Edison International Files 2023 Annual Report on Form 10-K

TL;DR

<b>Edison International has submitted its 2023 10-K filing, detailing its financial performance and operations for the fiscal year ending December 31, 2023.</b>

AI Summary

EDISON INTERNATIONAL (EIX) filed a Annual Report (10-K) with the SEC on February 22, 2024. Edison International filed its 2023 Form 10-K on February 22, 2024. The filing covers the fiscal year ending December 31, 2023. Key entities include Edison International and Southern California Edison Co. The SIC code for both entities is Electric Services [4911]. The company's principal business address is 2244 Walnut Grove Ave, Rosemead, CA.

Why It Matters

For investors and stakeholders tracking EDISON INTERNATIONAL, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Edison International's financial health, operational performance, and strategic direction for the past fiscal year, crucial for investors and stakeholders to assess the company's current standing and future prospects. The detailed financial statements and risk factors within the report are essential for understanding the company's exposure to regulatory changes, market fluctuations, and operational challenges within the electric services industry.

Risk Assessment

Risk Level: medium — EDISON INTERNATIONAL shows moderate risk based on this filing. The company operates in the highly regulated electric services industry, which presents inherent risks related to policy changes, environmental regulations, and rate-setting decisions by public utility commissions.

Analyst Insight

Investors should review the detailed risk factors and financial statements in the 10-K to understand potential impacts on future earnings and operational stability.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-22 — Filing Date (Date the 10-K was filed)
• 0000827052 — Central Index Key (Edison International's SEC identifier)
• 0000092103 — Central Index Key (Southern California Edison Co's SEC identifier)

Key Players & Entities

• EDISON INTERNATIONAL (company) — Filer name
• SOUTHERN CALIFORNIA EDISON Co (company) — Former company name and filer
• 2023-12-31 (date) — Fiscal year end
• 2024-02-22 (date) — Filing date
• Rosemead, CA (location) — Business address city and state
• 4911 (industry_code) — Standard Industrial Classification for Electric Services

FAQ

Risk Factors

• Regulatory Environment [high — regulatory]: The company operates under extensive regulation by state and federal agencies, including the California Public Utilities Commission (CPUC) and the Federal Energy Regulatory Commission (FERC), which impacts rates, operations, and environmental compliance.
• Market Conditions and Competition [medium — market]: Changes in energy markets, including wholesale electricity prices, fuel costs, and demand for electricity, can significantly affect the company's financial results.
• Infrastructure and Operational Risks [high — operational]: The company's extensive infrastructure is subject to risks from natural disasters, equipment failures, and cybersecurity threats, potentially leading to service disruptions and significant repair costs.
• Financing and Capital Structure [medium — financial]: The company's ability to access capital markets and manage its debt levels is critical for funding ongoing operations and significant capital expenditures, with potential impacts from interest rate fluctuations.
• Environmental Regulations [high — regulatory]: Evolving environmental regulations, particularly concerning greenhouse gas emissions and climate change, require substantial investments in cleaner energy sources and may lead to increased compliance costs.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.

Key Financial Figures

• $1.6 billion — AB 1054 Excluded Capital Expenditures $1.6 billion in wildfire risk mitigation capital exp

Filing Documents

• eix-20231231x10k.htm (10-K) — 7580KB
• eix-20231231xex10d3.htm (EX-10.3) — 170KB
• eix-20231231xex10d4.htm (EX-10.4) — 223KB
• eix-20231231xex10d8.htm (EX-10.8) — 223KB
• eix-20231231xex10d9.htm (EX-10.9) — 27KB
• eix-20231231xex21d1.htm (EX-21.1) — 26KB
• eix-20231231xex23d1.htm (EX-23.1) — 2KB
• eix-20231231xex23d2.htm (EX-23.2) — 2KB
• eix-20231231xex24d1.htm (EX-24.1) — 87KB
• eix-20231231xex24d2.htm (EX-24.2) — 16KB
• eix-20231231xex31d1.htm (EX-31.1) — 21KB
• eix-20231231xex31d2.htm (EX-31.2) — 22KB
• eix-20231231xex32d1.htm (EX-32.1) — 11KB
• eix-20231231xex32d2.htm (EX-32.2) — 11KB
• eix-20231231xex97d1.htm (EX-97.1) — 23KB
• eix-20231231x10k001.jpg (GRAPHIC) — 27KB
• 0000827052-24-000013.txt (&nbsp;) — 33095KB
• eix-20231231.xsd (EX-101.SCH) — 143KB
• eix-20231231_cal.xml (EX-101.CAL) — 172KB
• eix-20231231_def.xml (EX-101.DEF) — 934KB
• eix-20231231_lab.xml (EX-101.LAB) — 1298KB
• eix-20231231_pre.xml (EX-101.PRE) — 1179KB
• eix-20231231x10k_htm.xml (XML) — 7963KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS 1

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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 4

, Item 7

Part II, Item 7 MANAGEMENT OVERVIEW 4 Highlights of Operating Results 4 Electricity Industry Trends 6 Track 4 8 2025 General Rate Case 8 Cost of Capital Trigger 9 Capital Program 9 Southern California Wildfires and Mudslides 10 Customer-Funded Self-Insurance 12 RESULTS OF OPERATIONS 13 Southern California Edison Company 13 Years ended December 31, 2023, 2022 and 2021 14 Earning Activities 14 Cost-Recovery Activities 15 Supplemental Operating Revenue Information 16 Income Taxes 16 Edison International Parent and Other 16 Loss from Operations 16 LIQUIDITY AND CAPITAL RESOURCES 17 Southern California Edison Company 17 Available Liquidity 17 Regulatory Proceedings 18 Capital Investment Plan 19 Decommissioning of San Onofre 22 Margin and Collateral Deposits 23 Edison International Parent and Other 24 Edison International Income Taxes 25 Historical Cash Flows 26 i Table of Contents Southern California Edison Company 26 Edison International Parent and Other 28 Contractual Obligations and Contingencies 29 Contractual Obligations 29 Contingencies 30 Off-Balance Sheet Arrangements 30 MARKET RISK EXPOSURES 30 Interest Rate Risk 30 Commodity Price Risk 30 Investment Price Risk 31 Credit Risk 32 CRITICAL ACCOUNTING ESTIMATES AND POLICIES 32 Accounting for Contingencies 32 Rate Regulated Enterprises 33 Income Taxes 35 Nuclear Decommissioning – Asset Retirement Obligation 36 Pensions and Postretirement Benefits Other than Pensions 37 Contributions to the Wildfire Insurance Fund 39 NEW ACCOUNTING GUIDANCE 39

RISK FACTORS

RISK FACTORS 40

, Item 1A

Part I, Item 1A RISKS RELATING TO EDISON INTERNATIONAL 40 RISKS RELATING TO SOUTHERN CALIFORNIA EDISON COMPANY 40 Regulatory and Legislative Risks 40 Operating Risks 42 Financing Risks 47 Competitive and Market Risks 47 RISKS RELATING TO EDISON INTERNATIONAL AND SOUTHERN CALIFORNIA EDISON COMPANY 48 Cybersecurity and Physical Security Risks 48 Global and Regional Risks 50

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 50

, Item 7A

Part II, Item 7A

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 50

, Item 8

Part II, Item 8 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 238 ) 51 ii Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 238 ) 55 CONSOLIDATED FINANCIAL STATEMENTS 58 Consolidated Statements of Income for Edison International 58 Consolidated Statements of Comprehensive Income for Edison International 59 Consolidated Balance Sheets for Edison International 60 Consolidated Statements of Cash Flows for Edison International 62 Consolidated Statements of Changes in Equity for Edison International 63 Consolidated Statements of Income for Southern California Edison Company 65 Consolidated Statements of Comprehensive Income for Southern California Edison Company 65 Consolidated Balance Sheets for Southern California Edison Company 66 Consolidated Statements of Cash Flows for Southern California Edison Company 68 Consolidated Statements of Changes in Equity for Southern California Edison Company 69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 70 Note 1. Summary of Significant Accounting Policies 70 Note 2. Property, Plant and Equipment 82 Note 3. Variable Interest Entities 83 Note 4. Fair Value Measurements 85 Note 5. Debt and Credit Agreements 88 Note 6. Derivative Instruments 90 Note 7. Revenue 92 Note 8. Income Taxes 93 Note 9. Compensation and Benefit Plans 98 Note 10. Investments 111 Note 11. Regulatory Assets and Liabilities 112 Note 12. Commitments and Contingencies 115 Note 13. Leases 129 Note 14. Equity 131 Note 15. Accumulated Other Comprehensive Loss 133 Note 16. Other Income, Net 134 Note 17. Supplemental Cash Flows Information 134 Note 18. Related-Party Transactions 134 iii Table of Contents CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 135

, Item 9

Part II, Item 9

CONTROLS AND PROCEDURES

CONTROLS AND PROCEDURES 135

, Item 9A

Part II, Item 9A

BUSINESS

BUSINESS 136

, Item 1

Part I, Item 1 CORPORATE STRUCTURE, INDUSTRY AND OTHER INFORMATION 136 Subsidiaries of Edison International 136 Regulation of Edison International as a Holding Company 137 Human Capital 137 Insurance 140 SOUTHERN CALIFORNIA EDISON COMPANY 141 Regulation 141 Overview of Ratemaking Process 143 Purchased Power and Fuel Supply 145 Competition 147

Properties

Properties 149 Seasonality 150 SOUTHERN CALIFORNIA WILDFIRES 150 Recovery of Wildfire-Related Costs 150 Safety Certification and Wildfire Mitigation Plan 152 Public Safety Power Shutoffs 152 ENVIRONMENTAL CONSIDERATIONS 153 Greenhouse Gas Regulation 153 Environmental Risks 154 UNRESOLVED STAFF COMMENTS 155

, Item 1B

Part I, Item 1B CYBERSECURITY 155

, Item 1C

Part I, Item 1C

PROPERTIES

PROPERTIES 156

, Item 2

Part I, Item 2

LEGAL PROCEEDINGS

LEGAL PROCEEDINGS 156

, Item 3

Part I, Item 3 2017/2018 Wildfire/Mudslide Events 156 Environmental Proceedings 157 MINE SAFETY DISCLOSURES 157

, Item 4

Part I, Item 4 CERTAIN INFORMATION ABOUT EDISON INTERNATIONAL 158 INFORMATION ABOUT OUR EXECUTIVE OFFICERS 158 Part I DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 158

, Item 10

Part III, Item 10

EXECUTIVE COMPENSATION

EXECUTIVE COMPENSATION 159

, Item 11

Part III, Item 11 iv Table of Contents

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 159

, Item 12

Part III, Item 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 160

, Item 13

Part III, Item 13 PRINCIPAL ACCOUNTANT FEES AND SERVICES 160

, Item 14

Part III, Item 14 MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 161

, Item 5

Part II, Item 5 Edison International 161 Southern California Edison Company 161 Purchases of Equity Securities by Edison International and Affiliated Purchasers 162 Comparison of Five-Year Cumulative Total Return 163 OTHER INFORMATION 163

, Item 9B

Part II, Item 9B

, Item 6

Part II, Item 6 Insider Trading Arrangements 163 FORM 10-K SUMMARY 164

, Item 16

Part IV, Item 16 DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 164

, Item 9C

Part II, Item 9C EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 164

, Item 15

Part IV, Item 15 EXHIBIT INDEX 165 SCHEDULES SUPPLEMENTING FINANCIAL STATEMENTS 171

SIGNATURES

SIGNATURES 178 This combined Form 10-K is separately filed by Edison International and SCE. Information contained in this document relating to SCE is filed by Edison International and separately by SCE. SCE makes no representation as to information relating to Edison International or its subsidiaries, except as it may relate to SCE and its subsidiaries. v Table of Contents GLOSSARY The following terms and abbreviations appearing in the text of this report have the meanings indicated below. 2017/2018 Wildfire/Mudslide Events the Thomas Fire, the Koenigstein Fire, the Montecito Mudslides and the Woolsey Fire, collectively AB 1054 California Assembly Bill 1054, executed by the governor of California on July 12, 2019 AB 1054 Excluded Capital Expenditures $1.6 billion in wildfire risk mitigation capital expenditures that SCE has excluded from the equity portion of SCE's rate base as required under AB 1054 AB 1054 Liability Cap a cap on the aggregate requirement to reimburse the Wildfire Insurance Fund over a trailing three calendar year period which applies if certain conditions are met and is equal to 20% of the equity portion of the utility's transmission and distribution rate base, excluding general plant and intangibles, in the year of the applicable prudency determination ARO(s) asset retirement obligation(s) CAISO California Independent System Operator Capistrano Wind a group of wind projects referred to as Capistrano Wind Capital Structure Compliance Period January 1, 2023 to December 31, 2025, the current compliance period for SCE's CPUC authorized capital structure CAPP California Arrearage Payment Program CCAs community choice aggregators which are cities, counties, and certain other public agencies with the authority to generate and/or purchase electricity for their local residents and businesses COVID-19 Coronavirus disease 2019 CPUC California Public Utilities Commission CSRP Customer Service Re-platform, a customer servic

Management's Discussion and Analysis of Financial Condition and Results of Operations in this report

Management's Discussion and Analysis of Financial Condition and Results of Operations in this report Montecito Mudslides the debris flows and flooding in Montecito, Santa Barbara County, California, that occurred in January 2018 Moody's Moody's Investors Service, Inc. MW Megawatt(s) NDCTP Nuclear Decommissioning Cost Triennial Proceeding, a CPUC proceeding to review decommissioning costs NEM net energy metering NERC North American Electric Reliability Corporation NRC United States Nuclear Regulatory Commission OEIS Office of Energy Infrastructure Safety of the California Natural Resources Agency PABA Portfolio Allocation Balancing Account Palo Verde nuclear electric generating facility located near Phoenix, Arizona in which SCE holds a 15.8% ownership interest PBOP(s) postretirement benefits other than pension(s) PG&E Pacific Gas & Electric Company Post-2018 Wildfires Collectively, all the wildfires that originated in Southern California after 2018 where SCE's equipment has been or may be alleged to be associated with the fire's ignition PSPS Public Safety Power Shutoff(s) ROE return on common equity RPS California's Renewables Portfolio Standard S&P Standard & Poor's Financial Services LLC Safety Tier 1 Contractors individuals assigned to contracted work activities that may be high risk and, without implementation of appropriate safety measures, may be potentially hazardous or life threatening San Onofre retired nuclear generating facility located in south San Clemente, California in which SCE holds a 78.21% ownership interest SCE Southern California Edison Company, a wholly-owned subsidiary of Edison International SCE Recovery Funding LLC a bankruptcy remote, wholly owned special purpose subsidiary, consolidated by SCE SDG&E San Diego Gas & Electric Company SEC U.S. Securities and Exchange Commission SED Safety and Enforcement Division of the CPUC SED Agreement an agreement dated October 21, 2021 between SCE and th

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Edison International's and SCE's current expectations and projections about future events based on Edison International's and SCE's knowledge of present facts and circumstances and assumptions about future events and include any statements that do not directly relate to a historical or current fact. Other information distributed by Edison International and SCE that is incorporated in this report, or that refers to or incorporates this report, may also contain forward-looking statements. In this report and elsewhere, the words "expects," "believes," "anticipates," "estimates," "projects," "intends," "plans," "probable," "may," "will," "could," "would," "should," "targets," and variations of such words and similar expressions, or discussions of strategy or plans, are intended to identify forward-looking statements. Such statements necessarily involve risks and uncertainties that could cause actual results to differ materially from those anticipated. Some of the risks, uncertainties and other important factors that could cause results to differ from those currently expected, or that otherwise could impact Edison International and SCE, include, but are not limited to the: ability of SCE to recover its costs through regulated rates, timely or at all, including uninsured wildfire-related and debris flow-related costs (including amounts paid for self-insured retention and co-insurance), costs incurred to mitigate the risk of utility equipment causing future wildfires, costs incurred as a result of the COVID-19 pandemic, and increased costs due to supply chain constraints, inflation and rising interest rates; impact of affordability of customer rates on SCE's ability to execute its strategy, including the impact of affordability on the approval of operations and main