(Mark One) | |
R | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2013 | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to |
Commission File Number | Exact Name of Registrant as specified in its charter | State or Other Jurisdiction of Incorporation or Organization | IRS Employer Identification Number | |||
1-9936 | EDISON INTERNATIONAL | California | 95-4137452 | |||
1-2313 | SOUTHERN CALIFORNIA EDISON COMPANY | California | 95-1240335 |
EDISON INTERNATIONAL | SOUTHERN CALIFORNIA EDISON COMPANY | |
2244 Walnut Grove Avenue (P.O. Box 976) Rosemead, California 91770 (Address of principal executive offices) | 2244 Walnut Grove Avenue (P.O. Box 800) Rosemead, California 91770 (Address of principal executive offices) | |
(626) 302-2222 (Registrant's telephone number, including area code) | (626) 302-1212 (Registrant's telephone number, including area code) |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of "accelerated filer," "large accelerated filer," and "smaller reporting company" in Rule 12b-12 of the Exchange Act. (Check One): | ||||
Edison International | Large Accelerated Filer þ | Accelerated Filer ¨ | Non-accelerated Filer ¨ | Smaller Reporting Company ¨ |
Southern California Edison Company | Large Accelerated Filer ¨ | Accelerated Filer ¨ | Non-accelerated Filer þ | Smaller Reporting Company ¨ |
Common Stock outstanding as of July 30, 2013: | ||
Edison International | 325,811,206 shares | |
Southern California Edison Company | 434,888,104 shares |
Income (Loss) from Discontinued Operations (Net of Tax) | ||||
2012 Form 10-K | Edison International's and SCE's combined Annual Report on Form 10-K for the year-ended December 31, 2012 | |
APS | Arizona Public Service Company | |
ARO(s) | asset retirement obligation(s) | |
BACT | best available control technology | |
Bankruptcy Code | Chapter 11 of the United States Bankruptcy Code | |
Bankruptcy Court | United States Bankruptcy Court for the Northern District of Illinois, Eastern Division | |
Bcf | billion cubic feet | |
CAA | Clean Air Act | |
CAISO | California Independent System Operator | |
CARB | California Air Resources Board | |
CDWR | California Department of Water Resources | |
CEC | California Energy Commission | |
CPUC | California Public Utilities Commission | |
CRRs | congestion revenue rights | |
DOE | U.S. Department of Energy | |
EME | Edison Mission Energy | |
EMG | Edison Mission Group Inc. | |
EPS | earnings per share | |
ERRA | energy resource recovery account | |
FASB | Financial Accounting Standards Board | |
FERC | Federal Energy Regulatory Commission | |
FIP(s) | federal implementation plan(s) | |
Four Corners | coal fueled electric generating facility located in Farmington, New Mexico in which SCE holds a 48% ownership interest | |
GAAP | generally accepted accounting principles | |
GHG | greenhouse gas | |
GRC | general rate case | |
GWh | gigawatt-hours | |
IRS | Internal Revenue Service | |
ISO | Independent System Operator | |
kWh(s) | kilowatt-hour(s) | |
MD&A | Management's Discussion and Analysis of Financial Condition and Results of Operations in this report | |
MHI | Mitsubishi Heavy Industries, Inc. | |
Mohave | two coal fueled electric generating facilities that have been decommissioned and site remediated located in Clark County, Nevada in which SCE holds a 56% ownership interest | |
Moody's | Moody's Investors Service | |
MW | megawatts | |
MWh | megawatt-hours | |
NAAQS | national ambient air quality standards | |
NERC | North American Electric Reliability Corporation | |
Ninth Circuit | U.S. Court of Appeals for the Ninth Circuit | |
NRC | Nuclear Regulatory Commission |
NSR | New Source Review | |
Palo Verde | large pressurized water nuclear electric generating facility located near Phoenix, Arizona in which SCE holds a 15.8% ownership interest | |
PBOP(s) | postretirement benefits other than pension(s) | |
Petition Date | December 17, 2012 (date on which EME and certain of its wholly-owned subsidiaries filed for protection under Chapter 11 of the Bankruptcy Code) | |
PG&E | Pacific Gas & Electric Company | |
PSD | Prevention of Significant Deterioration | |
QF(s) | qualifying facility(ies) | |
ROE | return on equity | |
S&P | Standard & Poor's Ratings Services | |
San Onofre | large pressurized water nuclear electric generating facility located in south San Clemente, California in which SCE holds a 78.21% ownership interest | |
SCE | Southern California Edison Company | |
SCR | selective catalytic reduction equipment | |
SDG&E | San Diego Gas & Electric | |
SEC | U.S. Securities and Exchange Commission | |
SED | Safety and Enforcement Division of the CPUC, formerly known as the Consumer Protection and Safety Division or CPSD | |
Settlement Transaction | Certain transactions related to EME's Chapter 11 bankruptcy filing that the parties to the Support Agreement have by virtue of that agreement agreed to further document and support | |
Support Agreement | Transaction Support Agreement dated as of December 16, 2012 by and among Edison Mission Energy, Edison International and the Noteholders named therein | |
US EPA | U.S. Environmental Protection Agency | |
VIE(s) | variable interest entity(ies) |
Consolidated Statements of Income | Edison International | ||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in millions, except per-share amounts, unaudited) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Operating revenue | $ | 3,046 | $ | 2,653 | $ | 5,678 | $ | 5,068 | |||||||
Fuel | 81 | 61 | 154 | 138 | |||||||||||
Purchased power | 1,076 | 822 | 1,855 | 1,437 | |||||||||||
Operation and maintenance | 967 | 951 | 1,840 | 1,899 | |||||||||||
Depreciation, decommissioning and amortization | 418 | 400 | 832 | 788 | |||||||||||
Asset impairment and other | 575 | (1 | ) | 575 | — | ||||||||||
Total operating expenses | 3,117 | 2,233 | 5,256 | 4,262 | |||||||||||
Operating income (loss) | (71 | ) | 420 | 422 | 806 | ||||||||||
Interest and other income | 34 | 40 | 63 | 73 | |||||||||||
Interest expense | (133 | ) | (134 | ) | (265 | ) | (260 | ) | |||||||
Other expenses | (14 | ) | (19 | ) | (21 | ) | (26 | ) | |||||||
Income (loss) from continuing operations before income taxes | (184 | ) | 307 | 199 | 593 | ||||||||||
Income tax expense (benefit) | (102 | ) | 100 | (4 | ) | 192 | |||||||||
Income (loss) from continuing operations | (82 | ) | 207 | 203 | 401 | ||||||||||
Income (loss) from discontinued operations, net of tax | 12 | (109 | ) | 24 | (193 | ) | |||||||||
Net income (loss) | (70 | ) | 98 | 227 | 208 | ||||||||||
Dividends on preferred and preference stock of utility | 24 | 23 | 51 | 41 | |||||||||||
Other noncontrolling interests | — | 1 | — | — | |||||||||||
Net income (loss) attributable to Edison International common shareholders | $ | (94 | ) | $ | 74 | $ | 176 | $ | 167 | ||||||
Amounts attributable to Edison International common shareholders: | |||||||||||||||
Income (loss) from continuing operations, net of tax | $ | (106 | ) | $ | 183 | $ | 152 | $ | 360 | ||||||
Income (loss) from discontinued operations, net of tax | 12 | (109 | ) | 24 | (193 | ) | |||||||||
Net income (loss) attributable to Edison International common shareholders | $ | (94 | ) | $ | 74 | $ | 176 | $ | 167 | ||||||
Basic earnings (loss) per common share attributable to Edison International common shareholders: | |||||||||||||||
Weighted-average shares of common stock outstanding | 326 | 326 | 326 | 326 | |||||||||||
Continuing operations | $ | (0.33 | ) | $ | 0.56 | $ | 0.47 | $ | 1.10 | ||||||
Discontinued operations | 0.04 | (0.33 | ) | 0.07 | (0.59 | ) | |||||||||
Total | $ | (0.29 | ) | $ | 0.23 | $ | 0.54 | $ | 0.51 | ||||||
Diluted earnings (loss) per common share attributable to Edison International common shareholders: | |||||||||||||||
Weighted-average shares of common stock outstanding, including effect of dilutive securities | 326 | 334 | 329 | 333 | |||||||||||
Continuing operations | $ | (0.33 | ) | $ | 0.55 | $ | 0.47 | $ | 1.08 | ||||||
Discontinued operations | 0.04 | (0.33 | ) | 0.07 | (0.58 | ) | |||||||||
Total | $ | (0.29 | ) | $ | 0.22 | $ | 0.54 | $ | 0.50 | ||||||
Dividends declared per common share | $ | 0.3375 | $ | 0.325 | $ | 0.6750 | $ | 0.650 |
Consolidated Statements of Comprehensive Income | Edison International | ||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in millions, unaudited) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Net income (loss) | $ | (70 | ) | $ | 98 | $ | 227 | $ | 208 | ||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Pension and postretirement benefits other than pensions: | |||||||||||||||
Net loss arising during the period, net of income tax benefit of $2 for the three months June 30, 2012 and $4 and $2 for the six months ended June 30, 2013 and 2012, respectively | — | (4 | ) | (2 | ) | (3 | ) | ||||||||
Amortization of net loss included in net income, net of income tax expense of $1 for both the three months ended June 30, 2013 and 2012 and $2 and $5 for the six months ended June 30, 2013 and 2012, respectively | 5 | 3 | 7 | 9 | |||||||||||
Unrealized loss on derivatives qualified as cash flow hedges: | |||||||||||||||
Unrealized holding loss arising during the period, net of income tax benefit of $19 for the three months and $2 for the six months ended June 30, 2012, respectively | — | (28 | ) | — | (3 | ) | |||||||||
Reclassification adjustments included in net income, net of income tax benefit of $6 for the three months and $13 for the six months ended June 30, 2012, respectively | — | (9 | ) | — | (20 | ) | |||||||||
Other comprehensive income (loss), net of tax | 5 | (38 | ) | 5 | (17 | ) | |||||||||
Comprehensive income (loss) | (65 | ) | 60 | 232 | 191 | ||||||||||
Less: Comprehensive income attributable to noncontrolling interests | 24 | 24 | 51 | 41 | |||||||||||
Comprehensive income (loss) attributable to Edison International | $ | (89 | ) | $ | 36 | $ | 181 | $ | 150 |
Consolidated Balance Sheets | Edison International | |||||||
(in millions, unaudited) | June 30, 2013 | December 31, 2012 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 148 | $ | 170 | ||||
Receivables, less allowances of $66 and $75 for uncollectible accounts at respective dates | 815 | 762 | ||||||
Accrued unbilled revenue | 741 | 550 | ||||||
Inventory | 267 | 340 | ||||||
Prepaid taxes | 27 | 22 | ||||||
Derivative assets | 91 | 129 | ||||||
Margin and collateral deposits | 8 | 8 | ||||||
Regulatory assets | 803 | 572 | ||||||
Other current assets | 122 | 119 | ||||||
Total current assets | 3,022 | 2,672 | ||||||
Nuclear decommissioning trusts | 4,181 | 4,048 | ||||||
Investments in unconsolidated affiliates | 2 | 2 | ||||||
Other investments | 194 | 184 | ||||||
Total investments | 4,377 | 4,234 | ||||||
Utility property, plant and equipment, less accumulated depreciation of $7,578 and $7,424 at respective dates | 29,301 | 30,200 | ||||||
Nonutility property, plant and equipment, less accumulated depreciation of $69 and $123 at respective dates | 75 | 73 | ||||||
Total property, plant and equipment | 29,376 | 30,273 | ||||||
Derivative assets | 73 | 85 | ||||||
Restricted deposits | 4 | 4 | ||||||
Regulatory assets | 7,494 | 6,422 | ||||||
Other long-term assets | 681 | 704 | ||||||
Total long-term assets | 8,252 | 7,215 | ||||||
Total assets | $ | 45,027 | $ | 44,394 |
Consolidated Balance Sheets | Edison International | |||||||
(in millions, except share amounts, unaudited) | June 30, 2013 | December 31, 2012 | ||||||
LIABILITIES AND EQUITY | ||||||||
Short-term debt | $ | 853 | $ | 175 | ||||
Current portion of long-term debt | 800 | — | ||||||
Accounts payable | 1,288 | 1,423 | ||||||
Accrued taxes | 33 | 61 | ||||||
Accrued interest | 199 | 176 | ||||||
Customer deposits | 199 | 193 | ||||||
Derivative liabilities | 140 | 126 | ||||||
Regulatory liabilities | 493 | 536 | ||||||
Deferred income taxes | 79 | 64 | ||||||
Other current liabilities | 804 | 990 | ||||||
Total current liabilities | 4,888 | 3,744 | ||||||
Long-term debt | 8,830 | 9,231 | ||||||
Deferred income taxes | 6,304 | 6,127 | ||||||
Deferred investment tax credits | 102 | 104 | ||||||
Customer advances | 134 | 149 | ||||||
Derivative liabilities | 1,027 | 939 | ||||||
Pensions and benefits | 2,234 | 2,614 | ||||||
Asset retirement obligations | 3,322 | 2,782 | ||||||
Regulatory liabilities | 4,836 | 5,214 | ||||||
Other deferred credits and other long-term liabilities | 2,242 | 2,299 | ||||||
Total deferred credits and other liabilities | 20,201 | 20,228 | ||||||
Total liabilities | 33,919 | 33,203 | ||||||
Commitments and contingencies (Note 12) | ||||||||
Common stock, no par value (800,000,000 shares authorized; 325,811,206 shares issued and outstanding at each date) | 2,388 | 2,373 | ||||||
Accumulated other comprehensive loss | (82 | ) | (87 | ) | ||||
Retained earnings | 7,049 | 7,146 | ||||||
Total Edison International's common shareholders' equity | 9,355 | 9,432 | ||||||
Preferred and preference stock of utility | 1,753 | 1,759 | ||||||
Total noncontrolling interests | 1,753 | 1,759 | ||||||
Total equity | 11,108 | 11,191 | ||||||
Total liabilities and equity | $ | 45,027 | $ | 44,394 |
Consolidated Statements of Cash Flows | Edison International | |||||||
Six months ended June 30, | ||||||||
(in millions, unaudited) | 2013 | 2012 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 227 | $ | 208 | ||||
Less: Income (loss) from discontinued operations | 24 | (193 | ) | |||||
Income from continuing operations | 203 | 401 | ||||||
Adjustments to reconcile to net cash provided by operating activities: | ||||||||
Depreciation, decommissioning and amortization | 832 | 788 | ||||||
Regulatory impacts of net nuclear decommissioning trust earnings | 161 | 114 | ||||||
Other amortization and other | 33 | 34 | ||||||
Asset impairment | 575 | — | ||||||
Stock-based compensation | 12 | 16 | ||||||
Deferred income taxes and investment tax credits | 85 | 11 | ||||||
Proceeds from U.S. treasury grants | — | 29 | ||||||
Changes in operating assets and liabilities: | ||||||||
Receivables | (47 | ) | 10 | |||||
Inventory | 73 | 15 | ||||||
Margin and collateral deposits, net of collateral received | (67 | ) | (3 | ) | ||||
Prepaid taxes | (5 | ) | 98 | |||||
Other current assets | (190 | ) | (204 | ) | ||||
Accounts payable | 88 | 27 | ||||||
Accrued taxes | (33 | ) | (15 | ) | ||||
Other current liabilities | (98 | ) | (83 | ) | ||||
Derivative assets and liabilities, net | 152 | (79 | ) | |||||
Regulatory assets and liabilities, net | (11 | ) | 252 | |||||
Other assets | (27 | ) | (19 | ) | ||||
Other liabilities | (475 | ) | 122 | |||||
Operating cash flows from continuing operations | 1,261 | 1,514 | ||||||
Operating cash flows from discontinued operations, net | — | (354 | ) | |||||
Net cash provided by operating activities | 1,261 | 1,160 | ||||||
Cash flows from financing activities: | ||||||||
Long-term debt issued | 398 | 395 | ||||||
Long-term debt issuance costs | (4 | ) | (4 | ) | ||||
Long-term debt repaid | (3 | ) | (3 | ) | ||||
Bonds remarketed, net | 195 | — | ||||||
Bonds purchased | (196 | ) | — | |||||
Preference stock issued, net | 387 | 805 | ||||||
Preference stock redeemed | (400 | ) | (75 | ) | ||||
Short-term debt financing, net | 678 | (121 | ) | |||||
Settlements of stock-based compensation, net | (37 | ) | (30 | ) | ||||
Dividends to noncontrolling interests | (52 | ) | (29 | ) | ||||
Dividends paid | (220 | ) | (212 | ) | ||||
Financing cash flows from continuing operations | 746 | 726 | ||||||
Financing cash flows from discontinued operations, net | — | 300 | ||||||
Net cash provided by financing activities | $ | 746 | $ | 1,026 |
Consolidated Statements of Cash Flows | Edison International | |||||||
Six months ended June 30, | ||||||||
(in millions, unaudited) | 2013 | 2012 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | $ | (1,834 | ) | $ | (2,125 | ) | ||
Proceeds from sale of nuclear decommissioning trust investments | 1,956 | 1,097 | ||||||
Purchases of nuclear decommissioning trust investments and other | (2,128 | ) | (1,222 | ) | ||||
Customer advances for construction and other investments | (23 | ) | 7 | |||||
Investing cash flows from continuing operations | (2,029 | ) | (2,243 | ) | ||||
Investing cash flows from discontinued operations, net | — | (237 | ) | |||||
Net cash used by investing activities | (2,029 | ) | (2,480 | ) | ||||
Net decrease in cash and cash equivalents | (22 | ) | (294 | ) | ||||
Cash and cash equivalents at beginning of period | 170 | 1,469 | ||||||
Cash and cash equivalents at end of period | 148 | 1,175 | ||||||
Cash and cash equivalents from discontinued operations | — | 1,009 | ||||||
Cash and cash equivalents from continuing operations | $ | 148 | $ | 166 |
Consolidated Statements of Income | Southern California Edison Company |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions, unaudited) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Operating revenue | $ | 3,045 | $ | 2,651 | $ | 5,674 | $ | 5,063 | ||||||||
Fuel | 81 | 61 | 154 | 138 | ||||||||||||
Purchased power | 1,076 | 822 | 1,855 | 1,437 | ||||||||||||
Operation and maintenance | 879 | 866 | 1,665 | 1,717 | ||||||||||||
Depreciation, decommissioning and amortization | 417 | 399 | 832 | 788 | ||||||||||||
Property and other taxes | 72 | 73 | 151 | 156 | ||||||||||||
Asset impairment | 575 | — | 575 | — | ||||||||||||
Total operating expenses | 3,100 | 2,221 | 5,232 | 4,236 | ||||||||||||
Operating income (loss) | (55 | ) | 430 | 442 | 827 | |||||||||||
Interest and other income | 30 | 38 | 61 | 70 | ||||||||||||
Interest expense | (127 | ) | (127 | ) | (253 | ) | (249 | ) | ||||||||
Other expenses | (14 | ) | (19 | ) | (21 | ) | (26 | ) | ||||||||
Income (loss) before income taxes | (166 | ) | 322 | 229 | 622 | |||||||||||
Income tax expense (benefit) | (99 | ) | 108 | 13 | 208 | |||||||||||
Net income (loss) | (67 | ) | 214 | 216 | 414 | |||||||||||
Less: Dividends on preferred and preference stock | 24 | 23 | 51 | 41 | ||||||||||||
Net income (loss) available for common stock | $ | (91 | ) | $ | 191 | $ | 165 | $ | 373 |
Consolidated Statements of Comprehensive Income | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions, unaudited) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income (loss) | $ | (67 | ) | $ | 214 | $ | 216 | $ | 414 | |||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||
Pension and postretirement benefits other than pensions: | ||||||||||||||||
Net loss arising the during period, net of income tax benefit of $3 for the three months ended June 30, 2012 and $3 for both the six months ended June 30, 2013 and 2012 | — | (4 | ) | (4 | ) | (4 | ) | |||||||||
Amortization of net loss included in net income, net of income tax expense of $1 for both the three months ended June 30, 2013 and 2012 and $2 and $3 for the six months ended June 30, 2013 and 2012, respectively | 2 | 1 | 3 | 4 | ||||||||||||
Other comprehensive income (loss), net of tax | 2 | (3 | ) | (1 | ) | — | ||||||||||
Comprehensive income (loss) | $ | (65 | ) | $ | 211 | $ | 215 | $ | 414 |
Consolidated Balance Sheets | Southern California Edison Company |
(in millions, unaudited) | June 30, 2013 | December 31, 2012 | ||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 49 | $ | 45 | ||||
Receivables, less allowances of $66 and $75 for uncollectible accounts at respective dates | 768 | 755 | ||||||
Accrued unbilled revenue | 741 | 550 | ||||||
Inventory | 267 | 340 | ||||||
Prepaid taxes | 22 | 48 | ||||||
Derivative assets | 91 | 129 | ||||||
Regulatory assets | 803 | 572 | ||||||
Other current assets | 129 | 123 | ||||||
Total current assets | 2,870 | 2,562 | ||||||
Nuclear decommissioning trusts | 4,181 | 4,048 | ||||||
Other investments | 127 | 116 | ||||||
Total investments | 4,308 | 4,164 | ||||||
Utility property, plant and equipment, less accumulated depreciation of $7,578 and $7,424 at respective dates | 29,301 | 30,200 | ||||||
Nonutility property, plant and equipment, less accumulated depreciation of $63 and $117 at respective dates | 73 | 70 | ||||||
Total property, plant and equipment | 29,374 | 30,270 | ||||||
Derivative assets | 73 | 85 | ||||||
Regulatory assets | 7,494 | 6,422 | ||||||
Other long-term assets | 531 | 531 | ||||||
Total long-term assets | 8,098 | 7,038 | ||||||
Total assets | $ | 44,650 | $ | 44,034 |
Consolidated Balance Sheets | Southern California Edison Company |
(in millions, except share amounts, unaudited) | June 30, 2013 | December 31, 2012 | ||||||
LIABILITIES AND EQUITY | ||||||||
Short-term debt | $ | 828 | $ | 175 | ||||
Current portion of long-term debt | 800 | — | ||||||
Accounts payable | 1,264 | 1,297 | ||||||
Accrued taxes | 36 | 72 | ||||||
Accrued interest | 194 | 172 | ||||||
Customer deposits | 199 | 193 | ||||||
Derivative liabilities | 140 | 126 | ||||||
Regulatory liabilities | 493 | 536 | ||||||
Deferred income taxes | 79 | 81 | ||||||
Other current liabilities | 663 | 861 | ||||||
Total current liabilities | 4,696 | 3,513 | ||||||
Long-term debt | 8,427 | 8,828 | ||||||
Deferred income taxes | 6,819 | 6,669 | ||||||
Deferred investment tax credits | 102 | 104 | ||||||
Customer advances | 134 | 149 | ||||||
Derivative liabilities | 1,027 | 939 | ||||||
Pensions and benefits | 1,727 | 2,245 | ||||||
Asset retirement obligations | 3,322 | 2,782 | ||||||
Regulatory liabilities | 4,836 | 5,214 | ||||||
Other deferred credits and other long-term liabilities | 1,928 | 1,848 | ||||||
Total deferred credits and other liabilities | 19,895 | 19,950 | ||||||
Total liabilities | 33,018 | 32,291 | ||||||
Commitments and contingencies (Note 12) | ||||||||
Common stock, no par value (560,000,000 shares authorized; 434,888,104 shares issued and outstanding at each date) | 2,168 | 2,168 | ||||||
Additional paid-in capital | 584 | 581 | ||||||
Accumulated other comprehensive loss | (30 | ) | (29 | ) | ||||
Retained earnings | 7,115 | 7,228 | ||||||
Total common shareholder's equity | 9,837 | 9,948 | ||||||
Preferred and preference stock | 1,795 | 1,795 | ||||||
Total equity | 11,632 | 11,743 | ||||||
Total liabilities and equity | $ | 44,650 | $ | 44,034 |
Consolidated Statements of Cash Flows | Southern California Edison Company |
Six months ended June 30, | ||||||||
(in millions, unaudited) | 2013 | 2012 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 216 | $ | 414 | ||||
Adjustments to reconcile to net cash provided by operating activities: | ||||||||
Depreciation, decommissioning and amortization | 832 | 788 | ||||||
Regulatory impacts of net nuclear decommissioning trust earnings | 161 | 114 | ||||||
Other amortization | 35 | 37 | ||||||
Asset impairment | 575 | — | ||||||
Stock-based compensation | 7 | 8 | ||||||
Deferred income taxes and investment tax credits | 50 | 250 | ||||||
Proceeds from U.S. treasury grants | — | 29 | ||||||
Changes in operating assets and liabilities: | ||||||||
Receivables | (12 | ) | 11 | |||||
Inventory | 73 | 15 | ||||||
Margin and collateral deposits, net of collateral received | (67 | ) | (3 | ) | ||||
Prepaid taxes | 26 | 3 | ||||||
Other current assets | (192 | ) | (203 | ) | ||||
Accounts payable | 96 | 28 | ||||||
Accrued taxes | (36 | ) | (14 | ) | ||||
Other current liabilities | (102 | ) | (79 | ) | ||||
Derivative assets and liabilities, net | 152 | (72 | ) | |||||
Regulatory assets and liabilities, net | (11 | ) | 245 | |||||
Other assets | (12 | ) | (21 | ) | ||||
Other liabilities | (466 | ) | (39 | ) | ||||
Net cash provided by operating activities | 1,325 | 1,511 | ||||||
Cash flows from financing activities: | ||||||||
Long-term debt issued | 398 | 395 | ||||||
Long-term debt issuance costs | (4 | ) | (4 | ) | ||||
Long-term debt repaid | (3 | ) | (3 | ) | ||||
Bonds remarketed, net | 195 | — | ||||||
Bonds purchased | (196 | ) | — | |||||
Preference stock issued, net | 387 | 805 | ||||||
Preference stock redeemed | (400 | ) | (75 | ) | ||||
Short-term debt financing, net | 653 | (125 | ) | |||||
Settlements of stock-based compensation, net | (34 | ) | (20 | ) | ||||
Dividends paid | (292 | ) | (261 | ) | ||||
Net cash provided by financing activities | 704 | 712 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (1,834 | ) | (2,125 | ) | ||||
Proceeds from sale of nuclear decommissioning trust investments | 1,956 | 1,097 | ||||||
Purchases of nuclear decommissioning trust investments and other | (2,128 | ) | (1,222 | ) | ||||
Customer advances for construction and other investments | (19 | ) | 11 | |||||
Net cash used by investing activities | (2,025 | ) | (2,239 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 4 | (16 | ) | |||||
Cash and cash equivalents, beginning of period | 45 | 57 | ||||||
Cash and cash equivalents, end of period | $ | 49 | $ | 41 |
Edison International | SCE | ||||||||||||||
(in millions) | June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | |||||||||||
Money market funds | $ | 72 | $ | 107 | $ | 10 | $ | 5 |
Edison International | SCE | ||||||||||||||
(in millions) | June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | |||||||||||
Cash reclassified to accounts payable | $ | 160 | $ | 247 | $ | 158 | $ | 242 |
(in millions) | June 30, 2013 | December 31, 2012 | |||||
Materials, supplies and spare parts | $ | 244 | $ | 319 | |||
Fuel | 23 | 21 | |||||
Total inventory | $ | 267 | $ | 340 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Basic earnings per share – continuing operations: | |||||||||||||||
Income (loss) from continuing operations available to common shareholders | $ | (106 | ) | $ | 183 | $ | 152 | $ | 360 | ||||||
Weighted average common shares outstanding | 326 | 326 | 326 | 326 | |||||||||||
Basic earnings per share – continuing operations | $ | (0.33 | ) | $ | 0.56 | $ | 0.47 | $ | 1.10 | ||||||
Diluted earnings per share – continuing operations: | |||||||||||||||
Income (loss) from continuing operations available to common shareholders | $ | (106 | ) | $ | 183 | $ | 152 | $ | 360 | ||||||
Income impact of assumed conversions | — | — | — | — | |||||||||||
Income (loss) from continuing operations available to common shareholders and assumed conversions | $ | (106 | ) | $ | 183 | $ | 152 | $ | 360 | ||||||
Weighted average common shares outstanding | 326 | 326 | 326 | 326 | |||||||||||
Incremental shares from assumed conversions | — | 1 | 8 | 3 | 7 | ||||||||||
Adjusted weighted average shares – diluted | 326 | 334 | 329 | 333 | |||||||||||
Diluted earnings per share – continuing operations | $ | (0.33 | ) | $ | 0.55 | $ | 0.47 | $ | 1.08 |
1 | Due to a loss for the three months ended June 30, 2013, there were no incremental shares in the computation because such shares would be considered antidilutive. |
(in millions) | June 30, 2013 | December 31, 2012 | |||||
Beginning balance | $ | 2,782 | $ | 2,610 | |||
Accretion expense | 85 | 161 | |||||
Revisions | 455 | 12 | |||||
Liabilities settled | — | (1 | ) | ||||
Ending balance | $ | 3,322 | $ | 2,782 |
Equity Attributable to Edison International | Noncontrolling Interests | ||||||||||||||||||||||
(in millions) | Common Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Subtotal | Preferred and Preference Stock | Total Equity | |||||||||||||||||
Balance at December 31, 2012 | $ | 2,373 | $ | (87 | ) | $ | 7,146 | $ | 9,432 | $ | 1,759 | $ | 11,191 | ||||||||||
Net income | — | — | 176 | 176 | 51 | 227 | |||||||||||||||||
Other comprehensive income | — | 5 | — | 5 | — | 5 | |||||||||||||||||
Common stock dividends declared ($0.675 per share) | — | — | (220 | ) | (220 | ) | — | (220 | ) | ||||||||||||||
Dividends, distributions to noncontrolling interests | — | — | — | — | (51 | ) | (51 | ) | |||||||||||||||
Stock-based compensation and other | 3 | — | (40 | ) | (37 | ) | — | (37 | ) | ||||||||||||||
Noncash stock-based compensation and other | 12 | — | (5 | ) | 7 | (1 | ) | 6 | |||||||||||||||
Issuance of preference stock | — | — | — | — | 387 | 387 | |||||||||||||||||
Redemption of preference stock | — | — | (8 | ) | (8 | ) | (392 | ) | (400 | ) | |||||||||||||
Balance at June 30, 2013 | $ | 2,388 | $ | (82 | ) | $ | 7,049 | $ | 9,355 | $ | 1,753 | $ | 11,108 |
Equity Attributable to Edison International | Noncontrolling Interests | ||||||||||||||||||||||||||
(in millions) | Common Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Subtotal | Other | Preferred and Preference Stock | Total Equity | ||||||||||||||||||||
Balance at December 31, 2011 | $ | 2,360 | $ | (139 | ) | $ | 7,834 | $ | 10,055 | $ | 2 | $ | 1,029 | $ | 11,086 | ||||||||||||
Net income | — | — | 167 | 167 | — | 41 | 208 | ||||||||||||||||||||
Other comprehensive loss | — | (17 | ) | — | (17 | ) | — | — | (17 | ) | |||||||||||||||||
Contributions from noncontrolling interests | — | — | — | — | 238 | — | 238 | ||||||||||||||||||||
Transfer of assets to Capistrano Wind Partners | (21 | ) | — | — | (21 | ) | — | — | (21 | ) | |||||||||||||||||
Common stock dividends declared ($0.65 per share) | — | — | (212 | ) | (212 | ) | — | — | (212 | ) | |||||||||||||||||
Dividends, distributions to noncontrolling interests and other | — | — | — | — | — | (41 | ) | (41 | ) | ||||||||||||||||||
Stock-based compensation and other | 15 | — | (56 | ) | (41 | ) | — | — | (41 | ) | |||||||||||||||||
Noncash stock-based compensation and other | 17 | — | (2 | ) | 15 | — | — | 15 | |||||||||||||||||||
Issuance of preference stock | — | — | — | — | — | 805 | 805 | ||||||||||||||||||||
Redemption of preference stock | — | — | (1 | ) | (1 | ) | — | (74 | ) | (75 | ) | ||||||||||||||||
Balance at June 30, 2012 | $ | 2,371 | $ | (156 | ) | $ | 7,730 | $ | 9,945 | $ | 240 | $ | 1,760 | $ | 11,945 |
Equity Attributable to SCE | |||||||||||||||||||||||
(in millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Preferred and Preference Stock | Total Equity | |||||||||||||||||
Balance at December 31, 2012 | $ | 2,168 | $ | 581 | $ | (29 | ) | $ | 7,228 | $ | 1,795 | $ | 11,743 | ||||||||||
Net income | — | — | — | 216 | — | 216 | |||||||||||||||||
Other comprehensive loss | — | — | (1 | ) | — | — | (1 | ) | |||||||||||||||
Dividends declared on common stock | — | — | — | (240 | ) | — | (240 | ) | |||||||||||||||
Dividends declared on preferred and preference stock | — | — | — | (51 | ) | — | (51 | ) | |||||||||||||||
Stock-based compensation and other | — | 1 | — | (35 | ) | — | (34 | ) | |||||||||||||||
Noncash stock-based compensation and other | — | 7 | — | 5 | — | 12 | |||||||||||||||||
Issuance of preference stock | — | (13 | ) | — | — | 400 | 387 | ||||||||||||||||
Redemption of preference stock | — | 8 | — | (8 | ) | (400 | ) | (400 | ) | ||||||||||||||
Balance at June 30, 2013 | $ | 2,168 | $ | 584 | $ | (30 | ) | $ | 7,115 | $ | 1,795 | $ | 11,632 |
Equity Attributable to SCE | |||||||||||||||||||||||
(in millions) | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Preferred and Preference Stock | Total Equity | |||||||||||||||||
Balance at December 31, 2011 | $ | 2,168 | $ | 596 | $ | (24 | ) | $ | 6,173 | $ | 1,045 | $ | 9,958 | ||||||||||
Net income | — | — | — | 414 | — | 414 | |||||||||||||||||
Dividends declared on common stock | — | — | — | (233 | ) | — | (233 | ) | |||||||||||||||
Dividends declared on preferred and preference stock | — | — | — | (41 | ) | — | (41 | ) | |||||||||||||||
Stock-based compensation and other | — | 10 | — | (30 | ) | — | (20 | ) | |||||||||||||||
Noncash stock-based compensation and other | — | 8 | — | — | — | 8 | |||||||||||||||||
Issuance of preference stock | — | (20 | ) | — | — | 825 | 805 | ||||||||||||||||
Redemption of preference stock | — | 1 | — | (1 | ) | (75 | ) | (75 | ) | ||||||||||||||
Balance at June 30, 2012 | $ | 2,168 | $ | 595 | $ | (24 | ) | $ | 6,282 | $ | 1,795 | $ | 10,816 |
June 30, 2013 | |||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Netting and Collateral1 | Total | ||||||||||||||
Assets at Fair Value | |||||||||||||||||||
Money market funds | $ | 10 | $ | — | $ | — | $ | — | $ | 10 | |||||||||
Mutual funds | 28 | — | — | — | 28 | ||||||||||||||
Derivative contracts: | |||||||||||||||||||
Congestion Revenue Rights | — | — | 137 | — | 137 | ||||||||||||||
Electricity | — | — | 17 | (10 | ) | 7 | |||||||||||||
Natural gas | — | 13 | — | (1 | ) | 12 | |||||||||||||
Tolling | — | — | 8 | — | 8 | ||||||||||||||
Subtotal of derivative contracts | — | 13 | 162 | (11 | ) | 164 | |||||||||||||
Long-term disability plan | 8 | — | — | — | 8 | ||||||||||||||
Nuclear decommissioning trusts: | |||||||||||||||||||
Stocks2 | 2,085 | — | — | — | 2,085 | ||||||||||||||
U.S. government and agency securities | 881 | 144 | — | — | 1,025 | ||||||||||||||
Municipal bonds | — | 592 | — | — | 592 | ||||||||||||||
Corporate bonds3 | — | 347 | — | — | 347 | ||||||||||||||
Short-term investments, primarily cash equivalents4 | 168 | 112 | — | — | 280 | ||||||||||||||
Subtotal of nuclear decommissioning trusts | 3,134 | 1,195 | — | — | 4,329 | ||||||||||||||
Total assets | 3,180 | 1,208 | 162 | (11 | ) | 4,539 | |||||||||||||
Liabilities at Fair Value | |||||||||||||||||||
Derivative contracts: | |||||||||||||||||||
Electricity | — | 2 | 6 | (1 | ) | 7 | |||||||||||||
Natural gas | — | 68 | — | (31 | ) | 37 | |||||||||||||
Tolling | — | — | 1,123 | — | 1,123 | ||||||||||||||
Subtotal of derivative contracts | — | 70 | 1,129 | (32 | ) | 1,167 | |||||||||||||
Total liabilities | — | 70 | 1,129 | (32 | ) | 1,167 | |||||||||||||
Net assets (liabilities) | $ | 3,180 | $ | 1,138 | $ | (967 | ) | $ | 21 | $ | 3,372 |
December 31, 2012 | |||||||||||||||||||
(in millions) | Level 1 | Level 2 | Level 3 | Netting and Collateral1 | Total | ||||||||||||||
Assets at Fair Value | |||||||||||||||||||
Money market funds | $ | 5 | $ | — | $ | — | $ | — | $ | 5 | |||||||||
Derivative contracts: | |||||||||||||||||||
Congestion Revenue Rights | — | — | 186 | — | 186 | ||||||||||||||
Electricity | — | — | 31 | (13 | ) | 18 | |||||||||||||
Natural gas | — | 8 | — | (2 | ) | 6 | |||||||||||||
Tolling | — | — | 4 | — | 4 | ||||||||||||||
Subtotal of derivative contracts | — | 8 | 221 | (15 | ) | 214 | |||||||||||||
Long-term disability plan | 8 | — | — | — | 8 | ||||||||||||||
Nuclear decommissioning trusts: | |||||||||||||||||||
Stocks2 | 2,271 | — | — | — | 2,271 | ||||||||||||||
Municipal bonds | — | 644 | — | — | 644 | ||||||||||||||
U.S. government and agency securities | 477 | 126 | — | — | 603 | ||||||||||||||
Corporate bonds3 | — | 410 | — | — | 410 | ||||||||||||||
Short-term investments, primarily cash equivalents4 | 121 | — | — | — | 121 | ||||||||||||||
Subtotal of nuclear decommissioning trusts | 2,869 | 1,180 | — | — | 4,049 | ||||||||||||||
Total assets | 2,882 | 1,188 | 221 | (15 | ) | 4,276 | |||||||||||||
Liabilities at Fair Value | |||||||||||||||||||
Derivative contracts: | |||||||||||||||||||
Electricity | — | 2 | 5 | (2 | ) | 5 | |||||||||||||
Natural gas | — | 113 | 2 | (60 | ) | 55 | |||||||||||||
Tolling | — | — | 1,005 | — | 1,005 | ||||||||||||||
Subtotal of derivative contracts | — | 115 | 1,012 | (62 | ) | 1,065 | |||||||||||||
Total liabilities | — | 115 | 1,012 | (62 | ) | 1,065 | |||||||||||||
Net assets (liabilities) | $ | 2,882 | $ | 1,073 | $ | (791 | ) | $ | 47 | $ | 3,211 |
1 | Represents the netting of assets and liabilities under master netting agreements and cash collateral across the levels of the fair value hierarchy. Netting among positions classified within the same level is included in that level. |
2 | Approximately 70% and 66% of SCE's equity investments were located in the United States at June 30, 2013 and December 31, 2012, respectively. |
3 | At June 30, 2013 and December 31, 2012, SCE's corporate bonds were diversified and included collateralized mortgage obligations and other asset backed securities of $58 million and $56 million, respectively. |
4 | Excludes net payables of $148 million and $1 million at June 30, 2013 and December 31, 2012, respectively, of interest and dividend receivables as well as receivables and payables related to SCE's pending securities sales and purchases. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Fair value of net liabilities at beginning of period | $ | (882 | ) | $ | (1,097 | ) | $ | (791 | ) | $ | (754 | ) | ||||
Total realized/unrealized gains (losses): | ||||||||||||||||
Included in regulatory assets and liabilities1 | (76 | ) | 341 | (158 | ) | (23 | ) | |||||||||
Purchases | 20 | 29 | 38 | 50 | ||||||||||||
Settlements | (29 | ) | (12 | ) | (56 | ) | (12 | ) | ||||||||
Fair value of net liabilities at end of period | $ | (967 | ) | $ | (739 | ) | $ | (967 | ) | $ | (739 | ) | ||||
Change during the period in unrealized losses related to assets and liabilities held at the end of the period | $ | (43 | ) | $ | 335 | $ | (125 | ) | $ | (8 | ) |
1 | Due to regulatory mechanisms, SCE's realized and unrealized gains and losses are recorded as regulatory assets and liabilities. |
Fair Value (in millions) | Significant | Range | ||||||||
June 30, 2013 | Assets | Liabilities | Valuation Technique(s) | Unobservable Input | (Weighted Average) | |||||
Electricity: | ||||||||||
Options | $ | 22 | $ | 7 | Option model | Volatility of gas prices | 23% - 32% (29%) | |||
Volatility of power prices | 28% - 81% (44%) | |||||||||
Power prices | $45.20 - $55.50 ($49.60) | |||||||||
Forwards | 1 | 5 | Discounted cash flow | Power prices | $23.90 - $49.30 ($40.20) | |||||
CRRs | 137 | — | Market simulation model | Load forecast | 7,597 MW - 26,612 MW | |||||
Power prices | $(13.90) - $226.75 | |||||||||
Gas prices | $2.95 - $7.78 | |||||||||
Tolling | 8 | 1,123 | Option model | Volatility of gas prices | 15% - 32% (20%) | |||||
Volatility of power prices | 25% - 81% (29%) | |||||||||
Power prices | $39.70 - $71.20 ($51.90) | |||||||||
Netting | (6 | ) | (6 | ) | ||||||
Total derivative contracts | $ | 162 | $ | 1,129 |
Fair Value (in millions) | Significant | Range | ||||||||
December 31, 2012 | Assets | Liabilities | Valuation Technique(s) | Unobservable Input | (Weighted Average) | |||||
Electricity: | ||||||||||
Options | $ | 40 | $ | 12 | Option model | Volatility of gas prices | 25% - 36% (33%) | |||
Volatility of power prices | 29% - 64% (42%) | |||||||||
Power prices | $41.70 - $59.20 ($47.00) | |||||||||
Forwards | 2 | 4 | Discounted cash flow | Power prices | $23.10 - $44.90 ($31.10) | |||||
CRRs | 186 | — | Market simulation model | Load forecast | 7,597 MW - 26,612 MW | |||||
Power prices | $(13.90) - $226.75 | |||||||||
Gas prices | $2.95 - $7.78 | |||||||||
Gas options | — | 2 | Option model | Volatility of gas prices | 28% - 36% (34%) | |||||
Tolling | 4 | 1,005 | Option model | Volatility of gas prices | 17% - 36% (22%) | |||||
Volatility of power prices | 26% - 64% (29%) | |||||||||
Power prices | $35.00 - $84.10 ($55.40) | |||||||||
Netting | (11 | ) | (11 | ) | ||||||
Total derivative contracts | $ | 221 | $ | 1,012 |
June 30, 2013 | December 31, 2012 | ||||||||||||||
(in millions) | Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||
SCE | $ | 9,227 | $ | 10,168 | $ | 8,828 | $ | 10,505 | |||||||
Edison International | 9,630 | 10,593 | 9,231 | 10,944 |
June 30, 2013 | ||||||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||
(in millions) | Short-Term | Long-Term | Subtotal | Short-Term | Long-Term | Subtotal | Net Liability | |||||||||||||||||||||
Commodity derivative contracts | ||||||||||||||||||||||||||||
Gross amounts recognized | $ | 106 | $ | 74 | $ | 180 | $ | 170 | $ | 1,035 | $ | 1,205 | $ | 1,025 | ||||||||||||||
Gross amounts offset in the consolidated balance sheets | (15 | ) | (1 | ) | (16 | ) | (15 | ) | (1 | ) | (16 | ) | — | |||||||||||||||
Cash collateral posted1 | — | — | — | (15 | ) | (7 | ) | (22 | ) | (22 | ) | |||||||||||||||||
Net amounts presented in the consolidated balance sheets | $ | 91 | $ | 73 | $ | 164 | $ | 140 | $ | 1,027 | $ | 1,167 | $ | 1,003 |
December 31, 2012 | ||||||||||||||||||||||||||||
Derivative Assets | Derivative Liabilities | |||||||||||||||||||||||||||
(in millions) | Short-Term | Long-Term | Subtotal | Short-Term | Long-Term | Subtotal | Net Liability | |||||||||||||||||||||
Commodity derivative contracts | ||||||||||||||||||||||||||||
Gross amounts recognized | $ | 151 | $ | 91 | $ | 242 | $ | 186 | $ | 954 | $ | 1,140 | $ | 898 | ||||||||||||||
Gross amounts offset in the consolidated balance sheets | (22 | ) | (6 | ) | (28 | ) | (22 | ) | (6 | ) | (28 | ) | — | |||||||||||||||
Cash collateral posted1 | — | — | — | (38 | ) | (9 | ) | (47 | ) | (47 | ) | |||||||||||||||||
Net amounts presented in the consolidated balance sheets | $ | 129 | $ | 85 | $ | 214 | $ | 126 | $ | 939 | $ | 1,065 | $ | 851 |
1 | In addition, SCE has posted $8 million of collateral that is not offset against the derivative liabilities and is reflected in "Other current assets" on both the June 30, 2013 and December 31, 2012 consolidated balance sheets. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Realized losses | $ | (7 | ) | $ | (67 | ) | $ | (23 | ) | $ | (122 | ) | ||||
Unrealized gains (losses) | (64 | ) | 423 | (118 | ) | 62 |
Economic Hedges | |||||
Commodity | Unit of Measure | June 30, 2013 | December 31, 2012 | ||
Electricity options, swaps and forwards | GWh | 11,460 | 15,884 | ||
Natural gas options, swaps and forwards | Bcf | 38 | 100 | ||
Congestion revenue rights | GWh | 124,973 | 149,774 | ||
Tolling arrangements | GWh | 99,926 | 101,485 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Edison International: | |||||||||||||||
Income (loss) from continuing operations before income taxes | $ | (184 | ) | $ | 307 | $ | 199 | $ | 593 | ||||||
Provision for income tax at federal statutory rate of 35% | (64 | ) | 107 | 70 | 207 | ||||||||||
Increase (decrease) in income tax from: | |||||||||||||||
State tax, net of federal benefit | (20 | ) | 8 | (17 | ) | 14 | |||||||||
Property-related | (22 | ) | (10 | ) | (64 | ) | (19 | ) | |||||||
Uncertain tax positions | 11 | — | 18 | 1 | |||||||||||
Other | (7 | ) | (5 | ) | (11 | ) | (11 | ) | |||||||
Total income tax expense (benefit) from continuing operations | $ | (102 | ) | $ | 100 | $ | (4 | ) | $ | 192 | |||||
Effective tax rate | * | 32.6 | % | * | 32.4 | % | |||||||||
SCE: | |||||||||||||||
Income (loss) from continuing operations before income taxes | $ | (166 | ) | $ | 322 | $ | 229 | $ | 622 | ||||||
Provision for income tax at federal statutory rate of 35% | (58 | ) | 113 | 80 | 218 | ||||||||||
Increase (decrease) in income tax from: | |||||||||||||||
State tax, net of federal benefit | (23 | ) | 10 | (9 | ) | 20 | |||||||||
Property-related | (22 | ) | (10 | ) | (64 | ) | (20 | ) | |||||||
Uncertain tax positions | 11 | (1 | ) | 17 | — | ||||||||||
Other | (7 | ) | (4 | ) | (11 | ) | (10 | ) | |||||||
Total income tax expense (benefit) from continuing operations | $ | (99 | ) | $ | 108 | $ | 13 | $ | 208 | ||||||
Effective tax rate | * | 33.5 | % | 5.7 | % | 33.4 | % |
* | Not meaningful |
• | A proposed adjustment increasing the taxable gain on the 2004 sale of EME's international assets, which if sustained, would result in a federal tax payment of approximately $203 million, including interest and penalties through June 30, 2013 (the IRS has asserted a 40% penalty for understatement of tax liability related to this matter). |
• | A proposed adjustment to disallow a component of SCE's repair allowance deduction, which if sustained, would result in a federal tax payment of approximately $98 million, including interest through June 30, 2013. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Edison International: | |||||||||||||||
Service cost | $ | 38 | $ | 39 | $ | 76 | $ | 77 | |||||||
Interest cost | 42 | 45 | 84 | 91 | |||||||||||
Expected return on plan assets | (57 | ) | (55 | ) | (114 | ) | (111 | ) | |||||||
Settlement costs | 49 | — | 49 | — | |||||||||||
Amortization of prior service cost | 1 | 1 | 2 | 2 | |||||||||||
Amortization of net loss1 | 15 | 16 | 30 | 33 | |||||||||||
Expense under accounting standards | $ | 88 | $ | 46 | $ | 127 | $ | 92 | |||||||
Regulatory adjustment (deferred) | (31 | ) | 27 | (14 | ) | 54 | |||||||||
Total expense recognized | $ | 57 | $ | 73 | $ | 113 | $ | 146 | |||||||
SCE: | |||||||||||||||
Service cost | $ | 37 | $ | 37 | $ | 74 | $ | 74 | |||||||
Interest cost | 41 | 45 | 82 | 90 | |||||||||||
Expected return on plan assets | (57 | ) | (55 | ) | (114 | ) | (110 | ) | |||||||
Settlement costs | 48 | — | 48 | — | |||||||||||
Amortization of prior service cost | 1 | 1 | 2 | 2 | |||||||||||
Amortization of net loss1 | 14 | 15 | 28 | 30 | |||||||||||
Expense under accounting standards | $ | 84 | $ | 43 | $ | 120 | $ | 86 | |||||||
Regulatory adjustment (deferred) | (31 | ) | 27 | (14 | ) | 54 | |||||||||
Total expense recognized | $ | 53 | $ | 70 | $ | 106 | $ | 140 |
1 | Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was $4 million and $3 million for the three months ended June 30, 2013, respectively, and $7 million and $5 million for the six months ended June 30, 2013, respectively. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Edison International: | |||||||||||||||
Service cost | $ | 14 | $ | 12 | $ | 28 | $ | 24 | |||||||
Interest cost | 26 | 29 | 52 | 57 | |||||||||||
Expected return on plan assets | (30 | ) | (27 | ) | (60 | ) | (54 | ) | |||||||
Special termination benefits1 | 10 | — | 10 | — | |||||||||||
Amortization of prior service credit | (9 | ) | (9 | ) | (18 | ) | (18 | ) | |||||||
Amortization of net loss2 | 7 | 11 | 14 | 23 | |||||||||||
Total expense | $ | 18 | $ | 16 | $ | 26 | $ | 32 | |||||||
SCE: | |||||||||||||||
Service cost | $ | 14 | $ | 12 | $ | 27 | $ | 24 | |||||||
Interest cost | 26 | 28 | 52 | 56 | |||||||||||
Expected return on plan assets | (30 | ) | (27 | ) | (60 | ) | (54 | ) | |||||||
Special termination benefits1 | 10 | — | 10 | — | |||||||||||
Amortization of prior service credit | (9 | ) | (9 | ) | (18 | ) | (18 | ) | |||||||
Amortization of net loss2 | 7 | 11 | 14 | 22 | |||||||||||
Total expense | $ | 18 | $ | 15 | $ | 25 | $ | 30 |
1 | Due to the reduction in workforce, SCE has incurred costs for extended retiree health care coverage. |
2 | Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was less than $1 million and zero for the three- and six-months ended June 30, 2013, respectively. |
(in millions) | ||||
Balance at January 1, 2013 | $ | 104 | ||
Additions | 109 | |||
Payments | (88 | ) | ||
Balance at June 30, 2013 | $ | 125 |
• | Approximately $860 million of SCE's authorized revenue requirement collected since January 1, 2012 (subject to refund) associated with operating and maintenance expenses, and depreciation and return on SCE's investment in Unit 2, Unit 3 and common plant. In June 2013, SCE recorded approximately $56 million in severance costs associated with its decision to retire both Units. Until funding of post June 6, 2013 activities related to the permanent closure of the plant is transitioned from base rates to SCE's nuclear decommissioning trusts set up for that purpose, SCE will continue to record these costs through the San Onofre OII memorandum account, subject to refund. |
• | At May 31, 2013, SCE's net investment associated with San Onofre was $2.1 billion, including net book value of remaining property, plant and equipment, construction work-in-progress, nuclear fuel inventory and materials and supplies. |
• | In 2005, the CPUC authorized expenditures of approximately $525 million ($665 million based on SCE's estimate after adjustment for inflation using the Handy-Whitman Index) for SCE's 78.21% share of the costs to purchase and install the four new steam generators in Units 2 and 3 and remove and dispose of their predecessors. SCE has spent $602 million through June 30, 2013 on the steam generator replacement project, not including inspection, testing and repair costs subsequent to the replacement steam generator leak in Unit 3. |
• | As a result of outages associated with the steam generator inspection and repair, electric power and capacity normally provided by San Onofre were purchased in the market by SCE. These market power costs will be reviewed as part of the CPUC's OII proceeding. Estimated market power costs calculated in accordance with the OII methodology were approximately $670 million as of May 31, 2013, excluding avoided nuclear fuel costs of approximately $138 million which are no longer included as a reduction due to SCE's decision to permanently retire Units 2 and 3. Such amount includes costs of approximately $65 million associated with planned outage periods. SCE believes that such costs should be excluded as they would have been incurred even had the replacement steam generators performed as expected. The CPUC will ultimately determine a final methodology for estimating market power costs as it continues its review of the issues in the OII. Future market power costs are uncertain. |
• | Through June 30, 2013, SCE's share of incremental inspection and repair costs totaled $115 million for both Units (not including payments made by MHI as described below). SCE recorded its share of payments made to date by MHI ($36 million) as a reduction of incremental inspection and repair costs in 2012. |
• | Reclassified $1,521 million of its total investment in San Onofre at May 31, 2013 as described above to a regulatory asset (“San Onofre Regulatory Asset”) based on management's conclusion it is probable, though not certain, that such costs will be recoverable through future rates. Included in the San Onofre Regulatory Asset is approximately $404 million of property, plant and equipment, including construction work in progress, that is expected to support ongoing activities at the site. In addition, to the extent the San Onofre Regulatory Asset includes excess nuclear fuel and material and supplies, SCE will, if possible, sell such excess amounts to third parties and reduce the amount of the regulatory asset by such proceeds. |
• | Recorded an impairment charge of $575 million ($365 million after tax) in the second quarter of 2013. |
Longest Maturity Dates | Amortized Cost | Fair Value | |||||||||||||||
(in millions) | June 30, 2013 | December 31, 2012 | June 30, 2013 | December 31, 2012 | |||||||||||||
Stocks | — | $ | 728 | $ | 978 | $ | 2,085 | $ | 2,271 | ||||||||
Municipal bonds | 2051 | 504 | 518 | 592 | 644 | ||||||||||||
U.S. government and agency securities | 2043 | 975 | 547 | 1,025 | 603 | ||||||||||||
Corporate bonds | 2054 | 293 | 324 | 347 | 410 | ||||||||||||
Short-term investments, primarily cash equivalents | One-year | 274 | 117 | 280 | 121 | ||||||||||||
Total investments | 2,774 | 2,484 | 4,329 | 4,049 | |||||||||||||
Net payables | (148 | ) | (1 | ) | (148 | ) | (1 | ) | |||||||||
Total nuclear decommissioning trusts | $ | 2,626 | $ | 2,483 | $ | 4,181 | $ | 4,048 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Balance at beginning of period | $ | 4,246 | $ | 3,853 | $ | 4,048 | $ | 3,592 | |||||||
Gross realized gains | 137 | 15 | 142 | 40 | |||||||||||
Gross realized losses | (1 | ) | (1 | ) | (2 | ) | (5 | ) | |||||||
Unrealized gains (losses), net | (185 | ) | (67 | ) | (9 | ) | 116 | ||||||||
Other-than-temporary impairments | (21 | ) | (19 | ) | (29 | ) | (23 | ) | |||||||
Interest, dividends, contributions and other | 5 | 29 | 31 | 90 | |||||||||||
Balance at end of period | $ | 4,181 | $ | 3,810 | $ | 4,181 | $ | 3,810 |
(in millions) | June 30, 2013 | December 31, 2012 | |||||
Current: | |||||||
Regulatory balancing accounts | $ | 709 | $ | 502 | |||
Energy derivatives | 94 | 70 | |||||
Total Current | 803 | 572 | |||||
Long-term: | |||||||
Deferred income taxes, net | 2,759 | 2,663 | |||||
Pensions and other postretirement benefits | 1,119 | 1,550 | |||||
Energy derivatives | 990 | 900 | |||||
Unamortized investments, net | 363 | 507 | |||||
San Onofre | 1,584 | — | |||||
Unamortized loss on reacquired debt | 218 | 228 | |||||
Nuclear-related investment, net | 35 | 141 | |||||
Regulatory balancing accounts | 78 | 73 | |||||
Other | 348 | 360 | |||||
Total Long-term | 7,494 | 6,422 | |||||
Total Regulatory Assets | $ | 8,297 | $ | 6,994 |
(in millions) | June 30, 2013 | December 31, 2012 | |||||
Current: | |||||||
Regulatory balancing accounts | $ | 443 | $ | 484 | |||
Other | 50 | 52 | |||||
Total Current | 493 | 536 | |||||
Long-term: | |||||||
Costs of removal | 2,791 | 2,731 | |||||
Asset Retirement Obligations | 853 | 1,385 | |||||
Regulatory balancing accounts | 1,183 | 1,091 | |||||
Other | 9 | 7 | |||||
Total Long-term | 4,836 | 5,214 | |||||
Total Regulatory Liabilities | $ | 5,329 | $ | 5,750 |
Three months ended June 30, 2013 | Six months ended June 30, 2013 | ||||||
(in millions) | Pension and PBOP – Net Loss | ||||||
Balance at beginning of period | $ | (87 | ) | $ | (87 | ) | |
Other comprehensive loss before reclassifications | — | (2 | ) | ||||
Amounts reclassified from accumulated other comprehensive loss1 | 5 | 7 | |||||
Net current-period other comprehensive loss | 5 | 5 | |||||
Balance at end of period | $ | (82 | ) | $ | (82 | ) | |
Reclassifications from accumulated other comprehensive loss: | |||||||
Amortization of net loss included in net income | $ | 6 | $ | 9 | |||
Tax expense | 1 | 2 | |||||
Total reclassification, net of tax | $ | 5 | $ | 7 |
1 | These items are included in the computation of net periodic pension and PBOP expense. See Note 8 for additional information. |
Three months ended June 30, 2013 | Six months ended June 30, 2013 | ||||||
(in millions) | Pension and PBOP – Net Loss | ||||||
Balance at beginning of period | $ | (32 | ) | $ | (29 | ) | |
Other comprehensive loss before reclassifications | — | (4 | ) | ||||
Amounts reclassified from accumulated other comprehensive loss1 | 2 | 3 | |||||
Net current-period other comprehensive loss | 2 | (1 | ) | ||||
Balance at end of period | $ | (30 | ) | $ | (30 | ) | |
Reclassifications from accumulated other comprehensive loss: | |||||||
Amortization of net loss included in net income | $ | 3 | $ | 5 | |||
Tax expense | 1 | 2 | |||||
Total reclassification, net of tax | $ | 2 | $ | 3 |
1 | These items are included in the computation of net periodic pension and PBOP expense. See Note 8 for additional information. |
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
SCE's interest and other income: | ||||||||||||||||
Equity allowance for funds used during construction | $ | 18 | $ | 27 | $ | 39 | $ | 47 | ||||||||
Increase in cash surrender value of life insurance policies | 7 | 7 | 14 | 14 | ||||||||||||
Interest income | 4 | 2 | 6 | 3 | ||||||||||||
Other | 1 | 2 | 2 | 6 | ||||||||||||
Total SCE's interest and other income | 30 | 38 | 61 | 70 | ||||||||||||
Edison International Parent and Other income | 4 | 2 | 2 | 3 | ||||||||||||
Total Edison International interest and other income | $ | 34 | $ | 40 | $ | 63 | $ | 73 | ||||||||
SCE's other expenses: | ||||||||||||||||
Civic, political and related activities and donations | $ | 9 | $ | 10 | $ | 15 | $ | 17 | ||||||||
Other | 5 | 9 | 6 | 9 | ||||||||||||
Total SCE's other expenses | 14 | 19 | 21 | 26 | ||||||||||||
Edison International Parent and Other other expenses | — | — | — | — | ||||||||||||
Total Edison International other expenses | $ | 14 | $ | 19 | $ | 21 | $ | 26 |
• | Edison International would cease to own EME when EME emerges from bankruptcy pursuant to a plan or reorganization. |
• | The tax allocation agreements with respect to EME would be extended through the earlier of the effective date of a plan of reorganization or December 31, 2014, and EME would remain bound to perform its obligations under such agreements. |
• | Edison International and EME would continue to provide ongoing shared services to each other in the ordinary course, consistent with the same terms and conditions on which those services have been provided in the past. |
• | Upon effectiveness of EME's plan of reorganization, Edison International would assume certain of EME's employee retirement related liabilities. |
• | Edison International, EME and the Consenting Noteholders who had signed the Support Agreement would exchange releases of claims, and EME and Edison International would cross-indemnify one another against liabilities arising from the conduct of their separate businesses. |
Edison International | SCE | ||||||||||||||
Six months ended June 30, | |||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Cash payments (receipts) for interest and taxes: | |||||||||||||||
Interest, net of amounts capitalized | $ | 213 | $ | 194 | $ | 205 | $ | 194 | |||||||
Tax payments (refunds), net | 26 | 1 | 17 | (2 | ) | ||||||||||
Non-cash financing and investing activities: | |||||||||||||||
Dividends declared but not paid: | |||||||||||||||
Common stock | $ | 110 | $ | 106 | $ | — | $ | — | |||||||
Preferred and preference stock | 29 | 34 | 29 | 34 |
• | ability of SCE to recover its costs in a timely manner from its customers through regulated rates, including regulatory assets related to San Onofre; |
• | decisions and other actions by the CPUC, the FERC, the NRC and other regulatory authorities and delays in regulatory actions; |
• | the ability of Edison International or its subsidiaries to borrow funds and access the capital markets on reasonable terms; |
• | possible customer bypass or departure due to technological advancements or cumulative rate impacts that make self-generation or use of alternative energy sources economically viable; |
• | risks inherent in the construction of transmission and distribution infrastructure replacement and expansion projects, including those related to project site identification, public opposition, environmental mitigation, construction, permitting, power curtailment costs (payments due under power contracts in the event there is insufficient transmission to enable the acceptance of power delivery), and governmental approvals; |
• | risks associated with the operation of transmission and distribution assets and nuclear and other power generating facilities including: nuclear fuel storage issues, public safety issues, the failure, availability, efficiency, and output of equipment, the cost of repairs and retrofits of equipment, and availability and cost of spare parts; |
• | physical security of our critical assets and personnel and the cyber security of our critical information technology systems for grid control, and business and customer data; |
• | cost and availability of electricity, including the ability to procure sufficient resources to meet expected customer needs to replace power and voltage support that would have been provided by San Onofre or in the event of other power plant and/or transmission outages or significant counterparty defaults under power-purchase agreements; |
• | environmental laws and regulations, at both the state and federal levels, or changes in the application of those laws, that could require additional expenditures or otherwise affect the cost and manner of doing business; |
• | risk that the costs incurred in connection with the steam generators at Unit 2 and/or Unit 3 at San Onofre, as well as other costs incurred due to the outages may not be recoverable from SCE's supplier or insurance coverage; |
• | the termination of the Support Agreement related to the EME bankruptcy; |
• | changes in the fair value of investments and other assets; |
• | changes in interest rates and rates of inflation, including escalation rates, which may be adjusted by public utility regulators; |
• | governmental, statutory, regulatory or administrative changes or initiatives affecting the electricity industry, including the market structure rules applicable to each market and price mitigation strategies adopted by the California Independent System Operator, Regional Transmission Organizations, and adjoining regions; |
• | availability and creditworthiness of counterparties and the resulting effects on liquidity in the power and fuel markets and/or the ability of counterparties to pay amounts owed in excess of collateral provided in support of their obligations; |
• | cost and availability of labor, equipment and materials; |
• | ability to obtain sufficient insurance, including insurance relating to SCE's nuclear facilities and wildfire-related liability, and to recover the costs of such insurance or in the absence of insurance the ability to recover uninsured losses; |
• | effects of legal proceedings, changes in or interpretations of tax laws, rates or policies; |
• | potential for penalties or disallowances caused by non-compliance with applicable laws and regulations; |
• | cost and availability of fuel for generating facilities and related transportation to the extent not recovered through regulated rate cost escalation provisions or balancing accounts; |
• | cost and availability of emission credits or allowances for emission credits; |
• | risk that competing transmission systems will be built by merchant transmission providers in SCE's service area; and |
• | weather conditions and natural disasters. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||||||||||
(in millions) | 2013 | 2012 | Change | 2013 | 2012 | Change | |||||||||||||||||
Net Income (Loss) attributable to Edison International | |||||||||||||||||||||||
Continuing operations | |||||||||||||||||||||||
SCE | $ | (91 | ) | $ | 191 | $ | (282 | ) | $ | 165 | $ | 373 | $ | (208 | ) | ||||||||
Edison International Parent and Other | (15 | ) | (8 | ) | (7 | ) | (13 | ) | (13 | ) | — | ||||||||||||
Discontinued operations | 12 | (109 | ) | 121 | 24 | (193 | ) | 217 | |||||||||||||||
Edison International | (94 | ) | 74 | (168 | ) | 176 | 167 | 9 | |||||||||||||||
Less: Non-Core Items | |||||||||||||||||||||||
SCE - asset impairment | (365 | ) | — | (365 | ) | (365 | ) | — | (365 | ) | |||||||||||||
Edison International Parent and Other | — | — | — | 7 | — | 7 | |||||||||||||||||
Discontinued operations | 12 | (109 | ) | 121 | 24 | (193 | ) | 217 | |||||||||||||||
Total Non-Core Items | (353 | ) | (109 | ) | (244 | ) | (334 | ) | (193 | ) | (141 | ) | |||||||||||
Core Earnings (Losses) | |||||||||||||||||||||||
SCE | 274 | 191 | 83 | 530 | 373 | 157 | |||||||||||||||||
Edison International Parent and Other | (15 | ) | (8 | ) | (7 | ) | (20 | ) | (13 | ) | (7 | ) | |||||||||||
Edison International | $ | 259 | $ | 183 | $ | 76 | $ | 510 | $ | 360 | $ | 150 |
• | An impairment charge of $575 million ($365 million after tax) in the second quarter of 2013 related to the permanent retirement of San Onofre Units 2 and 3. |
• | An income tax benefit of $7 million from reduction in state income taxes related to the sale of Edison Capital's interest in Unit No. 2 of the Beaver Valley Power plant. The sale of Edison Capital's lease interest was completed in 2012, however, the final determination of state income taxes paid was not completed until the first quarter of 2013 which resulted in a change in the estimate of state income taxes due. |
• | An income tax benefit of $12 million and $24 million for the second quarter and year-to-date, respectively, from a revised estimate of the tax impact of expected future tax deconsolidation and separation of EME from Edison International. Edison International continues to consolidate EME for federal and certain combined state tax returns. Changes in the amount of tax attributes during the first and second quarter of 2013 affected income taxes of discontinued operations. Such benefits may or may not continue in future periods. |
• | Approximately $860 million of SCE's authorized revenue requirement collected since January 1, 2012 (subject to refund) associated with operating and maintenance expenses, and depreciation and return on SCE's investment in Unit 2, Unit 3 and common plant. In June 2013, SCE recorded approximately $56 million in severance costs associated with its decision to retire both Units. Until funding of post June 6, 2013 activities related to the permanent closure of the plant is transitioned from base rates to SCE's nuclear decommissioning trusts set up for that purpose, SCE will continue to record these costs through the San Onofre OII memorandum account, subject to refund. |
• | At May 31, 2013, SCE's net investment associated with San Onofre is set forth in the following table: |
(in millions) | Unit 2 | Unit 3 | Common Plant | Total | |||||||||||
Net investment1 | $ | 606 | $ | 430 | $ | 259 | $ | 1,295 | |||||||
Materials and supplies | — | — | 100 | 100 | |||||||||||
Construction work in progress | 25 | 99 | 106 | 230 | |||||||||||
Nuclear fuel | 153 | 216 | 102 | 471 | |||||||||||
Total investment | $ | 784 | $ | 745 | $ | 567 | $ | 2,096 |
1 | Includes net book value of the replacement steam generators of $542 million. |
• | In 2005, the CPUC authorized expenditures of approximately $525 million ($665 million based on SCE's estimate after adjustment for inflation using the Handy-Whitman Index) for SCE's 78.21% share of the costs to purchase and install the four new steam generators in Units 2 and 3 and remove and dispose of their predecessors. SCE has spent $602 million through June 30, 2013 on the steam generator replacement project, not including inspection, testing and repair costs subsequent to the replacement steam generator leak in Unit 3. |
• | As a result of outages associated with the steam generator inspection and repair, electric power and capacity normally provided by San Onofre were purchased in the market by SCE. These market power costs will be reviewed as part of the CPUC's OII proceeding. Estimated market power costs calculated in accordance with the OII methodology were approximately $670 million as of May 31, 2013, excluding avoided nuclear fuel costs of approximately $138 million which are no longer included as a reduction due to SCE's decision to permanently retire Units 2 and 3. Such amount includes costs of approximately $65 million associated with planned outage periods. SCE believes that such costs should be excluded as they would have been incurred even had the replacement steam generators performed as expected. The CPUC will ultimately determine a final methodology for estimating market power costs as it continues its review of the issues in the OII. Future market power costs are uncertain. |
• | Through June 30, 2013, SCE's share of incremental inspection and repair costs totaled $115 million for both Units (not including payments made by MHI as described below). SCE recorded its share of payments made to date by MHI ($36 million) as a reduction of incremental inspection and repair costs in 2012. |
• | Reclassified $1,521 million of its total investment in San Onofre at May 31, 2013 as described above to a regulatory asset (“San Onofre Regulatory Asset”) based on management's conclusion it is probable, though not certain, that such costs will be recoverable through future rates. Included in the San Onofre Regulatory Asset is approximately $404 million of property, plant and equipment, including construction work in progress, that is expected to support ongoing activities at the site. In addition, to the extent the San Onofre Regulatory Asset includes excess nuclear fuel and material and supplies, SCE will, if possible, sell such excess amounts to third parties and reduce the amount of the regulatory asset by such proceeds. |
• | Recorded an impairment charge of $575 million ($365 million after tax) in the second quarter of 2013. |
• | Utility earning activities – representing revenue authorized by the CPUC and FERC which is intended to provide SCE a reasonable opportunity to recover its costs and earn a return on its net investment in generation, transmission and distribution assets. The annual revenue requirements are comprised of authorized operation and maintenance costs, depreciation, taxes and a return consistent with the capital structure. Also, included in utility earnings activities are revenues or penalties related to incentive mechanisms, other operating revenue, and regulatory charges or disallowances, if any. |
• | Utility cost-recovery activities – representing CPUC- and FERC-authorized balancing accounts which allow for recovery of specific project or program costs, subject to reasonableness review or compliance with upfront standards. Utility cost-recovery activities include rates which provide recovery, subject to reasonableness review of, among other things, fuel costs, purchased power costs, public purpose related-program costs (including energy efficiency and demand-side management programs), certain operation and maintenance expenses and nuclear decommissioning expenses. |
Three months ended June 30, 2013 | Three months ended June 30, 2012 | |||||||||||||||||
(in millions) | Utility Earning Activities | Utility Cost- Recovery Activities | Total Consolidated | Utility Earning Activities | Utility Cost- Recovery Activities | Total Consolidated | ||||||||||||
Operating revenue | $ | 1,617 | $ | 1,428 | $ | 3,045 | $ | 1,488 | $ | 1,163 | $ | 2,651 | ||||||
Fuel and purchased power | — | 1,157 | 1,157 | — | 883 | 883 | ||||||||||||
Operation and maintenance | 608 | 271 | 879 | 591 | 275 | 866 | ||||||||||||
Depreciation, decommissioning and amortization | 417 | — | 417 | 399 | — | 399 | ||||||||||||
Property taxes and other | 72 | — | 72 | 73 | — | 73 | ||||||||||||
Asset impairment | 575 | — | 575 | — | — | — | ||||||||||||
Total operating expenses | 1,672 | 1,428 | 3,100 | 1,063 | 1,158 | 2,221 | ||||||||||||
Operating income (loss) | (55 | ) | — | (55 | ) | 425 | 5 | 430 | ||||||||||
Interest income and other | 16 | — | 16 | 19 | — | 19 | ||||||||||||
Interest expense | (127 | ) | — | (127 | ) | (122 | ) | (5 | ) | (127 | ) | |||||||
Income (loss) before income taxes | (166 | ) | — | (166 | ) | 322 | — | 322 | ||||||||||
Income tax expense | (99 | ) | — | (99 | ) | 108 | — | 108 | ||||||||||
Net income (loss) | (67 | ) | — | (67 | ) | 214 | — | 214 | ||||||||||
Dividends on preferred and preference stock | 24 | — | 24 | 23 | — | 23 | ||||||||||||
Net income available for common stock | $ | (91 | ) | $ | — | $ | (91 | ) | $ | 191 | $ | — | $ | 191 | ||||
Core Earnings1 | $ | 274 | $ | 191 | ||||||||||||||
Non-Core Earnings | (365 | ) | — | |||||||||||||||
Total SCE GAAP Earnings | $ | (91 | ) | $ | 191 |
1 | See use of non-GAAP financial measures in "Management Overview—Highlights of Operating Results." |
• | Higher operating revenue of $129 million primarily due to the following: |
• | The timing of finalizing the 2012 CPUC GRC. During the second quarter of 2012, pending the outcome of the 2012 GRC, SCE recognized GRC-related revenue based on the 2011 authorized revenue requirement. In the fourth quarter of 2012, SCE implemented its 2012 GRC which allowed SCE to recover its revenue requirement retroactive to January 1, 2012. The estimated revenue attributable to the second quarter of 2012 was $87 million. |
• | An increase of approximately $40 million in revenue during the second quarter of 2013 for SCE's return on its investment resulting from rate base growth and operating costs partially offset by a lower CPUC-adopted 2013 return on common equity and EdisonSmartConnect® revenue (see "Liquidity and Capital Resources—SCE—Regulatory Proceedings—2013 Cost of Capital Application" for further information). |
• | Higher operation and maintenance expense of $17 million primarily due to: |
• | $61 million of accrued severance costs for planned workforce reductions, |
• | $22 million decrease in incremental inspection and repairs costs at San Onofre, and |
• | $21 million lower operations and maintenance due to the full deployment of the EdisonSmartConnect® program in 2012. |
• | Higher depreciation, decommissioning and amortization expense of $18 million was primarily related to increased generation, transmission and distribution investments and capitalized software costs. |
• | Asset impairment charge of $575 million related to the permanent retirement of San Onofre. See "—San Onofre Outage, Inspection and Retirement" above for more information. |
• | Interest income and other included lower AFUDC equity due to lower rates and construction work in process balances in 2013 offset by lower other expenses in 2013. See "Notes to Consolidated Financial Statements—Note 15. Interest and Other Income and Other Expenses." |
• | The income tax benefit was primarily due to a net loss driven by the San Onofre impairment. See "—Income Taxes" below for more information. |
• | Higher fuel and purchased power expense of $274 million was primarily driven by increased load related to warmer weather experienced in 2013 relative to 2012 and higher power and gas prices experienced in 2013 relative to 2012. |
Six months ended June 30, 2013 | Six months ended June 30, 2012 | |||||||||||||||||
(in millions) | Utility Earning Activities | Utility Cost- Recovery Activities | Total Consolidated | Utility Earning Activities | Utility Cost- Recovery Activities | Total Consolidated | ||||||||||||
Operating revenue | $ | 3,167 | $ | 2,507 | $ | 5,674 | $ | 2,967 | $ | 2,096 | $ | 5,063 | ||||||
Fuel and purchased power | — | 2,009 | 2,009 | — | 1,575 | 1,575 | ||||||||||||
Operation and maintenance | 1,167 | 498 | 1,665 | 1,201 | 516 | 1,717 | ||||||||||||
Depreciation, decommissioning and amortization | 832 | — | 832 | 788 | — | 788 | ||||||||||||
Property taxes and other | 151 | — | 151 | 156 | — | 156 | ||||||||||||
Asset impairment | 575 | — | 575 | — | — | — | ||||||||||||
Total operating expenses | 2,725 | 2,507 | 5,232 | 2,145 | 2,091 | 4,236 | ||||||||||||
Operating income | 442 | — | 442 | 822 | 5 | 827 | ||||||||||||
Interest income and other | 40 | — | 40 | 44 | — | 44 | ||||||||||||
Interest expense | (253 | ) | — | (253 | ) | (244 | ) | (5 | ) | (249 | ) | |||||||
Income before income taxes | 229 | — | 229 | 622 | — | 622 | ||||||||||||
Income tax expense | 13 | — | 13 | 208 | — | 208 | ||||||||||||
Net income | 216 | — | 216 | 414 | — | 414 | ||||||||||||
Dividends on preferred and preference stock | 51 | — | 51 | 41 | — | 41 | ||||||||||||
Net income available for common stock | $ | 165 | $ | — | $ | 165 | $ | 373 | $ | — | $ | 373 | ||||||
Core Earnings1 | $ | 530 | $ | 373 | ||||||||||||||
Non-Core Earnings | (365 | ) | — | |||||||||||||||
Total SCE GAAP Earnings | $ | 165 | $ | 373 |
1 | See use of non-GAAP financial measures in "Management Overview—Highlights of Operating Results." |
• | Higher operating revenue of $200 million primarily due to the following: |
• | The timing of finalizing the 2012 CPUC GRC. During the first six months of 2012, pending the outcome of the 2012 GRC, SCE recognized GRC-related revenue based on the 2011 authorized revenue requirement. In the fourth quarter of 2012, SCE implemented its 2012 GRC which allowed SCE to recover its revenue requirement retroactive to January 1, 2012. The estimated revenue attributable to the first six months of 2012 was $167 million. |
• | An increase of approximately $70 million in revenue during the first six months of 2013 for SCE's return on its investment resulting from rate base growth and operating costs partially offset by a lower CPUC-adopted 2013 return on common equity and EdisonSmartConnect® revenue (see "Liquidity and Capital Resources—SCE—Regulatory Proceedings—2013 Cost of Capital Application" for further information). |
• | Revenue recognized in 2012 related to the San Onofre Unit 2 scheduled outage. |
• | Lower operation and maintenance expense of $34 million primarily due to: |
• | $40 million lower operations and maintenance due to the full deployment of the EdisonSmartConnect® program in 2012, |
• | $35 million of costs incurred in 2012 for the San Onofre Unit 2 scheduled outage which were not incurred in 2013, |
• | $35 million decrease in incremental inspection and repairs costs during the first six months of 2013 compared to the first six months of 2012, and |
• | $76 million offset by accrued severance costs. Accrued severance costs included $52 million that impacted earnings with the remaining amount related to the permanent retirement of San Onofre as described above. |
• | Higher depreciation, decommissioning and amortization expense of $44 million was primarily related to increased generation, transmission and distribution investments and capitalized software costs. |
• | Asset impairment charge of $575 million related to the permanent retirement of San Onofre. See "—San Onofre Outage, Inspection and Retirement" above for more information. |
• | Interest income and other included lower AFUDC equity due to lower rates and construction work in process balances in 2013 offset by lower other expenses in 2013. See "Notes to Consolidated Financial Statements—Note 15 Interest and Other Income and Other Expenses." |
• | Lower income taxes primarily due to lower pre-tax income driven by the San Onofre impairment charge. See "—Income Taxes" below for more information. |
• | Higher preferred and preference stock dividends related to new issuances in 2012 and 2013 partially offset by redemptions. |
• | Higher fuel and purchased power expense of $434 million was primarily driven by increased load related to warmer weather experienced in 2013 relative to 2012 and higher power and gas prices in 2013. |
• | Lower operation and maintenance expense of $18 million primarily due to lower employee benefit costs, primarily related to pension costs, and transmission access charges, partially offset by greenhouse gas emissions associated with utility owned-generation in 2013. |
• | A sales volume increase of $176 million and $67 million for the three- and six-month periods, respectively, due to higher load requirements related to warmer weather in 2013 relative to 2012. |
• | A rate increase of $52 million and $148 million for the three- and six-month periods, respectively, due to the implementation of the 2012 GRC decision. |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
(in millions) | 2013 | 2012 | 2013 | 2012 | |||||||||||
Income (loss) from continuing operations before income taxes | $ | (166 | ) | $ | 322 | $ | 229 | $ | 622 | ||||||
Provision for income tax at federal statutory rate of 35% | (58 | ) | 113 | 80 | 218 | ||||||||||
Increase (decrease) in income tax from: | |||||||||||||||
State tax, net of federal benefit | (23 | ) | 10 | (9 | ) | 20 | |||||||||
Property-related | (22 | ) | (10 | ) | (64 | ) | (20 | ) | |||||||
Uncertain tax positions | 11 | (1 | ) | 17 | — | ||||||||||
Other | (7 | ) | (4 | ) | (11 | ) | (10 | ) | |||||||
Total income tax expense (benefit) from continuing operations | $ | (99 | ) | $ | 108 | $ | 13 | $ | 208 | ||||||
Effective tax rate | * | 33.5 | % | 5.7 | % | 33.4 | % |
* | Not meaningful |
(in millions) | |||
Commitment | $ | 2,750 | |
Outstanding commercial paper supported by credit facilities | (828 | ) | |
Outstanding letters of credit | (96 | ) | |
Amount available | $ | 1,826 |
(in millions) | 2013 | 2014 | 2015 | 2016 | 2017 | 2013 – 2017 Total | |||||||||||||
Transmission | $ | 1,285 | $ | 978 | $ | 731 | $ | 735 | $ | 680 | $ | 4,409 | |||||||
Distribution | 2,300 | 2,728 | 3,169 | 3,180 | 3,004 | 14,381 | |||||||||||||
Generation | 372 | 255 | 287 | 283 | 265 | 1,462 | |||||||||||||
Total Estimated Capital Expenditures | $ | 3,957 | $ | 3,961 | $ | 4,187 | $ | 4,198 | $ | 3,949 | $ | 20,252 | |||||||
Total Estimated Capital Expenditures for 2013 – 2017 (using 12% variability discussed above) | $ | 3,667 | $ | 3,671 | $ | 3,549 | $ | 3,568 | $ | 3,349 | $ | 17,804 |
(in millions) | ||||
Collateral posted as of June 30, 20131 | $ | 128 | ||
Incremental collateral requirements for power procurement contracts resulting from a potential downgrade of SCE's credit rating to below investment grade | 67 | |||
Posted and potential collateral requirements2 | $ | 195 |
1 | Collateral provided to counterparties and other brokers consisted of $22 million of cash which was offset against net derivative liabilities on the consolidated balance sheets, $8 million of cash reflected in "Other current assets" on the consolidated balance sheets and $98 million in letters of credit and surety bonds. |
2 | SCE estimates that total posted and potential collateral requirements could increase by $3 million if SCE's forward positions as of June 30, 2013 were impacted by unfavorable market price movements over the remaining lives of the existing power procurement contracts using a 95% confidence level. |
(in millions) | Edison International Parent | ||
Commitment | $ | 1,250 | |
Outstanding borrowings | (25 | ) | |
Outstanding letters of credit | — | ||
Amount available | $ | 1,225 |
Six months ended June 30, | |||||||
(in millions) | 2013 | 2012 | |||||
Net cash provided by operating activities | $ | 1,325 | $ | 1,511 | |||
Net cash provided by financing activities | 704 | 712 | |||||
Net cash used by investing activities | (2,025 | ) | (2,239 | ) | |||
Net increase (decrease) in cash and cash equivalents | $ | 4 | $ | (16 | ) |
• | $250 million decrease from balancing accounts primarily composed of: |
• | $680 million decrease primarily resulting from ERRA balancing account undercollections for fuel and power procurement-related costs in 2013 compared to overcollections in 2012. The change in the ERRA balancing account decreased operating cash flows by $503 million in 2013 as compared to an increase in operating cash flows of $226 million in 2012. The 2013 undercollections were primarily due to higher power prices, for further details see "Liquidity and Capital Resources—SCE—Regulatory Balancing Accounts;" |
• | $300 million increase related to a rate increase in 2013 to recover undercollections in 2012 as a result of the implementation of the 2012 CPUC GRC decision; and |
• | $130 million increase from GHG auction revenue during 2013. |
• | Timing of cash receipts and disbursements related to working capital items and workforce reduction severance costs paid of $88 million during the first six months of 2013. |
• | Higher cash inflow due to higher authorized revenue requirements resulting from the implementation of the 2012 CPUC GRC decision. |
Six months ended June 30, | |||||||
(in millions) | 2013 | 2012 | |||||
Issuances of first and refunding mortgage bonds, net | $ | 394 | $ | 391 | |||
Issuances of commercial paper, net | 653 | (119 | ) | ||||
Issuances of preference stock, net | 387 | 805 | |||||
Payments of common stock dividends to Edison International | (240 | ) | (233 | ) | |||
Redemptions of preference stock | (400 | ) | (75 | ) | |||
Payments of preferred and preference stock dividends | (52 | ) | (28 | ) | |||
Other | (38 | ) | (29 | ) | |||
Net cash provided by financing activities | $ | 704 | $ | 712 |
Six months ended June 30, | |||||||
(in millions) | 2013 | 2012 | |||||
Net cash provided (used) by operating activities | $ | (64 | ) | $ | 3 | ||
Net cash provided by financing activities | 42 | 14 | |||||
Net cash used by investing activities | (4 | ) | (4 | ) | |||
Net increase (decrease) in cash and cash equivalents | $ | (26 | ) | $ | 13 |
• | Paid $220 million of dividends to Edison International common shareholders; |
• | Received $240 million of dividend payments from SCE; and |
• | Borrowed $25 million under Edison International's line of credit to fund interim working capital requirements. |
• | Paid $212 million of dividends to Edison International common shareholders; and |
• | Received $233 million of dividend payments from SCE. |
June 30, 2013 | |||||||||||
(in millions) | Exposure2 | Collateral | Net Exposure | ||||||||
S&P Credit Rating1 | |||||||||||
A or higher | $ | 138 | $ | — | $ | 138 | |||||
A- | 11 | — | 11 | ||||||||
BBB | 4 | — | 4 | ||||||||
Not rated3 | 8 | (2 | ) | 6 | |||||||
Total | $ | 161 | $ | (2 | ) | $ | 159 |
1 | SCE assigns a credit rating based on the lower of a counterparty's S&P or Moody's rating. For ease of reference, the above table uses the S&P classifications to summarize risk, but reflects the lower of the two credit ratings. |
2 | Exposure excludes amounts related to contracts classified as normal purchases and sales and non-derivative contractual commitments that are not recorded on the consolidated balance sheets, except for any related net accounts receivable. |
3 | The exposure in this category relates to long-term power purchase agreements. SCE's exposure is mitigated by regulatory treatment. |
Period | (a) Total Number of Shares (or Units) Purchased1 | (b) Average Price Paid per Share (or Unit)1 | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs | ||||||||
April 1, 2013 to April 30, 2013 | 626,447 | $ | 51.83 | — | — | |||||||
May 1, 2013 to May 31, 2013 | 471,051 | 51.88 | — | — | ||||||||
June 1, 2013 to June 30, 2013 | 308,333 | 46.57 | — | — | ||||||||
Total | 1,405,831 | 50.69 | — | — |
1 | The shares were purchased by agents acting on Edison International's behalf for delivery to plan participants to fulfill requirements in connection with Edison International's: (i) 401(k) Savings Plan; (ii) Dividend Reinvestment and Direct Stock Purchase Plan; and (iii) long-term incentive compensation plans. The shares were purchased in open-market transactions pursuant to plan terms or participant elections. The shares were never registered in Edison International's name and none of the shares purchased were retired as a result of the transactions. |
Exhibit Number | Description | |
10.1 | Edison International and Southern California Edison Company Director Compensation Schedule, as adopted June 20, 2013 | |
10.2 | Amendment to Credit Agreement dated July 18, 2013 among Edison International and the Lenders named therein (File 1-9936, filed as Exhibit 10.1 to Edison International's Form 8-K dated July 18, 2013 and filed July 19, 2013)* | |
10.3 | Amendment to Credit Agreement dated July 18, 2013 among Southern California Edison Company and the Lenders named therein (File 1-2313, filed as Exhibit 10.2 to Southern California Edison Company's Form 8-K dated July 18, 2013 and filed July 19, 2013)* | |
10.4 | Notice of Termination of Transaction Support Agreement, dated July 25, 2013 (File 1-9936, filed as Exhibit 2.1 to Edison International's Form 8-K dated July 25, 2013 and filed July 25, 2013)* | |
31.1 | Certifications of the Chief Executive Officer and Chief Financial Officer of Edison International pursuant to Section 302 of the Sarbanes-Oxley Act | |
31.2 | Certifications of the Chief Executive Officer and Chief Financial Officer of Southern California Edison Company pursuant to Section 302 of the Sarbanes-Oxley Act | |
32.1 | Certifications of the Chief Executive Officer and the Chief Financial Officer of Edison International required by Section 906 of the Sarbanes-Oxley Act | |
32.2 | Certifications of the Chief Executive Officer and the Chief Financial Officer of Southern California Edison Company required by Section 906 of the Sarbanes-Oxley Act | |
101.1 | Financial statements from the quarterly report on Form 10-Q of Edison International for the quarter ended June 30, 2013, filed on August 1, 2013, formatted in XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements | |
101.2 | Financial statements from the quarterly report on Form 10-Q of Southern California Edison Company for the quarter ended June 30, 2013, filed on August 1, 2013, formatted in XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; and (v) the Notes to Consolidated Financial Statements |
EDISON INTERNATIONAL | SOUTHERN CALIFORNIA EDISON COMPANY | |||
By: | /s/ Mark C. Clarke | By: | /s/ Mark C. Clarke | |
Mark C. Clarke Vice President and Controller (Duly Authorized Officer and Principal Accounting Officer) | Mark C. Clarke Vice President and Controller (Duly Authorized Officer and Principal Accounting Officer) | |||
Date: | August 1, 2013 | Date: | August 1, 2013 |
1 | To the extent any expense reimbursements provided for in this Director Compensation Schedule are taxable to a Director and provide for a deferral of compensation within the meaning of Section 409A of the Internal Revenue Code, the Director shall complete all steps required for reimbursement so as to facilitate payment, and any such reimbursements shall be paid to the Director on or before December 31 of the calendar year following the calendar year in which the expense was incurred. Such reimbursements shall not be subject to liquidation or exchange for other benefits, and the expenses eligible for reimbursement in one calendar year shall not affect the expenses eligible for reimbursement in any other calendar year. |
2 | With respect to equity-based awards approved and granted under current and prior compensation plans by prior resolutions of the EIX Board, this Director Compensation Schedule does not alter the intent of such resolutions to have the awards and subsequent transactions by the Directors occurring pursuant to the awards continue to comply with and be exempt under Section 16(b) of the Securities Exchange Act of 1934, as amended, pursuant to Rule 16b-3 promulgated thereunder (or any successor provision thereto). |
/s/ THEODORE F. CRAVER, JR. |
THEODORE F. CRAVER, JR. Chief Executive Officer |
/s/ W. JAMES SCILACCI |
W. JAMES SCILACCI Chief Financial Officer |
/s/ RONALD L. LITZINGER |
RONALD L. LITZINGER President |
/s/ LINDA G. SULLIVAN |
LINDA G. SULLIVAN Chief Financial Officer |
1. | The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and |
2. | The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ THEODORE F. CRAVER, JR. |
THEODORE F. CRAVER, JR. Chief Executive Officer Edison International |
/s/ W. JAMES SCILACCI |
W. JAMES SCILACCI Chief Financial Officer Edison International |
1. | The Quarterly Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and |
2. | The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ RONALD L. LITZINGER |
RONALD L. LITZINGER President Southern California Edison Company |
/s/ LINDA G. SULLIVAN |
LINDA G. SULLIVAN Chief Financial Officer Southern California Edison Company |
Other Investments
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Jun. 30, 2013
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Regulated Entity, Other Assets, Noncurrent [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Investments | Other Investments Nuclear Decommissioning Trusts Future decommissioning costs of removal of SCE's nuclear assets are expected to be funded from independent decommissioning trusts, which currently receive contributions of approximately $23 million per year through SCE customer rates. The following table sets forth amortized cost and fair value of the trust investments:
Trust fund earnings (based on specific identification) increase the trust fund balance and the ARO regulatory liability. Proceeds from sales of securities (which are reinvested) were $1.5 billion and $496 million for the three months ended June 30, 2013 and 2012, respectively and $2.0 billion and $1.1 billion for the six months ended June 30, 2013 and 2012, respectively. Unrealized holding gains, net of losses, were $1.3 billion and $1.6 billion at June 30, 2013 and December 31, 2012, respectively. The following table sets forth a summary of changes in the fair value of the trust:
Due to regulatory mechanisms, earnings and realized gains and losses (including other-than-temporary impairments) have no impact on operating revenue or earnings. |
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Net loss arising during the period, tax benefit | $ 0 | $ 2 | $ 4 | $ 2 |
Amortization of net loss included in net income, tax expense | 1 | 1 | 2 | 5 |
Unrealized holding loss arising during the period, tax benefit | 0 | 19 | 0 | 2 |
Reclassification adjustments included in net income, tax benefit | 0 | 6 | 0 | 13 |
Southern California Edison
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Net loss arising during the period, tax benefit | 0 | 3 | 3 | 3 |
Amortization of net loss included in net income, tax expense | $ 1 | $ 1 | $ 2 | $ 3 |
Variable Interest Entities
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6 Months Ended |
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Jun. 30, 2013
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Variable Interest Entities Disclosure [Abstract] | |
Variable Interest Entities | Variable Interest Entities Variable Interest in VIEs that are not Consolidated Power Purchase Contracts SCE has power purchase agreements ("PPAs") that are classified as variable interests in VIEs, including tolling agreements through which SCE provides the natural gas to fuel the plants and contracts with qualifying facilities ("QFs") that contain variable pricing provisions based on the price of natural gas. 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. In general, because 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 its involvement with VIEs result from amounts due under the PPAs or the fair value of those derivative contracts. 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 9 in the 2012 Form 10-K. 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 for these VIE projects was 4,057 MW and 2,014 MW at June 30, 2013 and 2012, respectively, and the amounts that SCE paid to these projects were $99 million and $57 million for the three months ended June 30, 2013 and 2012, respectively, and $197 million and $134 million for the six months ended June 30, 2013 and 2012, respectively. These amounts are recoverable in customer rates, subject to reasonableness review. As of June 30, 2013, SCE has additional VIE contracts with future aggregate contracted capacity of 1,358 MW to be delivered starting in August 2013 and January 2014. Unconsolidated Trusts of SCE SCE Trust I and Trust II were formed in 2012 and 2013, respectively, for the exclusive purpose of issuing the 5.625% and 5.10% 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. In May 2012, SCE Trust I issued $475 million (aggregate liquidation preference) of 5.625% trust securities (cumulative, liquidation amount of $25 per share) to the public and $10,000 of common stock (100%) to SCE. The trust invested the proceeds of these trust securities in Series F Preference Stock issued by SCE in the principal amount of $475 million (cumulative, $2,500 per share liquidation value) and which have substantially the same payment terms as the trust securities. In January 2013, SCE Trust II issued $400 million (aggregate liquidation preference) of 5.10% trust securities (cumulative, liquidation amount of $25 per share) to the public and $10,000 of common stock (100%) to SCE. The trust invested the proceeds of these trust securities in Series G Preference Stock issued by SCE in the principal amount of $400 million (cumulative, $2,500 per share liquidation value) and which have substantially the same payment terms as the trust securities. The Series F and Series G Preference Stock and the corresponding trust securities do not have a maturity date. Upon any redemption of any shares of the Series F or Series G Preference Stock, a corresponding dollar amount of trust securities will be redeemed by the applicable trust (for further information see Note 13). The applicable trust will make distributions at the same rate and on the same dates on the applicable series of trust securities when and if the SCE board of directors declares and makes dividend payments on the Series F or Series G Preference Stock. The applicable trusts will use any dividends it receives on the Series F or Series G Preference Stock to make its corresponding distributions on the applicable series of trust securities. If SCE does not make a dividend payment to either trust, 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 Series F and Series G Preference Stock. The Trust I balance sheet as of June 30, 2013 and December 31, 2012, consisted of an investment of $475 million in the Series F Preference Stock, $475 million of trust securities and $10,000 of common stock. The trust's income statement consisted of dividend income and dividend distributions of $6 million and $3 million each for the three months ended June 30, 2013 and 2012, respectively, and $13 million and $3 million each for the six months ended June 30, 2013 and 2012, respectively. The Trust II balance sheet as of June 30, 2013, consisted of an investment of $400 million in the Series G Preference Stock, $400 million of trust securities and $10,000 of common stock. The trust's income statement consisted of dividend income and dividend distributions of $5 million each for the three months ended June 30, 2013 and $9 million each for the six months ended June 30, 2013. |
Supplemental Cash Flows Information
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flows Information | Supplemental Cash Flows Information Supplemental cash flows information for continuing operations is:
SCE's accrued capital expenditures at June 30, 2013 and 2012 were $515 million and $408 million, respectively. Accrued capital expenditures will be included as an investing activity in the consolidated statements of cash flow in the period paid. |
Compensation and Benefit Plans (Workforce Reduction) (Details) (Southern California Edison, USD $)
In Millions, unless otherwise specified |
6 Months Ended |
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Jun. 30, 2013
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Employee severance
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Restructuring Cost and Reserve [Line Items] | |
Beginning balance | $ 104 |
Additions | 109 |
Payments | (88) |
Ending balance | $ 125 |
San Onofre [Member]
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Restructuring Cost and Reserve [Line Items] | |
San Onofre expected number of positions to be eliminated | 960 |
Regulatory Assets and Liabilities
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Regulatory Assets and Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets and Liabilities | Regulatory Assets and Liabilities As a result of the permanent retirement of San Onofre, SCE has reclassified at May 31, 2013, $1,521 million of its investment including property, plant and equipment, nuclear fuel and inventory, and other assets to a regulatory asset. The San Onofre regulatory asset will increase or decrease in subsequent periods based on the difference between authorized revenue related to San Onofre and actual cost of service that is expected to be recovered. In June 2013, SCE cost of service, including severance costs of $56 million, exceeded authorized revenue by $32 million resulting in an increase in the San Onofre regulatory asset. As of June 30, 2013, SCE also recorded a regulatory asset for recovery of $33 million of estimated costs associated with the cancellation and management of future deliveries of nuclear fuel. See Note 12 for further information. Regulatory Assets Regulatory assets included on the consolidated balance sheets are:
Regulatory Liabilities Regulatory liabilities included on the consolidated balance sheets are:
The regulatory liability related to asset retirement obligations represents the nuclear decommissioning trust assets in excess of the related asset retirement obligations. The decrease in this regulatory liability during June 2013 results from a revision to the asset retirement obligations of San Onofre. For further information, see Note 1. |
Fair Value Measurements (Fair Value of Long-Term Debt Recorded at Carrying Value) (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Fair Value of Long-Term Debt Recorded at Carrying Value | ||
Carrying Value | $ 9,630 | $ 9,231 |
Fair Value | 10,593 | 10,944 |
Southern California Edison
|
||
Fair Value of Long-Term Debt Recorded at Carrying Value | ||
Carrying Value | 9,227 | 8,828 |
Fair Value | $ 10,168 | $ 10,505 |
Compensation and Benefit Plans (Textual) (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2013
Pension Plans
|
Jun. 30, 2012
Pension Plans
|
Jun. 30, 2013
Pension Plans
|
Jun. 30, 2012
Pension Plans
|
Jun. 30, 2013
Postretirement Benefits Other Than Pensions
|
Jun. 30, 2013
Southern California Edison
|
May 31, 2013
Southern California Edison
|
Dec. 31, 2012
Southern California Edison
|
Jun. 30, 2013
Southern California Edison
Pension Plans
|
Jun. 30, 2012
Southern California Edison
Pension Plans
|
Jun. 30, 2013
Southern California Edison
Pension Plans
|
Jun. 30, 2012
Southern California Edison
Pension Plans
|
Jun. 30, 2013
Southern California Edison
Postretirement Benefits Other Than Pensions
|
May 31, 2013
Initial
|
May 31, 2013
Revised
|
Jun. 30, 2013
San Onofre [Member]
Southern California Edison
positions
|
Jun. 30, 2013
Decommissioning Plan
San Onofre [Member]
Southern California Edison
positions
|
|
Pension and Other Postretirement Benefits | ||||||||||||||||||
San Onofre expected number of positions to be eliminated | 960 | 175 | ||||||||||||||||
Defined Benefit Plan, Actuarial Gain (Loss) | $ 369 | $ 362 | ||||||||||||||||
Defined Benefit Plan, Assumptions Used Calculating Benefit Obligation, Discount Rate | 3.75% | 4.25% | ||||||||||||||||
Settlement costs | 49 | 0 | 49 | 0 | 48 | 0 | 48 | 0 | ||||||||||
Defined Benefit Plan, Unfunded Status of Plan | 658 | 1,100 | ||||||||||||||||
Employer contributions | 104 | 15 | 94 | 15 | ||||||||||||||
Estimated future contributions in remainder of 2013 | $ 86 | $ 86 | $ 20 | $ 70 | $ 70 | $ 20 |
Summary of Significant Accounting Policies (Details) (Southern California Edison, Electric Utility)
|
6 Months Ended |
---|---|
Jun. 30, 2013
sqmi
|
|
Southern California Edison | Electric Utility
|
|
Summary of Significant Accounting Policies [Line Items] | |
Supply of electricity, area covered (square mile) | 50,000 |
Summary of Significant Accounting Policies (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash Equivalents | Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period as follows:
The cash equivalents were as follows:
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Inventory Components | Inventory consisted of the following:
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EPS Attributable to Edison International Common Shareholders | EPS attributable to Edison International common shareholders was computed as follows:
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Asset Retirement Obligation |
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Summary of Significant Accounting Policies (Policies)
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Edison International is the parent holding company of Southern California Edison Company ("SCE"). SCE is an investor-owned public utility primarily engaged in the business of supplying electricity to an approximately 50,000 square mile area of southern California. Edison International is also the parent company of nonutility subsidiaries that are engaged in competitive businesses related to the delivery or use of electricity. Such competitive 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 wholly owned and 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 nonutility subsidiaries. SCE's consolidated financial statements include the accounts of SCE and its wholly owned and controlled subsidiaries. All intercompany transactions have been eliminated from the consolidated financial statements. Edison International's and SCE's significant accounting policies were described in Note 1 of "Notes to Consolidated Financial Statements" included in the 2012 Form 10-K. The same accounting policies are followed for interim reporting purposes, with the exception of accounting principles adopted as of January 1, 2013, discussed below in "—New Accounting Guidance." This quarterly report should be read in conjunction with the financial statements and notes included in the 2012 Form 10-K. Beginning in the fourth quarter of 2012, EME met the definition of a discontinued operation and was classified separately in Edison International's consolidated financial statements. Except as indicated, amounts in the notes to the consolidated financial statements relate to continuing operations of Edison International. See Note 16 for information related to discontinued operations. In the opinion of management, all adjustments, consisting of recurring accruals, have been made that are necessary to fairly state the consolidated financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America for the periods covered by this quarterly report on Form 10-Q. The results of operations for the three- and six-month periods ended June 30, 2013 are not necessarily indicative of the operating results for the full year. The December 31, 2012 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. |
Cash Equivalents | Cash is temporarily invested until required for check clearing from the primary disbursement accounts. Cash Equivalents Cash equivalents included 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. |
Inventory | Inventory Inventory is stated at the lower of cost or market, cost being determined by the weighted-average cost method for fuel, and the average cost method for materials, supplies and spare parts. |
Greenhouse Gas Emission Allowances | Greenhouse Gas Allowances SCE is allocated greenhouse gas ("GHG") allowances annually which it is then required to submit to quarterly auctions. GHG proceeds from the auction are recorded as a regulatory liability to be refunded to customers. SCE purchases GHG allowances from quarterly auctions or bilateral parties to satisfy its compliance obligations and recovers such costs of GHG from customers. GHG allowances held for use are classified as "Other current assets" on the consolidated balance sheets and are stated at the lower of weighted-average cost or market. |
Earnings Per Share | Earnings Per Share Edison International computes earnings per 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, including stock options, performance shares and restricted stock units, which earn dividend equivalents on an equal basis with common shares. Stock options awarded during the period 2003 through 2006 received dividend equivalents. |
New Accounting Guidance | New Accounting Guidance Accounting Guidance Adopted in 2013 Offsetting Assets and Liabilities In January 2013, the FASB issued accounting standards updates modifying the disclosure requirements about the nature of an entity's rights of offsetting recognized assets and liabilities in the statement of financial position under master netting agreements and similar arrangements associated with derivative instruments, repurchase agreements and securities lending transactions. The guidance requires increased disclosure of the gross and net recognized assets and liabilities, collateral positions and descriptions of setoff rights. Edison International and SCE adopted this guidance effective January 1, 2013. The adoption of this standard did not impact the consolidated income statements, balance sheets or cash flows of Edison International or SCE. Items Reclassified out of Accumulated Other Comprehensive Income In February 2013, the FASB issued an accounting standards update which requires disclosure related to items reclassified out of AOCI. The guidance requires companies to present separately, for each component of other comprehensive income, current period reclassifications and the remainder of the current-period other comprehensive income. In addition, for certain current period reclassifications, an entity is required to disclose the effect of the item reclassified out of AOCI on the respective line item(s) of net income. Edison International and SCE adopted this guidance effective January 1, 2013. See Note 14 for further details. Accounting Guidance Not Yet Adopted In July 2013, the FASB issued an accounting standards update that will require that an unrecognized tax benefit be presented on the balance sheet as a reduction of a deferred tax asset for a net operating loss ("NOL") or tax credit carryforward under certain circumstances. This proposal is effective January 1, 2014 and is not expected to have a material impact on the consolidated financial statements. |
Fair Value Measurements (Level 3 Rollforward) (Details) (Southern California Edison, Level 3, USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Southern California Edison | Level 3
|
||||
Fair Value Disclosures Level 3 [Roll Forward] | ||||
Fair value of net asset (liabilities) at beginning of period | $ (882) | $ (1,097) | $ (791) | $ (754) |
Total realized/unrealized gains (losses): | ||||
Included in regulatory assets and liabilities | (76) | 341 | (158) | (23) |
Purchases | 20 | 29 | 38 | 50 |
Settlements | (29) | (12) | (56) | (12) |
Fair value of net liabilities at end of period | (967) | (739) | (967) | (739) |
Change during the period in unrealized losses related to assets and liabilities held at the end of the period | $ (43) | $ 335 | $ (125) | $ (8) |
Regulatory Assets and Liabilities (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Regulatory Assets and Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Assets Included on the Consolidated Balance Sheets | Regulatory assets included on the consolidated balance sheets are:
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Regulatory Liabilities Included on the Consolidated Balance Sheets | Regulatory liabilities included on the consolidated balance sheets are:
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Summary of Significant Accounting Policies (Inventory) (Details) (USD $)
In Millions, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2013
Southern California Edison
|
Dec. 31, 2012
Southern California Edison
|
May 31, 2013
San Onofre (nuclear)
Southern California Edison
|
May 31, 2013
San Onofre (nuclear)
Inventory
Southern California Edison
|
---|---|---|---|---|---|---|
Summary of Significant Accounting Policies [Line Items] | ||||||
Materials and supplies, and spare parts | $ 244 | $ 319 | ||||
Fuel | 23 | 21 | ||||
Total inventory | 267 | 340 | 267 | 340 | ||
Amount of assets reclassified to a regulatory asset | $ 1,521 | $ 100 |
Debt and Credit Agreements (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2013
Southern California Edison
|
Dec. 31, 2012
Southern California Edison
|
Mar. 31, 2013
Southern California Edison
First and refunding mortgage bonds
|
Jun. 30, 2013
Southern California Edison
Revolving credit facility maturing in May 2017
|
Jun. 30, 2013
Edison International Parent and Other
Revolving credit facility maturing in May 2017
|
Dec. 31, 2012
Edison International Parent and Other
Revolving credit facility maturing in May 2017
|
Jun. 30, 2013
Commercial paper
Southern California Edison
Revolving credit facility maturing in May 2017
|
Dec. 31, 2012
Commercial paper
Southern California Edison
Revolving credit facility maturing in May 2017
|
Jun. 30, 2013
Letters of credit
Southern California Edison
Revolving credit facility maturing in May 2017
|
Jul. 18, 2013
Subsequent Event
Southern California Edison
Revolving credit facility maturing in May 2017
|
Jul. 18, 2013
Subsequent Event
Southern California Edison
Credit facility maturing in July 2018
|
Jul. 18, 2013
Subsequent Event
Edison International Parent and Other
Revolving credit facility maturing in May 2017
|
Jul. 18, 2013
Subsequent Event
Edison International Parent and Other
Credit facility maturing in July 2018
|
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Debt Instrument [Line Items] | |||||||||||||||
Issuance of debt | $ 400 | ||||||||||||||
Stated interest rate (as a percent) | 3.90% | ||||||||||||||
Outstanding borrowings | 828 | 175 | |||||||||||||
Weighted average interest rate (as a percent) | 1.48% | 0.27% | 0.37% | ||||||||||||
Commitment | 2,750 | 1,250 | 150 | 2,600 | 68 | 1,182 | |||||||||
Outstanding letters of credit | 96 | ||||||||||||||
Letters of credit expiration period | 12 months | ||||||||||||||
Short-term debt | $ 853 | $ 175 | $ 828 | $ 175 | $ 25 | $ 0 |
Income Taxes (Tables)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of income tax expense | The table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to the income tax provision:
|
Commitments and Contingencies (Operating Leases) (Details) (Southern California Edison, USD $)
|
Jun. 30, 2013
|
---|---|
Southern California Edison
|
|
Lease Disclosures [Line Items] | |
Future minimum payments due, 2014 | $ 197,000,000 |
Future minimum payments due, 2015 | 198,000,000 |
Future minimum payments due, 2016 | 202,000,000 |
Future minimum payments due, 2017 | 264,000,000 |
Future minimum payments due, 2018 | $ 1,800,000,000 |
Regulatory Assets and Liabilities (Textual) (Details) (Southern California Edison, USD $)
In Millions, unless otherwise specified |
1 Months Ended | ||||
---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 30, 2013
San Onofre (nuclear)
|
May 31, 2013
San Onofre (nuclear)
|
Jun. 30, 2013
Nuclear fuel supply commitments
Estimated costs related to contract cancellation and management
San Onofre (nuclear)
|
|
Regulatory Assets [Line Items] | |||||
Amount of assets reclassified to a regulatory asset | $ 1,521 | ||||
Cost of service | 56 | ||||
Increase in regulatory assets | 32 | ||||
Regulatory asset | $ 8,297 | $ 6,994 | $ 33 |
Consolidated Statements of Changes in Equity (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | $ 11,191 | $ 11,086 | ||
Net income (loss) | (70) | 98 | 227 | 208 |
Other comprehensive income (loss) | 5 | (38) | 5 | (17) |
Contributions from noncontrolling interests | 238 | |||
Transfer of assets to Capistrano Wind Partners | (21) | |||
Common stock dividends declared | (220) | (212) | ||
Dividends, distributions to noncontrolling interests and other | (51) | (41) | ||
Stock-based compensation and other | (37) | (41) | ||
Noncash stock-based compensation and other | 6 | 15 | ||
Issuance of preference stock | 387 | 805 | ||
Redemption of preference stock | (400) | (75) | ||
Balance, at the end of the period | 11,108 | 11,945 | 11,108 | 11,945 |
Dividends declared per common share (in dollars per share) | $ 0.3375 | $ 0.325 | $ 0.6750 | $ 0.65 |
Common Stock
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 2,373 | 2,360 | ||
Net income (loss) | 0 | 0 | ||
Other comprehensive income (loss) | 0 | 0 | ||
Contributions from noncontrolling interests | 0 | |||
Transfer of assets to Capistrano Wind Partners | (21) | |||
Common stock dividends declared | 0 | 0 | ||
Dividends, distributions to noncontrolling interests and other | 0 | 0 | ||
Stock-based compensation and other | 3 | 15 | ||
Noncash stock-based compensation and other | 12 | 17 | ||
Issuance of preference stock | 0 | 0 | ||
Redemption of preference stock | 0 | 0 | ||
Balance, at the end of the period | 2,388 | 2,371 | 2,388 | 2,371 |
Accumulated Other Comprehensive Loss
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | (87) | (139) | ||
Net income (loss) | 0 | 0 | ||
Other comprehensive income (loss) | 5 | (17) | ||
Contributions from noncontrolling interests | 0 | |||
Transfer of assets to Capistrano Wind Partners | 0 | |||
Common stock dividends declared | 0 | 0 | ||
Dividends, distributions to noncontrolling interests and other | 0 | 0 | ||
Stock-based compensation and other | 0 | 0 | ||
Noncash stock-based compensation and other | 0 | 0 | ||
Issuance of preference stock | 0 | 0 | ||
Redemption of preference stock | 0 | 0 | ||
Balance, at the end of the period | (82) | (156) | (82) | (156) |
Retained Earnings
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 7,146 | 7,834 | ||
Net income (loss) | 176 | 167 | ||
Other comprehensive income (loss) | 0 | 0 | ||
Contributions from noncontrolling interests | 0 | |||
Transfer of assets to Capistrano Wind Partners | 0 | |||
Common stock dividends declared | (220) | (212) | ||
Dividends, distributions to noncontrolling interests and other | 0 | 0 | ||
Stock-based compensation and other | (40) | (56) | ||
Noncash stock-based compensation and other | (5) | (2) | ||
Issuance of preference stock | 0 | 0 | ||
Redemption of preference stock | (8) | (1) | ||
Balance, at the end of the period | 7,049 | 7,730 | 7,049 | 7,730 |
Subtotal
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 9,432 | 10,055 | ||
Net income (loss) | 176 | 167 | ||
Other comprehensive income (loss) | 5 | (17) | ||
Contributions from noncontrolling interests | 0 | |||
Transfer of assets to Capistrano Wind Partners | (21) | |||
Common stock dividends declared | (220) | (212) | ||
Dividends, distributions to noncontrolling interests and other | 0 | 0 | ||
Stock-based compensation and other | (37) | (41) | ||
Noncash stock-based compensation and other | 7 | 15 | ||
Issuance of preference stock | 0 | 0 | ||
Redemption of preference stock | (8) | (1) | ||
Balance, at the end of the period | 9,355 | 9,945 | 9,355 | 9,945 |
Other Noncontrolling Interests
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 2 | |||
Net income (loss) | 0 | |||
Other comprehensive income (loss) | 0 | |||
Contributions from noncontrolling interests | 238 | |||
Transfer of assets to Capistrano Wind Partners | 0 | |||
Common stock dividends declared | 0 | |||
Dividends, distributions to noncontrolling interests and other | 0 | |||
Stock-based compensation and other | 0 | |||
Noncash stock-based compensation and other | 0 | |||
Issuance of preference stock | 0 | |||
Redemption of preference stock | 0 | |||
Balance, at the end of the period | 240 | 240 | ||
Preferred Stock and Preference Stock
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 1,759 | 1,029 | ||
Net income (loss) | 51 | 41 | ||
Other comprehensive income (loss) | 0 | 0 | ||
Contributions from noncontrolling interests | 0 | |||
Transfer of assets to Capistrano Wind Partners | 0 | |||
Common stock dividends declared | 0 | 0 | ||
Dividends, distributions to noncontrolling interests and other | (51) | (41) | ||
Stock-based compensation and other | 0 | 0 | ||
Noncash stock-based compensation and other | (1) | 0 | ||
Issuance of preference stock | 387 | 805 | ||
Redemption of preference stock | (392) | (74) | ||
Balance, at the end of the period | 1,753 | 1,760 | 1,753 | 1,760 |
Southern California Edison
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Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 11,743 | 9,958 | ||
Net income (loss) | (67) | 214 | 216 | 414 |
Other comprehensive income (loss) | 2 | (3) | (1) | 0 |
Common stock dividends declared | (240) | (233) | ||
Dividends declared on preferred and preference stock | (51) | (41) | ||
Stock-based compensation and other | (34) | (20) | ||
Noncash stock-based compensation and other | 12 | 8 | ||
Issuance of preference stock | 387 | 805 | ||
Redemption of preference stock | (400) | (75) | ||
Balance, at the end of the period | 11,632 | 10,816 | 11,632 | 10,816 |
Southern California Edison | Common Stock
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 2,168 | 2,168 | ||
Net income (loss) | 0 | 0 | ||
Other comprehensive income (loss) | 0 | |||
Common stock dividends declared | 0 | 0 | ||
Dividends declared on preferred and preference stock | 0 | 0 | ||
Stock-based compensation and other | 0 | 0 | ||
Noncash stock-based compensation and other | 0 | 0 | ||
Issuance of preference stock | 0 | 0 | ||
Redemption of preference stock | 0 | 0 | ||
Balance, at the end of the period | 2,168 | 2,168 | 2,168 | 2,168 |
Southern California Edison | Additional Paid-in Capital
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 581 | 596 | ||
Net income (loss) | 0 | 0 | ||
Other comprehensive income (loss) | 0 | |||
Common stock dividends declared | 0 | 0 | ||
Dividends declared on preferred and preference stock | 0 | 0 | ||
Stock-based compensation and other | 1 | 10 | ||
Noncash stock-based compensation and other | 7 | 8 | ||
Issuance of preference stock | (13) | (20) | ||
Redemption of preference stock | 8 | 1 | ||
Balance, at the end of the period | 584 | 595 | 584 | 595 |
Southern California Edison | Accumulated Other Comprehensive Loss
|
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Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | (29) | (24) | ||
Net income (loss) | 0 | 0 | ||
Other comprehensive income (loss) | (1) | |||
Common stock dividends declared | 0 | 0 | ||
Dividends declared on preferred and preference stock | 0 | 0 | ||
Stock-based compensation and other | 0 | 0 | ||
Noncash stock-based compensation and other | 0 | 0 | ||
Issuance of preference stock | 0 | 0 | ||
Redemption of preference stock | 0 | 0 | ||
Balance, at the end of the period | (30) | (24) | (30) | (24) |
Southern California Edison | Retained Earnings
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 7,228 | 6,173 | ||
Net income (loss) | 216 | 414 | ||
Other comprehensive income (loss) | 0 | |||
Common stock dividends declared | (240) | (233) | ||
Dividends declared on preferred and preference stock | (51) | (41) | ||
Stock-based compensation and other | (35) | (30) | ||
Noncash stock-based compensation and other | 5 | 0 | ||
Issuance of preference stock | 0 | 0 | ||
Redemption of preference stock | (8) | (1) | ||
Balance, at the end of the period | 7,115 | 6,282 | 7,115 | 6,282 |
Southern California Edison | Preferred Stock and Preference Stock
|
||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Balance, at the beginning of the period | 1,795 | 1,045 | ||
Net income (loss) | 0 | 0 | ||
Other comprehensive income (loss) | 0 | |||
Common stock dividends declared | 0 | 0 | ||
Dividends declared on preferred and preference stock | 0 | 0 | ||
Stock-based compensation and other | 0 | 0 | ||
Noncash stock-based compensation and other | 0 | 0 | ||
Issuance of preference stock | 400 | 825 | ||
Redemption of preference stock | (400) | (75) | ||
Balance, at the end of the period | $ 1,795 | $ 1,795 | $ 1,795 | $ 1,795 |
Discontinued Operations (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Dec. 31, 2012
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Income tax benefit from discontinued operations | $ 12 | $ 24 | |||
Operating revenues from discontinued operations | 406 | 849 | |||
Loss from discontinued operation before income taxes | 208 | 383 | |||
Pensions and benefits | 2,234 | 2,234 | 2,614 | ||
Edison Mission Energy
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of days after bankruptcy filing for settlement transaction (days) | 150 days | ||||
Number of days for completion of settlement transaction agreement from petition date (days) | 210 days | ||||
Joint tax liability | 189 | 189 | |||
Receivables from EME | 235 | 235 | |||
Edison Mission Energy | Pension Plans
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|||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Pensions and benefits | 80 | 80 | |||
Deconsolidated charges recorded in accumulated other comprehensive income | 34 | ||||
Plan Support Agreement
|
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net receivable under plan support agreement | 46 | 46 | |||
Retirement liabilities assumed under plan support agreement | 104 | 104 | |||
Estimated loss under plan support agreement | $ 150 |
Related Party Transactions
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6 Months Ended |
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Jun. 30, 2013
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Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Related-Party Transactions In 2008, EME was awarded by SCE, through a competitive bidding process, a 10-year power sales contract with SCE for the output of a 479 MW gas-fired peaking facility referred to as the Walnut Creek project. The power sales agreement was approved by the CPUC and FERC in 2008. Deliveries under the power sales agreement commenced in June 2013 and the expense for power purchased was $6 million for the three- and six-months ended June 30, 2013. |
Consolidated Balance Sheets (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified |
Jun. 30, 2013
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Dec. 31, 2012
|
---|---|---|
Receivables, allowances for uncollectible accounts (in dollars) | $ 66 | $ 75 |
Utility property, plant and equipment, accumulated depreciation (in dollars) | 7,578 | 7,424 |
Nonutility property, plant and equipment, accumulated depreciation (in dollars) | 69 | 123 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 325,811,206 | 325,811,206 |
Common stock, shares outstanding | 325,811,206 | 325,811,206 |
Southern California Edison
|
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Receivables, allowances for uncollectible accounts (in dollars) | 66 | 75 |
Utility property, plant and equipment, accumulated depreciation (in dollars) | 7,578 | 7,424 |
Nonutility property, plant and equipment, accumulated depreciation (in dollars) | $ 63 | $ 117 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 560,000,000 | 560,000,000 |
Common stock, shares issued | 434,888,104 | 434,888,104 |
Common stock, shares outstanding | 434,888,104 | 434,888,104 |
Summary of Significant Accounting Policies
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization and Basis of Presentation Edison International is the parent holding company of Southern California Edison Company ("SCE"). SCE is an investor-owned public utility primarily engaged in the business of supplying electricity to an approximately 50,000 square mile area of southern California. Edison International is also the parent company of nonutility subsidiaries that are engaged in competitive businesses related to the delivery or use of electricity. Such competitive 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 wholly owned and 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 nonutility subsidiaries. SCE's consolidated financial statements include the accounts of SCE and its wholly owned and controlled subsidiaries. All intercompany transactions have been eliminated from the consolidated financial statements. Edison International's and SCE's significant accounting policies were described in Note 1 of "Notes to Consolidated Financial Statements" included in the 2012 Form 10-K. The same accounting policies are followed for interim reporting purposes, with the exception of accounting principles adopted as of January 1, 2013, discussed below in "—New Accounting Guidance." This quarterly report should be read in conjunction with the financial statements and notes included in the 2012 Form 10-K. Beginning in the fourth quarter of 2012, EME met the definition of a discontinued operation and was classified separately in Edison International's consolidated financial statements. Except as indicated, amounts in the notes to the consolidated financial statements relate to continuing operations of Edison International. See Note 16 for information related to discontinued operations. In the opinion of management, all adjustments, consisting of recurring accruals, have been made that are necessary to fairly state the consolidated financial position, results of operations and cash flows in accordance with accounting principles generally accepted in the United States of America for the periods covered by this quarterly report on Form 10-Q. The results of operations for the three- and six-month periods ended June 30, 2013 are not necessarily indicative of the operating results for the full year. The December 31, 2012 condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Cash Equivalents Cash equivalents included 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:
Cash is temporarily invested until required for check clearing from the primary disbursement accounts. Checks issued, but not yet paid by the financial institution, are reclassified from cash to accounts payable at the end of each reporting period as follows:
Inventory Inventory is stated at the lower of cost or market, cost being determined by the weighted-average cost method for fuel, and the average cost method for materials, supplies and spare parts. Inventory consisted of the following:
As a result of the permanent retirement of San Onofre, SCE has reclassified $100 million of its inventory to a regulatory asset, see Note 9 for further details. Greenhouse Gas Allowances SCE is allocated greenhouse gas ("GHG") allowances annually which it is then required to submit to quarterly auctions. GHG proceeds from the auction are recorded as a regulatory liability to be refunded to customers. SCE purchases GHG allowances from quarterly auctions or bilateral parties to satisfy its compliance obligations and recovers such costs of GHG from customers. GHG allowances held for use are classified as "Other current assets" on the consolidated balance sheets and are stated at the lower of weighted-average cost or market. Earnings Per Share Edison International computes earnings per 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, including stock options, performance shares and restricted stock units, which earn dividend equivalents on an equal basis with common shares. Stock options awarded during the period 2003 through 2006 received dividend equivalents. EPS attributable to Edison International common shareholders was computed as follows:
Stock-based compensation awards to purchase 3,266,857 shares of common stock for the three months ended June 30, 2012, and 1,587,370 and 4,928,510 for the six months ended June 30, 2013 and 2012, respectively, were outstanding, but were not included in the computation of diluted earnings per share because the exercise price of the awards was greater than the average market price of the common shares during the respective periods and, therefore, the effect would have been antidilutive. Asset Retirement Obligation SCE is in the process of developing a comprehensive decommissioning plan following its decision to permanently retire San Onofre. See Note 9 for further details. The total asset retirement obligation ("ARO") liability related to San Onofre was revised in the second quarter of 2013 based on an updated decommissioning cost estimate for the retirement of both San Onofre Units 2 and 3. The revised ARO liability at June 30, 2013 related to San Onofre increased $455 million to $2.7 billion. The following table summarizes the changes in SCE's ARO liability, including San Onofre and Palo Verde:
New Accounting Guidance Accounting Guidance Adopted in 2013 Offsetting Assets and Liabilities In January 2013, the FASB issued accounting standards updates modifying the disclosure requirements about the nature of an entity's rights of offsetting recognized assets and liabilities in the statement of financial position under master netting agreements and similar arrangements associated with derivative instruments, repurchase agreements and securities lending transactions. The guidance requires increased disclosure of the gross and net recognized assets and liabilities, collateral positions and descriptions of setoff rights. Edison International and SCE adopted this guidance effective January 1, 2013. The adoption of this standard did not impact the consolidated income statements, balance sheets or cash flows of Edison International or SCE. Items Reclassified out of Accumulated Other Comprehensive Income In February 2013, the FASB issued an accounting standards update which requires disclosure related to items reclassified out of AOCI. The guidance requires companies to present separately, for each component of other comprehensive income, current period reclassifications and the remainder of the current-period other comprehensive income. In addition, for certain current period reclassifications, an entity is required to disclose the effect of the item reclassified out of AOCI on the respective line item(s) of net income. Edison International and SCE adopted this guidance effective January 1, 2013. See Note 14 for further details. Accounting Guidance Not Yet Adopted In July 2013, the FASB issued an accounting standards update that will require that an unrecognized tax benefit be presented on the balance sheet as a reduction of a deferred tax asset for a net operating loss ("NOL") or tax credit carryforward under certain circumstances. This proposal is effective January 1, 2014 and is not expected to have a material impact on the consolidated financial statements. |
Fair Value Measurements
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Recurring Fair Value Measurements 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 June 30, 2013 and December 31, 2012, 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. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets and liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). 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:
Edison International Parent and Other Assets measured at fair value consisted of money market funds of $72 million and $107 million at June 30, 2013 and December 31, 2012, respectively, classified as Level 1. 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:
Edison International and SCE recognize the fair value for transfers in and transfers out of each level at the end of each reporting period. There were no transfers between any levels during 2013 and 2012. Valuation Techniques Used to Determine Fair Value Level 1 The fair value of Edison International 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 and derivatives, U.S. treasury securities, mutual funds and money market funds. Level 2 SCE's Level 2 assets and liabilities include fixed income securities 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. For further discussion on fixed income securities, see "—Nuclear Decommissioning Trusts" below. 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 exchanges (New York Mercantile Exchange and 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 over-the-counter options, tolling arrangements and derivative contracts that trade infrequently such as congestion revenue rights ("CRRs") and long-term power agreements. Assumptions are made in order to value derivative contracts in which observable inputs are not available. Changes in fair value are based on changes to forward market prices, including extrapolation of short-term observable inputs into forecasted prices for illiquid forward periods. 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. Level 3 Valuation Process The process of determining fair value is the responsibility of SCE's risk management department, which reports to SCE's chief financial officer. This department obtains observable and unobservable inputs through broker quotes, exchanges and internal valuation techniques that use both standard and proprietary models to determine fair value. Each reporting period, the risk and finance departments collaborate to determine the appropriate fair value methodologies and classifications for each derivative. Inputs are validated for reasonableness by comparison against prior prices, other broker quotes and volatility fluctuation thresholds. Inputs used and valuations are reviewed period-over-period and compared with market conditions to determine reasonableness. The following table sets forth SCE's valuation techniques and significant unobservable inputs used to determine fair value for Level 3 assets and liabilities:
Level 3 Fair Value Sensitivity Gas Options, Electricity Options, and Tolling Arrangements The fair values of SCE's option contracts and tolling arrangements contain intrinsic value and time value. Intrinsic value is the difference between the market price and strike price of the underlying commodity. Time value is made up of several components, including volatility, time to expiration, and interest rates. The fair value of option contracts changes as the underlying commodity price moves away or towards the strike price. The option model for tolling arrangements reflects plant specific information such as operating and start-up costs. For tolling arrangements and certain gas and power option contracts where SCE is the buyer, increases in volatility of the underlying commodity prices would result in increases to fair value as it represents greater price movement risk. As power and gas prices increase, the fair value of the option contracts and tolling arrangements tends to increase. The valuation of power option contracts and tolling arrangements is also impacted by the correlation between gas and power prices. As the correlation increases, the fair value of power option contracts and tolling arrangements tends to decline. Forward Power Contracts Generally, an increase (decrease) in long-term forward power prices at illiquid locations where SCE is the buyer relative to the contract price will increase (decrease) fair value. Congestion Revenue Rights Where SCE is the buyer, generally increases (decreases) in forecasted load in isolation would result in increases (decreases) to the fair value. In general, an increase (decrease) in electricity and gas prices at illiquid locations tends to result in increases (decreases) to fair value; however, changes in electricity and gas prices in opposite directions may have varying results on fair value. Nuclear Decommissioning Trusts SCE's nuclear decommissioning trust investments include equity securities, U.S. treasury securities and other fixed income securities. Equity and treasury securities are classified as Level 1 as fair value is determined by observable market prices in active or highly liquid and transparent markets. The remaining fixed income securities are classified as Level 2. The fair value of these financial instruments is based on evaluated prices that reflect significant observable market information such as reported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes, issuer spreads, bids, offers and relevant credit information. Fair Value of Long-Term Debt Recorded at Carrying Value The carrying value and fair value of Edison International and SCE's long-term debt is as follows:
Fair value of Edison International and SCE's short-term and long-term debt is classified as Level 2 and is based on evaluated prices that reflect significant observable market information such as reported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes of new issue prices and relevant credit information. The carrying value of Edison International and SCE's trade receivables and payables, other investments, and short-term debt approximates fair value. |
Consolidated Statements of Changes in Equity (Notes)
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Jun. 30, 2013
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Statement of Stockholders' Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Statements of Changes in Equity | Consolidated Statements of Changes in Equity The following table provides Edison International's changes in equity for the six months ended June 30, 2013:
During the first quarter of 2013, SCE redeemed all outstanding shares of Series B and C preference stock and charged the issuance costs to retained earnings. The following table provides Edison International's changes in equity for the six months ended June 30, 2012:
The following table provides SCE's changes in equity for the six months ended June 30, 2013:
During the first quarter of 2013, SCE redeemed all outstanding shares of Series B and C preference stock and charged the issuance costs to retained earnings. The following table provides SCE's changes in equity for the six months ended June 30, 2012:
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Summary of Significant Accounting Policies (Earnings Per Share) (Details) (USD $)
In Millions, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | |||||
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Jun. 30, 2013
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Basic earnings per share - continuing operations: | |||||||
Income from continuing operations available to common shareholders | $ (106) | $ 183 | $ 152 | $ 360 | |||
Weighted average common shares outstanding (in shares) | 326,000,000 | 326,000,000 | 326,000,000 | 326,000,000 | |||
Basic earnings per share – continuing operations (in dollars per share) | $ (0.33) | $ 0.56 | $ 0.47 | $ 1.10 | |||
Diluted earnings per share - continuing operations: | |||||||
Income from continuing operations available to common shareholders | (106) | 183 | 152 | 360 | |||
Income impact of assumed conversions | 0 | 0 | 0 | 0 | |||
Income from continuing operations available to common shareholders and assumed conversions | $ (106) | $ 183 | $ 152 | $ 360 | |||
Weighted average common shares outstanding (in shares) | 326,000,000 | 326,000,000 | 326,000,000 | 326,000,000 | |||
Incremental shares from assumed conversions (in shares) | 0 | [1] | 8,000,000 | 3,000,000 | 7,000,000 | ||
Adjusted weighted average shares - diluted (in shares) | 326,000,000 | 334,000,000 | 329,000,000 | 333,000,000 | |||
Diluted earnings per share – continuing operations (in dollars per share) | $ (0.33) | $ 0.55 | $ 0.47 | $ 1.08 | |||
Stock-Based Compensation Awards
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Diluted earnings per share - continuing operations: | |||||||
Stock-based compensation awards excluded from the computation of diluted earnings per share (in shares) | 3,266,857 | 1,587,370 | 4,928,510 | ||||
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Consolidated Statements of Changes in Equity (Tables)
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Statement of Stockholders' Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in equity | The following table provides Edison International's changes in equity for the six months ended June 30, 2013:
During the first quarter of 2013, SCE redeemed all outstanding shares of Series B and C preference stock and charged the issuance costs to retained earnings. The following table provides Edison International's changes in equity for the six months ended June 30, 2012:
The following table provides SCE's changes in equity for the six months ended June 30, 2013:
During the first quarter of 2013, SCE redeemed all outstanding shares of Series B and C preference stock and charged the issuance costs to retained earnings. The following table provides SCE's changes in equity for the six months ended June 30, 2012:
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Compensation and Benefit Plans (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Workforce Reductions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Workforce reductions | The following table provides a summary of changes in the accrued severance liability associated with these reductions:
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Pension Plans
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Pension and Other Postretirement Benefits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expense Components for Plans | Expense components for continuing operations are:
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Postretirement Benefits Other Than Pensions
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Pension and Other Postretirement Benefits | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expense Components for Plans | Expense components for continuing operations are:
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Related Party Transactions (Details) (Southern California Edison, EME Natural Gas Fired Projects, USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended |
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Jun. 30, 2013
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Jun. 30, 2013
MW
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Southern California Edison | EME Natural Gas Fired Projects
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Related Party Transaction [Line Items] | ||
Term of power sales contract | 10 years | |
Output | 479 | |
Expense for power purchased | $ 6 | $ 6 |
Supplemental Cash Flows Information (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flows Information | Supplemental cash flows information for continuing operations is:
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Supplemental Cash Flows Information (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
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Jun. 30, 2013
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Jun. 30, 2012
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Cash payments (receipts) for interest and taxes: | ||
Interest, net of amounts capitalized | $ 213 | $ 194 |
Tax payments (refunds), net | 26 | 1 |
Dividends declared but not paid: | ||
Common stock | 110 | 106 |
Preferred and preference stock | 29 | 34 |
Southern California Edison
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Cash payments (receipts) for interest and taxes: | ||
Interest, net of amounts capitalized | 205 | 194 |
Tax payments (refunds), net | 17 | (2) |
Dividends declared but not paid: | ||
Common stock | 0 | 0 |
Preferred and preference stock | 29 | 34 |
Accrued capital expenditures | $ 515 | $ 408 |
Compensation and Benefit Plans (Expense Components) (Details) (USD $)
In Millions, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||||||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Postretirement Benefits Other Than Pensions
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Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||||||||
Service cost | $ 14 | $ 12 | $ 28 | $ 24 | ||||||||||
Interest cost | 26 | 29 | 52 | 57 | ||||||||||
Expected return on plan assets | (30) | (27) | (60) | (54) | ||||||||||
Special termination benefits | 10 | [1] | 0 | [1] | 10 | [1] | 0 | [1] | ||||||
Amortization of prior service cost | (9) | (9) | (18) | (18) | ||||||||||
Amortization of net loss | 7 | [2] | 11 | [2] | 14 | [2] | 23 | [2] | ||||||
Expense under accounting standards | 18 | 16 | 26 | 32 | ||||||||||
Pension Plans
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Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||||||||
Service cost | 38 | 39 | 76 | 77 | ||||||||||
Interest cost | 42 | 45 | 84 | 91 | ||||||||||
Expected return on plan assets | (57) | (55) | (114) | (111) | ||||||||||
Settlement costs | 49 | 0 | 49 | 0 | ||||||||||
Amortization of prior service cost | 1 | 1 | 2 | 2 | ||||||||||
Amortization of net loss | 15 | [3] | 16 | [3] | 30 | [3] | 33 | [3] | ||||||
Expense under accounting standards | 88 | 46 | 127 | 92 | ||||||||||
Regulatory adjustment (deferred) | (31) | 27 | (14) | 54 | ||||||||||
Total expense recognized | 57 | 73 | 113 | 146 | ||||||||||
Net loss reclassified | 4 | 7 | ||||||||||||
Southern California Edison | Postretirement Benefits Other Than Pensions
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Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||||||||
Service cost | 14 | 12 | 27 | 24 | ||||||||||
Interest cost | 26 | 28 | 52 | 56 | ||||||||||
Expected return on plan assets | (30) | (27) | (60) | (54) | ||||||||||
Special termination benefits | 10 | [1] | 0 | [1] | 10 | [1] | 0 | [1] | ||||||
Amortization of prior service cost | (9) | (9) | (18) | (18) | ||||||||||
Amortization of net loss | 7 | [2] | 11 | [2] | 14 | [2] | 22 | [2] | ||||||
Expense under accounting standards | 18 | 15 | 25 | 30 | ||||||||||
Net loss reclassified | 0 | 0 | ||||||||||||
Southern California Edison | Pension Plans
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Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||||||||
Service cost | 37 | 37 | 74 | 74 | ||||||||||
Interest cost | 41 | 45 | 82 | 90 | ||||||||||
Expected return on plan assets | (57) | (55) | (114) | (110) | ||||||||||
Settlement costs | 48 | 0 | 48 | 0 | ||||||||||
Amortization of prior service cost | 1 | 1 | 2 | 2 | ||||||||||
Amortization of net loss | 14 | [3] | 15 | [3] | 28 | [3] | 30 | [3] | ||||||
Expense under accounting standards | 84 | 43 | 120 | 86 | ||||||||||
Regulatory adjustment (deferred) | (31) | 27 | (14) | 54 | ||||||||||
Total expense recognized | 53 | 70 | 106 | 140 | ||||||||||
Net loss reclassified | 3 | 5 | ||||||||||||
Maximum | Postretirement Benefits Other Than Pensions
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Defined Benefit Plan, Net Periodic Benefit Cost [Abstract] | ||||||||||||||
Net loss reclassified | $ 1 | $ 1 | ||||||||||||
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