Compensation and Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2012

Defined Benefit Plan Disclosure [Line Items]

A summary of the status of EIX's stock options granted to EME employees is as follows:



			Weighted-Average
	Stock Options		Exercise Price		Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in millions)
Outstanding, December 31, 2011	3,344,611		$	34.05
Granted	660,222		43.16
Expired	(112,129	)	47.39
Transferred to affiliates	(270,312	)	33.13
Forfeited	(41,094	)	39.88
Exercised	(881,064	)	26.39
Outstanding, December 31, 2012	2,700,234		38.23		6.24
Vested and expected to vest at December 31, 2012	2,586,910		38.23		6.16	$	20
Exercisable at December 31, 2012	1,286,055		38.30		4.22	10

Schedule of Supplemental Data on Stock-Based Compensation

Supplemental Data on Stock-Based Compensation



	Years Ended December 31,
(in millions, except per award amounts)	2012		2011		2010
Stock-based compensation expense¹
Stock options	$	3	$	2	$	4
Performance shares	1		1		2
Restricted stock units	1		2		1
Other	2		2		2
Total stock-based compensation expense	$	7	$	7	$	9
Income tax benefits related to stock compensation expense	$	3	$	3	$	4
Excess tax benefits²	5		2		1
Stock options
Weighted average grant date fair value per option granted	$	5.22	$	5.61	$	4.92
Fair value of options vested	3		3		3
Cash used to purchase shares to settle options	44		18		11
Cash from participants to exercise stock options	26		12		6
Value of options exercised	18		6		4
Tax benefits from options exercised	6		2		2
Performance shares³ classified as equity awards
Weighted average grant date fair value per share granted	$	51.41	$	31.14	$	32.50
Fair value of shares vested	1.4		0.8		0.9
Restricted stock units
Weighted average grant date fair value per unit granted	$	43.16	$	38.03	$	33.30
Value of shares settled	$	1	$	2	$	—
Tax benefits realized from settlement of awards	$	—	$	1	$	—


¹	Reflected in administration and general on the consolidated statements of operations.


²	Reflected in excess tax benefits related to stock-based awards in cash flows from financing activities on the consolidated statements of cash flows.


³	There were no settlements of awards for performance shares in 2012, 2011 and 2010 as performance targets were not met.

Stock Options

Defined Benefit Plan Disclosure [Line Items]

Schedule of Assumptions Used in Valuation Model

The Black-Scholes option-pricing model requires various assumptions noted in the following table:



	Years Ended December 31,
	2012		2011		2010
Expected terms (in years)	6.9		7.0		7.3
Risk-free interest rate	1.1% - 1.7%		1.4% - 3.1%		2.0% - 3.2%
Expected dividend yield	2.8% - 3.1%		3.1% - 3.5%		3.3% - 4.0%
Weighted-average expected dividend yield	3.0	%	3.4	%	3.8	%
Expected volatility	17% - 18%		18% - 19%		19% - 20%
Weighted-average volatility	18.3	%	18.9	%	19.8	%

Performance Shares

Defined Benefit Plan Disclosure [Line Items]

Schedule of Assumptions Used in Valuation Model

The Monte Carlo simulation valuation model requires various assumptions noted in the following table:



	Years Ended December 31,
	2012		2011		2010
Equity awards
Grant date risk-free interest rate	0.4	%	1.2	%	1.3	%
Grant date expected volatility	13.2	%	20.4	%	21.6	%
Liability awards¹
Expected volatility	12.1	%	15.9	%	20.6	%
Risk-free interest rate
2012 awards	0.4	%	*		*
2011 awards	0.2	%	0.3	%	*
2010 awards	*		0.2	%	0.6	%


¹	The portion of performance shares classified as share-based liability awards are revalued at each reporting period.


*	Not applicable

Schedule of Nonvested Shares Activity

A summary of the status of EIX nonvested performance shares granted to EME employees is as follows:



	Equity Awards				Liability Awards
	Shares		Weighted-Average Grant-Date Fair Value		Shares		Weighted-Average Fair Value
Nonvested at December 31, 2011	84,313		$	27.50	84,313		$	29.48
Granted	16,797		51.41		16,750
Forfeited	(1,514	)	37.56		(1,508	)
Vested¹	(52,650	)	25.71		(52,678	)
Transferred to affiliates	(5,717	)	27.62		(5,716	)
Nonvested at December 31, 2012	41,229		39.14		41,161		46.48


¹	Includes performance shares that were paid as performance targets were met.

Restricted Stock Units

Defined Benefit Plan Disclosure [Line Items]

Schedule of Nonvested Shares Activity

The following is a summary of the status of EIX nonvested restricted stock units granted to EME employees:



	Restricted Stock Units		Weighted-Average Grant-Date Fair Value
Nonvested at December 31, 2011	129,750		$	32.11
Granted	39,918		43.16
Forfeited	(2,911	)	38.85
Paid Out	(45,488	)	26.24
Affiliate transfers—net	(10,049	)	31.42
Nonvested at December 31, 2012	111,220		38.36

Pension Plans

Defined Benefit Plan Disclosure [Line Items]

Information on Plan Assets and Benefit Obligations

Information on plan assets and benefit obligations is shown below:



	Years Ended December 31,
	2012									2011
(in millions)	Midwest Generation			Other EME Subsidiaries¹			EME			Midwest Generation			Other EME Subsidiaries¹			EME
Change in projected benefit obligation
Projected benefit obligation at beginning of year	$	195		$	121		$	316		$	164		$	123		$	287
Service cost	14			2			16			13			3			16
Interest cost	8			6			14			8			6			14
Actuarial (gain) loss	13			14			27			13			(1		)	12
Curtailment gain	—			(9		)	(9		)	—			—			—
Transfers out²	—			(23		)	(23		)	—			—			—
Benefits paid	(5		)	(6		)	(11		)	(3		)	(10		)	(13		)
Projected benefit obligation at end of year	$	225		$	105		$	330		$	195		$	121		$	316
Change in plan assets
Fair value of plan assets at beginning of year	$	121		$	56		$	177		$	109		$	55		$	164
Actual return on plan assets	19			7			26			2			—			2
Employer contributions	14			9			23			13			11			24
Benefits paid	(5		)	(6		)	(11		)	(3		)	(10		)	(13		)
Fair value of plan assets at end of year	$	149		$	66		$	215		$	121		$	56		$	177
Funded status at end of year	$	(76	)	$	(39	)	$	(115	)	$	(74	)	$	(65	)	$	(139	)
Amounts recognized on consolidated balance sheets:
Long-term liabilities	$	(76	)	$	(39	)	$	(115	)	$	(74	)	$	(65	)	$	(139	)
Amounts recognized in accumulated other comprehensive income:
Prior service cost	$	1		$	—		$	1		$	1		$	—		$	1
Net loss	40			27			67			38			31			69
Accumulated benefit obligation at end of year	$	195		$	105		$	300		$	168		$	110		$	278
Pension plans with an accumulated benefit obligation in excess of plan assets:
Projected benefit obligation	$	225		$	105		$	330		$	195		$	121		$	316
Accumulated benefit obligation	195			105			300			168			110			278
Fair value of plan assets	148			68			216			121			56			177
Weighted-average assumptions used to determine obligations at end of year:
Discount rate	4.50		%	4.50		%	4.50		%	4.50		%	4.50		%	4.50		%
Rate of compensation increase	4.50		%	4.50		%	4.50		%	4.50		%	4.50		%	4.50		%


¹	Includes Homer City.


²	Represents amount of EME's executive post retirement benefits liability assumed by EIX.

Expense Components for Plans

Expense components:



	Years Ended December 31,
	2012									2011									2010
(in millions)	Midwest Generation			Other EME Sub- sidiaries¹			EME			Midwest Generation			Other EME Sub- sidiaries¹			EME			Midwest Generation			Other EME Sub- sidiaries¹			EME
Service cost	$	14		$	—		$	14		$	13		$	2		$	15		$	12		$	3		$	15
Interest cost	8			4			12			8			4			12			8			4			12
Expected return on plan assets	(9		)	(3		)	(12		)	(9		)	(1		)	(10		)	(7		)	(1		)	(8		)
Net amortization	2			4			6			1			2			3			—			2			2
Special termination charges	—			2			2			—			—			—			—			—			—
Total expense	$	15		$	7		$	22		$	13		$	7		$	20		$	13		$	8		$	21


¹	Excludes Homer City.

Schedule of Other Changes in Plan Assets and Benefit Obligation Recognized in Other Comprehensive Income (Loss)

Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss:



	Years Ended December 31,
	2012									2011									2010
(in millions)	Midwest Generation			Other EME Sub- sidiaries¹			EME			Midwest Generation			Other EME Sub- sidiaries¹			EME			Midwest Generation		Other EME Sub- sidiaries¹			EME
Net loss	$	4		$	2		$	6		$	20		$	5		$	25		$	4	$	8		$	12
Amortization of net loss	(2		)	(4		)	(6		)	(1		)	(2		)	(3		)	—		(2		)	(2		)
Total in other comprehensive (income) loss	$	2		$	(2	)	$	—		$	19		$	3		$	22		$	4	$	6		$	10
Total in expense and other comprehensive (income) loss	$	17		$	5		$	22		$	32		$	10		$	42		$	17	$	14		$	31


¹	Includes Homer City.

Schedule of Weighted-Average Assumptions Used to Determine Expense

The following are weighted-average assumptions used to determine expenses:



	Years Ended December 31,
	2012						2011						2010
	Midwest Generation		Other EME Sub- sidiaries¹		EME		Midwest Generation		Other EME Sub- sidiaries¹		EME		Midwest Generation		Other EME Sub- sidiaries¹		EME
Discount rate	4.50	%	4.50	%	4.50	%	5.25	%	5.25	%	5.25	%	6.00	%	6.00	%	6.00	%
Rate of compensation increase	4.50	%	4.50	%	4.50	%	5.00	%	4.5% - 6.0%		4.5% - 6.0%		5.00	%	4.5% - 6.0%		4.5% - 6.0%
Expected long-term return on plan assets	7.50	%	7.50	%	7.50	%	7.50	%	7.50	%	7.50	%	7.50	%	7.50	%	7.50	%


¹	Includes Homer City.

Schedule of Benefit Payments to Be Paid

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



Years Ending December 31, (in millions)	Midwest Generation		Other EME Subsidiaries¹		EME
2013	$	8	$	4	$	12
2014	9		5		14
2015	10		5		15
2016	12		4		16
2017	13		4		17
2018-2022	68		21		89


¹	Excludes Homer City.

Schedule of Plan Assets by Asset Class and Level

The following table sets forth the Master Trust investments that were accounted for at fair value as of December 31, 2012 by asset class and level within the fair value hierarchy:



(in millions)	Level 1		Level 2		Level 3		Total
Corporate stocks¹	$	743	$	—	$	—	$	743
Common/collective funds²	—		635		—		635
U.S. government and agency securities³	242		350		—		592
Partnerships/joint ventures⁴	—		166		414		580
Corporate bonds⁵	—		508		—		508
Other investment entities⁶	—		271		—		271
Registered investment companies⁷	98		28		—		126
Interest-bearing cash	24		—		—		24
Other	1		100		—		101
Total	$	1,108	$	2,058	$	414	$	3,580
Receivables and payables, net							(38		)
Net plan assets available for benefits							3,542
EME's share of net plan assets							$	215
Midwest Generation's share of net plan assets							$	149

The following table sets forth the Master Trust investments that were accounted for at fair value as of December 31, 2011 by asset class and level within the fair value hierarchy:



(in millions)	Level 1			Level 2		Level 3		Total
Corporate stocks¹	$	642		$	—	$	—	$	642
Common/collective funds²	—			582		—		582
U.S. government and agency securities³	104			351		—		455
Partnerships/joint ventures⁴	—			140		448		588
Corporate bonds⁵	—			497		—		497
Other investment entities⁶	—			247		—		247
Registered investment companies⁷	79			29		—		108
Interest-bearing cash	5			—		—		5
Other	(1		)	69		—		68
Total	$	829		$	1,915	$	448	$	3,192
Receivables and payables, net								$	(39	)
Net plan assets available for benefits								3,153
EME's share of net plan assets								$	177
Midwest Generation's share of net plan assets								$	121


¹	Corporate stocks are diversified. For both 2012 and 2011, performance is primarily benchmarked against the Russell Indexes (60%) and Morgan Stanley Capital International (MSCI) index (40%).

At December 31, 2012 and 2011, respectively, the common/collective assets were invested in equity index funds that seek to track performance of the Standard and Poor's (S&P 500) Index (29% and 29%), Russell 200 and Russell 1000 indexes (28% and 27%) and the MSCI Europe, Australasia and Far East (EAFE) Index (11% and 10%). A non-index U.S. equity fund representing 25% and 23% of this category for 2012 and 2011, respectively, is actively managed. Another fund representing 6% and 8% of this category for 2012 and 2011, respectively, is a global asset allocation fund.


³	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.

⁴

Partnerships/joint venture Level 2 investments consist primarily of a partnership which invests in publicly traded fixed income securities, primarily from the banking and finance industry and U.S. government agencies. At December 31, 2012 and 2011, respectively, approximately 56% and 55% of the Level 3 partnerships are invested in (1) asset backed securities, including distressed mortgages and (2) commercial and residential loans and debt and equity of banks. The remaining Level 3 partnerships are invested in small private equity and venture capital funds. Investment strategies for these funds include branded consumer products, early stage technology, California geographic focus, and diversified US and non-US fund-of-funds.


⁵	Corporate bonds are diversified. At December 31, 2012 and 2011, respectively, this category includes $65 million and $53 million for collateralized mortgage obligations and other asset backed securities of which $7 million and $10 million are below investment grade.


⁶	Other investment entities were primarily invested in (1) emerging market equity securities, (2) a hedge fund that invests through liquid instruments in a global diversified portfolio of equity, fixed income, interest rate, foreign currency and commodities markets, and (3) domestic mortgage backed securities.


⁷	Level 1 of registered investment companies consisted of a global equity mutual fund which seeks to outperform the MSCI World Total Return Index. Level 2 primarily consisted of short-term, emerging market, high yield bond funds and government inflation-indexed bonds and short-term bond fund.

Schedule of Changes in Fair Value of Level 3 Investments

The following table sets forth a summary of changes in the fair value of Level 3 investments for 2012 and 2011:



(in millions)	2012			2011
Fair value, net at beginning of period	$	448		$	345
Actual return on plan assets:
Relating to assets still held at end of period	88			6
Relating to assets sold during the period	13			22
Purchases	98			130
Dispositions	(233		)	(55		)
Transfers in and /or out of Level 3	—			—
Fair value, net at end of period	$	414		$	448

Postretirement Benefits Other Than Pensions

Defined Benefit Plan Disclosure [Line Items]

Information on Plan Assets and Benefit Obligations

Information on plan assets and benefit obligations is shown below:



	Years Ended December 31,
	2012									2011
(in millions)	Midwest Generation			Other EME Subsidiaries¹			EME			Midwest Generation			Other EME Subsidiaries¹			EME
Change in benefit obligation
Benefit obligation at beginning of year	$	59		$	71		$	130		$	54		$	68		$	122
Service cost	1			2			3			2			1			3
Interest cost	3			3			6			2			4			6
Actuarial (gain) loss	(3		)	(5		)	(8		)	2			(1		)	1
Benefits paid	(1		)	(2		)	(3		)	(1		)	(1		)	(2		)
Benefit obligation at end of year	$	59		$	69		$	128		$	59		$	71		$	130
Change in plan assets
Fair value of plan assets at beginning of year	$	—		$	—		$	—		$	—		$	—		$	—
Employer contributions	1			2			3			1			1			2
Benefits paid	(1		)	(2		)	(3		)	(1		)	(1		)	(2		)
Fair value of plan assets at end of year	$	—		$	—		$	—		$	—		$	—		$	—
Funded status at end of year	$	(59	)	$	(69	)	$	(128	)	$	(59	)	$	(71	)	$	(130	)
Amounts recognized on consolidated balance sheets:
Long-term liabilities	$	(59	)	$	(69	)	$	(128	)	$	(59	)	$	(71	)	$	(130	)
Amounts recognized in accumulated other comprehensive income:
Prior service cost (credit)	$	10		$	(2	)	$	8		$	11		$	(3	)	$	8
Net loss	9			5			14			12			11			23
Weighted-average assumptions used to determine obligations at end of year:
Discount rate	4.25		%	4.25		%	4.25		%	4.75		%	4.75		%	4.75		%
Assumed health care cost trend rates:
Rate assumed for following year	8.50		%	8.50		%	8.50		%	9.50		%	9.50		%	9.50		%
Ultimate rate	5.00		%	5.00		%	5.00		%	5.25		%	5.25		%	5.25		%
Year ultimate rate reached	2020			2020			2020			2019			2019			2019


¹	Includes Homer City.

Expense Components for Plans

Expense components:



	Years Ended December 31,
	2012						2011							2010
(in millions)	Midwest Generation		Other EME Sub- sidiaries¹		EME		Midwest Generation		Other EME Sub- sidiaries¹			EME		Midwest Generation		Other EME Sub- sidiaries¹			EME
Service cost	$	1	$	1	$	2	$	2	$	—		$	2	$	1	$	—		$	1
Interest cost	3		1		4		2		2			4		2		3			5
Net amortization	1		—		1		1		(1		)	—		—		(1		)	(1		)
Total expense	$	5	$	2	$	7	$	5	$	1		$	6	$	3	$	2		$	5


¹	Excludes Homer City.

Schedule of Other Changes in Plan Assets and Benefit Obligation Recognized in Other Comprehensive Income (Loss)

Other changes in plan assets and benefit obligations recognized in other comprehensive (income) loss:



	Years Ended December 31,
	2012									2011								2010
(in millions)	Midwest Generation			Other EME Sub- sidiaries¹			EME			Midwest Generation			Other EME Sub- sidiaries¹			EME		Midwest Generation		Other EME Sub- sidiaries¹		EME
Net (gain) loss	$	(3	)	$	(4	)	$	(7	)	$	1		$	(1	)	$	—	$	5	$	7	$	12
Prior service cost	—			—			—			—			—			—		11		—		11
Net amortization	(1		)	—			(1		)	(1		)	1			—		—		—		—
Total in other comprehensive (income) loss	$	(4	)	$	(4	)	$	(8	)	$	—		$	—		$	—	$	16	$	7	$	23
Total in expense and other comprehensive (income) loss	$	1		$	(2	)	$	(1	)	$	5		$	1		$	6	$	19	$	9	$	28


¹	Includes Homer City.

Schedule of Weighted-Average Assumptions Used to Determine Expense

The following are weighted-average assumptions used to determine expense:



	Years Ended December 31,
	2012						2011						2010
	Midwest Generation		Other EME Sub- sidiaries¹		EME		Midwest Generation		Other EME Sub- sidiaries¹		EME		Midwest Generation		Other EME Sub- sidiaries¹		EME
Discount rate	4.75	%	4.75	%	4.75	%	5.50	%	5.50	%	5.50	%	6.00	%	6.00	%	6.00	%
Assumed health care cost trend rates:
Current year	9.50	%	9.50	%	9.50	%	9.75	%	9.75	%	9.75	%	8.25	%	8.25	%	8.25	%
Ultimate rate	5.25	%	5.3	%	5.3	%	5.5	%	5.5	%	5.5	%	5.5	%	5.5	%	5.5	%
Year ultimate rate reached	2019		2019		2019		2019		2019		2019		2016		2016		2016


¹	Includes Homer City.

Schedule of Benefit Payments to Be Paid

The following benefit payments are expected to be paid:



Years Ending December 31, (in millions)	Midwest Generation		Other EME Subsidiaries¹		EME
2013	$	1	$	1	$	2
2014	1		1		2
2015	2		1		3
2016	2		1		3
2017	2		2		4
2018-2022	16		11		27


¹	Excludes Homer City.