SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
[X] Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934
For the fiscal year ended December 31, 1997
---------------------------------------------
Commission File Number 1-9936
SOUTHERN CALIFORNIA EDISON COMPANY
STOCK SAVINGS PLUS PLAN
(Full Title of the Plan)
EDISON INTERNATIONAL
(Name of Issuer)
2244 WALNUT GROVE AVENUE (P.O. Box 800), ROSEMEAD, CALIFORNIA 91770
(Address of principal executive office)
<PAGE>
INDEX
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits as of December 31, 1997,
and 1996
Statement of Changes in Net Assets Available for Benefits for
the Year Ended December 31, 1997
NOTES TO FINANCIAL STATEMENTS
SCHEDULES
I. Line 27a - Schedule of Assets Held for Investment Purposes as of
December 31, 1997
II. Line 27d - Schedule of Reportable Transactions for the Year Ended
December 31, 1997
NOTE: All other schedules have been omitted since the information is either
disclosed elsewhere in the financial statements or not required by 29
CFR 2520.103-10 of the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security
Act of 1974.
1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Southern California Edison Company
Employee Benefits/Health Care Committee:
We have audited the accompanying statements of net assets available for benefits
of the SOUTHERN CALIFORNIA EDISON COMPANY STOCK SAVINGS PLUS PLAN (the Plan) as
of December 31, 1997, and 1996, and the related statement of changes in net
assets available for benefits for the year ended December 31, 1997. These
financial statements and the schedules referred to below are the responsibility
of the Plan's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1997, and 1996, and the changes in net assets available for
benefits for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedules I and II listed in the
accompanying Index are presented for the purpose of additional analysis and are
not a required part of the basic financial statements but are supplementary
information required by the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. The fund information in the statements of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for plan benefits and changes in net assets available for
benefits of each fund. The supplemental schedules and fund information have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Los Angeles, California
June 5, 1998
2
<PAGE>
SOUTHERN CALIFORNIA EDISON COMPANY
STOCK SAVINGS PLUS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
Edison Int'l Common Money
Stock Stock Market Balanced Bond Global Participant
Total Fund Fund Fund Fund Fund Fund Loans
-------------- ------------ ---------------------------- ----- ------ -----------
ASSETS:
Investments, at fair value:
Edison International
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Common Stock $ 815,178 $ 815,178 $ -- $ -- $ -- $ -- $ -- $ --
Participant loans receivable 71,920 -- -- -- -- -- -- 71,920
Collective trusts:
BZW Barclay's Global
Investors Equity Index
T-Fund 313,932 -- 313,932 -- -- -- -- --
Wells Fargo Short-Term
Income Fund 104,111 4,626 -- 99,485 -- -- -- --
Frank Russell Global
Balanced Fund 132,065 -- -- -- 132,065 -- -- --
Frank Russell Fixed
Income II Fund 32,147 -- -- -- -- 32,147 -- --
Frank Russell Global
Fund 192,275 -- -- -- -- -- 192,275 --
---------- -------- -------- ------- -------- ------- -------- -------
Total investments 1,661,628 819,804 313,932 99,485 132,065 32,147 192,275 71,920
---------- -------- -------- ------- -------- ------- -------- -------
Receivables:
Interest receivable 489 9 -- 480 -- -- -- --
Dividend receivable 7,496 7,496 -- -- -- -- -- --
Receivable from brokers 6,390 1,085 -- -- -- -- 5,305 --
---------- -------- -------- ------- -------- ------- -------- -------
Total receivables 14,375 8,590 -- 480 -- -- 5,305 --
---------- -------- -------- ------- -------- ------- -------- -------
Total assets 1,676,003 828,394 313,932 99,965 132,065 32,147 197,580 71,920
LIABILITIES:
Payable to brokers and others 2,627 -- 401 -- 201 1,713 312 --
---------- ---------- -------- ------- --------- ------- -------- -------
Net assets available
for benefits $1,673,376 $ 828,394 $313,531 $99,965 $ 131,864 $30,434 $197,268 $71,920
========== ========== ======== ======= ========= ======= ======== =======
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE>
SOUTHERN CALIFORNIA EDISON COMPANY
STOCK SAVINGS PLUS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
Edison Int'l Common Money
Stock Stock Market Balanced Bond Global Participant
Total Fund Fund Fund Fund Fund Fund Loans
--------- ----------- --------- ------- --------- ----- ------ -----------
ASSETS:
Investments, at fair value:
Edison International
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Common Stock $ 694,060 $694,060 $ -- $ -- $ -- $ -- $ -- $ --
Participant loans receivable 59,619 -- -- -- -- -- -- 59,619
Collective trusts:
BZW Barclay's Global
Investors Equity Index
T-Fund 222,282 -- 222,282 -- -- -- -- --
Wells Fargo Short-Term
Income Fund 146,667 11,186 -- 135,481 -- -- -- --
Frank Russell Global
Balanced Fund 107,224 -- -- -- 107,224 -- -- --
Frank Russell Fixed
Income II Fund 23,178 -- -- -- -- 23,178 -- --
Frank Russell Global
Fund 163,575 -- -- -- -- -- 163,575 --
---------- -------- -------- ------- -------- ------- -------- -------
Total investments 1,416,605 705,246 222,282 135,481 107,224 23,178 163,575 59,619
---------- -------- -------- ------- -------- ------- -------- -------
Receivables:
Interest receivable 632 71 -- 561 -- -- -- --
Dividend receivable 8,730 8,730 -- -- -- -- -- --
Receivable from brokers 46,302 6,994 15,081 -- 8,427 1,341 14,459 --
---------- -------- -------- ------- -------- ------- -------- -------
Total receivables 55,664 15,795 15,081 561 8,427 1,341 14,459 --
---------- -------- -------- ------- -------- ------- -------- -------
Total assets 1,472,269 721,041 237,363 136,042 115,651 24,519 178,034 59,619
LIABILITIES:
Payable to brokers and others 451 -- -- -- 152 27 272 --
---------- ---------- -------- ------- --------- ------- -------- -------
Net assets available
for benefits $1,471,818 $ 721,041 $237,363 $136,042 $ 115,499 $24,492 $177,762 $59,619
========== ========== ======== ======== ========= ======= ======== =======
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
SOUTHERN CALIFORNIA EDISON COMPANY
STOCK SAVINGS PLUS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
Edison Int'l Common Money
Stock Stock Market Balanced Bond Global Participant
Total Fund Fund Fund Fund Fund Fund Loans
--------- ------------ -------- ---------- ------- ---- ------ -----------
ADDITIONS:
Investment income:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend $ 30,863 $ 30,863 $ -- $ -- $ -- $ -- $ -- $ --
Interest 11,940 317 103 6,016 43 10 64 5,387
Net appreciation in fair value
of investments 363,532 230,942 74,649 -- 21,377 1,930 34,634 --
---------- -------- -------- --------- -------- ------ ------- --------
406,335 262,122 74,752 6,016 21,420 1,940 34,698 5,387
Less-- Investment expenses 1,924 -- -- -- 646 119 1,159 --
---------- -------- -------- --------- -------- ------ ------- --------
Net investment income 404,411 262,122 74,752 6,016 20,774 1,821 33,539 5,387
---------- -------- -------- --------- -------- ------ ------- --------
Contributions:
Employer contributions,
net of forfeitures 15,649 7,874 3,197 817 1,247 276 2,238 --
Participant contributions 63,828 24,955 12,042 13,328 4,425 1,014 8,064 --
---------- -------- -------- --------- -------- ------ ------- --------
Total contributions 79,477 32,829 15,239 14,145 5,672 1,290 10,302 --
---------- -------- -------- --------- -------- ------ ------- --------
Total additions 483,888 294,951 89,991 20,161 26,446 3,111 43,841 5,387
---------- -------- -------- --------- -------- ------ ------- --------
DEDUCTIONS:
Distributions to participants or
their beneficiaries 277,505 132,168 36,115 53,930 21,064 5,578 28,650 --
Loans to participants, net of
repayments and deemed
distributions 4,825 11,796 2,308 1,064 601 91 1,266 (12,301)
Transfers of interest on
participant loans -- (3,256) (890) (227) (316) (68) (630) 5,387
---------- -------- ------- ------- ------- ------ ------- --------
Total deductions 282,330 140,708 37,533 54,767 21,349 5,601 29,286 (6,914)
---------- -------- ------- ------- ------- ------ ------- --------
INTERFUND TRANSFERS, net -- (46,890) 23,710 (1,471) 11,268 8,432 4,951 --
---------- -------- ------- ------- ------- ------ ------- --------
NET INCREASE (DECREASE) 201,558 107,353 76,168 (36,077) 16,365 5,942 19,506 12,301
NET ASSETS AVAILABLE FOR
BENEFITS, beginning of year 1,471,818 721,041 237,363 136,042 115,499 24,492 177,762 59,619
---------- -------- ---------- -------- -------- ------- -------- -------
NET ASSETS AVAILABLE FOR
BENEFITS, end of year $1,673,376 $828,394 $313,531 $ 99,965 $131,864 $30,434 $197,268 $71,920
========== ======== ========== ======== ======== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE>
SOUTHERN CALIFORNIA EDISON COMPANY
STOCK SAVINGS PLUS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
Note 1. Nature of Plan and Summary of Significant Accounting Policies
The following description of the Southern California Edison Company (Plan
Sponsor or the Company) Stock Savings Plus Plan (the Plan) provides only general
information. Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
Nature of Plan
Eligibility
The Plan is a defined-contribution plan with a 401(k) feature, in which
substantially all qualifying full-time or part-time employees of Edison
International and its subsidiary companies including the Company are
eligible to participate. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). Prior to
September 1, 1997, an employee was eligible to participate in the Plan
after one year of service, in which an employee completes not less than
1,000 hours of service.
Contributions
Each year, participants may contribute up to 15 percent of pretax base
pay, subject to statutory limits, as defined by the Plan. The Company
contributes 50 percent of the first 6 percent of base pay that a
participant contributes to the Plan. The Plan also accepts rollovers
from other qualified plans.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching contribution
portion of their accounts plus actual earnings thereon occurs upon
completion of five years of credited service.
Forfeitures
At December 31, 1997, and 1996, forfeited non-vested accounts totaled
$360 and $10,350, respectively. These accounts are used to reduce
employer contributions. During 1997, employer contributions were
reduced by $16,310 from forfeited nonvested accounts.
Plan Trust
Plan assets are held in trust with Wells Fargo Bank, N.A. (the Trustee)
for the benefit of participants and their beneficiaries. The mutual
covenants to which the Company and the Trustee agree are disclosed in
the Stock Savings Plus Plan and Trust Agreement (Trust Agreement).
6
<PAGE>
Administrative and Investment Expenses
The Plan is administered by the Southern California Edison Company
Employee Benefits/Health Care Committee (Plan Administrator). The cost
of Plan administration is paid by the Plan Sponsor. The investment
expenses incurred by the Trustee in making investments are paid out of
the investment funds for which the investments are made as part of the
cost of the investment.
Participant Accounts
Each participant's account is credited with the participant's
contribution, the Company's matching contribution and allocations of
Plan earnings. Allocations of earnings and expenses are based on
account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the vested portion of
the participant's account.
Participant Loans Receivable
Participants may borrow from their accounts a minimum of $1,000 up to a
maximum of $50,000. Loan transactions are treated as a transfer to
(from) the investment fund from (to) Participant Loans. Loan terms
range from one to four years or up to 15 years for the purchase of a
primary residence. The loans bear interest at the Prime Rate plus one
percent. Interest rates range from 7.0 percent to 9.5 percent.
Principal and interest is paid ratably through bi-weekly payroll
deductions.
Payment of Benefits
Distribution of account balances of $3,500 or less occur after a
participant terminates employment, dies, or becomes permanently and
totally disabled. Participants terminating employment having account
balances greater than $3,500 and retirees, may: a) elect to receive
their distributions at any time before turning ages 65 and 70 1/2,
respectively, and b) choose between lump sum or installment forms of
payment.
Note 2. Summary of Significant Accounting Policies
Basis of Accounting
The financial statements are presented on the accrual basis of
accounting and in conformity with generally accepted accounting
principles applicable to employee benefit plans.
Certain previously reported amounts have been reclassified to conform
with the current-year presentation.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets,
liabilities, and changes therein, and disclosure of contingent assets
and liabilities. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Investments in the
collective funds are valued at quoted market prices, which represent
the net asset value of shares held by the Plan at year end. Edison
International common stock is valued at its quoted market price.
Participant loans are valued at cost, which approximates fair value.
7
<PAGE>
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are
recorded on the ex-dividend date.
Distributions to Participants
Distributions to participants are recorded when paid.
Note 3. Investment Options
The Trustee invests all contributions in accordance with participant
instructions. Funds not immediately allocated to investment funds are invested
by the Trustee in certain short-term investments.
Participants may direct the investment of their contributions, the employer's
matching contributions, and the earnings on those contributions into any of six
investment funds on a monthly basis, in one percent increments.
o Edison International Stock Fund -- Funds are invested in the common stock
of Edison International, which consisted of 29,983,003 and 34,921,286
shares of Edison International stock at December 31, 1997 and 1996 and a
per-share cost of $27.19 and $19.88, respectively. In addition, the Edison
International Stock Fund held $4,625,625 in cash and cash equivalents.
o Common Stock Fund -- Funds are invested in shares of the BZW Barclay's
Global Investors Equity Index T-Fund, a collective trust that invests
mainly in common stock.
o Money Market Fund -- Funds are invested in the Wells Fargo Bank, N.A.
Short-Term Income Fund, which invests in money market instruments.
o Balanced Fund -- Funds are invested in shares of the Frank Russell Global
Balanced Fund, a collective trust that invests in corporate bonds, common
stocks and U.S. Government Securities.
0 Bond Fund -- Funds are invested in shares of the Frank Russell Fixed Income
II Fund, a collective trust that invests mainly in corporate bonds and U.S.
Government Securities.
0 Global Fund -- Funds are invested in the following Frank Russell collective
trusts:
- Frank Russell Equity I Fund - 50%
- Frank Russell Equity II Fund - 15%
- Frank Russell International Fund - 35%
These collective trusts invest mainly in equity securities in the U.S. and
non-U.S. markets.
None of the Plan's investment funds are considered to be utilizing derivatives
to a material degree.
The transfer of the participants' investment from the Edison International Stock
Fund to all other funds is valued at the month-end closing price. The transfer
of the participants' investment from all other funds to the Edison International
Stock Fund, or to any other fund, is based on the actual market value balance
(including earnings and market adjustments) in each participant's account, as of
the date of transfer.
8
<PAGE>
Note 4. Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
December 31,
-----------
1997 1996
-------- --------
(In thousands)
Net assets available for benefits per the financial
statements $1,673,376 $1,471,818
Amounts allocated to withdrawing participants 8,715 99,312
---------- ----------
Net assets available for benefits per the Form 5500 $1,664,661 $1,372,506
========== ==========
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended
December 31, 1997
-----------------
(In thousands)
Benefits paid to participants per the financial statements $277,505
Add: Amounts allocated to withdrawing participants
at December 31, 1997 8,715
Less:Amounts allocated to withdrawing participants
at December 31, 1996 99,312
--------
Benefits paid to participants per the Form 5500 $186,908
========
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
December 31 but not yet paid as of that date.
During 1996, the Company adopted the provisions of a Voluntary Retirement Offer
to provide incentives for eligible employees to retire early. Such retirements
resulted in large amounts being allocated to withdrawing participants at
December 31, 1996.
Note 5. Related Party Transactions
The Money Market Fund is managed by Wells Fargo Bank, N.A., which also serves as
the Plan's trustee. As such, transactions in the Money Market Fund qualify as
party-in-interest transactions. Fees earned by the Trustee in its capacity as
fund manager for the Plan were $215,000 for 1997. Such fees are reported net of
interest income on the Statement of Changes in Net Assets Available for
Benefits.
Note 6. Plan Termination
Although it has not expressed an intent to do so, the Plan Sponsor has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become fully vested in their accounts. The Trust will continue
after termination until all Trust assets have been distributed to participants
and their beneficiaries.
9
<PAGE>
Note 7. Tax Status
The Internal Revenue Service has determined and informed the Company by a letter
dated June 5, 1995, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letter. However, the Plan
Administrator and the Plan's tax counsel believe that the Plan is designed and
is currently operated in compliance with the applicable requirements of the IRC.
Note 8. Subsequent Events
Effective February 23, 1998, the Plan was amended to convert the Edison
International Stock Fund into an employee stock ownership plan and to provide
for the current payment of dividends to participants unless they timely elect to
reinvest all or a portion of such dividends.
10
<PAGE>
SCHEDULE I
SOUTHERN CALIFORNIA EDISON COMPANY
STOCK SAVINGS PLUS PLAN
EIN 95-1240335 - PLAN NO. 002
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Description of Investment
Identity of Issue, Borrower, Lessor Including Maturity Date, Rate of Current
or Similar Party Interest, Par or Maturity Value Cost Value
- --- ----------------------------------- ---------------------------------- -------- -------
<S> <C> <C> <C> <C>
* Edison International Common Stock-- No Par Value $ 520,432 $ 815,178
BZW Barclay's Global Investors Collective Investment in the
BZW Barclay's Global Investors
Equity Index T-Fund 308,493 313,932
Frank Russell Trust Company Collective Investment in
Frank Russell Balanced Fund 84,750 132,065
* Wells Fargo Bank, N.A. Collective Investment in the
Wells Fargo Bank Short-Term
Income Fund 104,111 104,111
Frank Russell Trust Company Collective Investment in
Frank Russell Fixed Income II
Fund 27,145 32,147
Frank Russell Trust Company Collective Investments in
Frank Russell Equity I Fund,
Equity II Fund and International
Fund 119,553 192,275
Participant Loans Loans with Maturities Varying from
One to Fifteen Years and Interest
Rates Ranging From 7 Percent to
9.5 Percent -- 71,920
--------------------------------
Total $1,164,484 $1,661,628
========== ==========
</TABLE>
* Party-in-interest
11
<PAGE>
SCHEDULE II
SOUTHERN CALIFORNIA EDISON COMPANY
STOCK SAVINGS PLUS PLAN
EIN 95-1240335 - PLAN NO. 002
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Dollars in thousands)
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g) (h) (j)
Description of Assets Current Value
(include interest of Asst on
Identity of Party rate and maturity Purchase Selling Lease Incurred w/ Cost of Transaction Net Gain
Involved in case of a loan) Price Price Rental Transaction Asset Date or (Loss)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Wells Fargo Bank, N.A. Wells Fargo Bank, N.A.
Short-Term Income Fund
229 purchases $510,437 $ - N/A - $ - $510,437 $ -
216 sales - 545,796 N/A - 545,796 545,796 -
Edison International Common Stock
29 purchases 19,533 - N/A 13 19,533 19,533 -
27 sales - 71,546 N/A 49 47,762 71,546 23,784
</TABLE>
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
SOUTHERN CALIFORNIA EDISON COMPANY
STOCK SAVINGS PLUS PLAN
By: Lillian R. Gorman
-------------------------------------------------
Lillian R. Gorman
Chair
Employee Benefits/Health Care Committee
June 23, 1998
13
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated June 5, 1998 included in this Form 11-K, into the
previously filed Registration Statements of Edison International which follow:
Registration Form File No. Effective Date
----------------- -------- --------------
Form S-8 333-50443 April 17, 1998
Form S-3 333-08115 July 15, 1996
Form S-8 333-03913 May 16, 1996
Form S-8 33-32302 June 2, 1993
Form S-8 33-46714 June 2, 1993
Form S-3 33-44148 September 17, 1993
ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Los Angeles, California
June 23, 1998
