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Compensation and Benefit Plans (Tables) | 12 Months Ended
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Dec. 31, 2018
Pension and Other Postretirement Benefits |
Employee Savings Plan Employer Contributions | The following employer contributions were made for continuing operations:
| Edison International |  | SCE
(in millions) | Years ended December 31,
2018 | $ | 74 |  |  | $ | 74 |
2017 | 70 |  |  | 69 |
2016 | 69 |  |  | 68 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs | The following table summarizes total expense and tax benefits associated with stock based compensation:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2018 |  | 2017 |  | 2016 |  | 2018 |  | 2017 |  | 2016
Stock-based compensation expense 1: |  |  |  |  |  |  |  |  |  |  |
Stock options | $ | 11 |  |  | $ | 14 |  |  | $ | 14 |  |  | $ | 6 |  |  | $ | 8 |  |  | $ | 7 |
Performance shares | 1 |  |  | 2 |  |  | 13 |  |  | 1 |  |  | 2 |  |  | 6 |
Restricted stock units | 7 |  |  | 6 |  |  | 6 |  |  | 4 |  |  | 3 |  |  | 3 |
Other | 2 |  |  | 1 |  |  | 1 |  |  | — |  |  | — |  |  | — |
Total stock-based compensation expense | $ | 21 |  |  | $ | 23 |  |  | $ | 34 |  |  | $ | 11 |  |  | $ | 13 |  |  | $ | 16 |
Income tax benefits related to stock compensation expense | $ | 6 |  |  | $ | 72 |  |  | $ | 41 |  |  | $ | 3 |  |  | $ | 15 |  |  | $ | 20 |
1 | Reflected in "Operation and maintenance" on Edison International's and SCE's consolidated statements of income.
Black-Sholes Option-Pricing Model Assumptions | The Black-Scholes option-pricing model requires various assumptions noted in the following table:
| Years ended December 31,
| 2018 |  | 2017 |  | 2016
Expected terms (in years) | 5.7 |  | 5.7 |  | 5.9
Risk-free interest rate | 2.6% - 3.0% |  | 2.1% - 2.3% |  | 1.2% – 2.2%
Expected dividend yield | 3.6% - 4.3% |  | 2.7% - 3.8% |  | 2.5% – 3.0%
Weighted-average expected dividend yield | 3.8% |  | 2.7% |  | 2.9%
Expected volatility | 20.9% - 21.9% |  | 17.8% - 20.9% |  | 17.2% – 17.5%
Weighted-average volatility | 20.9% |  | 17.9% |  | 17.4%
Summary of Stock Options Activity | The following is a summary of the status of Edison International's stock options:
|  |  | Weighted-Average |  |
| Stock options |  | Exercise Price |  | Remaining Contractual Term (Years) |  | Aggregate Intrinsic Value (in millions)
Edison International: |  |  |  |  |  |  |
Outstanding at December 31, 2017 | 7,822,565 |  |  | $ | 58.98 |  |  |  |  |  |
Granted | 1,785,538 |  |  | 60.83 |  |  |  |  |  |
Forfeited or expired | (222,392 | ) |  | 69.59 |  |  |  |  |  |
Exercised 1 | (552,101 | ) |  | 47.33 |  |  |  |  |  |
Outstanding at December 31, 2018 | 8,833,610 |  |  | 59.81 |  |  | 6.13 |  |  |
Vested and expected to vest at December 31, 2018 | 8,726,445 |  |  | 59.76 |  |  | 6.10 |  | $ | 34 |
Exercisable at December 31, 2018 | 5,145,292 |  |  | $ | 54.77 |  |  | 4.74 |  | $ | 34 |
SCE: |  |  |  |  |  |  |
Outstanding at December 31, 2017 | 4,445,702 |  |  | $ | 56.46 |  |  |  |  |  |
Granted | 960,240 |  |  | 60.86 |  |  |  |  |  |
Forfeited or expired | (125,260 | ) |  | 68.90 |  |  |  |  |  |
Exercised 1 | (288,302 | ) |  | 41.57 |  |  |  |  |  |
Transfers, net | 44,805 |  |  | 55.74 |  |  |  |  |
Outstanding at December 31, 2018 | 5,037,185 |  |  | 57.84 |  |  | 5.79 |  |  |
Vested and expected to vest at December 31, 2018 | 4,982,445 |  |  | 57.77 |  |  | 5.75 |  | $ | 25 |
Exercisable at December 31, 2018 | 3,089,466 |  |  | $ | 52.15 |  |  | 4.33 |  | $ | 25 |
1 Edison International and SCE recognized tax benefits of $3 million and $2 million, respectively, from stock options exercised in 2018.
Schedule of Unrecognized Compensation Expense | At December 31, 2018, total unrecognized compensation cost related to stock options and the weighted-average period the cost is expected to be recognized are as follows:
(in millions) | Edison International |  | SCE
Unrecognized compensation cost, net of expected forfeitures | $ | 15 |  |  | $ | 8 |
Weighted-average period (in years) | 2.4 |  |  | 2.2 |
Supplemental Data on Stock-based Compensation | Supplemental Data on Stock Options
| Edison International |  | SCE
| Years ended December 31,
(in millions, except per award amounts) | 2018 |  | 2017 |  | 2016 |  | 2018 |  | 2017 |  | 2016
Stock options: |  |  |  |  |  |  |  |  |  |  |
Weighted average grant date fair value per option granted | $ | 8.21 |  |  | $ | 10.65 |  |  | $ | 7.38 |  |  | $ | 8.22 |  |  | $ | 10.63 |  |  | $ | 7.50 |
Fair value of options vested | 14 |  |  | 11 |  |  | 11 |  |  | 7 |  |  | 5 |  |  | 5 |
Value of options exercised | 10 |  |  | 126 |  |  | 84 |  |  | 7 |  |  | 29 |  |  | 41 |
Summary of Nonvested Share Activity | The following is a summary of the status of Edison International's nonvested performance shares:
| Shares |  | Weighted-Average Fair Value
Edison International: |  |  |
Nonvested at December 31, 2017 | 179,122 |  |  | $ | 63.85 |
Granted | 119,345 |  |  |  |
Forfeited | (51,281 | ) |  |
Vested 1 | (53,748 | ) |  |  |
Nonvested at December 31, 2018 | 193,438 |  |  | 42.81 |
SCE: |  |  |
Nonvested at December 31, 2017 | 88,722 |  |  | $ | 64.01 |
Granted | 64,335 |  |  |  |
Forfeited | (27,331 | ) |  |
Vested 1 | (24,574 | ) |  |  |
Affiliate transfers, net | 706 |  |  |
Nonvested at December 31, 2018 | 101,858 |  |  | 42.96 |
1 | Relates to performance shares that will be paid in 2019 as performance targets were met at December 31, 2018.
Summary of Nonvested Restricted Stock Units Activity | The following is a summary of the status of Edison International's nonvested restricted stock units:
| Edison International |  | SCE
| Restricted Stock Units |  | Weighted-Average Grant Date Fair Value |  | Restricted Stock Units |  | Weighted-Average Grant Date Fair Value
Nonvested at December 31, 2017 | 303,051 |  |  | $ | 69.52 |  |  | 141,418 |  |  | $ | 69.96 |
Granted | 120,606 |  |  | 60.83 |  |  | 64,919 |  |  | 60.87 |
Forfeited | (8,225 | ) |  | 68.76 |  |  | (7,973 | ) |  | 68.97 |
Vested | (123,646 | ) |  | 64.43 |  |  | (51,667 | ) |  | 64.07 |
Affiliate transfers, net | — |  |  | — |  |  | 1,129 |  |  | 68.64 |
Nonvested at December 31, 2018 | 291,786 |  |  | 68.11 |  |  | 147,826 |  |  | 68.08 |
Pension Plans |
Pension and Other Postretirement Benefits |
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan | Information on pension plan assets and benefit obligations for continuing and discontinued operations is shown below.
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2018 |  | 2017 |  | 2018 |  | 2017
Change in projected benefit obligation |  |  |  |  |  |  |
Projected benefit obligation at beginning of year | $ | 4,179 |  |  | $ | 4,284 |  |  | $ | 3,702 |  |  | $ | 3,791 |
Service cost | 126 |  |  | 137 |  |  | 121 |  |  | 129 |
Interest cost | 141 |  |  | 164 |  |  | 124 |  |  | 144 |
Actuarial gain | (280 | ) |  | (46 | ) |  | (273 | ) |  | (74 | )
Benefits paid | (286 | ) |  | (360 | ) |  | (243 | ) |  | (288 | )
Projected benefit obligation at end of year | $ | 3,880 |  |  | $ | 4,179 |  |  | $ | 3,431 |  |  | $ | 3,702 |
Change in plan assets |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | $ | 3,616 |  |  | $ | 3,388 |  |  | $ | 3,390 |  |  | $ | 3,172 |
Actual return on plan assets | (86 | ) |  | 483 |  |  | (86 | ) |  | 442 |
Employer contributions | 77 |  |  | 105 |  |  | 52 |  |  | 64 |
Benefits paid | (286 | ) |  | (360 | ) |  | (232 | ) |  | (288 | )
Fair value of plan assets at end of year | $ | 3,321 |  |  | $ | 3,616 |  |  | $ | 3,124 |  |  | $ | 3,390 |
Funded status at end of year | $ | (559 | ) |  | $ | (563 | ) |  | $ | (307 | ) |  | $ | (312 | )
Amounts recognized in the consolidated balance sheets consist of 1: |  |  |  |  |  |  |
Long-term assets | $ | 2 |  |  | $ | 7 |  |  | $ | — |  |  | $ | — |
Current liabilities | (29 | ) |  | (17 | ) |  | (5 | ) |  | (4 | )
Long-term liabilities | (532 | ) |  | (553 | ) |  | (302 | ) |  | (308 | )
| $ | (559 | ) |  | $ | (563 | ) |  | $ | (307 | ) |  | $ | (312 | )
Amounts recognized in accumulated other comprehensive loss consist of: |  |  |  |  |  |  |
Prior service cost | $ | (1 | ) |  | $ | (1 | ) |  | $ | — |  |  | $ | — |
Net loss 1 | 83 |  |  | 77 |  |  | 17 |  |  | 21 |
| $ | 82 |  |  | $ | 76 |  |  | $ | 17 |  |  | $ | 21 |
Amounts recognized as a regulatory asset | 271 |  |  | 271 |  |  | 271 |  |  | 271 |
Total not yet recognized as expense | $ | 353 |  |  | $ | 347 |  |  | $ | 288 |  |  | $ | 292 |
Accumulated benefit obligation at end of year | $ | 3,753 |  |  | $ | 4,022 |  |  | $ | 3,342 |  |  | $ | 3,585 |
Pension plans with an accumulated benefit obligation in excess of plan assets: |  |  |  |  |  |  |
Projected benefit obligation | $ | 3,880 |  |  | $ | 4,179 |  |  | $ | 3,431 |  |  | $ | 3,702 |
Accumulated benefit obligation | 3,753 |  |  | 4,022 |  |  | 3,342 |  |  | 3,585 |
Fair value of plan assets | 3,321 |  |  | 3,616 |  |  | 3,124 |  |  | 3,390 |
Weighted-average assumptions used to determine obligations at end of year: |  |  |  |  |  |  |
Discount rate | 4.19 | % |  | 3.46 | % |  | 4.19 | % |  | 3.46 | %
Rate of compensation increase | 4.10 | % |  | 4.10 | % |  | 4.10 | % |  | 4.10 | %
1 | The SCE liability excludes a long-term payable due to Edison International Parent of $117 million and $114 million at December 31, 2018 and 2017, respectively, related to certain SCE postretirement benefit obligations transferred to Edison International Parent. SCE's accumulated other comprehensive loss of $17 million and $21 million at December 31, 2018 and 2017, respectively, excludes net loss of $21 million and $19 million related to these benefits.
Expense Components for Plans | Net periodic pension expense components for continuing operations are:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2018 |  | 2017 3 |  | 2016 3 |  | 2018 |  | 2017 3 |  | 2016 3
Service cost | $ | 126 |  |  | $ | 138 |  |  | $ | 139 |  |  | $ | 123 |  |  | $ | 133 |  |  | $ | 136 |
Non-service cost |  |  |  |  |  |  |  |  |  |  |
Interest cost | 140 |  |  | 164 |  |  | 172 |  |  | 128 |  |  | 149 |  |  | 156 |
Expected return on plan assets | (228 | ) |  | (212 | ) |  | (220 | ) |  | (214 | ) |  | (199 | ) |  | (205 | )
Settlement costs 1 | — |  |  | 6 |  |  | — |  |  | — |  |  | — |  |  | — |
Amortization of prior service cost | 3 |  |  | 3 |  |  | 4 |  |  | 3 |  |  | 3 |  |  | 4 |
Amortization of net loss 2 | 9 |  |  | 21 |  |  | 27 |  |  | 6 |  |  | 17 |  |  | 23 |
Regulatory adjustment (deferred) | 15 |  |  | (28 | ) |  | (21 | ) |  | 15 |  |  | (28 | ) |  | (21 | )
Total non-service benefit | $ | (61 | ) |  | $ | (46 | ) |  | $ | (38 | ) |  | $ | (62 | ) |  | $ | (58 | ) |  | $ | (43 | )
Total expense recognized | $ | 65 |  |  | $ | 92 |  |  | $ | 101 |  |  | $ | 61 |  |  | $ | 75 |  |  | $ | 93 |
1 | Under GAAP, a settlement is recorded when lump-sum payments exceed estimated annual service and interest costs. Lump sum payments made in 2017 to Edison International executives retiring in 2016 from the Executive Retirement Plan exceeded the estimated service and interest costs, resulting in a partial settlement of that plan. A settlement loss of approximately $6.4 million ($3.8 million after-tax) was recorded at Edison International for the year ended December 31, 2017.
2 | Includes the amount of net loss reclassified from accumulated other comprehensive loss. The amount reclassified for Edison International was $9 million, $10 million and $10 million for the years ended December 31, 2018, 2017 and 2016, respectively. The amount reclassified for SCE was $6 million for all the years ended December 31, 2018, 2017 and 2016.
3 During the first quarter of 2018, Edison International and SCE adopted an accounting standard retrospectively related to the presentation of the components of net periodic benefit costs for the defined benefit pension and other postretirement plans. Prior years' consolidated income statements have been updated to reflect the retrospective application of this accounting standard. Service and non-service costs are included in "Operation and maintenance" and "Other income and expenses," respectively, on the consolidated income statement. See Note 1 for further information.
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income | Other changes in pension plan assets and benefit obligations recognized in other comprehensive loss for continuing operations:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2018 |  | 2017 |  | 2016 |  | 2018 |  | 2017 |  | 2016
Net loss | $ | 5 |  |  | $ | — |  |  | $ | 6 |  |  | $ | 5 |  |  | $ | 3 |  |  | $ | 4 |
Settlement charges | — |  |  | (6 | ) |  | — |  |  | — |  |  | — |  |  | — |
Amortization of net loss | (9 | ) |  | (10 | ) |  | (10 | ) |  | (6 | ) |  | (6 | ) |  | (6 | )
Total recognized in other comprehensive loss | $ | (4 | ) |  | $ | (16 | ) |  | $ | (4 | ) |  | $ | (1 | ) |  | $ | (3 | ) |  | $ | (2 | )
Total recognized in expense and other comprehensive loss | $ | 61 |  |  | $ | 76 |  |  | $ | 97 |  |  | $ | 60 |  |  | $ | 72 |  |  | $ | 91 |
Schedule of Amounts in Accumulated Other Comprehensive Loss to be Recognized | The estimated pension amounts that will be amortized to expense in 2019 for continuing operations are as follows:
(in millions) | Edison International |  | SCE
Unrecognized net loss to be amortized 1 | $ | 8 |  |  | $ | 6 |
Unrecognized prior service cost to be amortized | 2 |  |  | 2 |
1 | The amount of net loss expected to be reclassified from accumulated other comprehensive loss for Edison International and SCE is $8 million and $6 million, respectively.
Schedule of Assumptions Used | Edison International and SCE used the following weighted-average assumptions to determine pension expense for continuing operations:
| Years ended December 31,
| 2018 |  | 2017 |  | 2016
Discount rate | 3.46 | % |  | 3.94 | % |  | 4.18 | %
Rate of compensation increase | 4.10 | % |  | 4.00 | % |  | 4.00 | %
Expected long-term return on plan assets | 6.50 | % |  | 6.50 | % |  | 7.00 | %
Schedule of Expected Benefit Payments | The following benefit payments, which reflect expected future service, are expected to be paid:
| Edison International |  | SCE
(in millions) | Years ended December 31,
2019 | $ | 342 |  |  | $ | 299 |
2020 | 323 |  |  | 289 |
2021 | 323 |  |  | 285 |
2022 | 313 |  |  | 281 |
2023 | 301 |  |  | 274 |
2024 – 2028 | 1,446 |  |  | 1,280 |
Postretirement Benefits Other than Pension Plan Assets by Hierarchy Levels | The following table sets forth the Master Trust investments for Edison International and SCE that were accounted for at fair value as of December 31, 2018 by asset class and level within the fair value hierarchy:
(in millions) | Level 1 |  | Level 2 |  | Level 3 |  | NAV 1 |  | Total
U.S. government and agency securities 2 | $ | 110 |  |  | $ | 937 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,047 |
Corporate stocks 3 | 473 |  |  | 6 |  |  | — |  |  | — |  |  | 479 |
Corporate bonds 4 | — |  |  | 582 |  |  | — |  |  | — |  |  | 582 |
Common/collective funds 5 | — |  |  | — |  |  | — |  |  | 426 |  |  | 426 |
Partnerships/joint ventures 6 | — |  |  | — |  |  | — |  |  | 434 |  |  | 434 |
Other investment entities 7 | — |  |  | — |  |  | — |  |  | 236 |  |  | 236 |
Registered investment companies 8 | 112 |  |  | — |  |  | — |  |  | 2 |  |  | 114 |
Interest-bearing cash | 2 |  |  | — |  |  | — |  |  | — |  |  | 2 |
Other | — |  |  | 73 |  |  | — |  |  | — |  |  | 73 |
Total | $ | 697 |  |  | $ | 1,598 |  |  | $ | — |  |  | $ | 1,098 |  |  | $ | 3,393 |
Receivables and payables, net |  |  |  |  |  |  |  |  |  |  |  | (72 | )
Net plan assets available for benefits |  |  |  |  |  |  |  |  |  |  |  | $ | 3,321 |
SCE's share of net plan assets |  |  |  |  |  |  |  |  | $ | 3,124 |
The following table sets forth the Master Trust investments that were accounted for at fair value as of December 31, 2017 by asset class and level within the fair value hierarchy:
(in millions) | Level 1 |  | Level 2 |  | Level 3 |  | NAV 1 |  | Total
U.S. government and agency securities 2 | $ | 184 |  |  | $ | 507 |  |  | $ | — |  |  | $ | — |  |  | $ | 691 |
Corporate stocks 3 | 718 |  |  | 11 |  |  | — |  |  | — |  |  | 729 |
Corporate bonds 4 | — |  |  | 676 |  |  | — |  |  | — |  |  | 676 |
Common/collective funds 5 | — |  |  | — |  |  | — |  |  | 705 |  |  | 705 |
Partnerships/joint ventures 6 | — |  |  | — |  |  | — |  |  | 396 |  |  | 396 |
Other investment entities 7 | — |  |  | — |  |  | — |  |  | 262 |  |  | 262 |
Registered investment companies 8 | 140 |  |  | — |  |  | — |  |  | — |  |  | 140 |
Interest-bearing cash | 9 |  |  | — |  |  | — |  |  | — |  |  | 9 |
Other | — |  |  | 106 |  |  | — |  |  | — |  |  | 106 |
Total | $ | 1,051 |  |  | $ | 1,300 |  |  | $ | — |  |  | $ | 1,363 |  |  | $ | 3,714 |
Receivables and payables, net |  |  |  |  |  |  |  |  |  |  |  | (98 | )
Net plan assets available for benefits |  |  |  |  |  |  |  |  |  |  |  | $ | 3,616 |
SCE's share of net plan assets |  |  |  |  |  |  |  |  | $ | 3,390 |
1 | These investments are measured at fair value using the net asset value per share practical expedient and have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the net plan assets available for benefits.
2 | Level 1 U.S. government and agency securities are U.S. treasury bonds and notes. Level 2 primarily relates to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
3 | Corporate stocks are diversified. At December 31, 2018 and 2017, respectively, performance for actively managed separate accounts is primarily benchmarked against the Russell Indexes (43%) and (54%) and Morgan Stanley Capital International (MSCI) index (57%) and (46%).
4 | Corporate bonds are diversified. At December 31, 2018 and 2017, respectively, this category includes $60 million and $65 million for collateralized mortgage obligations and other asset backed securities.
5 | At December 31, 2018 and 2017, respectively, the common/collective assets were invested in equity index funds that seek to track performance of the Standard and Poor's 500 Index (43% and 41%) and Russell 1000 indexes (14% and 15%). In addition, at December 31, 2018 and 2017, respectively, 21% and 15% of the assets in this category are in index funds which seek to track performance in the MSCI All Country World Index exUS and 15% and 25% of this category are in non-index U.S. equity fund, which is actively managed.
6 | At December 31, 2018 and 2017, respectively, 50% and 55% are invested in private equity funds with investment strategies that include branded consumer products, clean technology and California geographic focus companies, 30% and 20% are invested in a broad range of financial assets in all global markets, and 16% and 23% are invested in publicly traded fixed income securities.
7 | 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.
8 | Level 1 registered investment companies primarily consisted of a global equity mutual fund which seeks to outperform the MSCI World Total Return Index.
Postretirement Benefits Other Than Pensions |
Pension and Other Postretirement Benefits |
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan | Information on PBOP Plan assets and benefit obligations is shown below:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2018 |  | 2017 |  | 2018 |  | 2017
Change in benefit obligation |  |  |  |  |  |  |
Benefit obligation at beginning of year | $ | 2,337 |  |  | $ | 2,276 |  |  | $ | 2,325 |  |  | $ | 2,266 |
Service cost | 37 |  |  | 31 |  |  | 37 |  |  | 31 |
Interest cost | 80 |  |  | 86 |  |  | 80 |  |  | 85 |
Special termination benefits | — |  |  | 1 |  |  | — |  |  | 1 |
Actuarial (gain) loss 1 | (382 | ) |  | 24 |  |  | (379 | ) |  | 23 |
Plan participants' contributions | 28 |  |  | 24 |  |  | 28 |  |  | 24 |
Benefits paid | (114 | ) |  | (105 | ) |  | (114 | ) |  | (105 | )
Benefit obligation at end of year | $ | 1,986 |  |  | $ | 2,337 |  |  | $ | 1,977 |  |  | $ | 2,325 |
Change in plan assets |  |  |  |  |  |  |
Fair value of plan assets at beginning of year | $ | 2,330 |  |  | $ | 2,102 |  |  | $ | 2,330 |  |  | $ | 2,102 |
Actual return on assets | (123 | ) |  | 297 |  |  | (123 | ) |  | 297 |
Employer contributions | 13 |  |  | 12 |  |  | 12 |  |  | 12 |
Plan participants' contributions | 28 |  |  | 24 |  |  | 28 |  |  | 24 |
Benefits paid | (115 | ) |  | (105 | ) |  | (114 | ) |  | (105 | )
Fair value of plan assets at end of year | $ | 2,133 |  |  | $ | 2,330 |  |  | $ | 2,133 |  |  | $ | 2,330 |
Funded status at end of year | $ | 147 |  |  | $ | (7 | ) |  | $ | 156 |  |  | $ | 5 |
Amounts recognized in the consolidated balance sheets consist of: |  |  |  |  |  |  |
Long-term assets | $ | 159 |  |  | $ | 6 |  |  | $ | 168 |  |  | $ | 17 |
Current liabilities | (12 | ) |  | (13 | ) |  | (12 | ) |  | (12 | )
Long-term liabilities | — |  |  | — |  |  | — |  |  | — |
| $ | 147 |  |  | $ | (7 | ) |  | $ | 156 |  |  | $ | 5 |
Amounts recognized in accumulated other comprehensive loss consist of: |  |  |  |  |  |  |
Net loss | $ | 1 |  |  | $ | 4 |  |  | $ | — |  |  | $ | — |
Amounts recognized as a regulatory liability | (185 | ) |  | (26 | ) |  | (185 | ) |  | (26 | )
Total not yet recognized as income | $ | (184 | ) |  | $ | (22 | ) |  | $ | (185 | ) |  | $ | (26 | )
Weighted-average assumptions used to determine obligations at end of year: |  |  |  |  |  |  |
Discount rate | 4.35 | % |  | 3.70 | % |  | 4.35 | % |  | 3.70 | %
Assumed health care cost trend rates: |  |  |  |  |  |  |
Rate assumed for following year | 6.75 | % |  | 6.75 | % |  | 6.75 | % |  | 6.75 | %
Ultimate rate | 5.00 | % |  | 5.00 | % |  | 5.00 | % |  | 5.00 | %
Year ultimate rate reached | 2029 |  |  | 2029 |  |  | 2029 |  |  | 2029 |
Expense Components for Plans | Net periodic PBOP expense components for continuing operations are:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2018 |  | 2017 2 |  | 2016 2 |  | 2018 |  | 2017 2 |  | 2016 2
Service cost | $ | 37 |  |  | $ | 31 |  |  | $ | 35 |  |  | $ | 37 |  |  | $ | 31 |  |  | $ | 34 |
Non-service cost |  |  |  |  |  |  |  |  |  |  |
Interest cost | 80 |  |  | 86 |  |  | 97 |  |  | 80 |  |  | 85 |  |  | 97 |
Expected return on plan assets | (121 | ) |  | (110 | ) |  | (112 | ) |  | (122 | ) |  | (110 | ) |  | (112 | )
Special termination benefits 1 | — |  |  | 1 |  |  | 2 |  |  | — |  |  | 1 |  |  | 2 |
Amortization of prior service credit | (1 | ) |  | (3 | ) |  | (2 | ) |  | (1 | ) |  | (2 | ) |  | (2 | )
Regulatory adjustment (deferred) | 24 |  |  | — |  |  | — |  |  | 24 |  |  | — |  |  | — |
Total non-service benefit | $ | (18 | ) |  | $ | (26 | ) |  | $ | (15 | ) |  | $ | (19 | ) |  | $ | (26 | ) |  | $ | (15 | )
Total expense | $ | 19 |  |  | $ | 5 |  |  | $ | 20 |  |  | $ | 18 |  |  | $ | 5 |  |  | $ | 19 |
1 | Due to the reduction in workforce, SCE has incurred costs for extended retiree health care coverage.
2 During the first quarter of 2018, Edison International and SCE adopted an accounting standard retrospectively related to the presentation of the components of net periodic benefit costs for the defined benefit pension and other postretirement plans. Prior years' consolidated income statements have been updated to reflect the retrospective application of this accounting standard. Service and non-service costs are included in "Operation and maintenance" and "Other income and expenses," respectively, on the consolidated income statement. See Note 1 for further information.
Schedule of Amounts in Accumulated Other Comprehensive Loss to be Recognized | The estimated PBOP amounts that will be amortized to expense in 2019 for continuing operations are as follows:
(in millions) | Edison International |  | SCE
Unrecognized net gain to be amortized | $ | (3 | ) |  | $ | (3 | )
Unrecognized prior service credit to be amortized | (1 | ) |  | (1 | )
Schedule of Assumptions Used | Edison International and SCE used the following weighted-average assumptions to determine PBOP expense for continuing operations:
| Years ended December 31,
| 2018 |  | 2017 |  | 2016
Discount rate | 3.70 | % |  | 4.29 | % |  | 4.55 | %
Expected long-term return on plan assets | 5.30 | % |  | 5.30 | % |  | 5.60 | %
Assumed health care cost trend rates: |  |  |  |  |
Current year | 6.75 | % |  | 7.00 | % |  | 7.50 | %
Ultimate rate | 5.00 | % |  | 5.00 | % |  | 5.00 | %
Year ultimate rate reached | 2029 |  |  | 2022 |  |  | 2022 |
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rate | A one-percentage-point change in assumed health care cost trend rate would have the following effects on continuing operations:
| Edison International |  | SCE
(in millions) | One-Percentage-Point Increase |  | One-Percentage-Point Decrease |  | One-Percentage-Point Increase |  | One-Percentage-Point Decrease
Effect on accumulated benefit obligation as of December 31, 2018 | $ | 210 |  |  | $ | (173 | ) |  | $ | 209 |  |  | $ | (172 | )
Effect on annual aggregate service and interest costs | 11 |  |  | (9 | ) |  | 11 |  |  | (9 | )
Schedule of Expected Benefit Payments | The following benefit payments (net of plan participants' contributions) are expected to be paid:
| Edison International |  | SCE
(in millions) | Years ended December 31,
2019 | $ | 91 |  |  | $ | 91 |
2020 | 94 |  |  | 94 |
2021 | 97 |  |  | 97 |
2022 | 100 |  |  | 99 |
2023 | 103 |  |  | 102 |
2024 – 2028 | 553 |  |  | 550 |
Postretirement Benefits Other than Pension Plan Assets by Hierarchy Levels | The following table sets forth the VEBA Trust assets for Edison International and SCE that were accounted for at fair value as of December 31, 2018 by asset class and level within the fair value hierarchy:
(in millions) | Level 1 |  | Level 2 |  | Level 3 |  | NAV 1 |  | Total
U.S. government and agency securities 2 | $ | 322 |  |  | $ | 49 |  |  | $ | — |  |  | $ | — |  |  | $ | 371 |
Corporate stocks 3 | 204 |  |  | — |  |  | — |  |  | — |  |  | 204 |
Corporate notes and bonds 4 | — |  |  | 832 |  |  | — |  |  | — |  |  | 832 |
Common/collective funds 5 | — |  |  | — |  |  | — |  |  | 495 |  |  | 495 |
Partnerships 6 | — |  |  | — |  |  | — |  |  | 89 |  |  | 89 |
Registered investment companies 7 | 38 |  |  | — |  |  | — |  |  | — |  |  | 38 |
Interest bearing cash | 22 |  |  | — |  |  | — |  |  | — |  |  | 22 |
Other 8 | 5 |  |  | 99 |  |  | — |  |  | — |  |  | 104 |
Total | $ | 591 |  |  | $ | 980 |  |  | $ | — |  |  | $ | 584 |  |  | $ | 2,155 |
Receivables and payables, net |  |  |  |  |  |  |  |  |  |  |  | (22 | )
Combined net plan assets available for benefits |  |  |  |  |  |  |  |  |  |  |  | $ | 2,133 |
The following table sets forth the VEBA Trust assets for SCE that were accounted for at fair value as of December 31, 2017 by asset class and level within the fair value hierarchy:
(in millions) | Level 1 |  | Level 2 |  | Level 3 |  | NAV 1 |  | Total
U.S. government and agency securities 2 | $ | 398 |  |  | $ | 33 |  |  | $ | — |  |  | $ | — |  |  | $ | 431 |
Corporate stocks 3 | 254 |  |  | — |  |  | — |  |  | — |  |  | 254 |
Corporate notes and bonds 4 | — |  |  | 845 |  |  | — |  |  | — |  |  | 845 |
Common/collective funds 5 | — |  |  | — |  |  | — |  |  | 569 |  |  | 569 |
Partnerships 6 | — |  |  | — |  |  | — |  |  | 82 |  |  | 82 |
Registered investment companies 7 | 37 |  |  | — |  |  | — |  |  | — |  |  | 37 |
Interest bearing cash | 42 |  |  | — |  |  | — |  |  | — |  |  | 42 |
Other 8 | 5 |  |  | 84 |  |  | — |  |  | — |  |  | 89 |
Total | $ | 736 |  |  | $ | 962 |  |  | $ | — |  |  | $ | 651 |  |  | $ | 2,349 |
Receivables and payables, net |  |  |  |  |  |  |  |  |  |  |  | (19 | )
Combined net plan assets available for benefits |  |  |  |  |  |  |  |  |  |  |  | $ | 2,330 |
1 | These investments are measured at fair value using the net asset value per share practical expedient and have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the net plan assets available for benefits.
2 | Level 1 U.S. government and agency securities are U.S. treasury bonds and notes. Level 2 primarily relates to the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association.
3 | Corporate stock performance for actively managed separate accounts is primarily benchmarked against the Russell Indexes (67% and 64%) and the MSCI All Country World Index (33% and 36%) for 2018 and 2017, respectively.
4 | Corporate notes and bonds are diversified and include approximately $59 million and $36 million for commercial collateralized mortgage obligations and other asset backed securities at December 31, 2018 and 2017, respectively.
5 | At December 31, 2018 and 2017, respectively, 74% and 75% of the common/collective assets are invested in index funds which seek to track performance in the MSCI All Country World Index Investable Market Index and 19% and 17% are invested in a non-index U.S. equity fund which is actively managed. The remaining assets in this category are primarily invested in emerging market fund.
6 | At December 31, 2018 and 2017, respectively, 48% and 56% of the partnerships are invested in private equity and venture capital funds. Investment strategies for these funds include branded consumer products, clean and information technology and healthcare. 34% and 33% are invested in a broad range of financial assets in all global markets. 17% and 9% of the remaining partnerships category are invested in asset backed securities including distressed mortgages, distressed companies and commercial and residential loans and debt and equity of banks.
7 | At both December 31, 2018 and 2017, registered investment companies were primarily invested in (1) a money market fund, (2) exchange rate trade funds which seek to track performance of MSCI Emerging Market Index, Russell 2000 Index, and international small cap equities.
8 | Other includes $58 million and $60 million of municipal securities at December 31, 2018 and 2017, respectively.

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