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 statementstatements that doesdo 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," and variations of such words and similar expressions, or discussions of strategy or of 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:

See "Risk Factors" in this report for additional information on risks and uncertainties that could cause results to differ from those currently expected or that otherwise could impact Edison International, SCE or their subsidiaries.

Additional information about risks and uncertainties, including more detail about the factors described in this report, is contained throughout this report. Readers are urged to read this entire report, including information incorporated by reference, and carefully consider the risk, uncertainties and other factors that affect Edison International's and SCE's businesses. Forward-looking statements speak only as of the date they are made and neither Edison International nor SCE are obligated to publicly update or revise forward-looking statements. Readers should review future reports filed by Edison International and SCE with the SEC. Additionally, Edison International and SCE provide direct links to SCE's regulatory filings with the CPUC and the FERC in open proceedings most important to investors at www.edisoninvestor.com (SCE Regulatory Highlights) so that such filings are available to all investors upon SCE filing with the relevant agency.

Except when otherwise stated, references to each of Edison International, SCE, EMG, Edison Energy Group, EME or Edison Capital mean each such company with its subsidiaries on a consolidated basis. References to "Edison International Parent and Other" mean Edison International Parent and its consolidated competitive subsidiaries.

Consolidated non-core items for 20152016 and 20142015 for Edison International included:

The electricityelectric power industry is undergoing transformative change includingdriven by technological advancements such as customer-owned generation and energy storage, thatwhich could alter the nature of energy generation and delivery. Recent trendsCalifornia's environmental policy objectives are accelerating the pace and scope of the industry change. The electric grid is a critical enabler of the adoption of new energy technologies that support California's climate change and GHG reduction objectives, which continue to be publicly supported by California policy makers notwithstanding a potential change in the federal approach to such matters. The grid is also key to enabling more customer choices with respect to new energy technologies. The transformative change taking place in the electric power industry include:is integral to Edison International's strategy.

SCE is investingChanges in the electric power industry are impacting customers and strengthening its electric gridjurisdictions outside California as well. Edison International believes that other states will also pursue climate change and driving operationalGHG reduction objectives, even if the federal approach to such objectives changes, and service excellencelarge commercial and industrial customers will continue to improve system safety, reliabilitypursue cost reduction and service while controllingsustainability goals. Edison Energy Group provides energy services to large commercial and industrial customers who may be impacted by these changes. Edison Energy Group seeks to provide advice in dealing with increasingly complex tariff and technology choices in order to support customers and their management of energy costs and rates.risks.

Total capital expenditures (including accruals), were $3.5 billion in 2016. SCE's year-end rate base was $25.9 billion at December 31, 2016 compared to $24.6 billion at December 31, 2015.

$10.7 billion in 2016 and $12.2 billion for both 2015 and 20142014.

The 2015 revenue reflects:

Results of operations for Edison International Parent and Other includes amounts from other subsidiaries that are not significant as a reportable segment, as well as intercompany eliminations.

The following table summarizes the results of Edison International Parent and Other:

Income from discontinued operations, net of tax, was $12 million, $35 million $185 million and $36$185 million for the years ended December 31, 2016, 2015 and 2014, respectively. The 2016 and 2013, respectively.2015 income were primarily related to the resolution of tax issues related to EME. The 2015 income was primarily due to income tax benefits (from revised estimates based on filing of the 2014 tax returns) andalso included insurance recoveries. The 2014 income was related to the impact of completing the transactions called for in the EME Settlement Agreement and income tax benefits from resolution of uncertain tax positions and other impacts related to EME. The 2013 income was from income tax benefits of $36 million from revised estimates of the tax impact of a tax deconsolidation of EME from Edison International as originally contemplated prior to the EME Settlement.

SCE's ability to operate its business, fund capital expenditures, and implement its business strategy is dependent upon its cash flow and access to the bank and capital markets. SCE's overall cash flows fluctuate based on, among other things, its ability to recover its costs in a timely manner from its customers through regulated rates, changes in commodity prices and volumes, collateral requirements, interest obligations, dividend payments to Edison International, and the outcome of tax and regulatory matters.

In the next 12 months, SCE expects to fund its 2016 obligations, capital expenditures and dividends through operating cash flows, tax benefits and capital market financings of debt and preferred equity, as needed. SCE also has availability under its credit facilities to fund cash requirements.

The Tehachapi Project consists of new and upgraded electric transmission lines and substations between eastern Kern County and San Bernardino County and was undertaken to bring renewable resources in Kern County to energy consumers in the Los Angeles basin and the California energy grid. The project consists of eleven segments. Segments 1-3 were placed in service beginning in 2009 through 2013. Portions of segmentsSegments 4-11 were placed in service in 2013 with the remaining portions expected to be in service in 2016 and 2017.December 2016.

The maximum cost estimate used by the CPUC to determine public need for segments 4-11 was established in 2009 at $1.5 billion in 2009 dollars, which was lower than SCE’s requested cost estimate of $1.7 billion (cost estimates made in Tehachapi regulatory filings are in constant dollars in the year of the filing and include direct expenditures and corporate overhead costs). Subsequently, the estimated costs of the project increased due to a number of factors, including engineering scope/design changes, licensing delays, added environmental mitigation and compliance costs, and added construction costs. In addition, the CPUC ordered SCE to underground a 3.5-mile portion of the line that traverses Chino Hills; setting a maximum cost estimate in 2013 of $224 million for the underground portion. The cost estimate that SCE had proposed in 2013 for the underground portion of the Tehachapi Project was $372 million. Separately, during 2013, the CPUC ordered

SCE made $758$701 million and $378$758 million in dividend payments to its parent, Edison International, in 20152016 and 2014,2015, respectively. The 2015 increase was due in part to a paymenttiming and amount of $147 million in 2015 for outstandingfuture dividends at the end of 2014. Future dividend amounts and timing of distributions are dependent upon several factors including the level of capital expenditures, operating cash flows and earnings. See "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—SCE Dividend Restrictions" for discussion of dividend restrictions.

Some of the power procurement contracts contain provisions that require SCE to maintain an investment grade credit rating from the major credit rating agencies. If SCE's credit rating were to fall below investment grade, SCE may be required to pay the liability or post additional collateral.

The table below provides the amount of collateral posted by SCE to its counterparties as well as the potential collateral that would be required as of December 31, 2015.2016.

SCE's cash flows are affected by regulatory balancing accounts over- or under-collections. Over- and under-collections represent differences between cash collected in current rates for specified forecasted costs and the costs actually incurred. With some exceptions, SCE seeks to adjust rates on an annual basis or at other designated times to recover or refund the balances recorded in its balancing account. Under- or over-collections in these balancing accounts impact cash flows and can change rapidly. Over- and under-collections accrue interest based on a three-month commercial paper rate published by the Federal Reserve.

Edison International Parent and Other's liquidity and its ability to pay operating expenses make investments and pay dividends to common shareholders are dependent on dividends from SCE, realization of tax benefits and access to bank and capital markets. Edison International may also finance working capital requirements, payment of obligations and capital investments, including capital contributions to subsidiaries to fund new businesses, with commercial paper or other borrowings, subject to availability in the capital markets.

At December 31, 2015,2016, Edison International Parent had $604$712 million available under its $1.25 billion multi-year revolving credit facility. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements." Edison International may finance working capital requirements to support operations and capital expenditures with commercial paper or other borrowings, subject to availability in the capital markets.

The debt covenant in Edison International'sInternational Parent's credit facility requires a consolidated debt to total capitalization ratio as defined in the credit agreement of less than or equal to 0.65 to 1 as defined in the credit agreement. The1. At December 31, 2016, Edison International'sInternational Parent's consolidated debt to total capitalization ratio was 0.47 to 1 at1.

Forecasted capital expenditures for Edison Energy Group’sGroup's commercial solar activities are estimated to be $134$114 million in 2016.2017. Edison Energy Group expects to finance a majority of these expenditures primarily with newthrough project debt and tax equity financings and an existing debt financing to support equity contributions similar to the existing financings arrangement used to fund 2015 capital expenditures.financings. For further information, see "Notes to Consolidated Financial Statements—Note 9. Investments."

The following table summarizes major categories of net cash provided by operating activities as provided in more detail in SCE's consolidated statements of cash flows for 2016, 2015 2014 and 2013.2014.

Net cash provided by operating activities was impacted by the following:

Net income and noncash items increased in 2016 by $265 million from 2015 and decreased in 2015 by $604 million from 2014 and increased2014. The increase in 2014 by $315 million2016 was primarily due to higher authorized revenue in 2016 from 2013.the escalation mechanism set forth in the 2015 GRC decision. The decrease in 2015 was primarily due to the implementation of the 2015 GRC decision. The increase in 2014 was primarily due to rate base growth. The factors that impacted these items are discussed under "Results of Operations—SCE—Utility Earning Activities."

ChangesNet cash for working capital was $236 million, $16 million and $79 million in 2016, 2015 and 2014, respectively. The net cash flowsfor 2016 and 2015 was primarily related to working capital items decreasedtiming of disbursements ($45 million in 2015 by $632016 and $120 million in 2015) and timing of receipts from 2014customers ($230 million in 2016 and increased$70 million in 2014 by $261 million from 2013.2015). In 2015,addition, SCE had net tax payments of approximately$78 million in 2016 and $144 million comparedin 2015. The net cash in 2014 was primarily related to net tax refunds of $88 million in 2014 and net tax payments of $28 million in 2013. The refunds in 2014 were due to net operating loss carrybacks to periods that SCE previously had taxable income. In 2015, 2014 and 2013, SCE had severance payments of $39 million, $22 million and $151 million, respectively, related to the workforce reductions. In addition, the cash outflow in 2015 was due to the timing of receipts from customers and timing of disbursements.

Net cash provided by operating activities was also impacted by changes in regulatory assets and liabilities, including changes in over (under) collections of balancing accounts.accounts, was $(292) million, $1.7 billion and $(358) million in 2016, 2015 and 2014, respectively. SCE has a number of balancing accounts, under CPUC decisions, which impact cash flows based on differences between timing of collection of amounts through rates and accrual expenditures. While some balancing accounts are discrete, other balancing accounts are ongoing with changes generally collectedCash flows were primarily impacted by the following:

Cash flows (used)(used in) provided by other noncurrent assets and liabilities were $(41) million, $(508) million and $33 million in 2016, 2015 and $(49) million in 2015, 2014, and 2013, respectively. Major factors affecting cash flow related to non-currentnoncurrent assets and liabilities were activities related to SCE's nuclear decommissioning trusts (principally related to the payment of decommissioning costs). Decommissioning costs of San Onofre were approximately $168 million and $216 million in 2016 and 2015, respectively (such costs were recorded as a reduction of SCE's asset retirement obligation).

The following table summarizes cash provided by financing activities for 2016, 2015 2014 and 2013.2014. Issuances of debt and preference stock are discussed in "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements—Long-Term Debt" and "—Note 12. Preferred and Preference Stock of Utility."

Cash flows used in investing activities are primarily due to capital expenditures and funding of nuclear decommissioning trusts. Capital expenditures were $3.6 billion for 2016, $4.2 billion for 2015 and $3.9 billion for 2014, and $3.6 billion for 2013, primarily related to transmission, distribution and generation investments. The decrease in capital expenditures during 2016 was primarily due to lower FERC capital spending. Net proceeds (purchases) of nuclear decommissioning trust investments were $179 million, $374 million and $(44) million for 2016, 2015 and $(98) million for 2015, 2014, and 2013, respectively. See "Nuclear Decommissioning Trusts" below for further discussion. The 2016 net proceeds from sale of nuclear decommissioning trust investments was used to fund decommissioning costs less net earnings during the period. The 2015 net proceeds from sale of nuclear decommissioning trust investments was used to payfund 2013, 2014 and a portion of 2015 decommissioning costs less net earnings during the period. The 2014 net purchase of nuclear decommissioning trust investments was due to net earnings during the period. In December 2013,addition, during the third quarter of 2016, SCE completedreceived proceeds of $140 million for a loan on the salecash surrender value of its ownership interest in Units 4 and 5 of the Four Corners Generating Station which resulted in $181 million of proceeds.life insurance policies. The proceeds were used for general corporate purposes.