowance for uncollectible accounts are included in \"Other long-term assets\" on SCE's consolidated balance sheets as of December 31, 2023 and December 31, 2022, respectively.InventorySCE's inventory is primarily composed of materials, supplies and spare parts, and generally stated at weighted average cost.Edison Carrier Solutions SCE operates commercial telecommunications service under the name of Edison Carrier Solutions (\"ECS\"), leveraging the temporarily available capacity of SCE's telecommunications network. As technology evolves, management is implementing strategic shifts in ECS services, including potential disposition of assets and ceasing to offer certain wire data services. ECS has notified affected customers of its intent to discontinue certain services over time and gave customers the option to discontinue those services. As a result of customer cancellations in the second quarter of 2023, materials and supplies inventory supporting data services are expected to be sold instead of placed into service and have been written-down to net realizable value, resulting in a charge of $13 million ($9 million after-tax). Labor and other costs of $4 million previously recorded as construction work in progress for projects no longer probable of completion were also expensed in the period.Emission Allowances and Energy CreditsSCE is allocated greenhouse gas (\"GHG\") allowances annually which it is then required to sell into quarterly auctions. GHG proceeds from the auctions are recorded as a regulatory liability to be refunded to customers. SCE purchases GHG allowances in quarterly auctions or from counterparties to satisfy its GHG emission compliance obligations and recovers such costs of GHG allowances from customers. GHG allowances held for use are classified as \"Other current assets\" on the consolidated balance sheets and are stated, similar to an inventory method, at the lower of weighted average cost or market. SCE will evaluate GHG allowances for impairment upon a triggering event that would indicate SCE might not recover the full cost of an allowance. SCE had GHG allowances held for use of $128 million and $87 million at December 31, 2023 and 2022, respectively. GHG emission obligations were $117 million and $55 million at December 31, 2023 and 2022, respectively, and are classified as \"Other current liabilities\" on the consolidated balance sheets.SCE is allocated low carbon fuel standard (\"LCFS\") credits which it sells to market participants. Proceeds from the sales, net of selling fees and program administration expenses, are recorded in a balancing account to be refunded to eligible 72 Table of Contents Table of Contents Table of Contents The following table sets forth the changes in allowance for uncollectible accounts for SCE:​​​​​​​​​​(in millions)​Customers​All others​TotalBalance at December 31, 2020 $ 175 $ 13​$ 188Current period provision for uncollectible accounts1​​124​​11​​ 135Write-offs, net of recoveries​ (6)​ (8)​ (14)Balance at December 31, 2021 $ 293 $ 16​$ 309Current period provision for uncollectible accounts1​​111​​ 11​​ 122Write-offs, net of recoveries​ (70)​ (7)​ (77)Balance at December 31, 2022²​$ 334 $ 20​$ 354Current period provision for uncollectible accounts1​​ 109​​ 6​​ 115Write-offs, net of recoveries​ (96)​ (9)​ (105)Balance at December 31, 2023²​$ 347 $ 17​$ 3641This includes $78 million, $40 million and $91 million of incremental costs for the years ended December 31, 2023, 2022 and 2021, respectively, which were probable of recovery from customers and recorded as regulatory assets.2Approximately $4 million and $7 million of allowance for uncollectible accounts are included in \"Other long-term assets\" on SCE's consolidated balance sheets as of December 31, 2023 and December 31, 2022, respectively.InventorySCE's inventory is primarily composed of materials, supplies and spare parts, and generally stated at weighted average cost.Edison Carrier Solutions SCE operates commercial telecommunications service under the name of Edison Carrier Solutions (\"ECS\"), leveraging the temporarily available capacity of SCE's telecommunications network. As technology evolves, management is implementing strategic shifts in ECS services, including potential disposition of assets and ceasing to offer certain wire data services. ECS has notified affected customers of its intent to discontinue certain services over time and gave customers the option to discontinue those services. As a result of customer cancellations in the second quarter of 2023, materials and supplies inventory supporting data services are expected to be sold instead of placed into service and have been written-down to net realizable value, resulting in a charge of $13 million ($9 million after-tax). Labor and other costs of $4 million previously recorded as construction work in progress for projects no longer probable of completion were also expensed in the period.Emission Allowances and Energy CreditsSCE is allocated greenhouse gas (\"GHG\") allowances annually which it is then required to sell into quarterly auctions. GHG proceeds from the auctions are recorded as a regulatory liability to be refunded to customers. SCE purchases GHG allowances in quarterly auctions or from counterparties to satisfy its GHG emission compliance obligations and recovers such costs of GHG allowances from customers. GHG allowances held for use are classified as \"Other current assets\" on the consolidated balance sheets and are stated, similar to an inventory method, at the lower of weighted average cost or market. SCE will evaluate GHG allowances for impairment upon a triggering event that would indicate SCE might not recover the full cost of an allowance. SCE had GHG allowances held for use of $128 million and $87 million at December 31, 2023 and 2022, respectively. GHG emission obligations were $117 million and $55 million at December 31, 2023 and 2022, respectively, and are classified as \"Other current liabilities\" on the consolidated balance sheets.SCE is allocated low carbon fuel standard (\"LCFS\") credits which it sells to market participants. Proceeds from the sales, net of selling fees and program administration expenses, are recorded in a balancing account to be refunded to eligible The following table sets forth the changes in allowance for uncollectible accounts for SCE: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in millions) ​ Customers ​ All others ​ Total", "prior_body": "The allowance for uncollectible accounts is recorded based on SCE's estimate of expected credit losses and adjusted over the life of the receivables as needed. Since the customer base of SCE is concentrated in Southern California and exposes SCE to a homogeneous set of economic conditions, the allowance is measured on a collective basis on the historical amounts written-off, assessment of customer collectibility and current economic trends, including unemployment rates and likelihood of recession for the region. At December 31, 2022, this included the estimated impacts of the COVID-19 pandemic. In addition, in June 2022, California's state assembly passed legislation to authorize, fund and implement the California Arrearage Payment Program (\"CAPP\") 2022, which reduced customer arrearages for certain residential customers. The allowance for uncollectible accounts recorded against qualified arrearages was reduced by $83 million based on the receipt of CAPP in the fourth quarter of 2022. 75 75 Table of ContentsThe following table sets forth the changes in allowance for uncollectible accounts for SCE:​​​​​​​​​​(in millions)​Customers​​All others​​TotalBalance at December 31, 2019 $ 35 $ 14​$ 49Current period provision for uncollectible accounts​​​​​​​​​Included in operation and maintenance expenses in earning activities1​ 36​ 9​ 45Included in operation and maintenance expenses in cost-recovery activities2​​ 15​​ —​​ 15Deferred to regulatory memorandum accounts​ 105​ —​ 105Write-offs, net of recoveries​ (16)​ (10)​ (26)Balance at December 31, 2020 $ 175 $ 13​$ 188Current period provision for uncollectible accounts​​​​​​​​​Included in operation and maintenance expenses in earning activities1​ 33​ 11​ 44Included in operation and maintenance expenses in cost-recovery activities2​​ 74​​ —​​ 74Deferred to regulatory memorandum accounts​ 17​ —​ 17Write-offs, net of recoveries​ (6)​ (8)​ (14)Balance at December 31, 2021³​$ 293 $ 16​$ 309Current period provision for uncollectible accounts​​​​​​​​​Included in operation and maintenance expenses in earning activities1​ 71​ 11​ 82Included in operation and maintenance expenses in cost-recovery activities2,4​​ 58​​ —​​ 58Deferred to regulatory memorandum accounts4​ (18)​ —​ (18)Write-offs, net of recoveries​ (70)​ (7)​ (77)Balance at December 31, 2022³​$ 334 $ 20​$ 3541Earning activities is one of SCE's disaggregated revenue sources. See Note 7 for further details.2Cost-recovery activities is one of SCE's disaggregated revenue sources. See Note 7 for further details. This portion of costs from the allowance for uncollectible expenses is recovered through the residential uncollectibles balancing account. 3Approximately $7 million and $116 million of allowance for uncollectible accounts are included in long-term \"Receivables\" on SCE's consolidated balance sheets as of December 31, 2022 and December 31, 2021, respectively.4Represents current year changes in the allowance for uncollectible accounts and excludes authorized recovery of previously deferred balances.InventorySCE's inventory is primarily composed of materials, supplies and spare parts, and generally stated at weighted average cost.Emission Allowances and Energy CreditsSCE is allocated greenhouse gas (\"GHG\") allowances annually which it is then required to sell into quarterly auctions. GHG proceeds from the auctions are recorded as a regulatory liability to be refunded to customers. SCE purchases GHG allowances in quarterly auctions or from counterparties to satisfy its GHG emission compliance obligations and recovers such costs of GHG allowances from customers. GHG allowances held for use are classified as \"Other current assets\" on the consolidated balance sheets and are stated, similar to an inventory method, at the lower of weighted average cost or market. SCE will evaluate GHG allowances for impairment upon a triggering event that would indicate SCE might not recover the full cost of an allowance. SCE had GHG allowances held for use of $87 million and $47 million at December 31, 2022 and 2021, respectively. GHG emission obligations were $55 million and $34 million at December 31, 2022 and 2021, respectively, and are classified as \"Other current liabilities\" on the consolidated balance sheets.76 Table of Contents Table of Contents Table of Contents The following table sets forth the changes in allowance for uncollectible accounts for SCE:​​​​​​​​​​(in millions)​Customers​​All others​​TotalBalance at December 31, 2019 $ 35 $ 14​$ 49Current period provision for uncollectible accounts​​​​​​​​​Included in operation and maintenance expenses in earning activities1​ 36​ 9​ 45Included in operation and maintenance expenses in cost-recovery activities2​​ 15​​ —​​ 15Deferred to regulatory memorandum accounts​ 105​ —​ 105Write-offs, net of recoveries​ (16)​ (10)​ (26)Balance at December 31, 2020 $ 175 $ 13​$ 188Current period provision for uncollectible accounts​​​​​​​​​Included in operation and maintenance expenses in earning activities1​ 33​ 11​ 44Included in operation and maintenance expenses in cost-recovery activities2​​ 74​​ —​​ 74Deferred to regulatory memorandum accounts​ 17​ —​ 17Write-offs, net of recoveries​ (6)​ (8)​ (14)Balance at December 31, 2021³​$ 293 $ 16​$ 309Current period provision for uncollectible accounts​​​​​​​​​Included in operation and maintenance expenses in earning activities1​ 71​ 11​ 82Included in operation and maintenance expenses in cost-recovery activities2,4​​ 58​​ —​​ 58Deferred to regulatory memorandum accounts4​ (18)​ —​ (18)Write-offs, net of recoveries​ (70)​ (7)​ (77)Balance at December 31, 2022³​$ 334 $ 20​$ 3541Earning activities is one of SCE's disaggregated revenue sources. See Note 7 for further details.2Cost-recovery activities is one of SCE's disaggregated revenue sources. See Note 7 for further details. This portion of costs from the allowance for uncollectible expenses is recovered through the residential uncollectibles balancing account. 3Approximately $7 million and $116 million of allowance for uncollectible accounts are included in long-term \"Receivables\" on SCE's consolidated balance sheets as of December 31, 2022 and December 31, 2021, respectively.4Represents current year changes in the allowance for uncollectible accounts and excludes authorized recovery of previously deferred balances.InventorySCE's inventory is primarily composed of materials, supplies and spare parts, and generally stated at weighted average cost.Emission Allowances and Energy CreditsSCE is allocated greenhouse gas (\"GHG\") allowances annually which it is then required to sell into quarterly auctions. GHG proceeds from the auctions are recorded as a regulatory liability to be refunded to customers. SCE purchases GHG allowances in quarterly auctions or from counterparties to satisfy its GHG emission compliance obligations and recovers such costs of GHG allowances from customers. GHG allowances held for use are classified as \"Other current assets\" on the consolidated balance sheets and are stated, similar to an inventory method, at the lower of weighted average cost or market. SCE will evaluate GHG allowances for impairment upon a triggering event that would indicate SCE might not recover the full cost of an allowance. SCE had GHG allowances held for use of $87 million and $47 million at December 31, 2022 and 2021, respectively. GHG emission obligations were $55 million and $34 million at December 31, 2022 and 2021, respectively, and are classified as \"Other current liabilities\" on the consolidated balance sheets. The following table sets forth the changes in allowance for uncollectible accounts for SCE: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in millions) ​ Customers ​ ​ All others ​ ​ Total" }, { "status": "MODIFIED", "current_title": "Total property, plant and equipment", "prior_title": "Total property, plant and equipment", "similarity_score": 0.659, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ 56,078 ​ 53,480 Regulatory assets (include $1,558 and $834 related to VIEs at respective dates) ​ 8,897 ​ 8,181 Wildfire Insurance Fund contributions ​ 1,951 ​ 2,155 Operating lease right-of-use assets ​ 1,214 ​ 1,433 Long-term insurance receivables ​ ​ 157 ​ ​ 139 Long-term insurance receivables due from affiliate ​ 355 ​ 334 Other long-term assets ​ 1,987 ​ 1,171\"" ], "current_body": "​ 56,084 ​ 53,486 Regulatory assets (include $1,558 and $834 related to Variable Interest Entities \"VIEs\" at respective dates) ​ 8,897 ​ 8,181 Wildfire Insurance Fund contributions ​ 1,951 ​ 2,155 Operating lease right-of-use assets ​ 1,221 ​ 1,442 Long-term insurance receivables ​ ​ 501 ​ ​ 465 Other long-term assets ​ 2,066 ​ 1,239", "prior_body": "​ 53,486 ​ 50,700 Receivables, less allowances of $7 and $116 for uncollectible accounts at respective dates ​ ​ 2 ​ ​ 122 Regulatory assets (include $834 and $325 related to Variable Interest Entities \"VIEs\" at respective dates) ​ 8,181 ​ 7,660 Wildfire Insurance Fund contributions ​ 2,155 ​ 2,359 Operating lease right-of-use assets ​ 1,442 ​ 1,932 Long-term insurance receivables ​ ​ 465 ​ ​ 75 Other long-term assets ​ 1,237 ​ 1,485" }, { "status": "MODIFIED", "current_title": "Operating income", "prior_title": "Operating income", "similarity_score": 0.646, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ 2,640 ​ 1,513 ​ 1,510 Interest expense ​ (1,356) ​ (1,005) ​ (791) Other income, net ​ 497 ​ 337 ​ 233\"" ], "current_body": "​ 2,627 ​ 1,483 ​ 1,477 Interest expense ​ (1,612) ​ (1,169) ​ (925) Other income, net ​ 500 ​ 348 ​ 237", "prior_body": "​ 1,483 ​ 1,477 ​ 1,217 Interest expense ​ (1,169) ​ (925) ​ (902) Other income ​ 348 ​ 237 ​ 251" }, { "status": "MODIFIED", "current_title": "Total liabilities and equity", "prior_title": "Total liabilities and equity", "similarity_score": 0.644, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ $ 81,758 ​ $ 78,041 ​ ​ The accompanying notes are an integral part of these consolidated financial statements.61 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ $ 81,758 ​ $ 78,041 ​ ​ The accompanying notes are an integral part of these consolidated financial statements.61 The accompanying notes are an integral part of these consolidated financial statements. 61 Table of Contents​​​​​​​​​​​​​​Consolidated Statements of Cash Flows​Edison International​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Cash flows from operating activities: ​ ​ ​ Net income​$ 1,407​$ 824​$ 925Adjustments to reconcile to net cash provided by operating activities:​ ​​ ​​ Depreciation and amortization​ 2,721​ 2,633​ 2,288Allowance for equity during construction​ (157)​ (137)​ (118)Impairment and other expense​ 1​ 54​ 71Deferred income taxes ​ 108​ (177)​ 43Wildfire Insurance Fund amortization expense​ 213​ 214​ 215Other​ 57​ 75​ 38Nuclear decommissioning trusts​ (180)​ (123)​ (256)Proceeds from Morongo Transmission LLC​​ —​​ —​​ 400Contributions to Wildfire Insurance Fund​ (95)​ (95)​ (95)Changes in operating assets and liabilities:​ ​​ ​​ Receivables​ (349)​ (252)​ (514)Inventory​ (63)​ (58)​ (21)Accounts payable​ (408)​ 367​ 138Tax receivables and payables​ 9​ 18​ 13Other current assets and liabilities​ 185​ 207​ (321)Derivative assets and liabilities, net​​ (174)​​ 115​​ (12)Regulatory assets and liabilities, net​ 576​ (51)​ (720)Wildfire-related insurance receivable​ (36)​ (390)​ 708Wildfire-related claims​ (410)​ (56)​ (2,648)Other noncurrent assets and liabilities​ (4)​ 48​ (123)Net cash provided by operating activities​ 3,401​ 3,216​ 11Cash flows from financing activities:​ ​ ​ Long-term debt issued, net of discount and issuance costs of $54, $62, and $43 for the respective years​ 5,121​ 5,971​ 5,412Long-term debt repaid ​ (2,498)​ (1,085)​ (1,037)Short-term debt issued​ 1,076​ 1,000​ 2,654Short-term debt repaid​ (2,407)​ (1,543)​ (2,255)Common stock issued​ 20​ 13​ 32Preferred and preference stock issued, net of issuance cost​ 542​ —​ 1,977Preferred stock repurchased​ (289)​ —​ —Commercial paper borrowing (repayments), net​ 1,102​ (317)​ (254)Dividends and distribution to noncontrolling interests​ (117)​ (110)​ (106)Common stock dividends paid​ (1,112)​ (1,050)​ (988)Preferred stock dividends paid​​ (108)​​ (99)​​ (35)Other​ 117​ 101​ 45Net cash provided by financing activities​ 1,447​ 2,881​ 5,445Cash flows from investing activities:​ ​ ​ Capital expenditures​ (5,448)​ (5,778)​ (5,505)Proceeds from sale of nuclear decommissioning trust investments​ 4,597​ 4,177​ 3,961Purchases of nuclear decommissioning trust investments​ (4,417)​ (4,054)​ (3,705)Other​ 35​ 81​ 98Net cash used in investing activities​ (5,233)​ (5,574)​ (5,151)Net (decrease) increase in cash, cash equivalents and restricted cash​ (385)​ 523​ 305Cash, cash equivalents and restricted cash at beginning of year​ 917​ 394​ 89Cash, cash equivalents and restricted cash at end of year​$ 532​$ 917​$ 394​The accompanying notes are an integral part of these consolidated financial statements.62 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​Consolidated Statements of Cash Flows​Edison International​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Cash flows from operating activities: ​ ​ ​ Net income​$ 1,407​$ 824​$ 925Adjustments to reconcile to net cash provided by operating activities:​ ​​ ​​ Depreciation and amortization​ 2,721​ 2,633​ 2,288Allowance for equity during construction​ (157)​ (137)​ (118)Impairment and other expense​ 1​ 54​ 71Deferred income taxes ​ 108​ (177)​ 43Wildfire Insurance Fund amortization expense​ 213​ 214​ 215Other​ 57​ 75​ 38Nuclear decommissioning trusts​ (180)​ (123)​ (256)Proceeds from Morongo Transmission LLC​​ —​​ —​​ 400Contributions to Wildfire Insurance Fund​ (95)​ (95)​ (95)Changes in operating assets and liabilities:​ ​​ ​​ Receivables​ (349)​ (252)​ (514)Inventory​ (63)​ (58)​ (21)Accounts payable​ (408)​ 367​ 138Tax receivables and payables​ 9​ 18​ 13Other current assets and liabilities​ 185​ 207​ (321)Derivative assets and liabilities, net​​ (174)​​ 115​​ (12)Regulatory assets and liabilities, net​ 576​ (51)​ (720)Wildfire-related insurance receivable​ (36)​ (390)​ 708Wildfire-related claims​ (410)​ (56)​ (2,648)Other noncurrent assets and liabilities​ (4)​ 48​ (123)Net cash provided by operating activities​ 3,401​ 3,216​ 11Cash flows from financing activities:​ ​ ​ Long-term debt issued, net of discount and issuance costs of $54, $62, and $43 for the respective years​ 5,121​ 5,971​ 5,412Long-term debt repaid ​ (2,498)​ (1,085)​ (1,037)Short-term debt issued​ 1,076​ 1,000​ 2,654Short-term debt repaid​ (2,407)​ (1,543)​ (2,255)Common stock issued​ 20​ 13​ 32Preferred and preference stock issued, net of issuance cost​ 542​ —​ 1,977Preferred stock repurchased​ (289)​ —​ —Commercial paper borrowing (repayments), net​ 1,102​ (317)​ (254)Dividends and distribution to noncontrolling interests​ (117)​ (110)​ (106)Common stock dividends paid​ (1,112)​ (1,050)​ (988)Preferred stock dividends paid​​ (108)​​ (99)​​ (35)Other​ 117​ 101​ 45Net cash provided by financing activities​ 1,447​ 2,881​ 5,445Cash flows from investing activities:​ ​ ​ Capital expenditures​ (5,448)​ (5,778)​ (5,505)Proceeds from sale of nuclear decommissioning trust investments​ 4,597​ 4,177​ 3,961Purchases of nuclear decommissioning trust investments​ (4,417)​ (4,054)​ (3,705)Other​ 35​ 81​ 98Net cash used in investing activities​ (5,233)​ (5,574)​ (5,151)Net (decrease) increase in cash, cash equivalents and restricted cash​ (385)​ 523​ 305Cash, cash equivalents and restricted cash at beginning of year​ 917​ 394​ 89Cash, cash equivalents and restricted cash at end of year​$ 532​$ 917​$ 394​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​", "prior_body": "​ $ 78,041 ​ $ 74,745 ​ ​ The accompanying notes are an integral part of these consolidated financial statements.65 The accompanying notes are an integral part of these consolidated financial statements. 65 Table of Contents​​​​​​​​​​​​​​Consolidated Statements of Cash Flows​Edison International​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Cash flows from operating activities: ​ ​ ​ Net income​$ 824​$ 925​$ 871Adjustments to reconcile to net cash provided by operating activities:​ ​​ ​ Depreciation and amortization​ 2,633​ 2,288​ 2,029Allowance for equity during construction​ (137)​ (118)​ (121)Impairment and other expense (income)​ 54​ 71​ (116)Gain on sale of lease interest and other operating income​​ (5)​​ (2)​​ (133)Deferred income taxes ​ (177)​ 43​ (296)Wildfire Insurance Fund amortization expense​ 214​ 215​ 336Other​ 80​ 40​ 36Nuclear decommissioning trusts​ (123)​ (256)​ (197)Proceeds from Morongo Transmission LLC​​ —​​ 400​​ —Contributions to Wildfire Insurance Fund​ (95)​ (95)​ (95)Changes in operating assets and liabilities:​ ​​ ​ Receivables​ (252)​ (514)​ (283)Inventory​ (58)​ (21)​ (43)Accounts payable​ 367​ 138​ 87Tax receivables and payables​ 18​ 13​ 113Other current assets and liabilities​ 322​ (333)​ 4Regulatory assets and liabilities, net​ (51)​ (720)​ (1,799)Wildfire-related insurance receivable​ (390)​ 708​ 932Wildfire-related claims​ (56)​ (2,648)​ (56)Other noncurrent assets and liabilities​ 48​ (123)​ (6)Net cash provided by operating activities​ 3,216​ 11​ 1,263Cash flows from financing activities:​ ​ ​ Long-term debt issued, plus premium and net of discount and issuance costs of $(62), $(43) and $23 for the respective years​ 5,971​ 5,412​ 3,073Long-term debt repaid ​ (1,085)​ (1,037)​ (1,099)Short-term debt issued​ 1,000​ 2,654​ 2,994Short-term debt repaid​ (1,543)​ (2,255)​ (1,126)Common stock issued​ 13​ 32​ 912Preferred stock issued, net​ —​ 1,977​ —Preferred and preference stock redeemed​ —​ —​ (308)Commercial paper borrowing (repayments), net​ (317)​ (254)​ 304Dividends and distribution to noncontrolling interests​ (110)​ (106)​ (118)Common stock dividends paid​ (1,050)​ (988)​ (928)Preferred stock dividends paid​​ (99)​​ (35)​​ —Other​ 101​ 45​ 23Net cash provided by financing activities​ 2,881​ 5,445​ 3,727Cash flows from investing activities:​ ​ ​ Capital expenditures​ (5,778)​ (5,505)​ (5,484)Proceeds from sale of nuclear decommissioning trust investments​ 4,177​ 3,961​ 5,927Purchases of nuclear decommissioning trust investments​ (4,054)​ (3,705)​ (5,730)Other​ 81​ 98​ 316Net cash used in investing activities​ (5,574)​ (5,151)​ (4,971)Net increase in cash, cash equivalents and restricted cash​ 523​ 305​ 19Cash, cash equivalents and restricted cash at beginning of year​ 394​ 89​ 70Cash, cash equivalents and restricted cash at end of year​$ 917​$ 394​$ 89​​The accompanying notes are an integral part of these consolidated financial statements.66 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​Consolidated Statements of Cash Flows​Edison International​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Cash flows from operating activities: ​ ​ ​ Net income​$ 824​$ 925​$ 871Adjustments to reconcile to net cash provided by operating activities:​ ​​ ​ Depreciation and amortization​ 2,633​ 2,288​ 2,029Allowance for equity during construction​ (137)​ (118)​ (121)Impairment and other expense (income)​ 54​ 71​ (116)Gain on sale of lease interest and other operating income​​ (5)​​ (2)​​ (133)Deferred income taxes ​ (177)​ 43​ (296)Wildfire Insurance Fund amortization expense​ 214​ 215​ 336Other​ 80​ 40​ 36Nuclear decommissioning trusts​ (123)​ (256)​ (197)Proceeds from Morongo Transmission LLC​​ —​​ 400​​ —Contributions to Wildfire Insurance Fund​ (95)​ (95)​ (95)Changes in operating assets and liabilities:​ ​​ ​ Receivables​ (252)​ (514)​ (283)Inventory​ (58)​ (21)​ (43)Accounts payable​ 367​ 138​ 87Tax receivables and payables​ 18​ 13​ 113Other current assets and liabilities​ 322​ (333)​ 4Regulatory assets and liabilities, net​ (51)​ (720)​ (1,799)Wildfire-related insurance receivable​ (390)​ 708​ 932Wildfire-related claims​ (56)​ (2,648)​ (56)Other noncurrent assets and liabilities​ 48​ (123)​ (6)Net cash provided by operating activities​ 3,216​ 11​ 1,263Cash flows from financing activities:​ ​ ​ Long-term debt issued, plus premium and net of discount and issuance costs of $(62), $(43) and $23 for the respective years​ 5,971​ 5,412​ 3,073Long-term debt repaid ​ (1,085)​ (1,037)​ (1,099)Short-term debt issued​ 1,000​ 2,654​ 2,994Short-term debt repaid​ (1,543)​ (2,255)​ (1,126)Common stock issued​ 13​ 32​ 912Preferred stock issued, net​ —​ 1,977​ —Preferred and preference stock redeemed​ —​ —​ (308)Commercial paper borrowing (repayments), net​ (317)​ (254)​ 304Dividends and distribution to noncontrolling interests​ (110)​ (106)​ (118)Common stock dividends paid​ (1,050)​ (988)​ (928)Preferred stock dividends paid​​ (99)​​ (35)​​ —Other​ 101​ 45​ 23Net cash provided by financing activities​ 2,881​ 5,445​ 3,727Cash flows from investing activities:​ ​ ​ Capital expenditures​ (5,778)​ (5,505)​ (5,484)Proceeds from sale of nuclear decommissioning trust investments​ 4,177​ 3,961​ 5,927Purchases of nuclear decommissioning trust investments​ (4,054)​ (3,705)​ (5,730)Other​ 81​ 98​ 316Net cash used in investing activities​ (5,574)​ (5,151)​ (4,971)Net increase in cash, cash equivalents and restricted cash​ 523​ 305​ 19Cash, cash equivalents and restricted cash at beginning of year​ 394​ 89​ 70Cash, cash equivalents and restricted cash at end of year​$ 917​$ 394​$ 89​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "MODIFIED", "current_title": "Operating revenue", "prior_title": "Operating revenue", "similarity_score": 0.64, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ $ 16,275 ​ $ 17,172 ​ $ 14,874 Purchased power and fuel ​ 5,486 ​ 6,375 ​ 5,540 Operation and maintenance ​ 4,071 ​ 4,659 ​ 3,588 Wildfire-related claims, net of insurance recoveries ​ 665 ​ 1,305 ​ 1,276 Wildfire Insurance Fund expense ​ 213 ​ 214 ​ 215 Depreciation and amortization ​ 2,633 ​ 2,559 ​ 2,216 Property and other taxes ​ 566 ​ 497 ​ 462 Impairment, net of other operating income ​ 1 ​ 50 ​ 67\"" ], "current_body": "​ $ 16,338 ​ $ 17,220 ​ $ 14,905 Purchased power and fuel ​ 5,486 ​ 6,375 ​ 5,540 Operation and maintenance ​ 4,138 ​ 4,724 ​ 3,645 Wildfire-related claims, net of insurance recoveries ​ 667 ​ 1,313 ​ 1,276 Wildfire Insurance Fund expense ​ 213 ​ 214 ​ 215 Depreciation and amortization ​ 2,635 ​ 2,561 ​ 2,218 Property and other taxes ​ 571 ​ 501 ​ 465 Impairment, net of other operating income ​ 1 ​ 49 ​ 69", "prior_body": "​ $ 17,172 ​ $ 14,874 ​ $ 13,546 Purchased power and fuel ​ 6,375 ​ 5,540 ​ 4,932 Operation and maintenance ​ 4,659 ​ 3,588 ​ 3,523 Wildfire-related claims, net of insurance recoveries ​ 1,305 ​ 1,276 ​ 1,328 Wildfire Insurance Fund expense ​ 214 ​ 215 ​ 336 Depreciation and amortization ​ 2,559 ​ 2,216 ​ 1,965 Property and other taxes ​ 497 ​ 462 ​ 435 Impairment, net of other (income) ​ 50 ​ 67 ​ (151)" }, { "status": "MODIFIED", "current_title": "Total liabilities and equity", "prior_title": "Total liabilities and equity", "similarity_score": 0.636, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ $ 81,483 ​ $ 77,807 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.67 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ $ 81,758 ​ $ 78,041 ​ ​ The accompanying notes are an integral part of these consolidated financial statements.61 The accompanying notes are an integral part of these consolidated financial statements. 61 Table of Contents​​​​​​​​​​​​​​Consolidated Statements of Cash Flows​Edison International​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Cash flows from operating activities: ​ ​ ​ Net income​$ 1,407​$ 824​$ 925Adjustments to reconcile to net cash provided by operating activities:​ ​​ ​​ Depreciation and amortization​ 2,721​ 2,633​ 2,288Allowance for equity during construction​ (157)​ (137)​ (118)Impairment and other expense​ 1​ 54​ 71Deferred income taxes ​ 108​ (177)​ 43Wildfire Insurance Fund amortization expense​ 213​ 214​ 215Other​ 57​ 75​ 38Nuclear decommissioning trusts​ (180)​ (123)​ (256)Proceeds from Morongo Transmission LLC​​ —​​ —​​ 400Contributions to Wildfire Insurance Fund​ (95)​ (95)​ (95)Changes in operating assets and liabilities:​ ​​ ​​ Receivables​ (349)​ (252)​ (514)Inventory​ (63)​ (58)​ (21)Accounts payable​ (408)​ 367​ 138Tax receivables and payables​ 9​ 18​ 13Other current assets and liabilities​ 185​ 207​ (321)Derivative assets and liabilities, net​​ (174)​​ 115​​ (12)Regulatory assets and liabilities, net​ 576​ (51)​ (720)Wildfire-related insurance receivable​ (36)​ (390)​ 708Wildfire-related claims​ (410)​ (56)​ (2,648)Other noncurrent assets and liabilities​ (4)​ 48​ (123)Net cash provided by operating activities​ 3,401​ 3,216​ 11Cash flows from financing activities:​ ​ ​ Long-term debt issued, net of discount and issuance costs of $54, $62, and $43 for the respective years​ 5,121​ 5,971​ 5,412Long-term debt repaid ​ (2,498)​ (1,085)​ (1,037)Short-term debt issued​ 1,076​ 1,000​ 2,654Short-term debt repaid​ (2,407)​ (1,543)​ (2,255)Common stock issued​ 20​ 13​ 32Preferred and preference stock issued, net of issuance cost​ 542​ —​ 1,977Preferred stock repurchased​ (289)​ —​ —Commercial paper borrowing (repayments), net​ 1,102​ (317)​ (254)Dividends and distribution to noncontrolling interests​ (117)​ (110)​ (106)Common stock dividends paid​ (1,112)​ (1,050)​ (988)Preferred stock dividends paid​​ (108)​​ (99)​​ (35)Other​ 117​ 101​ 45Net cash provided by financing activities​ 1,447​ 2,881​ 5,445Cash flows from investing activities:​ ​ ​ Capital expenditures​ (5,448)​ (5,778)​ (5,505)Proceeds from sale of nuclear decommissioning trust investments​ 4,597​ 4,177​ 3,961Purchases of nuclear decommissioning trust investments​ (4,417)​ (4,054)​ (3,705)Other​ 35​ 81​ 98Net cash used in investing activities​ (5,233)​ (5,574)​ (5,151)Net (decrease) increase in cash, cash equivalents and restricted cash​ (385)​ 523​ 305Cash, cash equivalents and restricted cash at beginning of year​ 917​ 394​ 89Cash, cash equivalents and restricted cash at end of year​$ 532​$ 917​$ 394​The accompanying notes are an integral part of these consolidated financial statements.62 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​Consolidated Statements of Cash Flows​Edison International​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Cash flows from operating activities: ​ ​ ​ Net income​$ 1,407​$ 824​$ 925Adjustments to reconcile to net cash provided by operating activities:​ ​​ ​​ Depreciation and amortization​ 2,721​ 2,633​ 2,288Allowance for equity during construction​ (157)​ (137)​ (118)Impairment and other expense​ 1​ 54​ 71Deferred income taxes ​ 108​ (177)​ 43Wildfire Insurance Fund amortization expense​ 213​ 214​ 215Other​ 57​ 75​ 38Nuclear decommissioning trusts​ (180)​ (123)​ (256)Proceeds from Morongo Transmission LLC​​ —​​ —​​ 400Contributions to Wildfire Insurance Fund​ (95)​ (95)​ (95)Changes in operating assets and liabilities:​ ​​ ​​ Receivables​ (349)​ (252)​ (514)Inventory​ (63)​ (58)​ (21)Accounts payable​ (408)​ 367​ 138Tax receivables and payables​ 9​ 18​ 13Other current assets and liabilities​ 185​ 207​ (321)Derivative assets and liabilities, net​​ (174)​​ 115​​ (12)Regulatory assets and liabilities, net​ 576​ (51)​ (720)Wildfire-related insurance receivable​ (36)​ (390)​ 708Wildfire-related claims​ (410)​ (56)​ (2,648)Other noncurrent assets and liabilities​ (4)​ 48​ (123)Net cash provided by operating activities​ 3,401​ 3,216​ 11Cash flows from financing activities:​ ​ ​ Long-term debt issued, net of discount and issuance costs of $54, $62, and $43 for the respective years​ 5,121​ 5,971​ 5,412Long-term debt repaid ​ (2,498)​ (1,085)​ (1,037)Short-term debt issued​ 1,076​ 1,000​ 2,654Short-term debt repaid​ (2,407)​ (1,543)​ (2,255)Common stock issued​ 20​ 13​ 32Preferred and preference stock issued, net of issuance cost​ 542​ —​ 1,977Preferred stock repurchased​ (289)​ —​ —Commercial paper borrowing (repayments), net​ 1,102​ (317)​ (254)Dividends and distribution to noncontrolling interests​ (117)​ (110)​ (106)Common stock dividends paid​ (1,112)​ (1,050)​ (988)Preferred stock dividends paid​​ (108)​​ (99)​​ (35)Other​ 117​ 101​ 45Net cash provided by financing activities​ 1,447​ 2,881​ 5,445Cash flows from investing activities:​ ​ ​ Capital expenditures​ (5,448)​ (5,778)​ (5,505)Proceeds from sale of nuclear decommissioning trust investments​ 4,597​ 4,177​ 3,961Purchases of nuclear decommissioning trust investments​ (4,417)​ (4,054)​ (3,705)Other​ 35​ 81​ 98Net cash used in investing activities​ (5,233)​ (5,574)​ (5,151)Net (decrease) increase in cash, cash equivalents and restricted cash​ (385)​ 523​ 305Cash, cash equivalents and restricted cash at beginning of year​ 917​ 394​ 89Cash, cash equivalents and restricted cash at end of year​$ 532​$ 917​$ 394​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​", "prior_body": "​ $ 78,041 ​ $ 74,745 ​ ​ The accompanying notes are an integral part of these consolidated financial statements.65 The accompanying notes are an integral part of these consolidated financial statements. 65 Table of Contents​​​​​​​​​​​​​​Consolidated Statements of Cash Flows​Edison International​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Cash flows from operating activities: ​ ​ ​ Net income​$ 824​$ 925​$ 871Adjustments to reconcile to net cash provided by operating activities:​ ​​ ​ Depreciation and amortization​ 2,633​ 2,288​ 2,029Allowance for equity during construction​ (137)​ (118)​ (121)Impairment and other expense (income)​ 54​ 71​ (116)Gain on sale of lease interest and other operating income​​ (5)​​ (2)​​ (133)Deferred income taxes ​ (177)​ 43​ (296)Wildfire Insurance Fund amortization expense​ 214​ 215​ 336Other​ 80​ 40​ 36Nuclear decommissioning trusts​ (123)​ (256)​ (197)Proceeds from Morongo Transmission LLC​​ —​​ 400​​ —Contributions to Wildfire Insurance Fund​ (95)​ (95)​ (95)Changes in operating assets and liabilities:​ ​​ ​ Receivables​ (252)​ (514)​ (283)Inventory​ (58)​ (21)​ (43)Accounts payable​ 367​ 138​ 87Tax receivables and payables​ 18​ 13​ 113Other current assets and liabilities​ 322​ (333)​ 4Regulatory assets and liabilities, net​ (51)​ (720)​ (1,799)Wildfire-related insurance receivable​ (390)​ 708​ 932Wildfire-related claims​ (56)​ (2,648)​ (56)Other noncurrent assets and liabilities​ 48​ (123)​ (6)Net cash provided by operating activities​ 3,216​ 11​ 1,263Cash flows from financing activities:​ ​ ​ Long-term debt issued, plus premium and net of discount and issuance costs of $(62), $(43) and $23 for the respective years​ 5,971​ 5,412​ 3,073Long-term debt repaid ​ (1,085)​ (1,037)​ (1,099)Short-term debt issued​ 1,000​ 2,654​ 2,994Short-term debt repaid​ (1,543)​ (2,255)​ (1,126)Common stock issued​ 13​ 32​ 912Preferred stock issued, net​ —​ 1,977​ —Preferred and preference stock redeemed​ —​ —​ (308)Commercial paper borrowing (repayments), net​ (317)​ (254)​ 304Dividends and distribution to noncontrolling interests​ (110)​ (106)​ (118)Common stock dividends paid​ (1,050)​ (988)​ (928)Preferred stock dividends paid​​ (99)​​ (35)​​ —Other​ 101​ 45​ 23Net cash provided by financing activities​ 2,881​ 5,445​ 3,727Cash flows from investing activities:​ ​ ​ Capital expenditures​ (5,778)​ (5,505)​ (5,484)Proceeds from sale of nuclear decommissioning trust investments​ 4,177​ 3,961​ 5,927Purchases of nuclear decommissioning trust investments​ (4,054)​ (3,705)​ (5,730)Other​ 81​ 98​ 316Net cash used in investing activities​ (5,574)​ (5,151)​ (4,971)Net increase in cash, cash equivalents and restricted cash​ 523​ 305​ 19Cash, cash equivalents and restricted cash at beginning of year​ 394​ 89​ 70Cash, cash equivalents and restricted cash at end of year​$ 917​$ 394​$ 89​​The accompanying notes are an integral part of these consolidated financial statements.66 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​Consolidated Statements of Cash Flows​Edison International​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Cash flows from operating activities: ​ ​ ​ Net income​$ 824​$ 925​$ 871Adjustments to reconcile to net cash provided by operating activities:​ ​​ ​ Depreciation and amortization​ 2,633​ 2,288​ 2,029Allowance for equity during construction​ (137)​ (118)​ (121)Impairment and other expense (income)​ 54​ 71​ (116)Gain on sale of lease interest and other operating income​​ (5)​​ (2)​​ (133)Deferred income taxes ​ (177)​ 43​ (296)Wildfire Insurance Fund amortization expense​ 214​ 215​ 336Other​ 80​ 40​ 36Nuclear decommissioning trusts​ (123)​ (256)​ (197)Proceeds from Morongo Transmission LLC​​ —​​ 400​​ —Contributions to Wildfire Insurance Fund​ (95)​ (95)​ (95)Changes in operating assets and liabilities:​ ​​ ​ Receivables​ (252)​ (514)​ (283)Inventory​ (58)​ (21)​ (43)Accounts payable​ 367​ 138​ 87Tax receivables and payables​ 18​ 13​ 113Other current assets and liabilities​ 322​ (333)​ 4Regulatory assets and liabilities, net​ (51)​ (720)​ (1,799)Wildfire-related insurance receivable​ (390)​ 708​ 932Wildfire-related claims​ (56)​ (2,648)​ (56)Other noncurrent assets and liabilities​ 48​ (123)​ (6)Net cash provided by operating activities​ 3,216​ 11​ 1,263Cash flows from financing activities:​ ​ ​ Long-term debt issued, plus premium and net of discount and issuance costs of $(62), $(43) and $23 for the respective years​ 5,971​ 5,412​ 3,073Long-term debt repaid ​ (1,085)​ (1,037)​ (1,099)Short-term debt issued​ 1,000​ 2,654​ 2,994Short-term debt repaid​ (1,543)​ (2,255)​ (1,126)Common stock issued​ 13​ 32​ 912Preferred stock issued, net​ —​ 1,977​ —Preferred and preference stock redeemed​ —​ —​ (308)Commercial paper borrowing (repayments), net​ (317)​ (254)​ 304Dividends and distribution to noncontrolling interests​ (110)​ (106)​ (118)Common stock dividends paid​ (1,050)​ (988)​ (928)Preferred stock dividends paid​​ (99)​​ (35)​​ —Other​ 101​ 45​ 23Net cash provided by financing activities​ 2,881​ 5,445​ 3,727Cash flows from investing activities:​ ​ ​ Capital expenditures​ (5,778)​ (5,505)​ (5,484)Proceeds from sale of nuclear decommissioning trust investments​ 4,177​ 3,961​ 5,927Purchases of nuclear decommissioning trust investments​ (4,054)​ (3,705)​ (5,730)Other​ 81​ 98​ 316Net cash used in investing activities​ (5,574)​ (5,151)​ (4,971)Net increase in cash, cash equivalents and restricted cash​ 523​ 305​ 19Cash, cash equivalents and restricted cash at beginning of year​ 394​ 89​ 70Cash, cash equivalents and restricted cash at end of year​$ 917​$ 394​$ 89​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "MODIFIED", "current_title": "Operating income", "prior_title": "Operating income", "similarity_score": 0.633, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ 2,627 ​ 1,483 ​ 1,477 Interest expense ​ (1,612) ​ (1,169) ​ (925) Other income, net ​ 500 ​ 348 ​ 237\"" ], "current_body": "​ 2,627 ​ 1,483 ​ 1,477 Interest expense ​ (1,612) ​ (1,169) ​ (925) Other income, net ​ 500 ​ 348 ​ 237", "prior_body": "​ 1,483 ​ 1,477 ​ 1,217 Interest expense ​ (1,169) ​ (925) ​ (902) Other income ​ 348 ​ 237 ​ 251" }, { "status": "MODIFIED", "current_title": "Total property, plant and equipment", "prior_title": "Total property, plant and equipment", "similarity_score": 0.629, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ 56,084 ​ 53,486 Regulatory assets (include $1,558 and $834 related to Variable Interest Entities \"VIEs\" at respective dates) ​ 8,897 ​ 8,181 Wildfire Insurance Fund contributions ​ 1,951 ​ 2,155 Operating lease right-of-use assets ​ 1,221 ​ 1,442 Long-term insurance receivables ​ ​ 501 ​ ​ 465 Other long-term assets ​ 2,066 ​ 1,239\"" ], "current_body": "​ 56,084 ​ 53,486 Regulatory assets (include $1,558 and $834 related to Variable Interest Entities \"VIEs\" at respective dates) ​ 8,897 ​ 8,181 Wildfire Insurance Fund contributions ​ 1,951 ​ 2,155 Operating lease right-of-use assets ​ 1,221 ​ 1,442 Long-term insurance receivables ​ ​ 501 ​ ​ 465 Other long-term assets ​ 2,066 ​ 1,239", "prior_body": "​ 53,486 ​ 50,700 Receivables, less allowances of $7 and $116 for uncollectible accounts at respective dates ​ ​ 2 ​ ​ 122 Regulatory assets (include $834 and $325 related to Variable Interest Entities \"VIEs\" at respective dates) ​ 8,181 ​ 7,660 Wildfire Insurance Fund contributions ​ 2,155 ​ 2,359 Operating lease right-of-use assets ​ 1,442 ​ 1,932 Long-term insurance receivables ​ ​ 465 ​ ​ 75 Other long-term assets ​ 1,237 ​ 1,485" }, { "status": "MODIFIED", "current_title": "LIABILITIES AND EQUITY", "prior_title": "LIABILITIES AND EQUITY", "similarity_score": 0.617, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ ​ Short-term debt ​ $ 1,077 ​ $ 2,015 Current portion of long-term debt ​ 2,697 ​ 2,614 Accounts payable ​ 1,983 ​ 2,359 Wildfire-related claims ​ ​ 30 ​ ​ 121 Customer deposits ​ 177 ​ 167 Regulatory liabilities ​ 763 ​ 964 Current portion of operating lease liabilities ​ 120 ​ 506 Other current liabilities ​ 1,751 ​ 1,601\"" ], "current_body": "​ ​ Short-term debt ​ $ 1,077 ​ $ 2,015 Current portion of long-term debt ​ 2,697 ​ 2,614 Accounts payable ​ 1,983 ​ 2,359 Wildfire-related claims ​ ​ 30 ​ ​ 121 Customer deposits ​ 177 ​ 167 Regulatory liabilities ​ 763 ​ 964 Current portion of operating lease liabilities ​ 120 ​ 506 Other current liabilities ​ 1,751 ​ 1,601", "prior_body": "​ ​ Short-term debt ​ $ 2,015 ​ $ 2,354 Current portion of long-term debt ​ 2,614 ​ 1,077 Accounts payable ​ 2,359 ​ 2,002 Wildfire-related claims ​ ​ 121 ​ ​ 131 Customer deposits ​ 167 ​ 193 Regulatory liabilities ​ 964 ​ 603 Current portion of operating lease liabilities ​ 506 ​ 582 Other current liabilities ​ 1,601 ​ 1,667" }, { "status": "MODIFIED", "current_title": "Total current assets", "prior_title": "Total current assets", "similarity_score": 0.617, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ 6,811 ​ 7,070 Nuclear decommissioning trusts ​ 4,173 ​ 3,948 Other investments ​ 54 ​ 55\"" ], "current_body": "​ 6,811 ​ 7,070 Nuclear decommissioning trusts ​ 4,173 ​ 3,948 Other investments ​ 54 ​ 55", "prior_body": "​ 7,070 ​ 5,491 Nuclear decommissioning trusts ​ 3,948 ​ 4,870 Marketable securities ​ ​ 5 ​ ​ 12 Other investments ​ 50 ​ 39" }, { "status": "MODIFIED", "current_title": "Net (decrease) increase in cash and cash equivalents", "prior_title": "Net increase in cash, cash equivalents and restricted cash", "similarity_score": 0.607, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ (368) ​ 486 ​ 224 Cash, cash equivalents and restricted cash at beginning of year ​ 766 ​ 280 ​ 56\"" ], "current_body": "​ (368) ​ 486 ​ 224 Cash, cash equivalents and restricted cash at beginning of year ​ 766 ​ 280 ​ 56", "prior_body": "​ 523 ​ 305 ​ 19 Cash, cash equivalents and restricted cash at beginning of year ​ 394 ​ 89 ​ 70" }, { "status": "MODIFIED", "current_title": "LIABILITIES AND EQUITY", "prior_title": "LIABILITIES AND EQUITY", "similarity_score": 0.601, "confidence": "medium", "key_changes": [ "Reworded sentence: \"​ ​ Short-term debt ​ $ 831 ​ $ 925 Current portion of long-term debt ​ 2,197 ​ 2,214 Accounts payable ​ 1,966 ​ 2,351 Wildfire-related claims ​ ​ 30 ​ ​ 121 Customer deposits ​ 177 ​ 167 Regulatory liabilities ​ 763 ​ 964 Current portion of operating lease liabilities ​ 118 ​ 505 Other current liabilities ​ 1,713 ​ 1,578\"" ], "current_body": "​ ​ Short-term debt ​ $ 1,077 ​ $ 2,015 Current portion of long-term debt ​ 2,697 ​ 2,614 Accounts payable ​ 1,983 ​ 2,359 Wildfire-related claims ​ ​ 30 ​ ​ 121 Customer deposits ​ 177 ​ 167 Regulatory liabilities ​ 763 ​ 964 Current portion of operating lease liabilities ​ 120 ​ 506 Other current liabilities ​ 1,751 ​ 1,601", "prior_body": "​ ​ Short-term debt ​ $ 2,015 ​ $ 2,354 Current portion of long-term debt ​ 2,614 ​ 1,077 Accounts payable ​ 2,359 ​ 2,002 Wildfire-related claims ​ ​ 121 ​ ​ 131 Customer deposits ​ 167 ​ 193 Regulatory liabilities ​ 964 ​ 603 Current portion of operating lease liabilities ​ 506 ​ 582 Other current liabilities ​ 1,601 ​ 1,667" }, { "status": "MODIFIED", "current_title": "Southern California Edison Company", "prior_title": "Southern California Edison Company", "similarity_score": 0.591, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions) ​ 2023 2022 ASSETS ​ ​ Cash and cash equivalents ​ $ 214 ​ $ 766 Receivables, less allowances of $360 and $347 for uncollectible accounts at respective dates ​ 1,981 ​ 1,675 Accrued unbilled revenue ​ 741 ​ 638 Inventory ​ ​ 527 ​ ​ 474 Prepaid expenses ​ 111 ​ 292 Regulatory assets ​ 2,524 ​ 2,497 Wildfire Insurance Fund contributions ​ 204 ​ 204 Other current assets ​ 331 ​ 384\"" ], "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) 2023 2022 2021", "prior_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) 2022 2021 2020" }, { "status": "MODIFIED", "current_title": "Balance at December 31, 2020", "prior_title": "Balance at December 31, 2020", "similarity_score": 0.583, "confidence": "low", "key_changes": [ "Reworded sentence: \"$ 175 $ 13 ​ $ 188 Current period provision for uncollectible accounts1 ​ ​ 124 ​ ​ 11 ​ ​ 135 Write-offs, net of recoveries ​ (6) ​ (8) ​ (14)\"" ], "current_body": "$ — ​ $ 5,962 ​ $ (69) ​ $ 8,155 ​ $ 14,048 ​ $ 1,901 ​ $ 15,949 Net income ​ ​ — ​ — ​ — ​ 819 ​ 819 ​ 106 ​ 925 Other comprehensive income ​ ​ — ​ — ​ 15 ​ — ​ 15 ​ — ​ 15 Common stock issued ​ ​ — ​ 71 ​ — ​ — ​ ​ 71 ​ — ​ ​ 71 Preferred stock issued, net ​ ​ 1,977 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,977 ​ ​ — ​ ​ 1,977 Common stock dividends declared ($2.6875 per share) ​ ​ — ​ — ​ — ​ (1,021) ​ (1,021) ​ — ​ (1,021) Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B) ​ ​ — ​ ​ — ​ ​ — ​ ​ (60) ​ ​ (60) ​ ​ — ​ ​ (60) Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (106) ​ (106) Noncash stock-based compensation ​ ​ — ​ 38 ​ — ​ 1 ​ 39 ​ — ​ 39", "prior_body": "​ $ — ​ $ 5,962 ​ $ (69) ​ $ 8,155 ​ $ 14,048 ​ $ 1,901 ​ $ 15,949 Net income ​ ​ — ​ — ​ — ​ 819 ​ 819 ​ 106 ​ 925 Other comprehensive income ​ ​ — ​ — ​ 15 ​ — ​ 15 ​ — ​ 15 Common stock issued, net of issuance cost ​ ​ — ​ 71 ​ — ​ — ​ 71 ​ — ​ 71 Preferred stock issued, net of issuance cost ​ ​ 1,977 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,977 ​ ​ — ​ ​ 1,977 Common stock dividends declared ($2.6875 per share) ​ ​ — ​ — ​ — ​ (1,021) ​ (1,021) ​ — ​ (1,021) Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B) ​ ​ — ​ ​ — ​ ​ — ​ ​ (60) ​ ​ (60) ​ ​ — ​ ​ (60) Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (106) ​ (106) Noncash stock-based compensation ​ ​ — ​ 38 ​ — ​ 1 ​ 39 ​ — ​ 39" }, { "status": "MODIFIED", "current_title": "Income before income taxes", "prior_title": "Income before taxes", "similarity_score": 0.58, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ 1,781 ​ 845 ​ 952 Income tax expense (benefit) ​ 184 ​ (109) ​ 17 Net income ​ 1,597 ​ 954 ​ 935 Less: Preference stock dividend requirements ​ 123 ​ 107 ​ 106\"" ], "current_body": "​ 1,515 ​ 662 ​ 789 Income tax expense (benefit) ​ 108 ​ (162) ​ (136) Net income ​ 1,407 ​ 824 ​ 925 Less: Preference stock dividend requirements of SCE ​ 123 ​ 107 ​ 106 Preferred stock dividend requirements of Edison International ​ ​ 87 ​ ​ 105 ​ ​ 60", "prior_body": "​ 845 ​ 952 ​ 665 Income tax (benefit) expense ​ (109) ​ 17 ​ (277) Net income ​ 954 ​ 935 ​ 942 Less: Preference stock dividend requirements ​ 107 ​ 106 ​ 132" }, { "status": "MODIFIED", "current_title": "Long-term debt (include $1,515 and $809 related to VIEs at respective dates)", "prior_title": "Long-term debt (include $809 and $314 related to VIEs at respective dates)", "similarity_score": 0.566, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ 26,297 ​ 24,044 Deferred income taxes and credits ​ 8,126 ​ 7,545 Pensions and benefits ​ 105 ​ 105 Asset retirement obligations ​ 2,666 ​ 2,754 Regulatory liabilities ​ 9,420 ​ 8,211 Operating lease liabilities ​ 1,096 ​ 928 Wildfire-related claims ​ 1,368 ​ 1,687 Other deferred credits and other long-term liabilities ​ 3,206 ​ 2,919\"" ], "current_body": "​ 30,316 ​ 27,025 Deferred income taxes and credits ​ 6,672 ​ 6,149 Pensions and benefits ​ 415 ​ 422 Asset retirement obligations ​ 2,666 ​ 2,754 Regulatory liabilities ​ 9,420 ​ 8,211 Operating lease liabilities ​ 1,101 ​ 936 Wildfire-related claims ​ 1,368 ​ 1,687 Other deferred credits and other long-term liabilities ​ 3,258 ​ 2,988", "prior_body": "​ 27,025 ​ 24,170 Deferred income taxes and credits ​ 6,149 ​ 5,740 Pensions and benefits ​ 422 ​ 496 Asset retirement obligations ​ 2,754 ​ 2,772 Regulatory liabilities ​ 8,211 ​ 8,981 Operating lease liabilities ​ 936 ​ 1,350 Wildfire-related claims ​ 1,687 ​ 1,733 Other deferred credits and other long-term liabilities ​ 2,988 ​ 3,105" }, { "status": "MODIFIED", "current_title": "Long-term debt (include $1,515 and $809 related to VIEs at respective dates)", "prior_title": "Long-term debt (include $809 and $314 related to VIEs at respective dates)", "similarity_score": 0.563, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ 30,316 ​ 27,025 Deferred income taxes and credits ​ 6,672 ​ 6,149 Pensions and benefits ​ 415 ​ 422 Asset retirement obligations ​ 2,666 ​ 2,754 Regulatory liabilities ​ 9,420 ​ 8,211 Operating lease liabilities ​ 1,101 ​ 936 Wildfire-related claims ​ 1,368 ​ 1,687 Other deferred credits and other long-term liabilities ​ 3,258 ​ 2,988\"" ], "current_body": "​ 30,316 ​ 27,025 Deferred income taxes and credits ​ 6,672 ​ 6,149 Pensions and benefits ​ 415 ​ 422 Asset retirement obligations ​ 2,666 ​ 2,754 Regulatory liabilities ​ 9,420 ​ 8,211 Operating lease liabilities ​ 1,101 ​ 936 Wildfire-related claims ​ 1,368 ​ 1,687 Other deferred credits and other long-term liabilities ​ 3,258 ​ 2,988", "prior_body": "​ 27,025 ​ 24,170 Deferred income taxes and credits ​ 6,149 ​ 5,740 Pensions and benefits ​ 422 ​ 496 Asset retirement obligations ​ 2,754 ​ 2,772 Regulatory liabilities ​ 8,211 ​ 8,981 Operating lease liabilities ​ 936 ​ 1,350 Wildfire-related claims ​ 1,687 ​ 1,733 Other deferred credits and other long-term liabilities ​ 2,988 ​ 3,105" }, { "status": "MODIFIED", "current_title": "Total assets", "prior_title": "Total assets", "similarity_score": 0.562, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ $ 81,758 ​ $ 78,041 ​ The accompanying notes are an integral part of these consolidated financial statements.60 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ $ 81,758 ​ $ 78,041 ​ The accompanying notes are an integral part of these consolidated financial statements.60 The accompanying notes are an integral part of these consolidated financial statements. 60 Table of Contents​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions, except share amounts)​2023 2022LIABILITIES AND EQUITY ​ ​ Short-term debt​$ 1,077​$ 2,015Current portion of long-term debt​ 2,697​ 2,614Accounts payable​ 1,983​ 2,359Wildfire-related claims​​ 30​​ 121Customer deposits​ 177​ 167Regulatory liabilities​ 763​ 964Current portion of operating lease liabilities​ 120​ 506Other current liabilities​ 1,751​ 1,601Total current liabilities​ 8,598​ 10,347Long-term debt (include $1,515 and $809 related to VIEs at respective dates)​ 30,316​ 27,025Deferred income taxes and credits​ 6,672​ 6,149Pensions and benefits​ 415​ 422Asset retirement obligations​ 2,666​ 2,754Regulatory liabilities​ 9,420​ 8,211Operating lease liabilities​ 1,101​ 936Wildfire-related claims​ 1,368​ 1,687Other deferred credits and other long-term liabilities​ 3,258​ 2,988Total deferred credits and other liabilities​ 24,900​ 23,147Total liabilities​ 63,814​ 60,519Commitments and contingencies (Note 12)​ ​ Preferred stock (50,000,000 shares authorized; 1,159,317 and 1,250,000 shares of Series A and 532,454 and 750,000 shares of Series B issued and outstanding at respective dates)​​ 1,673​​ 1,978Common stock, no par value (800,000,000 shares authorized; 383,924,912 and 382,208,498 shares issued and outstanding at respective dates)​ 6,338​ 6,200Accumulated other comprehensive loss​ (9)​ (11)Retained earnings​ 7,499​ 7,454Total Edison International's shareholders' equity​ 15,501​ 15,621Noncontrolling interests – preference stock of SCE​ 2,443​ 1,901Total equity​ 17,944​ 17,522Total liabilities and equity​$ 81,758​$ 78,041​​The accompanying notes are an integral part of these consolidated financial statements.61 Table of Contents Table of Contents Table of Contents ​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions, except share amounts)​2023 2022LIABILITIES AND EQUITY ​ ​ Short-term debt​$ 1,077​$ 2,015Current portion of long-term debt​ 2,697​ 2,614Accounts payable​ 1,983​ 2,359Wildfire-related claims​​ 30​​ 121Customer deposits​ 177​ 167Regulatory liabilities​ 763​ 964Current portion of operating lease liabilities​ 120​ 506Other current liabilities​ 1,751​ 1,601Total current liabilities​ 8,598​ 10,347Long-term debt (include $1,515 and $809 related to VIEs at respective dates)​ 30,316​ 27,025Deferred income taxes and credits​ 6,672​ 6,149Pensions and benefits​ 415​ 422Asset retirement obligations​ 2,666​ 2,754Regulatory liabilities​ 9,420​ 8,211Operating lease liabilities​ 1,101​ 936Wildfire-related claims​ 1,368​ 1,687Other deferred credits and other long-term liabilities​ 3,258​ 2,988Total deferred credits and other liabilities​ 24,900​ 23,147Total liabilities​ 63,814​ 60,519Commitments and contingencies (Note 12)​ ​ Preferred stock (50,000,000 shares authorized; 1,159,317 and 1,250,000 shares of Series A and 532,454 and 750,000 shares of Series B issued and outstanding at respective dates)​​ 1,673​​ 1,978Common stock, no par value (800,000,000 shares authorized; 383,924,912 and 382,208,498 shares issued and outstanding at respective dates)​ 6,338​ 6,200Accumulated other comprehensive loss​ (9)​ (11)Retained earnings​ 7,499​ 7,454Total Edison International's shareholders' equity​ 15,501​ 15,621Noncontrolling interests – preference stock of SCE​ 2,443​ 1,901Total equity​ 17,944​ 17,522Total liabilities and equity​$ 81,758​$ 78,041​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​", "prior_body": "​ $ 78,041 ​ $ 74,745 ​ The accompanying notes are an integral part of these consolidated financial statements.64 The accompanying notes are an integral part of these consolidated financial statements. 64 Table of Contents​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions, except share amounts) 2022 2021LIABILITIES AND EQUITY ​ ​ Short-term debt​$ 2,015​$ 2,354Current portion of long-term debt​ 2,614​ 1,077Accounts payable​ 2,359​ 2,002Wildfire-related claims​​ 121​​ 131Customer deposits​ 167​ 193Regulatory liabilities​ 964​ 603Current portion of operating lease liabilities​ 506​ 582Other current liabilities​ 1,601​ 1,667Total current liabilities​ 10,347​ 8,609Long-term debt (include $809 and $314 related to VIEs at respective dates)​ 27,025​ 24,170Deferred income taxes and credits​ 6,149​ 5,740Pensions and benefits​ 422​ 496Asset retirement obligations​ 2,754​ 2,772Regulatory liabilities​ 8,211​ 8,981Operating lease liabilities​ 936​ 1,350Wildfire-related claims​ 1,687​ 1,733Other deferred credits and other long-term liabilities​ 2,988​ 3,105Total deferred credits and other liabilities​ 23,147​ 24,177Total liabilities​ 60,519​ 56,956Commitments and contingencies (Note 12)​ ​ Preferred stock (50,000,000 shares authorized; 1,250,000 shares of Series A and 750,000 shares of Series B issued and outstanding at respective dates)​​ 1,978​​ 1,977Common stock, no par value (800,000,000 shares authorized; 382,208,498 and 380,378,145 shares issued and outstanding at respective dates)​ 6,200​ 6,071Accumulated other comprehensive loss​ (11)​ (54)Retained earnings​ 7,454​ 7,894Total Edison International's shareholders' equity​ 15,621​ 15,888Noncontrolling interests – preference stock of SCE​ 1,901​ 1,901Total equity​ 17,522​ 17,789Total liabilities and equity​$ 78,041​$ 74,745​​The accompanying notes are an integral part of these consolidated financial statements.65 Table of Contents Table of Contents Table of Contents ​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions, except share amounts) 2022 2021LIABILITIES AND EQUITY ​ ​ Short-term debt​$ 2,015​$ 2,354Current portion of long-term debt​ 2,614​ 1,077Accounts payable​ 2,359​ 2,002Wildfire-related claims​​ 121​​ 131Customer deposits​ 167​ 193Regulatory liabilities​ 964​ 603Current portion of operating lease liabilities​ 506​ 582Other current liabilities​ 1,601​ 1,667Total current liabilities​ 10,347​ 8,609Long-term debt (include $809 and $314 related to VIEs at respective dates)​ 27,025​ 24,170Deferred income taxes and credits​ 6,149​ 5,740Pensions and benefits​ 422​ 496Asset retirement obligations​ 2,754​ 2,772Regulatory liabilities​ 8,211​ 8,981Operating lease liabilities​ 936​ 1,350Wildfire-related claims​ 1,687​ 1,733Other deferred credits and other long-term liabilities​ 2,988​ 3,105Total deferred credits and other liabilities​ 23,147​ 24,177Total liabilities​ 60,519​ 56,956Commitments and contingencies (Note 12)​ ​ Preferred stock (50,000,000 shares authorized; 1,250,000 shares of Series A and 750,000 shares of Series B issued and outstanding at respective dates)​​ 1,978​​ 1,977Common stock, no par value (800,000,000 shares authorized; 382,208,498 and 380,378,145 shares issued and outstanding at respective dates)​ 6,200​ 6,071Accumulated other comprehensive loss​ (11)​ (54)Retained earnings​ 7,454​ 7,894Total Edison International's shareholders' equity​ 15,621​ 15,888Noncontrolling interests – preference stock of SCE​ 1,901​ 1,901Total equity​ 17,522​ 17,789Total liabilities and equity​$ 78,041​$ 74,745​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "MODIFIED", "current_title": "Balance at December 31, 2023", "prior_title": "Balance at December 31, 2022", "similarity_score": 0.529, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ $ 1,673 ​ $ 6,338 ​ $ (9) ​ $ 7,499 ​ $ 15,501 ​ $ 2,443 ​ $ 17,944 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.63 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ $ 1,673 ​ $ 6,338 ​ $ (9) ​ $ 7,499 ​ $ 15,501 ​ $ 2,443 ​ $ 17,944 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.63 The accompanying notes are an integral part of these consolidated financial statements. 63 Table of Contents​​​​​​​​​​(This page has been left blank intentionally.)​64 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​(This page has been left blank intentionally.)​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (This page has been left blank intentionally.) ​ 64 64 Table of Contents​​​​​​​​​​​​​​Consolidated Statements of IncomeSouthern California Edison Company​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2023 2022 2021Operating revenue​$ 16,275​$ 17,172​$ 14,874Purchased power and fuel​ 5,486​ 6,375​ 5,540Operation and maintenance​ 4,071​ 4,659​ 3,588Wildfire-related claims, net of insurance recoveries​ 665​ 1,305​ 1,276Wildfire Insurance Fund expense​ 213​ 214​ 215Depreciation and amortization​ 2,633​ 2,559​ 2,216Property and other taxes​ 566​ 497​ 462Impairment, net of other operating income​ 1​ 50​ 67Total operating expenses​ 13,635​ 15,659​ 13,364Operating income​ 2,640​ 1,513​ 1,510Interest expense​ (1,356)​ (1,005)​ (791)Other income, net​ 497​ 337​ 233Income before income taxes​ 1,781​ 845​ 952Income tax expense (benefit) ​ 184​ (109)​ 17Net income​ 1,597​ 954​ 935Less: Preference stock dividend requirements​ 123​ 107​ 106Net income available for common stock​$ 1,474​$ 847​$ 829​​​​​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Net income​$ 1,597​$ 954​$ 935Other comprehensive (loss) income, net of tax:​ ​ ​ Pension and postretirement benefits other than pensions​ (4)​ 24​ 9Other comprehensive (loss) income, net of tax​ (4)​ 24​ 9Comprehensive income​$ 1,593​$ 978​$ 944​​​​The accompanying notes are an integral part of these consolidated financial statements.65 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​Consolidated Statements of IncomeSouthern California Edison Company​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2023 2022 2021Operating revenue​$ 16,275​$ 17,172​$ 14,874Purchased power and fuel​ 5,486​ 6,375​ 5,540Operation and maintenance​ 4,071​ 4,659​ 3,588Wildfire-related claims, net of insurance recoveries​ 665​ 1,305​ 1,276Wildfire Insurance Fund expense​ 213​ 214​ 215Depreciation and amortization​ 2,633​ 2,559​ 2,216Property and other taxes​ 566​ 497​ 462Impairment, net of other operating income​ 1​ 50​ 67Total operating expenses​ 13,635​ 15,659​ 13,364Operating income​ 2,640​ 1,513​ 1,510Interest expense​ (1,356)​ (1,005)​ (791)Other income, net​ 497​ 337​ 233Income before income taxes​ 1,781​ 845​ 952Income tax expense (benefit) ​ 184​ (109)​ 17Net income​ 1,597​ 954​ 935Less: Preference stock dividend requirements​ 123​ 107​ 106Net income available for common stock​$ 1,474​$ 847​$ 829​​​​​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Net income​$ 1,597​$ 954​$ 935Other comprehensive (loss) income, net of tax:​ ​ ​ Pension and postretirement benefits other than pensions​ (4)​ 24​ 9Other comprehensive (loss) income, net of tax​ (4)​ 24​ 9Comprehensive income​$ 1,593​$ 978​$ 944​​​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​", "prior_body": "​ $ 1,978 ​ $ 6,200 ​ $ (11) ​ $ 7,454 ​ $ 15,621 ​ $ 1,901 ​ $ 17,522 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.67 The accompanying notes are an integral part of these consolidated financial statements. 67 Table of Contents​​​​​​​​​​(This page has been left blank intentionally.)​68 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​(This page has been left blank intentionally.)​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (This page has been left blank intentionally.) ​ 68 68 Table of Contents​​​​​​​​​​​​​​Consolidated Statements of IncomeSouthern California Edison Company​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Operating revenue​$ 17,172​$ 14,874​$ 13,546Purchased power and fuel​ 6,375​ 5,540​ 4,932Operation and maintenance​ 4,659​ 3,588​ 3,523Wildfire-related claims, net of insurance recoveries​ 1,305​ 1,276​ 1,328Wildfire Insurance Fund expense​ 214​ 215​ 336Depreciation and amortization​ 2,559​ 2,216​ 1,965Property and other taxes​ 497​ 462​ 435Impairment, net of other (income)​ 50​ 67​ (151)Total operating expenses​ 15,659​ 13,364​ 12,368Operating income​ 1,513​ 1,510​ 1,178Interest expense​ (1,005)​ (791)​ (768)Other income​ 337​ 233​ 255Income before taxes​ 845​ 952​ 665Income tax (benefit) expense​ (109)​ 17​ (277)Net income​ 954​ 935​ 942Less: Preference stock dividend requirements​ 107​ 106​ 132Net income available for common stock​$ 847​$ 829​$ 810​​​​​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Net income​$ 954​$ 935​$ 942Other comprehensive income (loss), net of tax:​ ​ ​ ​Pension and postretirement benefits other than pensions​ 24​ 9​ (2)Other comprehensive income (loss), net of tax​ 24​ 9​ (2)Comprehensive income​$ 978​$ 944​$ 940​​​​The accompanying notes are an integral part of these consolidated financial statements.69 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​Consolidated Statements of IncomeSouthern California Edison Company​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Operating revenue​$ 17,172​$ 14,874​$ 13,546Purchased power and fuel​ 6,375​ 5,540​ 4,932Operation and maintenance​ 4,659​ 3,588​ 3,523Wildfire-related claims, net of insurance recoveries​ 1,305​ 1,276​ 1,328Wildfire Insurance Fund expense​ 214​ 215​ 336Depreciation and amortization​ 2,559​ 2,216​ 1,965Property and other taxes​ 497​ 462​ 435Impairment, net of other (income)​ 50​ 67​ (151)Total operating expenses​ 15,659​ 13,364​ 12,368Operating income​ 1,513​ 1,510​ 1,178Interest expense​ (1,005)​ (791)​ (768)Other income​ 337​ 233​ 255Income before taxes​ 845​ 952​ 665Income tax (benefit) expense​ (109)​ 17​ (277)Net income​ 954​ 935​ 942Less: Preference stock dividend requirements​ 107​ 106​ 132Net income available for common stock​$ 847​$ 829​$ 810​​​​​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2022 2021 2020Net income​$ 954​$ 935​$ 942Other comprehensive income (loss), net of tax:​ ​ ​ ​Pension and postretirement benefits other than pensions​ 24​ 9​ (2)Other comprehensive income (loss), net of tax​ 24​ 9​ (2)Comprehensive income​$ 978​$ 944​$ 940​​​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "MODIFIED", "current_title": "Edison International", "prior_title": "Edison International", "similarity_score": 0.526, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions) ​ 2023 2022 ASSETS ​ ​ Cash and cash equivalents ​ $ 345 ​ $ 914 Receivables, less allowances of $360 and $347 for uncollectible accounts at respective dates ​ 2,016 ​ 1,695 Accrued unbilled revenue ​ 742 ​ 641 Inventory ​ 527 ​ 474 Prepaid expenses ​ 112 ​ 248 Regulatory assets ​ 2,524 ​ 2,497 Wildfire Insurance Fund contributions ​ 204 ​ 204 Other current assets ​ 341 ​ 397\"" ], "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) ​ 2023 2022 2021", "prior_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions, except per-share amounts) 2022 2021 2020" }, { "status": "MODIFIED", "current_title": "Comprehensive income", "prior_title": "Comprehensive income", "similarity_score": 0.523, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ $ 1,593 ​ $ 978 ​ $ 944 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.65 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ 1,409 ​ 867 ​ 940 Less: Comprehensive income attributable to noncontrolling interests ​ 123 ​ 107 ​ 106", "prior_body": "​ 867 ​ 940 ​ 871 Less: Comprehensive income attributable to noncontrolling interests ​ 107 ​ 106 ​ 132" }, { "status": "MODIFIED", "current_title": "Operating revenue", "prior_title": "Total operating revenue", "similarity_score": 0.521, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ $ 16,338 ​ $ 17,220 ​ $ 14,905 Purchased power and fuel ​ 5,486 ​ 6,375 ​ 5,540 Operation and maintenance ​ 4,138 ​ 4,724 ​ 3,645 Wildfire-related claims, net of insurance recoveries ​ 667 ​ 1,313 ​ 1,276 Wildfire Insurance Fund expense ​ 213 ​ 214 ​ 215 Depreciation and amortization ​ 2,635 ​ 2,561 ​ 2,218 Property and other taxes ​ 571 ​ 501 ​ 465 Impairment, net of other operating income ​ 1 ​ 49 ​ 69\"" ], "current_body": "​ $ 16,338 ​ $ 17,220 ​ $ 14,905 Purchased power and fuel ​ 5,486 ​ 6,375 ​ 5,540 Operation and maintenance ​ 4,138 ​ 4,724 ​ 3,645 Wildfire-related claims, net of insurance recoveries ​ 667 ​ 1,313 ​ 1,276 Wildfire Insurance Fund expense ​ 213 ​ 214 ​ 215 Depreciation and amortization ​ 2,635 ​ 2,561 ​ 2,218 Property and other taxes ​ 571 ​ 501 ​ 465 Impairment, net of other operating income ​ 1 ​ 49 ​ 69", "prior_body": "​ $ 17,220 ​ $ 14,905 ​ $ 13,578 Purchased power and fuel ​ 6,375 ​ 5,540 ​ 4,932 Operation and maintenance ​ 4,724 ​ 3,645 ​ 3,609 Wildfire-related claims, net of insurance recoveries ​ 1,313 ​ 1,276 ​ 1,328 Wildfire Insurance Fund expense ​ 214 ​ 215 ​ 336 Depreciation and amortization ​ 2,561 ​ 2,218 ​ 1,967 Property and other taxes ​ 501 ​ 465 ​ 438 Impairment, net of other (income) ​ 54 ​ 71 ​ (116) Gain on sale of lease interest and other operating income ​ (5) ​ (2) ​ (133)" }, { "status": "MODIFIED", "current_title": "Edison International's and SCE's financial condition and results of operations could be materially impacted by catastrophic, macroeconomic and geopolitical events that cause significant disruption to workforces, supply chains, economies, or societies on a regional, statewide, national or global basis.", "prior_title": "SCE's systems and network infrastructure are targets for physical and cyber attacks, intrusions or other catastrophic events that could result in their failure or reduced functionality.", "similarity_score": 0.521, "confidence": "low", "key_changes": [ "Reworded sentence: \"Edison International and SCE could be materially and adversely impacted by catastrophic, macroeconomic and geopolitical events, such as the effects of increased inflationary pressures and interest rates, potential economic downturns or recessions, geopolitical pressures, and pandemics and regional health emergencies.\"" ], "current_body": "Edison International and SCE could be materially and adversely impacted by catastrophic, macroeconomic and geopolitical events, such as the effects of increased inflationary pressures and interest rates, potential economic downturns or recessions, geopolitical pressures, and pandemics and regional health emergencies. For example, the global spread of COVID-19, which was declared a pandemic by the World Health Organization in March 2020, created significant uncertainty, volatility and disruption globally that resulted in, among other things, disruption to supply chains, economies, and workforce and impacted the operations of Edison International and SCE. Additionally, the geopolitical developments involving the Russia-Ukraine conflict, China and the Middle East, could cause delays and disruptions in the supply chain and the availability and timely delivery of services, materials and components used in SCE’s operations. Many of the risks and uncertainties identified in this Form 10-K have, and will be, exacerbated by the impacts of a catastrophic event and the actions taken by governmental entities, businesses, individuals and others in response to such an event. In addition, impacts of international conflict, recession, pandemic or similar events on SCE's customers and third parties could also result in SCE facing, among other things, significant reductions in demand for electricity and payment delays and/or defaults from customers which could result in significant under-collections. Edison International and SCE access to the bank and capital markets and/or the costs of accessing those markets could be constrained and could also face payment delays and/or defaults from insurers and other counterparties. These impacts, among others, could materially and adversely impact Edison International's and SCE's business, operations, cash flows, liquidity and financial results.", "prior_body": "Regulators such as NERC and U.S. Government agencies, including the Departments of Defense, Homeland Security and Energy, have increasingly stressed that threat sources continue to seek to exploit potential vulnerabilities in the U.S. national electric grid and other energy infrastructures, and that such attacks and disruptions, both physical and cyber, are highly sophisticated and dynamic. Several U.S. Government agencies have highlighted the increasing risks related to physical attacks, ransomware attacks and cybersecurity risks related to the electric sector, including its supply chains, and that the risks may escalate during periods of heightened geopolitical tensions. SCE's operations require the continuous availability of critical information technology systems, sensitive customer and employee data and network infrastructure and information, all of which are targets for malicious actors. New cyber and physical threats arise as SCE moves from an analog to a digital electric grid. For example, SCE's grid modernization efforts and the move to a network-connected grid increases the number of “threat surfaces” and potential vulnerabilities that an adversary can target. SCE system data and architecture are also disclosed, either intentionally or unintentionally, to third parties and the public by regulators, employees, contractors and vendors. This system information may be used by malicious actors to understand SCE’s systems to prepare for a cyber or physical attack. 52 52 Table of ContentsSCE depends on a wide array of vendors to provide it with services and equipment. Malicious actors may attack vendors to disrupt the services they provide to SCE, or to use those vendors as a conduit to attack SCE. Additionally, the equipment and material provided by SCE's vendors may contain cyber vulnerabilities. A compromise of equipment and/or exfiltration of SCE data, whether by physical or by electronic means, could result in loss or changes to confidential or sensitive electronic data, loss of intellectual property and interruption of business processes. While some of SCE's vendors have experienced cybersecurity incidents, such incidents have not, to SCE's knowledge, resulted in a material impact to SCE to date.SCE's systems have experienced, and will continue to experience, cybersecurity incidents involving attacks of malicious code, unauthorized access attempts, and other illicit activities, but to SCE's knowledge it has not experienced a material cybersecurity or data breach to date. Though SCE actively monitors developments in this area, no security measures can completely shield its systems, infrastructure and data from cyber attacks, intrusions or other catastrophic events that could result in their failure or reduced functionality.If SCE's information technology and operational technology systems' security measures were to be breached, or a critical system failure were to occur without timely recovery, SCE could be unable to fulfill critical business functions, such as delivery of electricity to customers, and/or sensitive confidential personal and other data could be compromised, which could result in violations of applicable privacy and other laws, material financial loss to SCE or to its customers, loss of confidence in SCE's security measures, customer dissatisfaction, and significant litigation and/or regulatory exposure, all of which could materially affect SCE's financial condition and results of operations and materially damage the business reputation of Edison International and SCE.RISKS RELATING TO EDISON INTERNATIONAL AND SOUTHERN CALIFORNIA EDISON COMPANYEdison International's and SCE's financial condition and results of operations could be materially impacted by events, like the COVID-19 pandemic, that cause significant disruption to workforces, supply chains, economies, or societies on a regional, statewide, national or global basis.Edison International and SCE could be materially and adversely impacted by events, such as the widespread outbreak of a communicable disease, that result in, among other things, significant disruption to supply chains, economies, societies or workforces on a regional, statewide, national or global basis. For example, the global spread of COVID-19, which was declared a pandemic by the World Health Organization in March 2020, created significant uncertainty, volatility and disruption globally and has impacted the operations of Edison International and SCE. Many of the risks and uncertainties identified in this Form 10-K are, and will be, exacerbated by the impacts of an event like a pandemic and the actions being taken by governmental entities, businesses, individuals and others in response to such an event. For example, SCE may be unable to effectively execute its PSPS program due to, among other things, requests from local and State authorities not to shut off the power during a pandemic or other event, and thereby may increase the risk of SCE equipment being associated with the ignition of wildfires.In addition, impacts of a pandemic or similar event on SCE's customers and third parties could also result in SCE facing, among other things, significant reductions in demand for electricity and payment delays and/or defaults from customers which could result in significant under-collections. In addition, Edison International and SCE could also face payment delays and/or defaults from insurers and other counterparties. Furthermore, Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase as a result of a pandemic or similar event, including if Edison International's and/or SCE's credit ratings are downgraded, or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of the impacts of the pandemic. SCE may also incur significant incremental costs as a result of actions it is taking in response to a pandemic or a similar event, including costs being incurred to maintain its operations and assist its employees who are required to telework or are otherwise impacted by the event. SCE could also face delays in important legal and 53 Table of Contents Table of Contents Table of Contents SCE depends on a wide array of vendors to provide it with services and equipment. Malicious actors may attack vendors to disrupt the services they provide to SCE, or to use those vendors as a conduit to attack SCE. Additionally, the equipment and material provided by SCE's vendors may contain cyber vulnerabilities. A compromise of equipment and/or exfiltration of SCE data, whether by physical or by electronic means, could result in loss or changes to confidential or sensitive electronic data, loss of intellectual property and interruption of business processes. While some of SCE's vendors have experienced cybersecurity incidents, such incidents have not, to SCE's knowledge, resulted in a material impact to SCE to date.SCE's systems have experienced, and will continue to experience, cybersecurity incidents involving attacks of malicious code, unauthorized access attempts, and other illicit activities, but to SCE's knowledge it has not experienced a material cybersecurity or data breach to date. Though SCE actively monitors developments in this area, no security measures can completely shield its systems, infrastructure and data from cyber attacks, intrusions or other catastrophic events that could result in their failure or reduced functionality.If SCE's information technology and operational technology systems' security measures were to be breached, or a critical system failure were to occur without timely recovery, SCE could be unable to fulfill critical business functions, such as delivery of electricity to customers, and/or sensitive confidential personal and other data could be compromised, which could result in violations of applicable privacy and other laws, material financial loss to SCE or to its customers, loss of confidence in SCE's security measures, customer dissatisfaction, and significant litigation and/or regulatory exposure, all of which could materially affect SCE's financial condition and results of operations and materially damage the business reputation of Edison International and SCE.RISKS RELATING TO EDISON INTERNATIONAL AND SOUTHERN CALIFORNIA EDISON COMPANYEdison International's and SCE's financial condition and results of operations could be materially impacted by events, like the COVID-19 pandemic, that cause significant disruption to workforces, supply chains, economies, or societies on a regional, statewide, national or global basis.Edison International and SCE could be materially and adversely impacted by events, such as the widespread outbreak of a communicable disease, that result in, among other things, significant disruption to supply chains, economies, societies or workforces on a regional, statewide, national or global basis. For example, the global spread of COVID-19, which was declared a pandemic by the World Health Organization in March 2020, created significant uncertainty, volatility and disruption globally and has impacted the operations of Edison International and SCE. Many of the risks and uncertainties identified in this Form 10-K are, and will be, exacerbated by the impacts of an event like a pandemic and the actions being taken by governmental entities, businesses, individuals and others in response to such an event. For example, SCE may be unable to effectively execute its PSPS program due to, among other things, requests from local and State authorities not to shut off the power during a pandemic or other event, and thereby may increase the risk of SCE equipment being associated with the ignition of wildfires.In addition, impacts of a pandemic or similar event on SCE's customers and third parties could also result in SCE facing, among other things, significant reductions in demand for electricity and payment delays and/or defaults from customers which could result in significant under-collections. In addition, Edison International and SCE could also face payment delays and/or defaults from insurers and other counterparties. Furthermore, Edison International's and SCE's access to the bank and capital markets could also be constrained and/or the costs of accessing those markets could increase as a result of a pandemic or similar event, including if Edison International's and/or SCE's credit ratings are downgraded, or placed on negative watch due to concerns about Edison International and/or SCE's financial health as a result of the impacts of the pandemic. SCE may also incur significant incremental costs as a result of actions it is taking in response to a pandemic or a similar event, including costs being incurred to maintain its operations and assist its employees who are required to telework or are otherwise impacted by the event. SCE could also face delays in important legal and SCE depends on a wide array of vendors to provide it with services and equipment. Malicious actors may attack vendors to disrupt the services they provide to SCE, or to use those vendors as a conduit to attack SCE. Additionally, the equipment and material provided by SCE's vendors may contain cyber vulnerabilities. A compromise of equipment and/or exfiltration of SCE data, whether by physical or by electronic means, could result in loss or changes to confidential or sensitive electronic data, loss of intellectual property and interruption of business processes. While some of SCE's vendors have experienced cybersecurity incidents, such incidents have not, to SCE's knowledge, resulted in a material impact to SCE to date. SCE's systems have experienced, and will continue to experience, cybersecurity incidents involving attacks of malicious code, unauthorized access attempts, and other illicit activities, but to SCE's knowledge it has not experienced a material cybersecurity or data breach to date. Though SCE actively monitors developments in this area, no security measures can completely shield its systems, infrastructure and data from cyber attacks, intrusions or other catastrophic events that could result in their failure or reduced functionality. If SCE's information technology and operational technology systems' security measures were to be breached, or a critical system failure were to occur without timely recovery, SCE could be unable to fulfill critical business functions, such as delivery of electricity to customers, and/or sensitive confidential personal and other data could be compromised, which could result in violations of applicable privacy and other laws, material financial loss to SCE or to its customers, loss of confidence in SCE's security measures, customer dissatisfaction, and significant litigation and/or regulatory exposure, all of which could materially affect SCE's financial condition and results of operations and materially damage the business reputation of Edison International and SCE." }, { "status": "MODIFIED", "current_title": "Comprehensive income attributable to Edison International", "prior_title": "Comprehensive income attributable to Edison International", "similarity_score": 0.519, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ $ 1,286 ​ $ 760 ​ $ 834 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.59 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ $ 1,286 ​ $ 760 ​ $ 834 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.59 The accompanying notes are an integral part of these consolidated financial statements. 59 Table of Contents​​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions)​2023 2022ASSETS ​ ​ Cash and cash equivalents​$ 345​$ 914Receivables, less allowances of $360 and $347 for uncollectible accounts at respective dates​ 2,016​ 1,695Accrued unbilled revenue​ 742​ 641Inventory​ 527​ 474Prepaid expenses​ 112​ 248Regulatory assets​ 2,524​ 2,497Wildfire Insurance Fund contributions​ 204​ 204Other current assets​ 341​ 397Total current assets​ 6,811​ 7,070Nuclear decommissioning trusts​ 4,173​ 3,948Other investments​ 54​ 55Total investments​ 4,227​ 4,003Utility property, plant and equipment, less accumulated depreciation and amortization of $12,910 and $12,260 at respective dates​ 55,877​ 53,274Nonutility property, plant and equipment, less accumulated depreciation of $114 and $106 at respective dates​ 207​ 212Total property, plant and equipment​ 56,084​ 53,486Regulatory assets (include $1,558 and $834 related to Variable Interest Entities \"VIEs\" at respective dates)​ 8,897​ 8,181Wildfire Insurance Fund contributions​ 1,951​ 2,155Operating lease right-of-use assets​ 1,221​ 1,442Long-term insurance receivables​​ 501​​ 465Other long-term assets​ 2,066​ 1,239Total long-term assets​ 14,636​ 13,482Total assets​$ 81,758​$ 78,041​The accompanying notes are an integral part of these consolidated financial statements.60 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions)​2023 2022ASSETS ​ ​ Cash and cash equivalents​$ 345​$ 914Receivables, less allowances of $360 and $347 for uncollectible accounts at respective dates​ 2,016​ 1,695Accrued unbilled revenue​ 742​ 641Inventory​ 527​ 474Prepaid expenses​ 112​ 248Regulatory assets​ 2,524​ 2,497Wildfire Insurance Fund contributions​ 204​ 204Other current assets​ 341​ 397Total current assets​ 6,811​ 7,070Nuclear decommissioning trusts​ 4,173​ 3,948Other investments​ 54​ 55Total investments​ 4,227​ 4,003Utility property, plant and equipment, less accumulated depreciation and amortization of $12,910 and $12,260 at respective dates​ 55,877​ 53,274Nonutility property, plant and equipment, less accumulated depreciation of $114 and $106 at respective dates​ 207​ 212Total property, plant and equipment​ 56,084​ 53,486Regulatory assets (include $1,558 and $834 related to Variable Interest Entities \"VIEs\" at respective dates)​ 8,897​ 8,181Wildfire Insurance Fund contributions​ 1,951​ 2,155Operating lease right-of-use assets​ 1,221​ 1,442Long-term insurance receivables​​ 501​​ 465Other long-term assets​ 2,066​ 1,239Total long-term assets​ 14,636​ 13,482Total assets​$ 81,758​$ 78,041​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​", "prior_body": "​ $ 760 ​ $ 834 ​ $ 739 ​ ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.63 The accompanying notes are an integral part of these consolidated financial statements. 63 Table of Contents​​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions) 2022 2021ASSETS ​ ​ Cash and cash equivalents​$ 914​$ 390Receivables, less allowances of $347 and $193 for uncollectible accounts at respective dates​ 1,695​ 1,398Accrued unbilled revenue​ 641​ 794Inventory​ 474​ 420Prepaid expenses​ 248​ 258Regulatory assets​ 2,497​ 1,778Wildfire Insurance Fund contributions​ 204​ 204Other current assets​ 397​ 249Total current assets​ 7,070​ 5,491Nuclear decommissioning trusts​ 3,948​ 4,870Marketable securities​​ 5​​ 12Other investments​ 50​ 39Total investments​ 4,003​ 4,921Utility property, plant and equipment, less accumulated depreciation and amortization of $12,260 and $11,407 at respective dates​ 53,274​ 50,497Nonutility property, plant and equipment, less accumulated depreciation of $106 and $98 at respective dates​ 212​ 203Total property, plant and equipment​ 53,486​ 50,700Receivables, less allowances of $7 and $116 for uncollectible accounts at respective dates​​ 2​​ 122Regulatory assets (include $834 and $325 related to Variable Interest Entities \"VIEs\" at respective dates)​ 8,181​ 7,660Wildfire Insurance Fund contributions​ 2,155​ 2,359Operating lease right-of-use assets​ 1,442​ 1,932Long-term insurance receivables​​ 465​​ 75Other long-term assets​ 1,237​ 1,485Total long-term assets​ 13,482​ 13,633Total assets​$ 78,041​$ 74,745​The accompanying notes are an integral part of these consolidated financial statements.64 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions) 2022 2021ASSETS ​ ​ Cash and cash equivalents​$ 914​$ 390Receivables, less allowances of $347 and $193 for uncollectible accounts at respective dates​ 1,695​ 1,398Accrued unbilled revenue​ 641​ 794Inventory​ 474​ 420Prepaid expenses​ 248​ 258Regulatory assets​ 2,497​ 1,778Wildfire Insurance Fund contributions​ 204​ 204Other current assets​ 397​ 249Total current assets​ 7,070​ 5,491Nuclear decommissioning trusts​ 3,948​ 4,870Marketable securities​​ 5​​ 12Other investments​ 50​ 39Total investments​ 4,003​ 4,921Utility property, plant and equipment, less accumulated depreciation and amortization of $12,260 and $11,407 at respective dates​ 53,274​ 50,497Nonutility property, plant and equipment, less accumulated depreciation of $106 and $98 at respective dates​ 212​ 203Total property, plant and equipment​ 53,486​ 50,700Receivables, less allowances of $7 and $116 for uncollectible accounts at respective dates​​ 2​​ 122Regulatory assets (include $834 and $325 related to Variable Interest Entities \"VIEs\" at respective dates)​ 8,181​ 7,660Wildfire Insurance Fund contributions​ 2,155​ 2,359Operating lease right-of-use assets​ 1,442​ 1,932Long-term insurance receivables​​ 465​​ 75Other long-term assets​ 1,237​ 1,485Total long-term assets​ 13,482​ 13,633Total assets​$ 78,041​$ 74,745​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "MODIFIED", "current_title": "Total assets", "prior_title": "Total assets", "similarity_score": 0.51, "confidence": "low", "key_changes": [ "Reworded sentence: \"​ $ 81,483 ​ $ 77,807 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.66 The accompanying notes are an integral part of these consolidated financial statements.\"" ], "current_body": "​ $ 81,758 ​ $ 78,041 ​ The accompanying notes are an integral part of these consolidated financial statements.60 The accompanying notes are an integral part of these consolidated financial statements. 60 Table of Contents​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions, except share amounts)​2023 2022LIABILITIES AND EQUITY ​ ​ Short-term debt​$ 1,077​$ 2,015Current portion of long-term debt​ 2,697​ 2,614Accounts payable​ 1,983​ 2,359Wildfire-related claims​​ 30​​ 121Customer deposits​ 177​ 167Regulatory liabilities​ 763​ 964Current portion of operating lease liabilities​ 120​ 506Other current liabilities​ 1,751​ 1,601Total current liabilities​ 8,598​ 10,347Long-term debt (include $1,515 and $809 related to VIEs at respective dates)​ 30,316​ 27,025Deferred income taxes and credits​ 6,672​ 6,149Pensions and benefits​ 415​ 422Asset retirement obligations​ 2,666​ 2,754Regulatory liabilities​ 9,420​ 8,211Operating lease liabilities​ 1,101​ 936Wildfire-related claims​ 1,368​ 1,687Other deferred credits and other long-term liabilities​ 3,258​ 2,988Total deferred credits and other liabilities​ 24,900​ 23,147Total liabilities​ 63,814​ 60,519Commitments and contingencies (Note 12)​ ​ Preferred stock (50,000,000 shares authorized; 1,159,317 and 1,250,000 shares of Series A and 532,454 and 750,000 shares of Series B issued and outstanding at respective dates)​​ 1,673​​ 1,978Common stock, no par value (800,000,000 shares authorized; 383,924,912 and 382,208,498 shares issued and outstanding at respective dates)​ 6,338​ 6,200Accumulated other comprehensive loss​ (9)​ (11)Retained earnings​ 7,499​ 7,454Total Edison International's shareholders' equity​ 15,501​ 15,621Noncontrolling interests – preference stock of SCE​ 2,443​ 1,901Total equity​ 17,944​ 17,522Total liabilities and equity​$ 81,758​$ 78,041​​The accompanying notes are an integral part of these consolidated financial statements.61 Table of Contents Table of Contents Table of Contents ​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions, except share amounts)​2023 2022LIABILITIES AND EQUITY ​ ​ Short-term debt​$ 1,077​$ 2,015Current portion of long-term debt​ 2,697​ 2,614Accounts payable​ 1,983​ 2,359Wildfire-related claims​​ 30​​ 121Customer deposits​ 177​ 167Regulatory liabilities​ 763​ 964Current portion of operating lease liabilities​ 120​ 506Other current liabilities​ 1,751​ 1,601Total current liabilities​ 8,598​ 10,347Long-term debt (include $1,515 and $809 related to VIEs at respective dates)​ 30,316​ 27,025Deferred income taxes and credits​ 6,672​ 6,149Pensions and benefits​ 415​ 422Asset retirement obligations​ 2,666​ 2,754Regulatory liabilities​ 9,420​ 8,211Operating lease liabilities​ 1,101​ 936Wildfire-related claims​ 1,368​ 1,687Other deferred credits and other long-term liabilities​ 3,258​ 2,988Total deferred credits and other liabilities​ 24,900​ 23,147Total liabilities​ 63,814​ 60,519Commitments and contingencies (Note 12)​ ​ Preferred stock (50,000,000 shares authorized; 1,159,317 and 1,250,000 shares of Series A and 532,454 and 750,000 shares of Series B issued and outstanding at respective dates)​​ 1,673​​ 1,978Common stock, no par value (800,000,000 shares authorized; 383,924,912 and 382,208,498 shares issued and outstanding at respective dates)​ 6,338​ 6,200Accumulated other comprehensive loss​ (9)​ (11)Retained earnings​ 7,499​ 7,454Total Edison International's shareholders' equity​ 15,501​ 15,621Noncontrolling interests – preference stock of SCE​ 2,443​ 1,901Total equity​ 17,944​ 17,522Total liabilities and equity​$ 81,758​$ 78,041​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​", "prior_body": "​ $ 78,041 ​ $ 74,745 ​ The accompanying notes are an integral part of these consolidated financial statements.64 The accompanying notes are an integral part of these consolidated financial statements. 64 Table of Contents​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions, except share amounts) 2022 2021LIABILITIES AND EQUITY ​ ​ Short-term debt​$ 2,015​$ 2,354Current portion of long-term debt​ 2,614​ 1,077Accounts payable​ 2,359​ 2,002Wildfire-related claims​​ 121​​ 131Customer deposits​ 167​ 193Regulatory liabilities​ 964​ 603Current portion of operating lease liabilities​ 506​ 582Other current liabilities​ 1,601​ 1,667Total current liabilities​ 10,347​ 8,609Long-term debt (include $809 and $314 related to VIEs at respective dates)​ 27,025​ 24,170Deferred income taxes and credits​ 6,149​ 5,740Pensions and benefits​ 422​ 496Asset retirement obligations​ 2,754​ 2,772Regulatory liabilities​ 8,211​ 8,981Operating lease liabilities​ 936​ 1,350Wildfire-related claims​ 1,687​ 1,733Other deferred credits and other long-term liabilities​ 2,988​ 3,105Total deferred credits and other liabilities​ 23,147​ 24,177Total liabilities​ 60,519​ 56,956Commitments and contingencies (Note 12)​ ​ Preferred stock (50,000,000 shares authorized; 1,250,000 shares of Series A and 750,000 shares of Series B issued and outstanding at respective dates)​​ 1,978​​ 1,977Common stock, no par value (800,000,000 shares authorized; 382,208,498 and 380,378,145 shares issued and outstanding at respective dates)​ 6,200​ 6,071Accumulated other comprehensive loss​ (11)​ (54)Retained earnings​ 7,454​ 7,894Total Edison International's shareholders' equity​ 15,621​ 15,888Noncontrolling interests – preference stock of SCE​ 1,901​ 1,901Total equity​ 17,522​ 17,789Total liabilities and equity​$ 78,041​$ 74,745​​The accompanying notes are an integral part of these consolidated financial statements.65 Table of Contents Table of Contents Table of Contents ​​​​​​​​​Consolidated Balance Sheets​Edison International​​​​​​​​​​​December 31, (in millions, except share amounts) 2022 2021LIABILITIES AND EQUITY ​ ​ Short-term debt​$ 2,015​$ 2,354Current portion of long-term debt​ 2,614​ 1,077Accounts payable​ 2,359​ 2,002Wildfire-related claims​​ 121​​ 131Customer deposits​ 167​ 193Regulatory liabilities​ 964​ 603Current portion of operating lease liabilities​ 506​ 582Other current liabilities​ 1,601​ 1,667Total current liabilities​ 10,347​ 8,609Long-term debt (include $809 and $314 related to VIEs at respective dates)​ 27,025​ 24,170Deferred income taxes and credits​ 6,149​ 5,740Pensions and benefits​ 422​ 496Asset retirement obligations​ 2,754​ 2,772Regulatory liabilities​ 8,211​ 8,981Operating lease liabilities​ 936​ 1,350Wildfire-related claims​ 1,687​ 1,733Other deferred credits and other long-term liabilities​ 2,988​ 3,105Total deferred credits and other liabilities​ 23,147​ 24,177Total liabilities​ 60,519​ 56,956Commitments and contingencies (Note 12)​ ​ Preferred stock (50,000,000 shares authorized; 1,250,000 shares of Series A and 750,000 shares of Series B issued and outstanding at respective dates)​​ 1,978​​ 1,977Common stock, no par value (800,000,000 shares authorized; 382,208,498 and 380,378,145 shares issued and outstanding at respective dates)​ 6,200​ 6,071Accumulated other comprehensive loss​ (11)​ (54)Retained earnings​ 7,454​ 7,894Total Edison International's shareholders' equity​ 15,621​ 15,888Noncontrolling interests – preference stock of SCE​ 1,901​ 1,901Total equity​ 17,522​ 17,789Total liabilities and equity​$ 78,041​$ 74,745​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "MODIFIED", "current_title": "Income Taxes", "prior_title": "Income Taxes", "similarity_score": 0.504, "confidence": "low", "key_changes": [ "Reworded sentence: \"This involves estimating current period tax expense along with assessing temporary differences resulting from the differing treatment of items (such as depreciation) for tax and accounting purposes.\"", "Reworded sentence: \"Interest income, interest expense, and penalties associated with income taxes are generally reflected in \"Income tax expense (benefit)\" on the consolidated statements of income.\"", "Reworded sentence: \"Edison International has tax-allocation and payment agreements with certain of its 81 81 Table of Contentssubsidiaries.\"" ], "current_body": "Edison International and SCE estimate their income taxes for each jurisdiction in which they operate. This involves estimating current period tax expense along with assessing temporary differences resulting from the differing treatment of items (such as depreciation) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheets. Income tax expense includes the current tax liability from operations and the change in deferred income taxes during the year. Interest income, interest expense, and penalties associated with income taxes are generally reflected in \"Income tax expense (benefit)\" on the consolidated statements of income. Edison International's eligible subsidiaries are included in Edison International's consolidated federal income tax and combined state tax returns. Edison International has tax-allocation and payment agreements with certain of its 81 81 Table of Contentssubsidiaries. Pursuant to an income tax-allocation agreement approved by the CPUC, SCE's tax liability is computed as if it filed its federal and state income tax returns on a separate return basis.New Accounting GuidanceAccounting Guidance AdoptedNo material accounting standards were adopted in 2023. Accounting Guidance Not Yet AdoptedIn November 2023, the FASB issued an accounting standards update to enhance the disclosures related to public entities' reportable segments. The new guidance requires an entity with only one reportable segment to include all the required segment disclosures. The guidance will be effective for annual disclosures for the year ended December 31, 2024 and subsequent interim periods with early adoption permitted. The guidance is applied retrospectively to all periods presented in the financial statements. Edison International and SCE have one reportable segment and are currently evaluating the impact of any increased segment disclosures. In December 2023, the FASB issued an accounting standards update requiring public entities to provide more disclosures primarily related to the income tax rate reconciliation and income taxes paid. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The guidance is effective January 1, 2025 with early adoption permitted. The guidance is applied prospectively. Edison International and SCE are currently evaluating the impact of the new guidance.Note 2.Property, Plant and EquipmentSCE's utility property, plant and equipment included in the consolidated balance sheets is composed of the following:​​​​​​​​ December 31, (in millions) 2023 2022Distribution​$ 34,573​$ 32,754Transmission​ 18,526​ 18,106Generation​ 3,593​ 3,880General plant and other​ 6,383​ 6,121Accumulated depreciation​ (12,910)​ (12,260)​​ 50,165​ 48,601Construction work in progress​ 5,590​ 4,551Nuclear fuel, at amortized cost​ 122​ 122Total utility property, plant and equipment​$ 55,877​$ 53,274​Capitalized Software CostsSCE capitalizes costs incurred during the application development stage of internal use software projects to property, plant and equipment. SCE amortizes capitalized software costs ratably over their useful lives, primarily 5 and 7 year lives, commencing upon operational use. Capitalized software costs, included in general plant and other above, was $2.1 billion and $2.0 billion at December 31, 2023 and 2022, and accumulated amortization was $0.9 billion and $0.7 billion, at December 31, 2023 and 2022, respectively. Amortization expense for capitalized software was $358 million, $344 million and $311 million in 2023, 2022 and 2021, respectively. At December 31, 2023, amortization expense is estimated to be $359 million, $317 million, $253 million, $168 million and $61 million for 2024 through 2028, respectively.82 Table of Contents Table of Contents Table of Contents subsidiaries. Pursuant to an income tax-allocation agreement approved by the CPUC, SCE's tax liability is computed as if it filed its federal and state income tax returns on a separate return basis.New Accounting GuidanceAccounting Guidance AdoptedNo material accounting standards were adopted in 2023. Accounting Guidance Not Yet AdoptedIn November 2023, the FASB issued an accounting standards update to enhance the disclosures related to public entities' reportable segments. The new guidance requires an entity with only one reportable segment to include all the required segment disclosures. The guidance will be effective for annual disclosures for the year ended December 31, 2024 and subsequent interim periods with early adoption permitted. The guidance is applied retrospectively to all periods presented in the financial statements. Edison International and SCE have one reportable segment and are currently evaluating the impact of any increased segment disclosures. In December 2023, the FASB issued an accounting standards update requiring public entities to provide more disclosures primarily related to the income tax rate reconciliation and income taxes paid. The guidance also eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. The guidance is effective January 1, 2025 with early adoption permitted. The guidance is applied prospectively. Edison International and SCE are currently evaluating the impact of the new guidance.Note 2.Property, Plant and EquipmentSCE's utility property, plant and equipment included in the consolidated balance sheets is composed of the following:​​​​​​​​ December 31, (in millions) 2023 2022Distribution​$ 34,573​$ 32,754Transmission​ 18,526​ 18,106Generation​ 3,593​ 3,880General plant and other​ 6,383​ 6,121Accumulated depreciation​ (12,910)​ (12,260)​​ 50,165​ 48,601Construction work in progress​ 5,590​ 4,551Nuclear fuel, at amortized cost​ 122​ 122Total utility property, plant and equipment​$ 55,877​$ 53,274​Capitalized Software CostsSCE capitalizes costs incurred during the application development stage of internal use software projects to property, plant and equipment. SCE amortizes capitalized software costs ratably over their useful lives, primarily 5 and 7 year lives, commencing upon operational use. Capitalized software costs, included in general plant and other above, was $2.1 billion and $2.0 billion at December 31, 2023 and 2022, and accumulated amortization was $0.9 billion and $0.7 billion, at December 31, 2023 and 2022, respectively. Amortization expense for capitalized software was $358 million, $344 million and $311 million in 2023, 2022 and 2021, respectively. At December 31, 2023, amortization expense is estimated to be $359 million, $317 million, $253 million, $168 million and $61 million for 2024 through 2028, respectively. subsidiaries. Pursuant to an income tax-allocation agreement approved by the CPUC, SCE's tax liability is computed as if it filed its federal and state income tax returns on a separate return basis.", "prior_body": "Edison International and SCE estimate their income taxes for each jurisdiction in which they operate. This involves estimating current period tax expense along with assessing temporary differences resulting from differing treatment of 85 85 Table of Contentsitems (such as depreciation) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheets.Income tax expense includes the current tax liability from operations and the change in deferred income taxes during the year. Interest income, interest expense, and penalties associated with income taxes are generally reflected in \"Income tax benefit\" on the consolidated statements of income.Edison International's eligible subsidiaries are included in Edison International's consolidated federal income tax and combined state tax returns. Edison International has tax-allocation and payment agreements with certain of its subsidiaries. Pursuant to an income tax-allocation agreement approved by the CPUC, SCE's tax liability is computed as if it filed its federal and state income tax returns on a separate return basis.Business AcquisitionIn October 2022, Edison Energy acquired 100% of Alfa Energy Ltd., an international energy and sustainability consultancy based in the United Kingdom, for total consideration of $22 million, including the estimated fair value of contingent consideration up to 14 million British pounds ($17 million U.S. dollars at December 31, 2022) that the sellers will be entitled to if certain financial thresholds are achieved after 3 years. As a result of the acquisition, Edison Energy recognized goodwill of $16 million, which is included in \"Other long-term assets\" on Edison International's consolidated balance sheets as of December 31, 2022. New Accounting GuidanceAccounting Guidance AdoptedIn November 2021, the Financial Accounting Standards Board (\"FASB\") issued an accounting standards update to require business entities that account for transactions with a government by providing additional details about the transactions and their accounting impact. Edison International and SCE have adopted this standard on January 1, 2022 using the prospective adoption approach. The adoption of this standard did not have a material impact on Edison International's and SCE's annual disclosure. In December 2022, the FASB issued an accounting standards update to defer the original sunset date for applying the reference rate reform relief in Accounting Standards Codification (\"ASC\") 848 to December 31, 2024 from December 31, 2022. Edison International and SCE have adopted the standard as of December 1, 2022 prospectively. SCE has certain preference stocks, for which the distributions will be payable at a floating rate referenced to the London Interbank Offered Rate (\"LIBOR\") from 2022. Upon adoption of this standard, if contract amendments are made where LIBOR is no longer valid, SCE expects to utilize the expedients in ASC 848 through the allowed period of December 31, 2024. 86 Table of Contents Table of Contents Table of Contents items (such as depreciation) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheets.Income tax expense includes the current tax liability from operations and the change in deferred income taxes during the year. Interest income, interest expense, and penalties associated with income taxes are generally reflected in \"Income tax benefit\" on the consolidated statements of income.Edison International's eligible subsidiaries are included in Edison International's consolidated federal income tax and combined state tax returns. Edison International has tax-allocation and payment agreements with certain of its subsidiaries. Pursuant to an income tax-allocation agreement approved by the CPUC, SCE's tax liability is computed as if it filed its federal and state income tax returns on a separate return basis.Business AcquisitionIn October 2022, Edison Energy acquired 100% of Alfa Energy Ltd., an international energy and sustainability consultancy based in the United Kingdom, for total consideration of $22 million, including the estimated fair value of contingent consideration up to 14 million British pounds ($17 million U.S. dollars at December 31, 2022) that the sellers will be entitled to if certain financial thresholds are achieved after 3 years. As a result of the acquisition, Edison Energy recognized goodwill of $16 million, which is included in \"Other long-term assets\" on Edison International's consolidated balance sheets as of December 31, 2022. New Accounting GuidanceAccounting Guidance AdoptedIn November 2021, the Financial Accounting Standards Board (\"FASB\") issued an accounting standards update to require business entities that account for transactions with a government by providing additional details about the transactions and their accounting impact. Edison International and SCE have adopted this standard on January 1, 2022 using the prospective adoption approach. The adoption of this standard did not have a material impact on Edison International's and SCE's annual disclosure. In December 2022, the FASB issued an accounting standards update to defer the original sunset date for applying the reference rate reform relief in Accounting Standards Codification (\"ASC\") 848 to December 31, 2024 from December 31, 2022. Edison International and SCE have adopted the standard as of December 1, 2022 prospectively. SCE has certain preference stocks, for which the distributions will be payable at a floating rate referenced to the London Interbank Offered Rate (\"LIBOR\") from 2022. Upon adoption of this standard, if contract amendments are made where LIBOR is no longer valid, SCE expects to utilize the expedients in ASC 848 through the allowed period of December 31, 2024. items (such as depreciation) for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included in the consolidated balance sheets. Income tax expense includes the current tax liability from operations and the change in deferred income taxes during the year. Interest income, interest expense, and penalties associated with income taxes are generally reflected in \"Income tax benefit\" on the consolidated statements of income. Edison International's eligible subsidiaries are included in Edison International's consolidated federal income tax and combined state tax returns. Edison International has tax-allocation and payment agreements with certain of its subsidiaries. Pursuant to an income tax-allocation agreement approved by the CPUC, SCE's tax liability is computed as if it filed its federal and state income tax returns on a separate return basis." }, { "status": "MODIFIED", "current_title": "Basis for Opinions", "prior_title": "Definition and Limitations of Internal Control over Financial Reporting", "similarity_score": 0.483, "confidence": "low", "key_changes": [ "Reworded sentence: \"The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A.\"" ], "current_body": "The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. ​", "prior_body": "​ A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. ​ Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ​" }, { "status": "UNCHANGED", "current_title": "SCE's energy procurement activities are subject to regulatory and market risks that could materially affect its financial condition and liquidity.", "prior_title": "SCE's energy procurement activities are subject to regulatory and market risks that could materially affect its financial condition and liquidity.", "current_body": "SCE obtains energy, capacity, environmental credits and ancillary services needed to serve its customers from its own generating plants and through contracts with energy producers and sellers. California law and CPUC decisions allow SCE to recover, through the rates it is allowed to charge its customers, reasonable procurement costs incurred in compliance with an approved procurement plan. Nonetheless, SCE's cash flows remain subject to volatility primarily resulting from changes in commodity prices, including as a result of gas supply constraints. Additionally, significant and prolonged gas use restrictions may adversely impact the reliability of the electric grid if critical generation resources are limited in their operations. For further information, see \"Business—SCE—Purchased Power and Fuel Supply.\" SCE is also subject to the risks of unfavorable or untimely CPUC decisions about the compliance with SCE's procurement plan and the reasonableness of certain procurement-related costs. SCE may not be able to hedge its risk for commodities on economic terms or fully recover the costs of hedges through the rates it is allowed to charge its customers, which could materially affect SCE's liquidity and results of operations, see \"Market Risk Exposures\" in the MD&A." }, { "status": "UNCHANGED", "current_title": "Balance at December 31, 2021", "prior_title": "Balance at December 31, 2021", "current_body": "​ $ 1,977 ​ $ 6,071 ​ $ (54) ​ $ 7,894 ​ $ 15,888 ​ $ 1,901 ​ $ 17,789 Net income ​ ​ — ​ — ​ — ​ 717 ​ 717 ​ 107 ​ 824 Other comprehensive income ​ ​ — ​ — ​ 43 ​ — ​ 43 ​ — ​ 43 Common stock issued ​ ​ — ​ 87 ​ — ​ — ​ 87 ​ — ​ 87 Common stock dividends declared ($2.8375 per share) ​ ​ — ​ — ​ — ​ (1,083) ​ (1,083) ​ — ​ (1,083) Preferred stock dividend declared ($53.75 per share for Series A and $42.08333 per share for Series B) ​ ​ — ​ ​ — ​ ​ — ​ ​ (74) ​ ​ (74) ​ ​ — ​ ​ (74) Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (107) ​ (107) Noncash stock-based compensation ​ ​ — ​ 42 ​ — ​ — ​ 42 ​ — ​ 42 Other ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1 ​ ​ — ​ ​ 1" }, { "status": "UNCHANGED", "current_title": "QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK", "prior_title": "QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK", "current_body": "Information responding to this section is included in the MD&A under the heading \"Market Risk Exposures.\" ​" }, { "status": "UNCHANGED", "current_title": "CONSOLIDATED FINANCIAL STATEMENTS", "prior_title": "CONSOLIDATED FINANCIAL STATEMENTS", "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "UNCHANGED", "current_title": "Report of Independent Registered Public Accounting Firm", "prior_title": "Report of Independent Registered Public Accounting Firm", "current_body": "​ To the Board of Directors and Shareholders of Edison International ​" }, { "status": "UNCHANGED", "current_title": "Report of Independent Registered Public Accounting Firm", "prior_title": "Report of Independent Registered Public Accounting Firm", "current_body": "​ To the Board of Directors and Shareholders of Edison International ​" }, { "status": "UNCHANGED", "current_title": "SCE will not benefit from all of the features of AB 1054 if the Wildfire Insurance Fund is exhausted.", "prior_title": "SCE will not benefit from all of the features of AB 1054 if the Wildfire Insurance Fund is exhausted.", "current_body": "Catastrophic wildfires could rapidly exhaust the Wildfire Insurance Fund and SCE will not be reimbursed by the Wildfire Insurance Fund or benefit from the AB 1054 Liability Cap if the fund has been exhausted as a result of damage claims previously incurred by SCE or the other participating utilities. For more information on AB 1054, see \"Business—Southern California Wildfires and Mudslides—Recovery of Wildfire-Related Costs—2019 Wildfire Legislation.\"" }, { "status": "UNCHANGED", "current_title": "Balance at December 31, 2020", "prior_title": "Balance at December 31, 2020", "current_body": "$ — ​ $ 5,962 ​ $ (69) ​ $ 8,155 ​ $ 14,048 ​ $ 1,901 ​ $ 15,949 Net income ​ ​ — ​ — ​ — ​ 819 ​ 819 ​ 106 ​ 925 Other comprehensive income ​ ​ — ​ — ​ 15 ​ — ​ 15 ​ — ​ 15 Common stock issued ​ ​ — ​ 71 ​ — ​ — ​ ​ 71 ​ — ​ ​ 71 Preferred stock issued, net ​ ​ 1,977 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,977 ​ ​ — ​ ​ 1,977 Common stock dividends declared ($2.6875 per share) ​ ​ — ​ — ​ — ​ (1,021) ​ (1,021) ​ — ​ (1,021) Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B) ​ ​ — ​ ​ — ​ ​ — ​ ​ (60) ​ ​ (60) ​ ​ — ​ ​ (60) Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (106) ​ (106) Noncash stock-based compensation ​ ​ — ​ 38 ​ — ​ 1 ​ 39 ​ — ​ 39" }, { "status": "UNCHANGED", "current_title": "SCE's distribution of water and propane gas on Catalina Island involves inherent risks of damage to private property and the environment and injury to employees and the general public.", "prior_title": "SCE's distribution of water and propane gas on Catalina Island involves inherent risks of damage to private property and the environment and injury to employees and the general public.", "current_body": "SCE owns and operates the water distribution system that serves Catalina Island, California and a propane gas distribution system that serves the City of Avalon on Catalina Island, California. Production, storage, treatment and distribution of water for human use and the transportation, storage, distribution and use of gas can be hazardous, and can cause damage to private property and the environment and injury to employees and the general public if equipment fails or does not perform as anticipated. For example, the risks of operating a water distribution system include the potential for burst pipes and water contamination and the risks of operating gas distribution system include the potential for gas leaks, fire or explosion. The risks related to SCE's operation of its water and gas distribution systems may be exacerbated due to aging infrastructure. SCE has, in the past, requested that the CPUC allow SCE to include certain water system costs in electric rates and may make similar requests for the water and gas systems in the future. If such requests are denied, significant costs may not be recoverable from customers. In addition, SCE may have to pay fines, penalties and remediation costs if it does not comply with laws and regulations in the operation of the water and gas distribution systems. An inability to recover costs associated with any such damages or injuries or any fines, penalties or remediation costs, from insurance or through electric rates, could materially affect SCE's business, financial condition and results of operations." }, { "status": "UNCHANGED", "current_title": "Edison International's and SCE's business activities are concentrated in one industry and in one region.", "prior_title": "Edison International's and SCE's business activities are concentrated in one industry and in one region.", "current_body": "Substantially all of Edison International's and all of SCE's business activities are concentrated in the electric utility industry. Edison International's principal subsidiary, SCE, serves customers only in southern and central California. As a result, Edison International's and SCE's future performance may be affected by events and economic factors unique to California or by regional regulation, legislation or judicial decisions. For example, California courts have applied strict liability to investor-owned utilities in wildfire and other litigation matters. See \"Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides.\" ​" }, { "status": "UNCHANGED", "current_title": "Balance at December 31, 2021", "prior_title": "Balance at December 31, 2021", "current_body": "​ $ 1,977 ​ $ 6,071 ​ $ (54) ​ $ 7,894 ​ $ 15,888 ​ $ 1,901 ​ $ 17,789 Net income ​ ​ — ​ — ​ — ​ 717 ​ 717 ​ 107 ​ 824 Other comprehensive income ​ ​ — ​ — ​ 43 ​ — ​ 43 ​ — ​ 43 Common stock issued ​ ​ — ​ 87 ​ — ​ — ​ 87 ​ — ​ 87 Common stock dividends declared ($2.8375 per share) ​ ​ — ​ — ​ — ​ (1,083) ​ (1,083) ​ — ​ (1,083) Preferred stock dividend declared ($53.75 per share for Series A and $42.08333 per share for Series B) ​ ​ — ​ ​ — ​ ​ — ​ ​ (74) ​ ​ (74) ​ ​ — ​ ​ (74) Dividends to noncontrolling interests ($65.1098 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (107) ​ (107) Noncash stock-based compensation ​ ​ — ​ 42 ​ — ​ — ​ 42 ​ — ​ 42 Other ​ ​ 1 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1 ​ ​ — ​ ​ 1" }, { "status": "UNCHANGED", "current_title": "Balance at December 31, 2020", "prior_title": "Balance at December 31, 2020", "current_body": "$ — ​ $ 5,962 ​ $ (69) ​ $ 8,155 ​ $ 14,048 ​ $ 1,901 ​ $ 15,949 Net income ​ ​ — ​ — ​ — ​ 819 ​ 819 ​ 106 ​ 925 Other comprehensive income ​ ​ — ​ — ​ 15 ​ — ​ 15 ​ — ​ 15 Common stock issued ​ ​ — ​ 71 ​ — ​ — ​ ​ 71 ​ — ​ ​ 71 Preferred stock issued, net ​ ​ 1,977 ​ ​ — ​ ​ — ​ ​ — ​ ​ 1,977 ​ ​ — ​ ​ 1,977 Common stock dividends declared ($2.6875 per share) ​ ​ — ​ — ​ — ​ (1,021) ​ (1,021) ​ — ​ (1,021) Preferred stock dividend accrued ($43.5972 per share for Series A and $6.8056 per share for Series B) ​ ​ — ​ ​ — ​ ​ — ​ ​ (60) ​ ​ (60) ​ ​ — ​ ​ (60) Dividends to noncontrolling interests ($62.50 - $143.75 per share for preference stock) ​ ​ — ​ — ​ — ​ — ​ — ​ (106) ​ (106) Noncash stock-based compensation ​ ​ — ​ 38 ​ — ​ 1 ​ 39 ​ — ​ 39" }, { "status": "UNCHANGED", "current_title": "FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA", "prior_title": "FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA", "current_body": "​ 50 50 Table of Contents​Report of Independent Registered Public Accounting Firm​To the Board of Directors and Shareholders of Edison International​Opinions on the Financial Statements and Internal Control over Financial ReportingWe have audited the accompanying consolidated balance sheets of Edison International and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and schedule of condensed financial information of parent as of December 31, 2023 and 2022 and for each of the three years in the period ended December 31, 2023 appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.​Basis for OpinionsThe Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.​Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies 51 Table of Contents Table of Contents Table of Contents ​Report of Independent Registered Public Accounting Firm​To the Board of Directors and Shareholders of Edison International​Opinions on the Financial Statements and Internal Control over Financial ReportingWe have audited the accompanying consolidated balance sheets of Edison International and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and schedule of condensed financial information of parent as of December 31, 2023 and 2022 and for each of the three years in the period ended December 31, 2023 appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.​Basis for OpinionsThe Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.​Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies ​" }, { "status": "UNCHANGED", "current_title": "Power Purchase Agreements", "prior_title": "Power Purchase Agreements", "current_body": "SCE enters into power purchase agreements (\"PPAs\") in the normal course of business. A power purchase agreement may be considered a variable interest in a variable interest entity (\"VIE\"). If SCE is the primary beneficiary in the VIE, SCE is required to consolidate the VIE. None of SCE's PPAs resulted in consolidation at December 31, 2023 and 2022. See Note 3 for further discussion of PPAs that are considered variable interests. A PPA may also contain a lease for accounting purposes. See \"Leases\" below and Note 12 and Note 13 for further discussion of SCE's PPAs. A PPA that does not contain a lease may be classified as a derivative which is recorded at fair value on the consolidated balance sheets, unless the PPA is eligible for an election to designate as a normal purchase or sale, which is accounted for on an accrual basis as an executory contract. PPAs that do not meet the above classifications are accounted for on an accrual basis." }, { "status": "UNCHANGED", "current_title": "Nuclear Decommissioning and Asset Retirement Obligations", "prior_title": "Nuclear Decommissioning and Asset Retirement Obligations", "current_body": "The fair value of a liability for an asset retirement obligation (\"ARO\") is recorded in the period in which it is incurred, including a liability for the fair value of a conditional ARO, if the fair value can be reasonably estimated even though uncertainty exists about the timing and/or method of settlement. When an ARO liability is initially recorded, SCE capitalizes the cost by increasing the carrying amount of the related long-lived asset. For each subsequent period, the liability is increased for accretion expense and the capitalized cost is depreciated over the useful life of the related asset. SCE has not recorded an ARO for assets that are expected to operate indefinitely or where SCE cannot estimate a settlement date (or range of potential settlement dates). As such, ARO liabilities are not recorded for certain retirement activities, including certain hydroelectric facilities. The following table summarizes the changes in SCE's ARO liability: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (in millions) 2023 2022 Beginning balance ​ $ 2,754 ​ $ 2,772 Accretion1 ​ 144 ​ 143 Revisions ​ (3) ​ 28 Liabilities settled ​ (229) ​ (189) Ending balance ​ $ 2,666 ​ $ 2,754 AROs related to decommissioning of SCE's nuclear power facilities are based on site-specific studies conducted as part of each Nuclear Decommissioning Cost Triennial Proceeding (\"NDCTP\") conducted before the CPUC. Revisions of an ARO are established for updated site-specific decommissioning cost estimates. The ARO for decommissioning SCE's San Onofre Nuclear Generating Station (\"San Onofre\") and Palo Verde nuclear power facilities is $2.2 billion as of December 31, 2023. The liability to decommission SCE's nuclear power facilities is based on a 2020 decommissioning study, filed as part of the 2021 NDCTP, for San Onofre Unit 1, 2 and 3 and a 2019 decommissioning study for Palo Verde, with revisions to the cost estimate in 2020. SCE records an ARO regulatory liability as a result of timing differences between the recognition of costs and the recovery of costs through the ratemaking process. For further information, see Note 11. Decommissioning of San Onofre Unit 1 began in 1999 and the transfer of spent nuclear fuel from Unit 1 to dry cask storage in the Independent Spent Fuel Storage Installation (\"ISFSI\") 1 was completed in 2005. Major decommissioning work for Unit 1 has been completed except for certain underground work. Decommissioning of San Onofre Units 2 and 3 began in June 2013 and the transfer of spent nuclear fuel from San Onofre Units 2 and 3 to dry cask storage in the two ISFSIs was completed in August 2020. In August 2020, SCE commenced, and is currently conducting, major decommissioning activities in accordance with the terms of the Coastal Developmental Permit for San Onofre Units 2 and 3. Decommissioning costs, which are recovered through customer rates over the term of each nuclear facility's operating license, are recorded as a component of depreciation expense, with a corresponding credit to the ARO regulatory liability. Due to regulatory recovery of SCE's nuclear decommissioning expense, prudently incurred costs for nuclear decommissioning activities do not affect SCE's earnings. Amortization of the ARO asset (included within the 75 75 Table of Contentsunamortized nuclear investment) and accretion of the ARO liability are deferred as decreases to the ARO regulatory liability account, resulting in no impact on earnings.SCE has collected in rates amounts for the future decommissioning of its nuclear assets and has placed those amounts in independent trusts. Amounts collected in rates in excess of the ARO liability are classified as regulatory liabilities.Changes in the estimated costs, timing of decommissioning or the assumptions underlying these estimates could cause material revisions to the estimated total cost to decommission. SCE currently estimates that it will spend approximately $6.1 billion through 2080 to decommission its nuclear facilities. This estimate is based on SCE's decommissioning cost methodology used for ratemaking purposes, escalated at rates ranging from 2.2% to 7.5% (depending on the cost element) annually. These costs are expected to be funded from independent decommissioning trusts. SCE estimates annual after-tax earnings on the decommissioning funds of 3.1% to 6.1% dependent on asset class. If the assumed return on trust assets is not earned or costs escalate at higher rates, SCE expects that additional funds needed for decommissioning will be recoverable through future rates, subject to a reasonableness review. See Note 10 for further information.Due to regulatory recovery of SCE's nuclear decommissioning expense, prudently incurred costs for nuclear decommissioning activities do not affect SCE's earnings. SCE's nuclear decommissioning costs are subject to CPUC review through the triennial regulatory proceedings. SCE's nuclear decommissioning trust investments primarily consist of fixed income investments that are classified as available-for-sale and equity investments. Due to regulatory mechanisms, investment earnings and realized gains and losses have no impact on earnings. Unrealized gains and losses on decommissioning trust funds, including impairment, increase or decrease the trust assets and the related regulatory asset or liability and have no impact on electric utility revenue or decommissioning expense. SCE reviews each fixed income security for impairment on the last day of each month. If the fair value on the last day of the month is less than the amortized cost for that security, SCE impairs the disclosed amortized cost. If the fair value is greater or less than the carrying value for that security at the time of sale, SCE recognizes a related realized gain or loss, respectively.Deferred Financing CostsDebt premium, discount and issuance expenses incurred in connection with obtaining financing are deferred and amortized over the life of each debt issue. These deferred amounts are recorded as an offset to long-term debt. See Note 5 for further details. Under CPUC ratemaking procedures, SCE's debt reacquisition expenses are amortized over the remaining life of the reacquired debt, or if refinanced, the life of the new debt. The unamortized losses on reacquired debt are reflected as long-term \"Regulatory assets\" in the consolidated balance sheets. See Note 11 for further details.Amortization of deferred financing costs charged to interest expense is as follows:​​​​​​​​​​​​​​​​​​​​ Edison International SCE​​Years ended December 31, (in millions) 2023 2022 2021 2023 2022 2021Amortization of deferred financing costs charged to interest expense​$ 39​$ 37​$ 34​$ 32​$ 31​$ 29​Revenue RecognitionRevenue is recognized by Edison International and SCE when a performance obligation to transfer control of the promised goods is satisfied or when services are rendered to customers. This typically occurs when electricity is delivered to customers, which includes amounts for services rendered but unbilled at the end of a reporting period.76 Table of Contents Table of Contents Table of Contents unamortized nuclear investment) and accretion of the ARO liability are deferred as decreases to the ARO regulatory liability account, resulting in no impact on earnings.SCE has collected in rates amounts for the future decommissioning of its nuclear assets and has placed those amounts in independent trusts. Amounts collected in rates in excess of the ARO liability are classified as regulatory liabilities.Changes in the estimated costs, timing of decommissioning or the assumptions underlying these estimates could cause material revisions to the estimated total cost to decommission. SCE currently estimates that it will spend approximately $6.1 billion through 2080 to decommission its nuclear facilities. This estimate is based on SCE's decommissioning cost methodology used for ratemaking purposes, escalated at rates ranging from 2.2% to 7.5% (depending on the cost element) annually. These costs are expected to be funded from independent decommissioning trusts. SCE estimates annual after-tax earnings on the decommissioning funds of 3.1% to 6.1% dependent on asset class. If the assumed return on trust assets is not earned or costs escalate at higher rates, SCE expects that additional funds needed for decommissioning will be recoverable through future rates, subject to a reasonableness review. See Note 10 for further information.Due to regulatory recovery of SCE's nuclear decommissioning expense, prudently incurred costs for nuclear decommissioning activities do not affect SCE's earnings. SCE's nuclear decommissioning costs are subject to CPUC review through the triennial regulatory proceedings. SCE's nuclear decommissioning trust investments primarily consist of fixed income investments that are classified as available-for-sale and equity investments. Due to regulatory mechanisms, investment earnings and realized gains and losses have no impact on earnings. Unrealized gains and losses on decommissioning trust funds, including impairment, increase or decrease the trust assets and the related regulatory asset or liability and have no impact on electric utility revenue or decommissioning expense. SCE reviews each fixed income security for impairment on the last day of each month. If the fair value on the last day of the month is less than the amortized cost for that security, SCE impairs the disclosed amortized cost. If the fair value is greater or less than the carrying value for that security at the time of sale, SCE recognizes a related realized gain or loss, respectively.Deferred Financing CostsDebt premium, discount and issuance expenses incurred in connection with obtaining financing are deferred and amortized over the life of each debt issue. These deferred amounts are recorded as an offset to long-term debt. See Note 5 for further details. Under CPUC ratemaking procedures, SCE's debt reacquisition expenses are amortized over the remaining life of the reacquired debt, or if refinanced, the life of the new debt. The unamortized losses on reacquired debt are reflected as long-term \"Regulatory assets\" in the consolidated balance sheets. See Note 11 for further details.Amortization of deferred financing costs charged to interest expense is as follows:​​​​​​​​​​​​​​​​​​​​ Edison International SCE​​Years ended December 31, (in millions) 2023 2022 2021 2023 2022 2021Amortization of deferred financing costs charged to interest expense​$ 39​$ 37​$ 34​$ 32​$ 31​$ 29​Revenue RecognitionRevenue is recognized by Edison International and SCE when a performance obligation to transfer control of the promised goods is satisfied or when services are rendered to customers. This typically occurs when electricity is delivered to customers, which includes amounts for services rendered but unbilled at the end of a reporting period. unamortized nuclear investment) and accretion of the ARO liability are deferred as decreases to the ARO regulatory liability account, resulting in no impact on earnings. SCE has collected in rates amounts for the future decommissioning of its nuclear assets and has placed those amounts in independent trusts. Amounts collected in rates in excess of the ARO liability are classified as regulatory liabilities. Changes in the estimated costs, timing of decommissioning or the assumptions underlying these estimates could cause material revisions to the estimated total cost to decommission. SCE currently estimates that it will spend approximately $6.1 billion through 2080 to decommission its nuclear facilities. This estimate is based on SCE's decommissioning cost methodology used for ratemaking purposes, escalated at rates ranging from 2.2% to 7.5% (depending on the cost element) annually. These costs are expected to be funded from independent decommissioning trusts. SCE estimates annual after-tax earnings on the decommissioning funds of 3.1% to 6.1% dependent on asset class. If the assumed return on trust assets is not earned or costs escalate at higher rates, SCE expects that additional funds needed for decommissioning will be recoverable through future rates, subject to a reasonableness review. See Note 10 for further information. Due to regulatory recovery of SCE's nuclear decommissioning expense, prudently incurred costs for nuclear decommissioning activities do not affect SCE's earnings. SCE's nuclear decommissioning costs are subject to CPUC review through the triennial regulatory proceedings. SCE's nuclear decommissioning trust investments primarily consist of fixed income investments that are classified as available-for-sale and equity investments. Due to regulatory mechanisms, investment earnings and realized gains and losses have no impact on earnings. Unrealized gains and losses on decommissioning trust funds, including impairment, increase or decrease the trust assets and the related regulatory asset or liability and have no impact on electric utility revenue or decommissioning expense. SCE reviews each fixed income security for impairment on the last day of each month. If the fair value on the last day of the month is less than the amortized cost for that security, SCE impairs the disclosed amortized cost. If the fair value is greater or less than the carrying value for that security at the time of sale, SCE recognizes a related realized gain or loss, respectively." }, { "status": "UNCHANGED", "current_title": "Southern California Edison Company", "prior_title": "Southern California Edison Company", "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) 2023 2022 2021" }, { "status": "UNCHANGED", "current_title": "Southern California Edison Company", "prior_title": "Southern California Edison Company", "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) 2023 2022 2021" }, { "status": "UNCHANGED", "current_title": "Southern California Edison Company", "prior_title": "Southern California Edison Company", "current_body": "​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, (in millions) 2023 2022 2021" }, { "status": "UNCHANGED", "current_title": "Basic earnings per share:", "prior_title": "Basic earnings per share:", "current_body": "​ ​ ​ Weighted average shares of common stock outstanding ​ 383 ​ 381 ​ 380" }, { "status": "UNCHANGED", "current_title": "Diluted earnings per share:", "prior_title": "Diluted earnings per share:", "current_body": "​ ​ ​ Weighted average shares of common stock outstanding, including effect of dilutive securities ​ 385 ​ 383 ​ 380" }, { "status": "UNCHANGED", "current_title": "Organization and Basis of Presentation", "prior_title": "Organization and Basis of Presentation", "current_body": "Edison International is the ultimate parent holding company of Southern California Edison Company (\"SCE\") and Edison Energy, LLC (\"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 a global energy advisory firm providing integrated sustainability and energy solutions to commercial, industrial and institutional customers. Edison Energy's business activities are currently not material to report as a separate business segment. These combined notes to the consolidated financial statements apply to both Edison International and SCE unless otherwise described. Edison International's consolidated financial statements include the accounts of Edison International, SCE, and other controlled subsidiaries. References to Edison International refer to the consolidated group of Edison International and its subsidiaries. References to \"Edison International Parent and Other\" refer to Edison International Parent and its competitive subsidiaries and \"Edison International Parent\" refer to Edison International on a stand-alone basis, not consolidated with its subsidiaries. SCE's consolidated financial statements include the accounts of SCE, its controlled subsidiaries and a variable interest entity, SCE Recovery Funding LLC, of which SCE is the primary beneficiary. All intercompany transactions have been eliminated from the consolidated financial statements. Edison International's and SCE's accounting policies conform to accounting principles generally accepted in the United States of America (\"GAAP\"), including the accounting principles for rate-regulated enterprises, which reflect the ratemaking policies of the California Public Utility Commission (\"CPUC\") and the Federal Energy Regulatory Commission (\"FERC\"). SCE applies authoritative guidance for rate-regulated enterprises to the portion of its operations in which regulators set rates at levels intended to recover the estimated costs of providing service, plus a return on net investments in assets, or rate base. Regulators may also impose certain penalties or grant certain incentives. Due to timing and other differences in the collection of electric utility revenue, these accounting principles require an incurred cost that would otherwise be charged to expense by a non-regulated entity to be capitalized as a regulatory asset if it is probable that the cost is recoverable through future rates; and conversely the accounting principles require recording of a regulatory liability for amounts collected in rates to recover costs expected to be incurred in the future or amounts collected in excess of costs incurred and refundable to customers. In addition, SCE recognizes revenue and regulatory assets from alternative revenue programs, which enables the utility to adjust future rates in response to past activities or completed events, if certain criteria are met. SCE assesses, at the end of each reporting period, whether regulatory assets are probable of future recovery. See Note 11 for composition of regulatory assets and liabilities. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates. Certain prior year amounts have been conformed to the current year's presentation, including the separate presentation of derivative assets and liabilities on Edison International's and SCE's consolidated statements of cash flows and the aggregation of significant components in the net regulatory balancing and memorandum accounts table in Note 11." }, { "status": "UNCHANGED", "current_title": "Basis for Opinion", "prior_title": "Basis for Opinions", "current_body": "These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion." }, { "status": "UNCHANGED", "current_title": "Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054 (the \"Wildfire Insurance Fund\" and \"AB 1054\")", "prior_title": "Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054 (the \"Wildfire Insurance Fund\" and \"AB 1054\")", "current_body": "Edison International and SCE accounted for the contributions to the Wildfire Insurance Fund similarly to prepaid insurance. No period of coverage was provided in AB 1054, therefore expense is being allocated to periods ratably based on an estimated period of coverage. At December 31, 2023 and 2022, Edison International and SCE had a $2.0 billion and a $2.2 billion long-term asset, respectively, as well as a $204 million current asset for both years, reflected as \"Wildfire Insurance Fund contributions\" in their consolidated balance sheets for the initial $2.4 billion contribution made during 2019 and the present value of annual contributions SCE committed to make to the Wildfire Insurance Fund, reduced by amortization. At December 31, 2023 and 2022, long-term liabilities of $450 million and $536 million, respectively, have been reflected in \"Other deferred credits and other long-term liabilities\" for the present value of unpaid contributions. Contributions were discounted to the present value using US treasury interest rates at the date SCE committed to participate in the Wildfire Insurance Fund. In 2023 and 2022, the asset was amortized based on an estimated period of coverage of 15 years. All expenses related to the contributions are being reflected in \"Wildfire Insurance Fund Expense\" in the consolidated statements of income. Changes in the estimated period of coverage provided by the Wildfire Insurance Fund could lead to material changes in future expense recognition. In estimating the period of coverage, Edison International and SCE used Monte Carlo simulations based on historical data from wildfires caused by electrical utility equipment to estimate expected losses, using nine years (2014 – 2022) of available historical data in 2023 and eight years (2014 – 2021) of available historical data in 2022. The details of the operation of the Wildfire Insurance Fund and estimates related to claims by SCE, Pacific Gas & Electric Company (\"PG&E\"), and San Diego Gas & Electric (\"SDG&E\") against the fund have been applied to the expected loss simulations to estimate the period of coverage of the fund. The most sensitive inputs to the estimated period of coverage are the expected frequency of wildfire events caused by investor-owned utility electrical equipment and the estimated costs associated with those forecasted events. Edison International and SCE reassesses the period of coverage of the fund at least annually in January each year, or upon claims being made from the fund for catastrophic wildfires. Based on information available in January of 2024 regarding catastrophic wildfires during 2023, SCE reassessed its estimate of the life of the Wildfire Insurance Fund. After incorporating 2023 expected losses into the historical data for the Monte Carlo simulations by using ten years of historical data (2014 – 2023), SCE determined that effective in the first quarter of 2024, the life of the Wildfire Insurance Fund is expected to increase to 20 years from the date SCE committed to participate in the Wildfire Insurance Fund. Edison International and SCE will assess the Wildfire Insurance Fund contribution assets for impairment in the event that a participating utility's electrical equipment is found to be the substantial cause of a catastrophic wildfire, based on 74 74 Table of Contentsthe ability of SCE to benefit from the coverage provided by the Wildfire Insurance Fund in an amount equal to the recorded assets.Nuclear Decommissioning and Asset Retirement ObligationsThe fair value of a liability for an asset retirement obligation (\"ARO\") is recorded in the period in which it is incurred, including a liability for the fair value of a conditional ARO, if the fair value can be reasonably estimated even though uncertainty exists about the timing and/or method of settlement. When an ARO liability is initially recorded, SCE capitalizes the cost by increasing the carrying amount of the related long-lived asset. For each subsequent period, the liability is increased for accretion expense and the capitalized cost is depreciated over the useful life of the related asset.SCE has not recorded an ARO for assets that are expected to operate indefinitely or where SCE cannot estimate a settlement date (or range of potential settlement dates). As such, ARO liabilities are not recorded for certain retirement activities, including certain hydroelectric facilities.The following table summarizes the changes in SCE's ARO liability:​​​​​​​​ December 31, (in millions) 2023 2022Beginning balance​$ 2,754​$ 2,772Accretion1​ 144​ 143Revisions​ (3)​ 28Liabilities settled​ (229)​ (189)Ending balance​$ 2,666​$ 2,7541An ARO represents the present value of a future obligation. Accretion is an increase in the liability to account for the time value of money resulting from discounting.AROs related to decommissioning of SCE's nuclear power facilities are based on site-specific studies conducted as part of each Nuclear Decommissioning Cost Triennial Proceeding (\"NDCTP\") conducted before the CPUC. Revisions of an ARO are established for updated site-specific decommissioning cost estimates.The ARO for decommissioning SCE's San Onofre Nuclear Generating Station (\"San Onofre\") and Palo Verde nuclear power facilities is $2.2 billion as of December 31, 2023. The liability to decommission SCE's nuclear power facilities is based on a 2020 decommissioning study, filed as part of the 2021 NDCTP, for San Onofre Unit 1, 2 and 3 and a 2019 decommissioning study for Palo Verde, with revisions to the cost estimate in 2020. SCE records an ARO regulatory liability as a result of timing differences between the recognition of costs and the recovery of costs through the ratemaking process. For further information, see Note 11.Decommissioning of San Onofre Unit 1 began in 1999 and the transfer of spent nuclear fuel from Unit 1 to dry cask storage in the Independent Spent Fuel Storage Installation (\"ISFSI\") 1 was completed in 2005. Major decommissioning work for Unit 1 has been completed except for certain underground work. Decommissioning of San Onofre Units 2 and 3 began in June 2013 and the transfer of spent nuclear fuel from San Onofre Units 2 and 3 to dry cask storage in the two ISFSIs was completed in August 2020. In August 2020, SCE commenced, and is currently conducting, major decommissioning activities in accordance with the terms of the Coastal Developmental Permit for San Onofre Units 2 and 3. Decommissioning costs, which are recovered through customer rates over the term of each nuclear facility's operating license, are recorded as a component of depreciation expense, with a corresponding credit to the ARO regulatory liability. Due to regulatory recovery of SCE's nuclear decommissioning expense, prudently incurred costs for nuclear decommissioning activities do not affect SCE's earnings. Amortization of the ARO asset (included within the 75 Table of Contents Table of Contents Table of Contents the ability of SCE to benefit from the coverage provided by the Wildfire Insurance Fund in an amount equal to the recorded assets.Nuclear Decommissioning and Asset Retirement ObligationsThe fair value of a liability for an asset retirement obligation (\"ARO\") is recorded in the period in which it is incurred, including a liability for the fair value of a conditional ARO, if the fair value can be reasonably estimated even though uncertainty exists about the timing and/or method of settlement. When an ARO liability is initially recorded, SCE capitalizes the cost by increasing the carrying amount of the related long-lived asset. For each subsequent period, the liability is increased for accretion expense and the capitalized cost is depreciated over the useful life of the related asset.SCE has not recorded an ARO for assets that are expected to operate indefinitely or where SCE cannot estimate a settlement date (or range of potential settlement dates). As such, ARO liabilities are not recorded for certain retirement activities, including certain hydroelectric facilities.The following table summarizes the changes in SCE's ARO liability:​​​​​​​​ December 31, (in millions) 2023 2022Beginning balance​$ 2,754​$ 2,772Accretion1​ 144​ 143Revisions​ (3)​ 28Liabilities settled​ (229)​ (189)Ending balance​$ 2,666​$ 2,7541An ARO represents the present value of a future obligation. Accretion is an increase in the liability to account for the time value of money resulting from discounting.AROs related to decommissioning of SCE's nuclear power facilities are based on site-specific studies conducted as part of each Nuclear Decommissioning Cost Triennial Proceeding (\"NDCTP\") conducted before the CPUC. Revisions of an ARO are established for updated site-specific decommissioning cost estimates.The ARO for decommissioning SCE's San Onofre Nuclear Generating Station (\"San Onofre\") and Palo Verde nuclear power facilities is $2.2 billion as of December 31, 2023. The liability to decommission SCE's nuclear power facilities is based on a 2020 decommissioning study, filed as part of the 2021 NDCTP, for San Onofre Unit 1, 2 and 3 and a 2019 decommissioning study for Palo Verde, with revisions to the cost estimate in 2020. SCE records an ARO regulatory liability as a result of timing differences between the recognition of costs and the recovery of costs through the ratemaking process. For further information, see Note 11.Decommissioning of San Onofre Unit 1 began in 1999 and the transfer of spent nuclear fuel from Unit 1 to dry cask storage in the Independent Spent Fuel Storage Installation (\"ISFSI\") 1 was completed in 2005. Major decommissioning work for Unit 1 has been completed except for certain underground work. Decommissioning of San Onofre Units 2 and 3 began in June 2013 and the transfer of spent nuclear fuel from San Onofre Units 2 and 3 to dry cask storage in the two ISFSIs was completed in August 2020. In August 2020, SCE commenced, and is currently conducting, major decommissioning activities in accordance with the terms of the Coastal Developmental Permit for San Onofre Units 2 and 3. Decommissioning costs, which are recovered through customer rates over the term of each nuclear facility's operating license, are recorded as a component of depreciation expense, with a corresponding credit to the ARO regulatory liability. Due to regulatory recovery of SCE's nuclear decommissioning expense, prudently incurred costs for nuclear decommissioning activities do not affect SCE's earnings. Amortization of the ARO asset (included within the the ability of SCE to benefit from the coverage provided by the Wildfire Insurance Fund in an amount equal to the recorded assets." }, { "status": "UNCHANGED", "current_title": "Balance at December 31, 2023", "prior_title": "Balance at December 31, 2022", "current_body": "​ $ 1,673 ​ $ 6,338 ​ $ (9) ​ $ 7,499 ​ $ 15,501 ​ $ 2,443 ​ $ 17,944 ​ ​ ​ The accompanying notes are an integral part of these consolidated financial statements.63 The accompanying notes are an integral part of these consolidated financial statements. 63 Table of Contents​​​​​​​​​​(This page has been left blank intentionally.)​64 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​(This page has been left blank intentionally.)​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (This page has been left blank intentionally.) ​ 64 64 Table of Contents​​​​​​​​​​​​​​Consolidated Statements of IncomeSouthern California Edison Company​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2023 2022 2021Operating revenue​$ 16,275​$ 17,172​$ 14,874Purchased power and fuel​ 5,486​ 6,375​ 5,540Operation and maintenance​ 4,071​ 4,659​ 3,588Wildfire-related claims, net of insurance recoveries​ 665​ 1,305​ 1,276Wildfire Insurance Fund expense​ 213​ 214​ 215Depreciation and amortization​ 2,633​ 2,559​ 2,216Property and other taxes​ 566​ 497​ 462Impairment, net of other operating income​ 1​ 50​ 67Total operating expenses​ 13,635​ 15,659​ 13,364Operating income​ 2,640​ 1,513​ 1,510Interest expense​ (1,356)​ (1,005)​ (791)Other income, net​ 497​ 337​ 233Income before income taxes​ 1,781​ 845​ 952Income tax expense (benefit) ​ 184​ (109)​ 17Net income​ 1,597​ 954​ 935Less: Preference stock dividend requirements​ 123​ 107​ 106Net income available for common stock​$ 1,474​$ 847​$ 829​​​​​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Net income​$ 1,597​$ 954​$ 935Other comprehensive (loss) income, net of tax:​ ​ ​ Pension and postretirement benefits other than pensions​ (4)​ 24​ 9Other comprehensive (loss) income, net of tax​ (4)​ 24​ 9Comprehensive income​$ 1,593​$ 978​$ 944​​​​The accompanying notes are an integral part of these consolidated financial statements.65 Table of Contents Table of Contents Table of Contents ​​​​​​​​​​​​​​Consolidated Statements of IncomeSouthern California Edison Company​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions) 2023 2022 2021Operating revenue​$ 16,275​$ 17,172​$ 14,874Purchased power and fuel​ 5,486​ 6,375​ 5,540Operation and maintenance​ 4,071​ 4,659​ 3,588Wildfire-related claims, net of insurance recoveries​ 665​ 1,305​ 1,276Wildfire Insurance Fund expense​ 213​ 214​ 215Depreciation and amortization​ 2,633​ 2,559​ 2,216Property and other taxes​ 566​ 497​ 462Impairment, net of other operating income​ 1​ 50​ 67Total operating expenses​ 13,635​ 15,659​ 13,364Operating income​ 2,640​ 1,513​ 1,510Interest expense​ (1,356)​ (1,005)​ (791)Other income, net​ 497​ 337​ 233Income before income taxes​ 1,781​ 845​ 952Income tax expense (benefit) ​ 184​ (109)​ 17Net income​ 1,597​ 954​ 935Less: Preference stock dividend requirements​ 123​ 107​ 106Net income available for common stock​$ 1,474​$ 847​$ 829​​​​​​​​​​​​​​​​​​Consolidated Statements of Comprehensive Income​​​​​​​​​​​​​​​​​​​​​​​​Years ended December 31, (in millions)​2023 2022 2021Net income​$ 1,597​$ 954​$ 935Other comprehensive (loss) income, net of tax:​ ​ ​ Pension and postretirement benefits other than pensions​ (4)​ 24​ 9Other comprehensive (loss) income, net of tax​ (4)​ 24​ 9Comprehensive income​$ 1,593​$ 978​$ 944​​​​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "UNCHANGED", "current_title": "Net income available for common stock", "prior_title": "Net income available for common stock", "current_body": "​ $ 1,474 ​ $ 847 ​ $ 829 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​" }, { "status": "UNCHANGED", "current_title": "Emission Allowances and Energy Credits", "prior_title": "Emission Allowances and Energy Credits", "current_body": "SCE is allocated greenhouse gas (\"GHG\") allowances annually which it is then required to sell into quarterly auctions. GHG proceeds from the auctions are recorded as a regulatory liability to be refunded to customers. SCE purchases GHG allowances in quarterly auctions or from counterparties to satisfy its GHG emission compliance obligations and recovers such costs of GHG allowances from customers. GHG allowances held for use are classified as \"Other current assets\" on the consolidated balance sheets and are stated, similar to an inventory method, at the lower of weighted average cost or market. SCE will evaluate GHG allowances for impairment upon a triggering event that would indicate SCE might not recover the full cost of an allowance. SCE had GHG allowances held for use of $128 million and $87 million at December 31, 2023 and 2022, respectively. GHG emission obligations were $117 million and $55 million at December 31, 2023 and 2022, respectively, and are classified as \"Other current liabilities\" on the consolidated balance sheets. SCE is allocated low carbon fuel standard (\"LCFS\") credits which it sells to market participants. Proceeds from the sales, net of selling fees and program administration expenses, are recorded in a balancing account to be refunded to eligible 72 72 Table of Contentscustomers. SCE's net proceeds from the sale of these LCFS credits were $248 million and $218 million and are classified as \"Regulatory liabilities\" on the consolidated balance sheets at December 31, 2023 and 2022, respectively.Property, Plant and EquipmentSCE plant additions, including replacements and betterments, are capitalized. Direct material and labor and indirect costs such as construction overhead, administrative and general costs, employee benefits, and property taxes are capitalized as part of plant additions. The CPUC authorizes a capitalization rate for each of the indirect costs which are allocated to each project based on either labor or total costs.Estimated useful lives authorized by the CPUC in the 2021 General Rate Case (\"GRC\") and weighted average useful lives of SCE's property, plant and equipment, are as follows:​​​​​​ ​​Weighted Average ​ Estimated Useful Lives Useful LivesGeneration plant​10 years to 54 years​39 yearsDistribution plant 20 years to 67 years​50 yearsTransmission plant 30 years to 65 years​54 yearsGeneral plant and other 5 years to 60 years​20 years​Depreciation of utility property, plant and equipment is computed on a straight-line, remaining-life basis. SCE's depreciation expense was $2.5 billion, $2.5 billion and $2.0 billion for 2023, 2022 and 2021, respectively. Depreciation expense stated as a percent of average original cost of depreciable utility plant was, on a composite basis, 4.1%, 4.2% and 3.7% for 2023, 2022 and 2021, respectively. The original costs of retired property are charged to accumulated depreciation. See Note 2 for further information.Nuclear fuel for the Palo Verde Nuclear Generating Station (\"Palo Verde\") is recorded as utility plant (nuclear fuel in the fabrication and installation phase is recorded as construction in progress) in accordance with CPUC ratemaking procedures. Palo Verde nuclear fuel is amortized using the units of production method.Allowance for funds used during construction (\"AFUDC\") represents the estimated cost of debt and equity funds that finance utility-plant construction and is capitalized during certain plant construction. AFUDC is recovered in rates through depreciation expense over the useful life of the related asset. AFUDC equity represents a method to compensate SCE for the estimated cost of equity used to finance utility plant additions and is recorded as part of construction in progress. AFUDC equity was $157 million, $137 million and $118 million in 2023, 2022 and 2021, respectively, and is reflected in \"Other income\" on the consolidated statements of income. AFUDC debt was $74 million, $53 million and $50 million in 2023, 2022 and 2021, respectively and is reflected as a reduction of \"Interest expense\" on the consolidated statements of income.Major MaintenanceMajor maintenance costs for SCE's facilities and equipment are expensed as incurred.Impairment of Long-Lived AssetsImpairments of long-lived assets are evaluated based on a review of estimated future cash flows expected to be generated whenever events or changes in circumstances indicate that the carrying amount of such investments or assets may not be recoverable. If the carrying amount of a long-lived asset exceeds expected future cash flows, undiscounted and without interest charges, an impairment loss is recognized in the amount of the excess of fair value over the carrying amount. Fair value is determined via market, cost and income-based valuation techniques, as appropriate.73 Table of Contents Table of Contents Table of Contents customers. SCE's net proceeds from the sale of these LCFS credits were $248 million and $218 million and are classified as \"Regulatory liabilities\" on the consolidated balance sheets at December 31, 2023 and 2022, respectively.Property, Plant and EquipmentSCE plant additions, including replacements and betterments, are capitalized. Direct material and labor and indirect costs such as construction overhead, administrative and general costs, employee benefits, and property taxes are capitalized as part of plant additions. The CPUC authorizes a capitalization rate for each of the indirect costs which are allocated to each project based on either labor or total costs.Estimated useful lives authorized by the CPUC in the 2021 General Rate Case (\"GRC\") and weighted average useful lives of SCE's property, plant and equipment, are as follows:​​​​​​ ​​Weighted Average ​ Estimated Useful Lives Useful LivesGeneration plant​10 years to 54 years​39 yearsDistribution plant 20 years to 67 years​50 yearsTransmission plant 30 years to 65 years​54 yearsGeneral plant and other 5 years to 60 years​20 years​Depreciation of utility property, plant and equipment is computed on a straight-line, remaining-life basis. SCE's depreciation expense was $2.5 billion, $2.5 billion and $2.0 billion for 2023, 2022 and 2021, respectively. Depreciation expense stated as a percent of average original cost of depreciable utility plant was, on a composite basis, 4.1%, 4.2% and 3.7% for 2023, 2022 and 2021, respectively. The original costs of retired property are charged to accumulated depreciation. See Note 2 for further information.Nuclear fuel for the Palo Verde Nuclear Generating Station (\"Palo Verde\") is recorded as utility plant (nuclear fuel in the fabrication and installation phase is recorded as construction in progress) in accordance with CPUC ratemaking procedures. Palo Verde nuclear fuel is amortized using the units of production method.Allowance for funds used during construction (\"AFUDC\") represents the estimated cost of debt and equity funds that finance utility-plant construction and is capitalized during certain plant construction. AFUDC is recovered in rates through depreciation expense over the useful life of the related asset. AFUDC equity represents a method to compensate SCE for the estimated cost of equity used to finance utility plant additions and is recorded as part of construction in progress. AFUDC equity was $157 million, $137 million and $118 million in 2023, 2022 and 2021, respectively, and is reflected in \"Other income\" on the consolidated statements of income. AFUDC debt was $74 million, $53 million and $50 million in 2023, 2022 and 2021, respectively and is reflected as a reduction of \"Interest expense\" on the consolidated statements of income.Major MaintenanceMajor maintenance costs for SCE's facilities and equipment are expensed as incurred.Impairment of Long-Lived AssetsImpairments of long-lived assets are evaluated based on a review of estimated future cash flows expected to be generated whenever events or changes in circumstances indicate that the carrying amount of such investments or assets may not be recoverable. If the carrying amount of a long-lived asset exceeds expected future cash flows, undiscounted and without interest charges, an impairment loss is recognized in the amount of the excess of fair value over the carrying amount. Fair value is determined via market, cost and income-based valuation techniques, as appropriate. customers. SCE's net proceeds from the sale of these LCFS credits were $248 million and $218 million and are classified as \"Regulatory liabilities\" on the consolidated balance sheets at December 31, 2023 and 2022, respectively." }, { "status": "UNCHANGED", "current_title": "Property, Plant and Equipment", "prior_title": "Property, Plant and Equipment", "current_body": "SCE plant additions, including replacements and betterments, are capitalized. Direct material and labor and indirect costs such as construction overhead, administrative and general costs, employee benefits, and property taxes are capitalized as part of plant additions. The CPUC authorizes a capitalization rate for each of the indirect costs which are allocated to each project based on either labor or total costs. Estimated useful lives authorized by the CPUC in the 2021 General Rate Case (\"GRC\") and weighted average useful lives of SCE's property, plant and equipment, are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ Estimated Useful Lives Useful Lives Generation plant ​ 10 years to 54 years ​ 39 years Distribution plant 20 years to 67 years ​ 50 years Transmission plant 30 years to 65 years ​ 54 years General plant and other 5 years to 60 years ​ 20 years ​ Depreciation of utility property, plant and equipment is computed on a straight-line, remaining-life basis. SCE's depreciation expense was $2.5 billion, $2.5 billion and $2.0 billion for 2023, 2022 and 2021, respectively. Depreciation expense stated as a percent of average original cost of depreciable utility plant was, on a composite basis, 4.1%, 4.2% and 3.7% for 2023, 2022 and 2021, respectively. The original costs of retired property are charged to accumulated depreciation. See Note 2 for further information. Nuclear fuel for the Palo Verde Nuclear Generating Station (\"Palo Verde\") is recorded as utility plant (nuclear fuel in the fabrication and installation phase is recorded as construction in progress) in accordance with CPUC ratemaking procedures. Palo Verde nuclear fuel is amortized using the units of production method. Allowance for funds used during construction (\"AFUDC\") represents the estimated cost of debt and equity funds that finance utility-plant construction and is capitalized during certain plant construction. AFUDC is recovered in rates through depreciation expense over the useful life of the related asset. AFUDC equity represents a method to compensate SCE for the estimated cost of equity used to finance utility plant additions and is recorded as part of construction in progress. AFUDC equity was $157 million, $137 million and $118 million in 2023, 2022 and 2021, respectively, and is reflected in \"Other income\" on the consolidated statements of income. AFUDC debt was $74 million, $53 million and $50 million in 2023, 2022 and 2021, respectively and is reflected as a reduction of \"Interest expense\" on the consolidated statements of income. Major Maintenance Major maintenance costs for SCE's facilities and equipment are expensed as incurred." }, { "status": "UNCHANGED", "current_title": "Opinions on the Financial Statements and Internal Control over Financial Reporting", "prior_title": "Opinions on the Financial Statements and Internal Control over Financial Reporting", "current_body": "We have audited the accompanying consolidated balance sheets of Edison International and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and schedule of condensed financial information of parent as of December 31, 2023 and 2022 and for each of the three years in the period ended December 31, 2023 appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. ​" } ] }