Compensation and Benefit Plans

12 Months Ended

Dec. 31, 2023

Compensation and Benefit Plans

Compensation and Benefit Plans

Note 9.Compensation and Benefit Plans

Employee Savings Plan

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

	Edison
	International		SCE
(in millions)	Years ended December 31,
2023	$	121	$	119
2022		103		101
2021		97		96

Pension Plans and Postretirement Benefits Other Than Pensions

Pension Plans

Noncontributory defined benefit pension plans (some with cash balance features) cover most employees meeting minimum service requirements. Employees hired by the participating companies on or after December 31, 2017 are no longer eligible to participate in the pension plan. In lieu of that, an additional non-contributory employer contribution is deposited into the Edison 401(k) Savings Plan. SCE recognizes pension expense for its nonexecutive plan as calculated by the actuarial method used for ratemaking. The expected contributions (all by the employer) for Edison International and SCE are approximately $45 million and $13 million, respectively, for the year ending December 31, 2024. The majority of annual contributions made by SCE to its pension plans are anticipated to be recovered through CPUC-approved regulatory mechanisms.

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

Information on pension plan assets and benefit obligations is shown below.

	Edison International						SCE
	Years ended December 31,
(in millions)	2023			2022			2023			2022
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	3,524		$	4,171		$	3,159		$	3,694
Service cost		101			120			97			115
Interest cost		180			111			162			97
Actuarial loss (gain)		96			(589)			82			(503)
Benefits paid		(254)			(289)			(222)			(244)
Projected benefit obligation at end of year	$	3,647		$	3,524		$	3,278		$	3,159
Change in plan assets
Fair value of plan assets at beginning of year	$	3,462		$	4,296		$	3,275		$	4,061
Actual return (loss) on plan assets		369			(575)			349			(544)
Employer contributions		32			30			13			2
Benefits paid		(254)			(289)			(222)			(244)
Fair value of plan assets at end of year		3,609			3,462			3,415			3,275
(Underfunded)/Overfunded status at end of year	$	(38)		$	(62)		$	137		$	116
Amounts recognized in the consolidated balance sheets consist of 1:
Long-term assets	$	169		$	139		$	149		$	128
Current liabilities		(30)			(26)			(2)			(2)
Long-term liabilities		(177)			(175)			(10)			(10)
	$	(38)		$	(62)		$	137		$	116
Amounts recognized in accumulated other comprehensive loss consist of:
Net loss1	$	21			17			8			8
Amounts recognized as a regulatory liability		(159)			(139)			(159)			(139)
Accumulated benefit obligation at end of year	$	3,495		$	3,401		$	3,136		$	3,049
Pension plans with plan assets in excess of an accumulated benefit obligation:
Projected benefit obligation		3,647			3,524			3,278			3,159
Accumulated benefit obligation		3,495			3,401			3,136			3,049
Fair value of plan assets		3,609			3,462			3,415			3,275
Weighted average assumptions used to determine obligations at end of year:
Discount rate		5.04	%		5.36	%		5.04	%		5.36	%
Rate of compensation increase		4.00	%		4.00	%		4.00	%		4.00	%

1 The SCE liability excludes a long-term payable due to Edison International Parent of $94 million and $93 million at December 31, 2023 and 2022, respectively, related to certain SCE postretirement benefit obligations transferred to Edison International Parent. SCE's accumulated other comprehensive loss of $8 million at both December 31, 2023 and 2022, excludes net losses of $8 million and $3 million related to these benefits, respectively.

For Edison International and SCE, respectively, the 2023 actuarial losses are primarily related to $96 million and $92 million in losses from a decrease of 32 basis points in the discount rate (from 5.36% as of December 31, 2022 to 5.04% as of December 31, 2023). For Edison International and SCE, respectively, the 2022 actuarial gains are primarily related to $1.0 billion and $929 million in gains from an increase in the discount rate (from 2.75% as of December 31, 2021 to 5.36% as of December 31, 2022), partially offset by $456 million and $430 million in losses from economic assumption and experience.

Net periodic pension expense components are:

	Edison International						SCE
	Years ended December 31,
(in millions)	2023		2022		2021		2023		2022		2021
Service cost	$	101	$	120	$	130	$	99	$	118	$	127
Non-service cost (benefit)
Interest cost		180		111		103		166		101		95
Expected return on plan assets		(214)		(227)		(222)		(202)		(215)		(211)
Settlement costs		—		4		—		—		4		—
Amortization of prior service cost		—		—		1		—		—		1
Amortization of net loss		3		5		11		2		2		7
Regulatory adjustment		(47)		6		25		(47)		6		25
Total non-service benefit1		(78)		(101)		(82)		(81)		(102)		(83)
Total expense	$	23	$	19	$	48	$	18	$	16	$	44

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

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

	Edison International						SCE
	Years ended December 31,
(in millions)	2023		2022		2021		2023		2022		2021
Net loss (gain)	$	6	$	(45)	$	(10)	$	6	$	(24)	$	(5)
Settlement charges		—		(4)		—		—		(4)		—
Amortization of net loss		(2)		(8)		(11)		(2)		(5)		(7)
Total loss (gain) recognized in other comprehensive income		4		(57)		(21)		4		(33)		(12)
Total recognized in expense and other comprehensive income	$	27	$	(38)	$	27	$	22	$	(17)	$	32

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

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

	Years ended December 31,
	2023		2022		2021
Discount rate	5.36	%	2.75	%	2.38	%
Rate of compensation increase	4.00	%	4.00	%	4.00	%
Expected long-term return on plan assets	6.50	%	5.50	%	5.50	%
Interest crediting rate for cash balance account1
Starting rate	5.86	%	3.12	%	3.03	%
Ultimate rate	5.86	%	4.50	%	4.50	%
Year ultimate rate is reached	2023		2026		2025

1 Edison International and SCE were using a graduated assumption for interest crediting rate for cash balance account, where current interest rate gradually increased to an ultimate rate at a certain year. Starting 2023, Edison International and SCE changed to use single interest crediting rate assumption to determine the pension expense for cash balance account.

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

	Edison
(in millions)	International		SCE
2024	$	325	$	279
2025		319		279
2026		332		290
2027		320		284
2028		314		281
2029 – 2033		1,447		1,308

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

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

There are no expected contributions for PBOP benefits for the year ended December 31, 2024. Annual contributions related to SCE employees made to SCE plans are anticipated to be recovered through CPUC-approved regulatory mechanisms and are expected to be, at a minimum, equal to the total annual expense for these plans.

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

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

	Edison International						SCE
	Years ended December 31,
(in millions)	2023			2022			2023			2022
Change in benefit obligation
Benefit obligation at beginning of year	$	1,331		$	1,904		$	1,323		$	1,895
Service cost		20			34			20			34
Interest cost		67			56			67			55
Actuarial gain		(567)			(598)			(563)			(596)
Plan participants' contributions		28			29			28			29
Benefits paid		(106)			(94)			(106)			(94)
Benefit obligation at end of year	$	773		$	1,331		$	769		$	1,323
Change in plan assets
Fair value of plan assets at beginning of year	$	2,187		$	2,772		$	2,187		$	2,772
Actual return on assets		162			(527)			162			(527)
Employer contributions		4			7			4			7
Plan participants' contributions		28			29			28			29
Benefits paid		(106)			(94)			(106)			(94)
Fair value of plan assets at end of year		2,275			2,187			2,275			2,187
Overfunded status at end of year	$	1,502		$	856		$	1,506		$	864
Amounts recognized in the consolidated balance sheets consist of:
Long-term assets	$	1,506		$	871		$	1,506		$	871
Current liabilities		—			(8)			—			(7)
Long-term liabilities		(4)			(7)			—			—
	$	1,502		$	856		$	1,506		$	864
Amounts recognized in accumulated other comprehensive loss consist of:
Net gain	$	(5)		$	(2)		$	—		$	—
Amounts recognized as a regulatory liability		(1,505)			(867)			(1,505)			(867)
Weighted average assumptions used to determine obligations at end of year:
Discount rate		5.06	%		5.43	%		5.06	%		5.43	%
Assumed health care cost trend rates:
Rate assumed for following year		6.50	%		6.75	%		6.50	%		6.75	%
Ultimate rate		5.00	%		5.00	%		5.00	%		5.00	%
Year ultimate rate reached		2029			2029			2029			2029

For Edison International and SCE, the 2023 actuarial gains are primarily related to $553 million and $550 million in gains from the change in postretirement medical carrier and retiree medical delivery mechanism effective in 2024, respectively. For Edison International and SCE, the 2022 actuarial gains are primarily related to $546 million and $543 million in gains from an increase in the discount rate (from 2.95% as of December 31, 2021 to 5.43% as of December 31, 2022), respectively.

Net periodic PBOP expense components are:

	Edison International						SCE
	Years ended December 31,
(in millions)	2023		2022		2021		2023		2022		2021
Service cost	$	20	$	34	$	40	$	20	$	34	$	40
Non-service cost (benefit)
Interest cost		67		56		52		67		55		52
Expected return on plan assets		(107)		(97)		(106)		(107)		(97)		(106)
Amortization of prior service cost		(1)		(2)		(1)		(1)		(2)		(1)
Amortization of net gain		(50)		(45)		(35)		(50)		(45)		(36)
Regulatory adjustment		71		55		51		71		55		51
Total non-service benefit1		(20)		(33)		(39)		(20)		(34)		(40)
Total expense	$	—	$	1	$	1	$	—	$	—	$	—

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

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

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

	Years ended December 31,
	2023		2022		2021
Discount rate	5.43	%	2.95	%	2.67	%
Expected long-term return on plan assets	5.00	%	3.50	%	4.00	%
Assumed health care cost trend rates:
Current year	6.75	%	6.25	%	6.50	%
Ultimate rate	5.00	%	5.00	%	5.00	%
Year ultimate rate reached	2029		2029		2029

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

	Edison
(in millions)	International		SCE
2024	$	48	$	48
2025		49		48
2026		49		49
2027		53		53
2028		54		53
2029 – 2033		276		275

Plan Assets

Description of Pension and Postretirement Benefits Other than Pensions Investment Strategies

The investment of plan assets is overseen by a fiduciary investment committee. Plan assets are invested using a combination of asset classes and may have active and passive investment strategies within asset classes. Target allocations for 2023 pension plan assets were 19.2% for U.S. equities, 10.8% for non-U.S. equities, 55% for fixed income and 15% for opportunistic and/or alternative investments. Target allocations for 2023 PBOP plan assets (except for Represented VEBA which is 95% for fixed income and 5% for U.S. and non-U.S. equities) are 29% for U.S. and non-U.S. equities, 65% for fixed income and 6% for opportunistic and/or alternative investments. Edison International employs multiple investment management firms. Investment managers within each asset class cover a range of investment styles and approaches. Risk is managed through diversification among multiple asset classes, managers,

styles and securities. Plan asset classes and individual manager performances are measured against targets. Edison International also monitors the stability of its investment managers' organizations.

Allowable investment types under CPUC investment guidelines include:

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

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

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

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

Asset class portfolio weights are permitted to range within plus or minus 5%. Where approved by the fiduciary investment committee, futures contracts are used for portfolio rebalancing and to reallocate portfolio cash positions. Where authorized, a few of the plans' investment managers employ limited use of derivatives, including futures contracts, options, options on futures and interest rate swaps in place of direct investment in securities to gain efficient exposure to markets. Derivatives are not used to leverage the plans or any portfolios.

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

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

Capital Markets Return Forecasts

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

Fair Value of Plan Assets

The PBOP Plan and the Southern California Edison Company Retirement Plan Trust assets include investments in equity securities, U.S. treasury securities, other fixed-income securities, common/collective funds, mutual funds, other investment entities, foreign exchange and interest rate contracts, and partnership/joint ventures. Equity securities, U.S. treasury securities, mutual and money market funds are classified as Level 1 as fair value is determined by observable, unadjusted quoted market prices in active or highly liquid and transparent markets. The fair value of the underlying

investments in equity mutual funds are based on stock-exchange prices. The fair value of the underlying investments in fixed-income mutual funds and other fixed income securities including municipal bonds are based on evaluated prices that reflect significant observable market information such as reported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes, issuer spreads, bids, offers and relevant credit information. Foreign exchange and interest rate contracts are classified as Level 2 because the values are based on observable prices but are not traded on an exchange. Futures contracts trade on an exchange and therefore are classified as Level 1. No investment is classified as Level 3 as of December 31, 2023 and 2022. Common/collective funds and partnerships are measured at fair value using the net asset value per share ("NAV") and have not been classified in the fair value hierarchy. Other investment entities are valued similarly to common/collective funds and are therefore classified as NAV. The Level 1 registered investment companies are either mutual or money market funds. The remaining funds in this category are readily redeemable and classified as NAV and are discussed further at note 8 to the pension plan trust investments table below.

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

Pension Plan

The following table sets forth the investments for Edison International and SCE that were accounted for at fair value as of December 31, 2023 and December 31, 2022, respectively, by asset class and level within the fair value hierarchy:

	December 31, 2023
(in millions)	Level 1		Level 2		NAV1		Total
U.S. government and agency securities2	$	256	$	352	$	—	$	608
Corporate stocks3		176		5		—		181
Corporate bonds4		—		1,057		—		1,057
Common/collective funds5		—		—		584		584
Partnerships/joint ventures6		—		—		657		657
Other investment entities7		—		—		58		58
Registered investment companies8		212		—		153		365
Interest-bearing cash		10		—		—		10
Other		—		46		8		54
Total	$	654	$	1,460	$	1,460	$	3,574
Receivables and payables, net								35
Combined net plan assets available for benefits								3,609
SCE's share of net plan assets							$	3,415

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

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

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

3 Corporate stocks are diversified. At both December 31, 2023 and 2022, performance for actively managed separate accounts is primarily benchmarked against the Russell Indexes (36%) and Morgan Stanley Capital International (MSCI) index (64%).

4 Corporate bonds are diversified. At December 31, 2023 and 2022, respectively, this category includes $78 million and $67 million for collateralized mortgage obligations and other asset backed securities.

5 The common/collective assets are invested in equity index funds that seek to track performance of the Standard and Poor's 500 Index (41% at both December 31, 2023 and 2022). In addition, at December 31, 2023 and 2022, respectively, 40% and 46% of the assets in this category are in index funds which seek to track performance in the MSCI All Country World Index ex-US and 16% and 11% of this category are in a non-index U.S. equity fund, which is actively managed.

6 At December 31, 2023 and 2022, respectively, 74% and 76% are invested in private equity funds with investment strategies that include branded consumer products and clean technology companies, 17% and 18% are invested in ABS including distressed mortgages and commercial and residential loans, 5% and 2% are invested in a broad range of financial assets in all global markets.

7 At December 31, 2023 and 2022, respectively, 68% and 64% are invested in domestic mortgage backed securities and 32% and 36% in high yield debt securities, respectively.

8 At December 31, 2023 and 2022, respectively, 57% and 56% are invested in Level 1 corporate bond funds, 13% and 21% in a fixed income fund used for cash management and 28% and 22% in a US equity fund, respectively.

At December 31, 2023 and 2022, respectively, approximately 62% and 61% of the publicly traded equity investments, including equities in the common/collective funds, were located in the United States.

Postretirement Benefits Other than Pensions

The following table sets forth the VEBA Trust assets for Edison International and SCE that were accounted for at fair value as of December 31, 2023 and December 31, 2022, respectively, by asset class and level within the fair value hierarchy:

	December 31, 2023
(in millions)	Level 1		Level 2		NAV1		Total
U.S. government and agency securities2	$	569	$	84	$	—	$	653
Corporate stocks3		85		2		—		87
Corporate notes and bonds4		—		1,064		—		1,064
Common/collective funds5		—		—		222		222
Partnerships6		—		—		124		124
Registered investment companies7		47		—		—		47
Interest bearing cash		—		29		—		29
Other8		2		70		—		72
Total	$	703	$	1,249	$	346	$	2,298
Receivables and payables, net								(23)
Net plan assets available for benefits								2,275

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

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

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

3 Corporate stock performance for actively managed separate accounts is primarily benchmarked against the Russell Indexes (74% and 73% for 2023 and 2022, respectively) and the MSCI All Country World Index (26% and 27% for 2023 and 2022, respectively).

4 Corporate notes and bonds are diversified and include approximately $237 million and $150 million for commercial collateralized mortgage obligations and other asset backed securities at December 31, 2023 and 2022, respectively.

5 At December 31, 2023 and 2022, respectively, 45% and 53% of the common/collective assets are invested in index funds which seek to track performance in the MSCI All Country World Investable Market Index, 40% and 27% are invested in a non-index U.S. equity fund which is actively managed. The remaining assets in this category are primarily invested in a fixed income fund.

6 At December 31, 2023 and 2022, respectively, 65% and 63% of the partnerships are invested in private equity and venture capital funds. Investment strategies for these funds include branded consumer products, clean and information technology and healthcare. Of the remaining partnerships category, 28% and 31% are invested in asset backed securities including distressed mortgages, distressed companies and commercial and residential loans and debt and equity of banks, 7% and 6% are invested in a broad range of financial assets in all global markets.

7 At December 31, 2023 and 2022, respectively, registered investment companies were primarily invested in a money market fund (70% and 75%) and exchange rate traded funds which seek to track performance of MSCI Emerging Market Index, Russell 2000 Index and international small cap equities (30% and 25%)

8 Other includes $58 million and $53 million of municipal securities at December 31, 2023 and 2022, respectively.

At December 31, 2023 and 2022, respectively, approximately 78% and 70% of the publicly traded equity investments, including equities in the common/collective funds, were located in the United States.

Stock-Based Compensation

Edison International maintains a shareholder-approved incentive plan (the "2007 Performance Incentive Plan") that includes stock-based compensation. The maximum number of shares of Edison International's common stock authorized to be issued or transferred pursuant to awards under the 2007 Performance Incentive Plan, as amended, is approximately 71 million shares. As of December 31, 2023, Edison International had approximately 13 million shares remaining available for new award grants under its stock-based compensation plans.

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

	Edison International						SCE
	Years ended December 31,
(in millions)	2023		2022		2021		2023		2022		2021
Stock-based compensation expense1:
Stock options	$	12	$	13	$	16	$	6	$	7	$	8
Performance shares		15		13		9		8		6		4
Restricted stock units		17		14		12		12		9		8
Other		2		2		2		—		—		—
Total stock-based compensation expense	$	46	$	42	$	39	$	26	$	22	$	20
Income tax benefits related to stock-based compensation expense	$	7	$	9	$	4	$	5	$	5	$	3

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

Stock Options

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

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

	Years ended December 31,
	2023	2022	2021
Expected terms (in years)	4.8	5.0	5.4
Risk-free interest rate	3.6%-4.7%	1.6% - 4.1%	1.1% - 1.3%
Expected dividend yield	4.2% -4.7%	4.0% - 5.0%	4.1% - 4.8%
Weighted average expected dividend yield	4.2%	4.0%	4.5%
Expected volatility	29.0% - 29.6%	27.8% - 28.6%	26.9% - 27.1%
Weighted average volatility	29.1%	27.8%	26.9%

The expected term represents the period of time for which the options are expected to be outstanding and is primarily based on historical exercise and post-vesting cancellation experience and stock price history. The risk-free interest rate

for periods within the contractual life of the option is based on a zero-coupon U.S. Treasury STRIPS (separate trading of registered interest and principal of securities) whose maturity corresponds to the option's expected term on the measurement date. Expected volatility is based on the historical volatility of Edison International's common stock for the length of the option's expected term for 2023. The volatility period used was 58 months, 60 months and 64 months at December 31, 2023, 2022 and 2021, respectively.

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

		Weighted Average
				Remaining	Aggregate
		Exercise		Contractual	Intrinsic Value
	Shares	Price		Term (years)	(in millions)
Edison International:
Outstanding at December 31, 2022	11,883,556	$	63.64
Granted	766,167		64.71
Forfeited or expired	(129,716)		65.61
Exercised1	(1,101,764)		57.36
Outstanding at December 31, 2023	11,418,243		64.30	4.89
Vested and expected to vest at December 31, 2023	11,183,196		64.40	4.83	$	88
Exercisable at December 31, 2023	8,642,764	$	65.24	4.03	$	63
SCE:
Outstanding at December 31, 2022	5,797,632	$	63.31
Granted	393,304		64.81
Forfeited or expired	(110,560)		66.28
Exercised1	(857,922)		58.07
Affiliate transfers, net	(30,179)		63.35
Outstanding at December 31, 2023	5,192,275		64.22	5.04
Vested and expected to vest at December 31, 2023	5,072,830		64.34	4.97	$	41
Exercisable at December 31, 2023	3,808,466	$	65.31	4.11	$	28

1 Edison International and SCE recognized tax benefits of $4 million and $3 million, respectively, from stock options exercised in 2023.

At December 31, 2023, total unrecognized compensation cost related to stock options and the weighted average period the cost is expected to be recognized are as follows:

	Edison International		SCE
Unrecognized compensation cost, net of expected forfeitures (in millions)	$	10	$	5
Weighted average period (in years)		1.5		1.5

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

	Edison International						SCE
	Years ended December 31,
(in millions, except per award amounts)	2023		2022		2021		2023		2022		2021
Weighted average grant date fair value per option granted	$	12.69	$	9.92	$	7.26	$	12.71	$	9.92	$	7.30
Fair value of options vested		8		8		3		7		5		3
Value of options exercised		14		17		8		11		12		6

Performance Shares

A target number of contingent performance shares were awarded to executives in 2023, 2022 and 2021 and vest as of December 31, 2025, 2024 and 2023, respectively. The vesting of the grants is dependent upon market and financial performance and service conditions as defined in the grants for each of the years. The number of performance shares

earned from each year's grants could range from zero to twice the target number (plus additional units credited as dividend equivalents).

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

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

	Equity Awards
		Weighted Average
	Shares	Fair Value
Edison International:
Nonvested at December 31, 2022	402,830	$	64.22
Granted	255,883		76.00
Forfeited	(20,738)		69.32
Vested	(141,134)		57.71
Nonvested at December 31, 2023	496,841	$	71.93
SCE:
Nonvested at December 31, 2022	210,073	$	63.93
Granted	131,318		76.18
Forfeited	(14,758)		69.16
Vested	(76,108)		57.68
Affiliate transfers, net	(1,434)		62.85
Nonvested at December 31, 2023	249,091	$	71.99

Restricted Stock Units

Restricted stock units were awarded to executives in 2023, 2022 and 2021 and vest and become payable on January 2, 2026, January 2, 2025 and January 2, 2024, respectively. Each restricted stock unit awarded includes a dividend equivalent feature and is a contractual right to receive one share of Edison International common stock, if vesting requirements are satisfied. The vesting of Edison International's restricted stock units is dependent upon continuous service through the end of the vesting period, except for awards granted to retirement-eligible participants, which vest on an accelerated basis.

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

	Edison International			SCE
		Weighted Average			Weighted Average
		Grant Date			Grant Date
	Shares	Fair Value		Shares	Fair Value
Nonvested at December 31, 2022	698,182	$	60.60	488,335	$	60.13
Granted	324,469		64.84	231,446		64.92
Forfeited	(21,965)		61.73	(15,371)		61.86
Vested	(108,274)		68.16	(55,488)		67.57
Affiliate transfers, net	—		—	(3,373)		60.05
Nonvested at December 31, 2023	892,412	$	61.19	645,549	$	61.17

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