The following terms and abbreviations appearing in the text of this report have the meanings indicated below.

This quarterly report on Form 10-Q 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," 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:

Additional information about risks and uncertainties, including more detail about the factors described in this report, is contained throughout this report and in the 2018 Form 10-K, including the "Risk Factors" section. Readers are urged to read this entire report, including information incorporated by reference, as well as the 2018 Form 10-K, and carefully consider the risks, 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. Edison International and SCE provide direct links to certain SCE and other parties' regulatory filings and documents with the CPUC and the FERC and certain agency rulings and notices in open proceedings at www.edisoninvestor.com (SCE Regulatory Highlights) so that such filings, rulings and notices are available to all investors. Edison International and SCE post or provide direct links to certain documents and information related to Southern California wildfires which may be of interest to investors at www.edisoninvestor.com (Southern California Wildfires) in order to publicly disseminate such information. Edison International and SCE also routinely post or provide direct links to presentations, documents and other information that may be of interest to investors at www.edisoninvestor.com (Events and Presentations) in order to publicly disseminate such information.

The MD&A for the sixnine months ended JuneSeptember 30, 2019 discusses material changes in the consolidated financial condition, results of operations and other developments of Edison International and SCE since December 31, 2018 and as compared to the sixnine months ended JuneSeptember 30, 2018. This discussion presumes that the reader has read or has access to Edison International's and SCE's MD&A for the calendar year 2018 (the "year-ended 2018 MD&A"), which was included in the 2018 Form 10-K.

Except when otherwise stated, references to each of Edison International, SCE, or Edison Energy Group 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 and "Edison International Parent" mean Edison International on a stand-alone basis, not consolidated with its subsidiaries.

Edison International is the parent holding company of SCE and Edison Energy Group. SCE is an investor-owned public utility primarily engaged in the business of supplying and delivering electricity to an approximately 50,000 square mile area of southern California. Edison Energy Group is a holding company for Edison Energy which is engaged in the competitive business of providing energy services to commercial and industrial customers. Edison Energy's business activities are currently not material to report as a separate business segment. 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 competitive subsidiaries. Unless otherwise described, all the information contained in this report relates to both filers.

The revenue requirements in the 2018 GRC final decision are retroactive to January 1, 2018. SCE recorded the prior period impact of the 2018 GRC final decision in the second quarter of 2019, including an increase to core earnings of $131 million from the application of the decision to revenue, depreciation expense and income tax expense and a non-core impairment of utility property, plant and equipment of $170 million ($123 million after-tax) related to disallowed historical capital expenditures. See “Results of Operations—SCE” and "Notes to Consolidated Financial Statements—Note 11. Regulatory Assets and Liabilities" for further information.

Total capital expenditures (including accruals) were $2.0$3.3 billion and $1.9$2.9 billion for the first sixnine months of 2019 and 2018, respectively.

Based on the 2021 GRC request, SCE forecasts capital expenditures for 2019 – 2023 to be approximately $23.8 billion to $25.6 billion. SCE's capital expenditure forecast for 2019 and 2020 has been updated since the filing of the 2018 Form 10-K to reflect planned CPUC jurisdictional spending as informed by the 2018 GRC final decision, including authorized capitalization rates, spending associated with SCE's wildfire mitigation-related capital expenditures under the GS&RP and WMP, and increased FERCcurrent expectations of FERC- jurisdictional spending. SCE's capital expenditure forecast for 2021 – 2023 reflects the requested CPUC jurisdictional spending for inspections, maintenance,included in the 2021 GRC application, approved non-GRC CPUC capital spending, and physical plant.

Multiple factors have contributed to increased wildfires,wildfire activity, faster progression of wildfires and the increased damage from wildfires across SCE's service territory and throughout California. These include the buildup of dry vegetation in areas severely impacted by years of historic drought, lack of adequate clearing of hazardous fuels by responsible parties, higher temperatures, lower humidity, and strong Santa Ana winds. At the same time that wildfire risk has been increasing in Southern California, residential and commercial development has occurred and is occurring in some of the highest-risk areas. Such factors can increase the likelihood and extent of wildfires.

In December 2017 and November 2018, wind-driven wildfires impacted portions of SCE's service territory, causing substantial damage to both residential and business properties and service outages for SCE customers. The investigating government agencies, the VCFD and CAL FIRE, have determined that the largest of the 2017 fires originated on December 4, 2017, in the Anlauf Canyon area of Ventura County (the investigating agencies refer to this fire as the "Thomas Fire"), followed shortly thereafter by the Koenigstein Fire. While the progression of these two fires remains under review, the December 4, 2017 fires eventually burned substantial acreage in both Ventura and Santa Barbara Counties. The largest of the November 2018 fires, known as the Woolsey Fire, originated in Ventura County and burned acreage in both Ventura and Los Angeles Counties.

In March 2019, the VCFD and CAL FIRE issued separate reports finding that the Thomas Fire and the Koenigstein Fire were each caused by SCE equipment. At this time, based on available information, SCE has not determined whether its equipment caused the Thomas Fire. Based on publicly available radar data showing a smoke plume in the Anlauf Canyon area emerging in advance of the start time of the Thomas Fire indicated in the Thomas Fire report, SCE believes that the Thomas Fire started at least 12 minutes prior to any issue involving SCE's system and at least 15 minutes prior to the start time indicated in the report. SCE has previously disclosed that SCE believed its equipment was associated with the ignition of the Koenigstein

Fire. SCE is continuing to assess the progression of the Thomas and Koenigstein Fires and the extent of damages that may be attributable to each fire.

Multiple lawsuits related to the Thomas and Koenigstein Fires and the Woolsey Fire have been initiated against SCE and Edison International. Some of the Thomas and Koenigstein Fires lawsuits claim that SCE and Edison International have

Even when investigations are still pending or liability is disputed, an assessment of likely outcomes, including through future settlement of disputed claims, may require a liability to be accrued under accounting standards. Based on information available to SCE and consideration of the risks associated with litigation, Edison International and SCE expect to incur a material loss in connection with the 2017/2018 Wildfire/Mudslide Events and have accrued a liability of $4.7 billion in the fourth quarter of 2018. This liability corresponds to the lower end of the reasonably estimated range of expected potential losses that may be incurred in connection with the 2017/2018 Wildfire/Mudslide Events and is subject to change as additional information becomes available.

Edison International and SCE will seek to offset any actual losses realized in connection with the 2017/2018 Wildfire/Mudslide Events with recoveries from insurance policies in place at the time of the events and, to the extent actual losses exceed insurance, through electric rates. In the fourth quarter of 2018, Edison International and SCE also recorded expected recoveries from insurance of $2.0 billion and expected recoveries through FERC electric rates of $135 million, which is the FERC portion of the $4.7 billion liability it accrued. SCE believes that, in light of the CPUC's decision in a cost recovery proceeding involving SDG&E arising from several 2007 wildfires in SDG&E's service area, there is substantial uncertainty regarding how the CPUC will interpret and apply its prudency standard to an investor-owned utility in future wildfire cost-recovery proceedings for fires ignited prior to July 12, 2019. Accordingly, while the CPUC has not made a determination regarding SCE's prudency relative to any of the 2017/2018 Wildfire/Mudslide Events, SCE is unable to conclude, at this time, that uninsured CPUC-jurisdictional wildfire-related costs are probable of recovery through electric rates.

On July 12, 2019, AB 1054 was signed by the Governor of California and became effective immediately. The summary of the wildfire legislation in this report is based on SCE’sSCE's interpretation of the legislation and is qualified in its entirety by, and should be read together with, AB 1054 and companion Assembly Bill 111.

AB 1054 establishes a wildfire fundprovided for the Wildfire Insurance Fund to reimburse utilities for payment of third-party damage claims arising from certain wildfires that exceed, in aggregate in a calendar year, the greater of $1 billion or the utility's insurance coverage. The wildfire fund will only beWildfire Insurance Fund was established in September 2019 when both SCE and SDG&E made their initial contributions to the fund. The Wildfire Insurance Fund is available for claims related to wildfires ignited after July 12, 2019 that are determined to have been caused by a utility by the responsible government investigatory agency.

The wildfire fund can take one of two forms, an insurance fund or a liquidity fund. SCE PG&E and SDG&E have notified the CPUCcollectively made initial contributions of their commitmentapproximately $2.7 billion to the insurance fund. The insurance fund will be established if both SCE and SDGWildfire Insurance Fund. While PG&E has agreed to make theiran initial contributionscontribution of approximately $4.8 billion to the fund by September 10, 2019. If either SCE or SDG&E fail to make their initial contributions by the required date, the insurance fund will not be established and the wildfire fund will be a liquidity fund.

$3 billion to the insurance fundWildfire Insurance Fund over a 10-year period. If PG&E is unable to participate in the fund,Wildfire Insurance Fund, the investor-owned utility aggregate annual contributions to the fund are expected to be approximately $1 billion. In addition to PG&E's, SCE's and SDG&E's contributions to the Wildfire Insurance Fund, $13.5 billion is expected to be collected from their ratepayers through a dedicated rate component to support a $10.5 billion contribution to the fund. Based on a decision adopted by the CPUC in October 2019 in the Order Instituting Rulemaking to Consider Authorization of a Non-Bypassable Charge to Support the Wildfire Insurance Fund, PG&E’s ratepayers will not be required to contribute to the fund if PG&E does not participate in the Wildfire Insurance Fund. In that case, $7.5 billion will be collected from SCE's and SDG&E's ratepayers through the dedicated rate component to support a contribution to the Wildfire Insurance Fund. In addition to funding contributions to the Wildfire Insurance Fund, the amount collected from utility ratepayers will pay for, among other things, any interest and financing costs related to any bonds that are issued to support the contributions to the Wildfire Insurance Fund.

SCE has committed to makemade an initial contribution of approximately $2.4 billion byto the Wildfire Insurance Fund in September 10, 2019, and has committed to make ten annual contributions of approximately $95 million per year to the fund, starting on January 1, 2020, to the insurance fund.2020. Edison International and SCE are evaluating funding options to supportsupported SCE's initial contribution to the insurance fund and anticipateWildfire Insurance Fund by raising

Participating investor-owned utilities will be reimbursed from the insurance fundWildfire Insurance Fund for eligible claims, subject to the fund administrator’sadministrator's review, and will be required to reimburse the insurance fund for withdrawn amounts that the CPUC disallows up to the Liability Cap. A utility will not be eligible for the Liability Cap if it does not maintain a valid safety certification or its actions or inactions that resulted in the wildfire are found to constitute conscious or willful disregard of the rights and safety of others. On July 25, 2019, SCE obtained its initial safety certification that will be valid for twelve months. The initial Liability Cap for SCE will be approximately $2.5 billion based on its 2019 rate base, and will be adjusted annually. SCE will not be allowed to recover borrowing costs incurred to reimburse the fund for amounts that the CPUC disallows. The insurance fundWildfire Insurance Fund and, consequently the Liability Cap, will terminate when the administrator determines that the insurance fund has been exhausted.

IfAs a result of the insurance fund is established,establishment of the Wildfire Insurance Fund, AB 1054 createscreated a new standard that the CPUC must apply to determine whetherwhen assessing the prudency of a utility was prudent and therefore able to recover wildfire costs through the insurance fund or, if the insurance fund has been exhausted, through electric rates. The new standard, if it is established, will apply to requestsin connection with a request for recovery of wildfire costs for wildfires ignited after July 12, 2019. Under AB 1054, prudent conduct occurs when the conduct ofCPUC is required to find a utility to be prudent if the utility's conduct related to the ignition was consistent with actions that a reasonable utility would have undertaken under similar circumstances, at the relevant point in time, and based on the information available at that time. Utilities with a valid safety certification will be presumed to have acted prudently related to a wildfire ignition unless a party in the cost recovery proceeding creates serious doubt as to the reasonableness of the utility's conduct, at which time, the burden shifts back to the utility to prove its conduct was reasonable. If a utility does not have a valid safety certification, it will have the burden to prove, based on a preponderance of evidence, that its conduct was prudent. The new prudency standard will survive the termination of the Wildfire Insurance Fund.

LiquidityUtilities participating in the Wildfire Insurance Fund

For further information, see "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—Initial and annual contributions to the wildfire insurance fund established pursuant to California Assembly Bill 1054 ", "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies—Contingencies—Southern California Wildfires and Mudslides" and "Legal Proceedings."

SCE's results of operations are derived mainly through two sources:

Cost-recovery activities were primarily affected by the following:

Cost-recovery activities were primarily affected by the following:

SCE's retail billed and unbilled revenue (excluding wholesale sales) was $2.6$3.5 billion and $4.0 billion for both the three months ended JuneSeptember 30, 2019 and 2018, respectively, and $5.2$8.6 billion and $5.0$9.0 billion for the sixnine months ended JuneSeptember 30, 2019 and 2018, respectively.

The increasedecrease for the sixnine months ended JuneSeptember 30, 2019 compared to the same period in 2018 is primarily related to higher cost-recovery activities related to 2018 wildfire insurance costs and higher purchased power and fuel costs driven by higher power and gas prices, lower congestion revenue right credits and higher charges from contract amendments, partially offset by lower load related to customer departures to CCAs and cooler weather. See "—Cost-Recovery Activities" for further details.

As a result of the CPUC-authorized decoupling mechanism, SCE earnings are not affected by changes in retail electricity sales.

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

The loss from continuing operations of Edison International Parent and Other increased $6$9 million and decreased $47$38 million for the three and sixnine months ended JuneSeptember 30, 2019, respectively, compared to the same periods in 2018.

The increase for the three months ended JuneSeptember 30, 2019 is primarily driven by higher interest expenses as a result of increased borrowings. The decrease for the sixnine months ended JuneSeptember 30, 2019 is primarily related to thean absence of an after-tax impairment charge of $46$49 million resulting from the sale of SoCore Energy in 2018 lower corporate and operating expenses in 2019 and lower losses at the competitive business under Edison Energy Group, partially offset by higher interest expense.

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 and equity contributions from Edison International, obligations to preferred and preference shareholders, and the outcome of tax and regulatory matters.

In the next 12 months, SCE expects to fund its cash requirements through operating cash flows, capital market financings, and equity contributions from Edison International Parent, as needed. SCE also has availability under its credit facility to fund cash requirements.

SCE has committed to makemade an initial contribution of approximately $2.4 billion byto the Wildfire Insurance Fund in September 10, 2019 and has committed to make ten annual contributions of approximately 95$95 million per yearto the fund, starting on January 1, 2020, to the wildfire fund expected to be established under AB 1054.2020. Edison International and SCE are evaluating funding options to supportParent supported SCE's initial contribution to the insurance fund and anticipate raising approximatelyWildfire Insurance Fund by contributing $1.2 billion to SCE, which was raised from the issuance of Edison International equity and approximatelyParent equity. SCE raised the remaining $1.2 billion from the issuance of long-term debt at SCE.debt. SCE also expects to finance approximately $1.6 billion of capital expenses by issuing securitized bonds. If SCE incurs a substantial chargePrior to earnings in the third quarter of 2019 as a result of SCE's anticipated contributions to the insurance fund under AB 1054, SCE may, as a result of

At JuneSeptember 30, 2019, SCE had approximately $2.6$2.8 billion available under its $3.0 billion credit facility. In June 2019, SCE extended its credit facility through May 2024, pursuant to an option to extend, and may extend its credit facility for one additional year with the lenders' approval.

SCE borrowed $750 million under a term loan in February 2019 and issued $1.1 billion of first and refunding mortgage bonds in March 2019. The proceeds from the term loan and the March 2019 bond issuances were used to repay commercial paper borrowings and for general corporate purposes. In August 2019, SCE issued $1.2 billion of first and refunding mortgage bonds. The proceeds of which, along with the equity contribution from Edison International Parent described below, were used to make SCE's initial contribution to the Wildfire Insurance Fund. For further details, see "Notes to Consolidated Financial Statements—Note 5. Debt and Equity Financing."

In April 2019, Edison International Parent contributed $750 million to SCE, which SCE used to repay its February 2019 term loan discussed above. In June 2019, Edison International Parent contributed $450 million to SCE, which SCE used to payrepay commercial paper borrowings and for general corporate purposes. In August 2019, Edison International Parent contributed $1.2 billion to SCE, which SCE used, along with the debt issuance described above, to make its initial contribution to the Wildfire Insurance Fund. In August 2019 and September 2019, Edison International Parent contributed $200 million and $450 million, respectively, for general corporate purposes.

SCE may finance balancing account undercollections and working capital requirements to support operations and capital expenditures with commercial paper, its credit facility or other borrowings, subject to availability in the bank and capital markets. As necessary, SCE will utilize its available liquidity, capital market financings, other borrowings or parent company contributions to SCE equity in order to meet its obligations as they become due, including any potential costs related to the 2017/2018 Wildfire/Mudslide Events. For further information, see "Management Overview—Southern California Wildfires and Mudslides."

A debt covenant in SCE's credit facility limits its debt to total capitalization ratio to less than or equal to 0.65 to 1. At JuneSeptember 30, 2019, SCE's debt to total capitalization ratio was 0.480.46 to 1.

At JuneSeptember 30, 2019, SCE was in compliance with all other financial covenants that affect access to capital.

In April 2019, SCE filed itsan application with the CPUC for authority to establish its authorized cost of capital for utility operations for a three-year term, beginning January 1, 2020. In its application, SCE seeksrequested a return on common equityROE of 16.60% for 2020 compared to its current CPUC ROE of 10.30%. SCEand committed to reduce its ROE if there iswas a material reduction in its wildfire cost recovery risk due to regulatory or legislative reform. In August 2019, as a result of the anticipated impact of AB 1054 on SCE's wildfire cost recovery risks, SCE updated its requested ROE to 11.45% for 2020, compared to its current CPUC ROE of 10.3%.

SCE also seeks to modify its current capital structure to increase the common equity component of its capital structure from its current authorized level of 48% to 52% in 2020 and correspondingly reduce its preferred equity from 9% to 5%. If this change is not approved, SCE seeks an additional 0.3% ROE to account for the increased leverage. SCE does not propose to change its currently authorized level of long-term debt of 43%. In the application, SCE projects a cost of long-term debt of 4.74% and an embedded cost of preferred equity of 5.70% and requests that the CPUC authorize these costs for 2020. Based on the capital structure and cost factors discussed above, SCE proposes a weighted average return on rate base of 10.96%8.28% for 2020.

Based on the revenue requirement approved in SCE's 2018 GRC, SCE's proposed cost of capital and capital structure will result in a projected revenue requirement increase in 2020 of approximately $1.2 billion$204 million from revenue currently included in bundled electric rates of $11.1$9.4 billion.

2018 and 2019 Formula Rates

As discussed in the year-end 2018 MD&A, the FERC accepted, subject to refund and settlement procedures, SCE's request to implement its 2018 Formula Rate,

In September 2019, SCE filed a settlement on its formula rate associated withrates for the 2018 Formula Rate case that will establish SCE's FERC transmission revenue requirement for the FERC 2018 Settlement Period. The settlement provides for a weighted-average ROE of 11.2%, which includes a previously authorized 50 basis point incentive for CAISO participation and individual and previously authorized project incentives. Under the settlement, if the FERC issues a final, unappealable ruling that finds SCE is not eligible for the 50 basis point incentive for CAISO participation, then the ROE for the FERC 2018 Settlement Period will be reduced to 10.7%. The FERC has approved implementing this settlement on an interim basis pending the FERC's consideration of the settlement. The transmission revenue requirement and rates that have been billed to customers for the FERC 2018 Settlement Period were based on a total FERC weighted average ROE of 11.58%. SCE will true-up customer rates for the difference between its transmission facilitiesoriginal request and the settlement from existing regulatory liabilities pending FERC's consideration of the settlement and will reverse the true-up if the settlement is not approved by the FERC. SCE had been recognizing revenue during the FERC 2018 Settlement Period based on its expectations of the probable outcome of the 2018 Formula Rate case. Regulatory assets and liabilities were adjusted based on the probable approval of the 2018 Formula Rate case settlement, which resulted in 2019. recording a $48.4 million increase in net income.

In the April 2019 formula rate,Formula Rate case, SCE seeksrequested a base return on equity of 17.12% ("FERC Base ROE"), compared to its proposed base ROE of 10.30% for its 2018 formula rate.. The requested FERC Base ROE reflectsreflected a conventional ROE of

In September 2019, SCE filed a partial settlement on the 2019 Formula Rate that modifies its requested FERC Base ROE from 17.12% to 11.97%. This reduced ROE request reflects a conventional ROE of 11.12% and an additional ROE of 0.85% to compensate investors for current wildfire risk. As with the equivalent reduction in SCE's requested ROE in its 2020 CPUC Cost of Capital proceeding, for SCE is currently evaluatingthis partial settlement reflects the anticipated impact of AB 1054 on its requested ROE. As modified, SCE's total ROE request.

On June 4,In October 2019, the CPUC issued a draft resolution that if adopted would approveapproved incentives of approximately $10.6 million for activities in program years 2016 and 2017. The proposed award is approximately 5% less than SCE's requested award as a result of a CPUC decision that changed the formula used to calculate the Energy Efficiency Savings and Performance Incentive awards.

As a California corporation, SCE's ability to pay dividends is also governed by the California General Corporation Law. California law requires that for a dividend to be declared: (a) retained earnings must equal or exceed the proposed dividend, or (b) immediately after the dividend is made, the value of the corporation's assets must exceed the value of its liabilities plus amounts required to be paid, if any, in order to liquidate stock senior to the shares receiving the dividend. Additionally, a California corporation may not declare a dividend if it is, or as a result of the dividend would be, likely to be unable to meet its liabilities as they mature. Prior to declaring dividends, SCE's Board of Directors evaluates available information, including

The timing and amount of future dividends are also dependent on a number of other factors including SCE's requirements to fund other obligations and capital expenditures, and its ability to access the capital markets, and generate operating cash flows and earnings. If SCE incurs significant costs related to the 2017/2018 Wildfire/Mudslide Events and is unable to recover such costs through insurance or from customers or access capital markets on reasonable terms, SCE may be limited in its ability to pay future dividends to Edison internationalInternational and its preferred and preference shareholders.

Certain derivative instruments, power procurement contracts and other contractual arrangements contain collateral requirements. In addition, certain environmental remediation obligations require financial assurance that may be in the form of collateral postings. Future collateral requirements may differ from the requirements at JuneSeptember 30, 2019 due to the addition of incremental power and energy procurement contracts with collateral requirements, if any, the impact of changes in wholesale power and natural gas prices on SCE's contractual obligations, and the impact of SCE's credit ratings falling below investment grade.

As discussed in the year-end 2018 MD&A, spent fuel transfer operations at San Onofre were suspended on August 3, 2018 due to an incident that occurred when an SCE contractor was loading a spent fuel canister into the Independent Spent Fuel Storage Installation (ISFSI). In May 2019, after an extensive review, the NRC determined that fuel loading can be safely resumed at San Onofre. SCE commenced fuel transfer operations at San Onofre in July 2019. In October 2019, the California Coastal Commission approved SCE's application for the Coastal Development Permit required to start major decommissioning activities at San Onofre. The permit may be challenged by interested parties. SCE plans on commencing major decommissioning activities in 2020 in accordance with the terms of the permit, subject to any legal challenges that may be raised by interested parties.

In the next 12 months, Edison International expects to fund its net cash requirements through capital market and bank financings, including by issuing additional debt and equity, as needed.

A debt covenant in Edison International Parent's credit facility requires a consolidated debt to total capitalization ratio as defined in the credit agreement of less than or equal to 0.70 to 1. At JuneSeptember 30, 2019, Edison International Parent's consolidated debt to total capitalization ratio was 0.580.55 to 1.

At JuneSeptember 30, 2019, Edison International Parent was in compliance with all financial covenants that affect access to capital.

Edison International Parent's long-term issuer credit ratings remain at investment grade levels after downgrade actions taken by the major credit rating agencies in the first quarter of 2019. In the third quarter of 2019, the major credit agencies changed Edison International Parent's outlook from negative to stable, due to the passage of AB 1054 and the establishment of the Wildfire Insurance Fund, which provided the Liability Cap and the new standard that the CPUC must apply when assessing the prudency of a utility. For further information, see "Management Overview—Southern California Wildfires and Mudslides."

The following table summarizes Edison International Parent's current long-term issuer credit ratings and outlook from the major credit rating agencies:

Edison International Parent's credit ratings may be further affected if, among other things, regulators fail to successfully implement AB 1054 in a consistent and credit supportive manner or the Wildfire Insurance Fund is depleted by the ultimate outcome of pending enforcement and litigation matters, including the outcome of the uncertainties and potential liabilities associated with the 2017/2018 Wildfire/Mudslide Events, and the effective reform of policies allocating liability to investor-owned utilities for damages caused byclaims from catastrophic wildfires substantially caused by utility equipment, including, without limitation, the passage of AB 1054.wildfires. Credit rating downgrades increase the cost and may impact the availability of short-term and long-term borrowings, including commercial paper, credit facilities, note financings or other borrowings.

Edison International has net operating loss and tax credit carryforwards retained by SCE, which are available to offset future consolidated taxtaxable income or tax liabilities. In May 2019, SCE received the 2018 GRC final decision, which included a reduction in revenue and taxable income for 2018 through 2020. At JuneSeptember 30, 2019, net operating loss and tax credit carryforwards reflect the impact of the 2018 GRC final decision, the potential for claims related to the 2017/2018 Wildfire/Mudslide Events, and participation in the wildfire fundWildfire Insurance Fund as described in AB 1054. Edison International expects to realize its NOL and tax credit carryforward position through 2027.

Net cash (used in) provided by operating activities was impacted by the following:

Net income and non-cash items decreased in 2019 by $153$324 million. Net Income increased by $96 million primarily due to the adoption of the 2018 GRC final decision in the second quarter of 2019, higher FERC revenue due to the pending settlement of SCE's 2018 Formula Rate proceeding, and timing of regulatory deferral and cost recoverydeferrals of wildfire insurance costs, and higher revenue due to a change in estimate under the FERC formula rate mechanism, partially offset by higher wildfire mitigation costsand other maintenance expenses. The $420 million decrease in 2019. Non-cashnon-cash items included changes in deferred income taxes and investment credits of $(175)$(207) million and $12$108 million in 2019 and 2018, respectively, depreciation and amortization of $834 million$1.3 billion and $1.1$1.6 billion in 2019 and 2018, respectively, and an impairment charge of $170 million recorded in 2019 related to disallowed historical capital expenditures in SCE's 2018 GRC final decision.

Net cash used in operating activities was also impacted by cash outflow of $2.4 billion related to SCE's contribution to the Wildfire Insurance Fund in September 2019. See "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies" for further information.

Net cash outflow for working capital was $(235)$247 million and $(507)$692 million during the sixnine months ended JuneSeptember 30, 2019 and 2018, respectively. Net cash for working capital in 2019 was primarily impacted by insurance premium payments of $431$453 million for wildfire-related coverage.coverage, partially offset by net tax refunds of $166 million. The net cash for each periodworking capital outflow was also impacted by the timingdue to an increase in receivables from customers of disbursements of $170$533 million and $(55)$632 million during the first six months ofin 2019 and 2018, respectively, and an increase in receivables from customerspayables of $149 million and $499$270 million in 2019 and 2018, respectively.primarily related to purchased power.

Net cash provided by regulatory assets and liabilities, including changes in overcollections of balancing accounts was $(543)$(470) million and $204$213 million during the sixnine months ended JuneSeptember 30, 2019 and 2018, respectively. SCE has a number of balancing accounts, which impact cash flows based on differences between timing of collection of amounts through rates and accrual expenditures. Cash flows were primarily impacted by the following:

2019

2018

Cash flows used in other noncurrent assets and liabilities were primarily related to net earnings from nuclear decommissioning trust investments ($3719 million and $5$29 million in 2019 and 2018, respectively) and SCE's payments of decommissioning costs ($98126 million and $71$109 million in 2019 and 2018, respectively). See "Nuclear Decommissioning Activities" below for further discussion.

The following table summarizes cash provided by financing activities for the sixnine months ended JuneSeptember 30, 2019 and 2018. Issuances of debt are discussed in "Notes to Consolidated Financial Statements—Note 5. Debt and Credit Agreements.Equity Financing."

Cash flows used in investing activities are primarily due to capital expenditures related to transmission and distribution investments ($2.23.5 billion and $2.1$3.2 billion for the six-monthnine-month periods ended JuneSeptember 30, 2019 and 2018, respectively). In addition, SCE had a net redemption of nuclear decommissioning trust investments of $72$114 million and $73$86 million during the first sixnine months ended JuneSeptember 30, 2019 and 2018, respectively. See "Nuclear Decommissioning Activities" below for further discussion.

Net cash (used in) provided by investing activities decreased $61$70 million during the first sixnine months of 2019 compared to 2018 primarily due to a cash inflow of $78 million from the sale of SoCore Energy in April 2018.

SCE has contingencies related to the 2017/2018 Wildfire/Mudslide Events, wildfire insurance, Environmental Remediation, Nuclear Insurance and Spent Nuclear Fuel, which are discussed in "Notes to Consolidated Financial Statements—Note 12. Commitments and Contingencies."

For a complete discussion onof Edison International's and SCE's critical accounting policies, other than the policy described below, see "Critical Accounting Estimates and Policies" in the year-ended 2018 MD&A.

New accounting guidance is discussed in "Notes to Consolidated Financial Statements—Note 1. Summary of Significant Accounting Policies—New Accounting Guidance."

Information responding to this section is included in the MD&A under the heading "Market Risk Exposures" and is incorporated herein by reference.