10-Q - Edison International

Postretirement Benefits Other Than PensionsSCE made contributions of $5 million during the three months ended March 31, 2012 and expects to make $57 million ofadditional contributions during the remainder of 2012. SCE's 2012 annual contributions are anticipated to be recoveredthrough CPUC-approved regulatory mechanisms, pending the outcome of the 2012 GRC decision. Annual contributions areexpected to be, at a minimum, equal to the total annual expense for these plans. Benefits under these plans, with someexceptions, are generally unvested and subject to change.Expense components are:Three months ended March 31,(in millions) 2012 2011Service cost $ 12 $ 10Interest cost 28 31Expected return on plan assets (27) (27)Amortization of prior service credit (9) (9)Amortization of net loss 11 9Total expense $ 15 $ 14Transfer of Certain Postretirement Benefits to Edison InternationalIn March 2012, Edison International agreed to assume the liabilities for active employees of SCE and its subsidiaries underthe specified plans related to deferred compensation and executive post retirement benefits. SCE is obligated to reimburseEdison International upon settlement of liabilities on an after tax basis. Included in the consolidated balance sheet at March31, 2012 was $111 million related to this obligation.Note 9.Commitments and ContingenciesIndemnitiesIndemnity Provided as Part of the Acquisition of MountainviewIn connection with the acquisition of the Mountainview power plant, SCE agreed to indemnify the seller with respect tospecific environmental claims related to SCE's previously owned San Bernardino Generating Station, divested by SCE in1998 and reacquired as part of the Mountainview acquisition. SCE retained certain responsibilities with respect toenvironmental claims as part of the original divestiture of the station. The aggregate liability for either party to the purchaseagreement for damages and other amounts is a maximum of $60 million. This indemnification for environmental liabilitiesexpires on or before March 12, 2033. SCE has not recorded a liability related to this indemnity.Mountainview Filter Cake IndemnitySCE has indemnified the City of Redlands, California in connection with Mountainview's California Energy Commissionpermit for cleanup or associated actions related to groundwater contaminated by perchlorate due to the disposal of filter cakeat the City's solid waste landfill. The obligations under this agreement are not limited to a specific time period or subject to amaximum liability. SCE has not recorded a liability related to this indemnity.Other IndemnitiesSCE provides other indemnifications through contracts entered into in the normal course of business. These are primarilyindemnifications against adverse litigation outcomes in connection with underwriting agreements, and indemnities forspecified environmental liabilities and income taxes with respect to assets sold. SCE's obligations under these agreementsmay or may not be limited in terms of time and/or amount, and in some instances SCE may have recourse against thirdparties. SCE has not recorded a liability related to these indemnities. The overall maximum amount of the obligations underthese indemnifications cannot be reasonably estimated.16