x.yy6A.nnual Report

SouthernCaliforniaEdison

Company

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DEADLINE RETURN DATE

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RECORDS FACILITYBRANCH

Southern California Edison Company

WASIIINCTON MONTANA

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NEVADA VTAIICOEORA

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ARIZONA

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NEWMEXICO

Southern California Edison Company provides electricservice in a go,ooo square-mile area of central andsouthern California. This area includes nearly 8oo citiesand communities with a population of more than 7'/2millionpeople.

Edison's gross investment in plant facilities exceeds $5.6billion.The installed Company-owned generating capa-city at the end of x976 was iz,goo. megawat ts of which77% is accounted for by oil and gas-fired generatingunits. SCE's interest in coal-fired generating unitsaccounts for another xp%, and 7% is in hydroelectricplants. The Company's So% interest in a nuclear plantaccounts for the remaining p%. In addition, Edison hadx,g64 megawatts of capacity under contract from otherutilitysources at year- end.

The Company, incorporated in agog under the laws ofCalifornia, is a public utilityand its retail operations aresubject to regulation by the California Public UtilitiesCommission which has the power, among other things,to establish retail rates and to regulate security issues,accounting and depreciation. The Company's resaleoperations are subject to regulation by the Federal PowerCommission as to rates on sales for resale, as well as toother matters including accounting and depreciation.

The Company's plant construction planning and sitingare subject to the jurisdiction of the California EnergyResources Conservation and Development Commission.Edison also is subject to various governmental licensingrequirements, to Securities and Exchange Commissionfilingand disclosure requirements, and to certain otherfederal, state and local laws and regulations includ-ing those related to nuclear energy and nuclear plant con-struction, environmental protection, fuel supplies andland use.

xyy6 Annual Report

Highlights xg76 x975 Change

Earnings Per Share $ 3.o7 20.5

Common Dividends Paid Per Share 5 x.68 x.68

Operating Revenues (ooo) $ x,8x6,784 9 x,668,ox5 8.g

Operating Expenses (ooo)

Fuel (ooo) (a)

Kilowatt-Hour Consumption (ooo)

(a) Included in Operating Expenses.

5 x,5@x,o65

$ 81 8i932

53,685,378

5 x,39x,5@8

768,843

5xi327p508

93

6.5

4.6

Contents Source of Income: 1976

Letter to Shareholders

Review of xg76

xo: Financial Review

x3: Report of Independent Public Accountants

x4: Financial Statements

Capital Stock —Price and Dividend Informationx6: Summary of Operations and

Comparative Statistics of Progress

3xg Residentialz5< Commercialz3t.'ndustrial

gg Public authorities7p Resale

3p Otherzg Agricultural

Distribution of Income: 1976

sC sC

44t-'uelxxp Other operation expenses

(principally labor)8t." Taxes yC

7g Dividends7g Interest7g Depreciation6) Maintenance

'tt

Earnings reinves tedin the business

4'urchased power

eCsC

jxC

CCC

To Our More Than x8o,ooo Shareholders

For the Company, x976 was a year marked by regulatorydecisions and intensification of energy management andconservation programs. Earnings for x976 were $ >.7o pershare, up from the $ 5.o7 per share recorded for x975.

Factors contributing to the increased earnings includedthe partial general rate increase granted by the CaliforniaPublic Utilities Commission (CPUC) in December x975and a significant increase in the non-cash credit for allow-ance for funds used during construction. Kilowatt-hourconsumption increased during the year reflecting both anincreased number of customers and a general improvementin economic conditions.

We are particularly gratified to note the success of ouremployees'fforts in holding controllable operating coststo minimum levels. Also of note is that the total num-ber of employees at year-end —x5,oz4-is virtually the sameas itwas five years ago, even though our customer increaseduring the same period has been more than goo,ooo orabout x>%.

A dividend of 4zg per share of common stock was de-clared for each quarter of x976, maintaining the annual rateof Sx.68 per share. The Company has paid quarterly cashdividends on its common stock each year since x9xo.

RatesThe Company was granted a $44.5 milliongeneral rate in-crease on December zx, x976, as the CPUC issued its deci-sion on the balance of Edison's z'/2-year-old request for$559 millionannually in rate relief. This increase, coupledwith the partial increase authorized in December x975,brings total rate relief from this proceeding to Sxzz.5million.

However, the Commission concurrently reduced Edi-son's energy cost adjustment billing factor by an amountequivalent to $44.5 millionin revenues on an annual basis.This action resulted from the Company's earlier filingun-der the new Energy Cost Adjustment Clause which isdiscussed in more detail in the text of this report.

We are disappointed in both the amount and timing ofthe general rate relief. The Company is seeking a rehearingor reconsideration and modification of the decision fromthe Commission.

Future GrowthAn increase in the number of customers served and an im-proving economy in x976 contributed to the 4.6% increasein kilowatt-hour consumption over the previous year.However, expanded programs by the Company designedto encourage the conservation and efficient use of electricenergy, along with the impact of higher rates, keptelectric consumption by our customers below the recordlevel set in x975.

During the next five years, it is estimated that nearlygoo,ooo new customers willbe added to the Edison system,an average of about 6o,ooo annually. Thus, even with con-tinued effective energy conservation programs andsome increased use of electricity by existing customers,we are projecting an average annual growth rate of electricconsumption of >.8% for the five-year period x977-81.

Load ManagementEdison is devoting increased attention to load managementin an attempt to shift electric usage from periods of peakdemand to periods of lesser demand. To the extent theseefforts are successful, benefits shall result from moreefficient utilization of existing generating capacity, andsome future construction expenditures can be deferred.

Through load management, as well as increasedconservation efforts, we hope to achieve a more manageablerate of growth and reduced construction and capital costs.

Solar & Wind PowerWe are pleased that the Energy Research and DevelopmentAdministration (ERDA) has selected Edison's Cool WaterGenerating Station site for the nation's firstelectric gene-rating station powered directly by solar energy.

Edison, the Los Angeles Department of Water andPower and the California Energy Resources Conservationand Development Commission were chosen as partnerswith ERDA to build and operate the xo-megawatt pilotplant. SCE willact as project manager for the non-solarportion of the plant with construction scheduled to becompleted in xgso-sz.

The Company also is participating in the ERDAWindEnergy Program which willlead to field tests of experi-mental wind power electric generating stations.

Shareholders OrganizeIn recent years, the imbalance of presentations in utilityrate proceedings resulting from intervention by smallgroups of consumer advocates and the lack of participa-tion by utilityshareholders has become increasinglyapparent.

A group of concerned shareholders has recently formedthe California Association of UtilityShareholders with theobjectives of providing an independent voice, bringing a

better balance to the regulatory and rate-making processes,and seeking increased recognition of the mutual interestsof consumers and investors in maintaining financiallyhealthy utilities.

Changes in Board of DirectorsWarren Christopher, a valued'director of the Companysince l971 resigned from the board on January 20 '1977,to accept the appointment by President Carter as DeputySecretary of State.

On February L7, xg77, Mrs. Carla A. Hills, at torney andformer Secretary of the U.S. Department of Housing andUrban Development, was elected an Edison director.

Jack K. Hor tonChairman of the Board

T. M. McDaniel, Jr., Presi rien t

February x7 1977

Review of xyy6

Customers Ec Kilowatt-hour Consumption IncreaseEdison provided electric service to z,8x4,4o3 customers in'1976 an increase of 64 723 over year-end xg75.

Kilowatt-hour (kwh) consumption of electricity Eor theyear totaled 53.7 billionkwh, up 4.6% from the previousyear's level, but stillslightly under the 54 billionkwh re-corded in xg73 before costs Eor electricity increased signifi-cantly and the call for energy conservation became a na-tional commitment. Among the major customer categories,commercial consumption increased 7.6% while industrialand residential consumption increased 3.8% and 3.4%,respectively, over xg75 levels.

Average annual consumption per residential customer inxg76 was 5,65o kwh, which is well below the high onEdison's system of 5,885 kwh recorded in'1973.

Heat Wave Sets New Maximum Peak DemandAsix-day heat wave contributed to a new maximum sys-tem peak demand of xx,o8x megawatts (mw) on June z8,exceeding the previous maximum demand of xo,z53 mwwhich was set in June '1973.

SCE Intensifies Energy Conservation ProgramsConservation of Capacity: Although Edison has been in-volved in load management programs for many years, ef-forts were intensified during the year in an attempt toimprove the effective utilization of existing generatingcapacity and reduce the need for future plant expansion.

The Company initiated several programs to test and eval-uate methods of managirig system peak demand throughthe use of control equipment on commercial and industrialloads, residential air conditioning cycling devices andradio control of electric water heaters.

In cooperation with the CPUC, time-of-day billingratesfor large industrial customers were developed by the Com-pany and submitted to the Commission Eor review. Underthe time-of-day pricing concept, charges for electricityused during periods of high system use would be at a high-er price than those for non-peak periods. Such increasedcharges are intended to encourage customers to shiftconsumption to lower-use periods.

Conservation of Energy: Several new programs wereadded to Edison's on-going energy conservation program inxg76 to stimulate further customer conservation efforts inan attempt to reverse an apparent waning of public concernEor energy conservation.

The programs include demand and energy analysesfor commercial and industrial customers, expanded adver-tising and individual contacts to inform customers on waysto conserve energy including increased use of insulationand shower flowcontrol devices.

An innovative Elementary Energy Conservation Class-room program was developed and distributed to more thangoo elementary schools throughout the Company's serviceterritory with a total student body of more than 36o,oooyoung people. This program is designed to help the youngstudent develop positive attitudes toward energy conserva-tion and with the hope that these attitudes willtransferto the home and produce a significant impact on familyconservation efforts.

Peak DemandBecause of thcanticipatedimpact of loadmanagement,energy conser-vation programsand morc moderateeconomic growth,thc projectedlong-range growthrate of Edison'speak demand hasbeen reduced toabout gt/z%per year.

thousand megawatts

3a

at

s6

d

Actual 0 agcy Forecasty5% Annually

'197$ Forecast6th% Annually

x965 x9$5 1980 1985 x990 8995

Construction Program Keeps Pace with Projected NeedsBecause of the anticipated impact of load management andenergy conservation programs and more moderate econom-ic growth, the projected growth rate of Edison's systempeak demand for the x977-86 time period has been reducedto >.4% per year, down from the 6% compound annualgrowth rate recorded for the previous xo-year period.

The Company's construction program is largely de-termined by its projection of peak demand. Approxi-mately 6g% of the new generating capacity planned forthe next xo years is currently under construction.

During x976, the Company expended approximately&goo millionon its construction program, and $go9 mil-lion is projected for x977.

In Aprilx976, the Company removed the coal-fired Kai-parowits Power Project in Utah from its financial and re-source planning schedule. The decision to abandon theproject was based upon a series of uncertainties, particu-larly those increasing ultimate costs, including delayscaused by the regulatory approval process and environ-mental litigation.

The following is the status of the Company's major fu-ture generating resources as of year-end:

San Onofrei On-going construction of the two So%Edison-owned x,xoo-mw nuclear units at the San OnofreNuclear Generating Station was approximately 28% com-plete at year-end. Overall, the project remains on schedulewith Units 2 and y expected to be placed in fullfirmopera-tion in x98x and x98y, respectively. However, proceedingsto obtain final construction permits are stillpending.

Long Beach: Mid-1976 marked the start-up of the g72-mw multi-unitcombined cycle facilityat the existing LongBeach Generating Station with approximately half of thetotal generating capacity operable at year-end. Firm opera-tion of the entire facilityis scheduled forMay x, x977.

Cool Water: Construction of two combined cycle elec-tric generating units at the existing Cool Water GeneratingStation commenced in January x976. Initialoperation of the472-mw addition is scheduled for x978.

Lucerne Valley: The Company is continuing its effortsto obtain the necessary permits and approvals for thex 29o-mw combined cycle project now scheduled for com-pletion in the mid-x98o's.

Yuma-Axis: Edison commenced final engineering dur-ing x976 on the 2>-mw Yuma-Axis Combustion TurbineUnitx. Construction is scheduled to begin in June x978,with an estimated operation date of Aprilx979.

Big Creek: Engineering work commenced in x976 onthe g-mw hydraulic turbine-generator Unit g at the exist-ing Big Creek No. p Generating Station. The scheduled op-eration date for this facility is March x98o.

Palo Verde: In x976, the Company acquired an addi-tional o.4% ownership in the p,7og-mw Palo Verde Nucle-ar Generating Station in western Arizona, bringing Edi-son's total interest to xg.8% or ps'w. Constructioncommenced in x976 with the three units scheduled F5 beplaced in service during the x982-86 time period.

San 7oaquini The Company is continuing to participatewith other utilities in the feasibility study and preliminarylicensing efforts for the proposed g,oSo-mw San JoaquinNuclear Generating Station in Kern County, California.Edison's share is currently 22% or x,xxS mw. The operat-ing date for Unit x is now scheduled for x987.

Kilowatt-hourConsumptionKilowatt-hourconsumption forTg76 totaled 55.7billionkwh,slightly under the54 billionkwhrecorded in sg75.

6o

So

Kilowatt-hourConsumption% Change

An increase inthe number ofcustomers servedand an improvingeconomy in xg76contributed to the4.6% increase inkwh consumptionover the previousyear.

~IU\~gIIPn

~IVl~4

Q

billion kwh o

>97> s973 s97h 6973 6976 >97m >973 >974 >973 s 976

Voters Support Nuclear PowerDuring the year, the overwhelming support of millions ofvoters for the continued development of nuclear powerwas indicated in the decisive defeats of anti-nuclearinitiatives in seven states. The judgment of Californiavoters in June T976 in rejecting Proposition T3 by a 2"Tmargin was affirmed by a vast majority of voters in allother states where nuclear power restrictions were issues.

San Onofre Unit X Saves Fuel OilSan Onofre Nuclear Generating Station Unit T was shutdown in September T976 to complete its fifthrefueling andfor major backfit modifications. It is scheduled to be re-turned to service in March T977.

During the first nine months of operation in T976, theunit generated more than 2.4 billionkwh which replacedthe need to burn an equivalent of four millionbarrels of oilto produce this electricity.

Fuel Costs Continue to Rise

Total fuel and purchased power expenses for T976 were$903 million,an increase of 9.3% over the $823 millionrecorded in T973. The cost of fuel oil alone totaled $694million,or 77% of the total T976 fuel and purchasedpower expense. Out of each dollar of revenue receivedby Edison in T976, 48'as expended for fuel andpurchased power.

For T977, Edison's fuel oilcosts are estimated toexceed $ 8oo millionand its total fuel and purchasedpower expenses are expected to approximate ST billion.

In cooperation with requests of the California AirRe-sources Board and the California Energy Resources Con-servation and Development Commission to reduce sulfuremissions from power plants, Edison has begun a conver-

sion program to reduce by half the sulfur content in thefuel oilburned at all of SCE's oil-fired generating stations.Instead of using o.3% sulfur oilpreviously used to meetair quality regulations, the Company intends to burn aneven cleaner fuel oilwith no greater than o.23% sulfurcontent.

This action is expected to add from $ 6o to SToo millionto the Company's annual fuel costs. The Company plansto filewith the CPUC for energy cost adjustment increasesto cover the added costs of the lower sulfur-content fuel oil.

Edison plans to continue to utilize lower cost sourcesof fuel and purchased power in lieu of higher-cost oil gene-ration to the extent available. In T976, for instance, favor-able hydro conditions in the Pacific Northwest and pur-chases of thermal energy from other off-system sourcesreplaced the need to burn over T9 millionbarrels of low-sulfur oil with a net savings of approximately $22o million.

New Energy Cost AdjustmentProcedure AdoptedBecause the cost of fuel continues to represent such asignificant portion of operating expenses, timely reflectionin rates of changes in these costs through an effectiveenergy cost adjustment clause is both important to thefinancial health of the Company and fair to consumers.

On April27, T976, a new energy clause procedure wasadopted for California electric utilities by the CPUCreplacing the former fuel cost adjustment clause which hadbeen in effect since T972.

CustomersEdison's customershave increased bymore than >oo,oooor about ay% overthe past five years.

Employeesat Year-end

Althoughcustomers haveincreased, thenumber of Edisonemployees is nowat approximatelythe same level as inthe early x9yo's.

13

millions o

197»993 1974 1973 197<

thousands o

199»933 1914 1993 1W<

The new Energy Cost Adjustment Clause (ECAC) re-flects some revised concepts Eor determining rate revisionsrequired to offset changes in energy costs associated withthe production of electricity. It is based on recordedkilowatt-hour sales and energy mix Eor historical 1z-monthperiods rather than on future 1z-month-average-yearestimates utilized under the former fuel clause. Also,filings are to be made at six-month intervals rather thanafter three months as was done previously. It also includesall fuel and purchased power, whereas the former clausecovered only fossil fuels.

The new ECAC procedure includes a balancing accountdesigned to adjust the results of operations on a monthlybasis Eor differences between recorded revenues andexpenses associated with the energy clause. Suchdifferences are to be accumulated in the balancing accountand reflected in future semi-annual energy cost adjustmentfilings. This balancing account provision is designed toprovide Eor an accounting matching of energy clauserevenues and related expenses on a recorded basis.

General Rate Case Decision Reached

Additional rate relief in the amount of about $44.g millionannually was granted December z1, 1976, by the CPUC toEdison on its $ gp9 millionrate increase request which wasfiled with the Commission on June 7 1974. This was inaddition to the projected $79.6 millionpartial increasemade effective December y1, 197', in the same proceeding.

The CPUC authorized an 8.8% return on rate base anda xz.6g% return on common equity, as compared with theCompany's original request for returns of 9.6% and 1g%%uo,

respectively.The Company is seeking from the CPUC a rehearing or

reconsideration and modification of certain issues in thegeneral rate case decision.

On December z1, the Commission also issued a com-

panion decision in connection with the Company's October

1976 filingunder the Energy Cost Adjustment Clausewhich adjusted the Company's ECAC billing factor down-ward by an amount equivalent to about $ 44.g millioninannual revenues. The combined effect of both decisions,which became effective January 1p, 1977 ifnot modified inthe course of further proceedings before the CPUC, is tomaintain the present overall rate level until the next filingunder the ECAC procedure which is scheduled to be madeApril1, 1977 'with a contemplated effective date of May1I 1977

In a related matter, the CPUC, in the April1976 decision,determined that the Company had "overcollected" reve-nues in conjunction with the operation of the former Com-mission-authorized fuel clause. If the alleged

net�

"overcol-lections" are calculated and administered as prescribed inthat CPUC decision, they would amount to approximately$1pg millionand would be required by such decision to berefunded with interest to customers by credits to futurebills over a three-year period.

The Company disagrees with both the conclusions of thedecision and the method of calculating any amounts whichmight be involved. Apetition with the California SupremeCourt for a review of this decision was filed on the principalbases that it represents unlawful retroactive rate-makingand that no "overcollections," in fact, occurred. The Courthas agreed to consider the case and oral argument washeard on February 8 T977. Adecision has not yet beenreached.

Resale Rates: Three rate increase filings applicable to re-sale sales having a combined annual revenue effect ofapproximately $44.7 millionare pending before the FederalPower Commission. Of the three filings, two have beenapproved by the presiding administrative law judge, sub-

OperatingCapacity andSystemPeak Demand

A six-day heatwave contributedto a new maximumsystem peakdemand of xx,osxmegawat ts.

xd

thousand megawatts o

x97a x973 x974 x973 x97~

Rcscrvc Marginat Peak

Edison's reservemargin of zy'yoover the ncwmaximum systempeak demand,combined with thccapacity nowunder construc-tion, places thcCompany in afavorable positionto meet clcctricenergy require-ments throughthe early xgso's.

30

x 97x x973 x974 x973 x976

ject to Commission approval, and the third is scheduled forhearing early in 297'. The rates are being collected subjectto refund.

Outlook for Future Fuel Supplies Favorable

The outlook is favorable for an adequate supply of fuel toproduce electric energy from new and presently operatinggeneration facilities despite the projection that littlenaturalgas willbe available to Edison for boiler fuel under averageclimatic conditions in z977 and subsequent years.

Edison has under contract over 8o% of its estimatedrequirements for low-sulfur fuel oil through 298'ndexpects the remaining requirements to be met with oil pur-chased on the spot market and under short-term contracts.

Contracts for coal for the electric generating units atMohave and Four Corners Generating Stations extend overthe projected useful lives of those plants.

With respect to nuclear fuel, zoo% of the total uraniumrequirements of San Onofre Units 2, 2 and y through l982are currently under contract, and during the periodl982-90 supply for about 44% of the uranium require-ments for these units has been committed.

The Company is participating in a uranium explorationand development joint venture through its wholly-ownedsubsidiary, Mono Power Company. Construction of a ura-nium mine and mill is under way, and the facilityis ex-pected to provide >g% of the uranium required by the SanOnofre units through l990.

Uranium reserves under control of the joint venture, butnot yet scheduled for development, could be produced tomeet a substantial portion of future uncovered demand.

SCE Continues R&D EffortsDuring the year, the Company increased its efforts to iden-tifylong-range fossil fuel resource alternatives includingdomestic coal and unrefined liquid fuels. Research and de-velopment projects include low emissions of nitrogenoxides from the combustion of shale oil, development oflow emission burners and tests to control nitrogen oxidesand sulfur dioxides by stack gas scrubbing.

Research interests in synthetic fuels from coal include aproposal submitted to the Energy and Research Develop-ment Administration to demonstrate the low-emission po-tential of burning methanol at one of the Company's gas-turbine peaking facilities.

New Customer Information System Begins OperationThe Company's first on-line business computer system be-gan operation during the year in Edison's Southern Divi-sion Headquarters in Long Beach.

Anew Customer Information System that willinvolveultimately some zoo customer contact employees in aboutzoo field locations was initiated with the installation of x8video display terminals to serve the information serviceneeds of x8o,ooo customers in the Redondo Beach District.

Customer Telephone Representatives (CTRs), whiletalking to a customer, use the terminals for access to cus-tomer billing,credit and service information directly froma large-scale computer located in the Company's Data Pro-cessing Center. Within seconds, customer requestsfor information or service are satisfied by CTRs whohave immediate accessibility to complete'and up-to-daterecords of customers'ccounts.

When completed in mid-x978, the system is designed toprovide Edison's customer contact personnel with theability to obtain information and to enter service requestsand account changes directly into the computer system foreach of the Company's 2.8 millioncustomers from anycustomer contact location in Edison's service territory.

GrossUtilityPlantEdison'sinvestment inutility plantnow exceedsSS.6 billion.

AnnualConstructionExpenditures

During Ig76,the CompanyexpendedapproximatelyShoo million onits constructionprogram, andScrog millionis projectedfor 1977.

500

200

billion S o

>97> >9D >976 >975 <976

million S o

<972 <971 >976 >975 <976 c977Est.

Changes Made in Management

Robert N. Coe, senior vice president, retired May 1. con-cluding 47 years of valued service to the Company, and onDecember 31, S. F. Buese, vice president, retired after 28years of dedicated service.

On August 19, the Board elected four Company execu-tives to new corporate positions.

H. Fred Christie, vice president and treasurer, waselected senior vice president, and Michael L. Noel, assis-tant treasurer, was named treasurer.

A. Arenal, previously manager of engineering and con-struction, was elected vice president with responsibilityfor system development. Robert E. Umbaugh, formerlydata processing manager, was elected vice president andassigned broadened administrative responsibility.

Affirmative Action Progress Continues

Progress toward AffirmativeAction goals continued in'1976. Minorityrepresentation in the work force increasedfrom 26.5%%uo at the beginning of T976 to'17.9% at the endof the year. Female representation also increased fromx5.4% to 26.7%.

Because of continued Company-wide restricted hiringpractices and resulting minimal growth in the work force,Affirmativeaction efforts have been more concentrated inthe direction of increased training opportunities andupward mobilityfor current employees.

The Company is still involved in conciliation and litiga-tion proceedings relative to alleged discriminatory employ-ment practices which are discussed more fullyin Note 4 ofthe Notes to Financial Statements.

Percentage of Male,Female and MinorityEmployees atYear EndX971 and X976

Male%%uo

Year End197'I '1976

Female

Year End1971 '1976

AmericanBlack Oriental Indian

%%uo %%uo

Year End Year End Year End'1971 1976 1971 '1976 '1971 '1976

SpanishSurnamedAmerican

Year End'1971 1976

TotalMinorities

Year End'1971 '1976

Management'" 96.2 92.9 3.8 7.2 2.0 2.8 2.3 3.6 o.4 o.6 2.3 4.3 5.0 10.3

Non-Managementoa 83.6 79.2 26.4 20.8 4.8 6.7 0.7 2.7 0.3 0.8 6.5 M..9 22.3 2'1.2

Total Company 87.o 83.'3 23.0 26.7 3.8 5.3 0.9 2.3 0.3 0.7 5.4 9.6 10.4 27.9

tu Data as of December 29, 1976.

ut Management employees include thc "officialand Managers," and "professionals" Affirmatfoc Action Categories.

cu Non-Management employees fncfude the "Technfcfans," "0iffce and Clerical," "Craftsmen," "Operatfocs,""laborers" and "Service Workers" Affhmatfoe Action Categories.

Financial Review

The following review of financial highlights is intended,in part, to provide more detailed information concerningsignificant variations which are reflected in the Statementsof Income comparing xg76 withx975 and xg75 withxg74.Reference also should be made to the accompanying finan-cial statements and their related notes.

Earnings Increase

Earnings per share for the year were $3.7o, as comparedwith $3.o7 for xg75 and $4.xo for xg74. The zx% increasefor xg76 over xg75 and the decrease for xg75 from xg74of z5% were due primarily to factors discussed below.Increases in the number of shares outstanding on aweighted average basis for both xg76 and xg75 had a

dilutive influence on earnings per share.Net income for xg76 was $zzz million,up $35 million,

or xg%, from xg75. This was in contrast with the $ 32million,or x4%, decline recorded in xg75, as comparedwithxg74.

Factors contributing to the increased net income forxg76 over xg75 were the partial general rate increaseauthorized by the CPUC in December xg75, an increasein kwh consumption and a $ zx millionincrease in the non-cash credit for allowance for funds used during construc-tion (ADC). These upward influences on net income werepartially offset by higher operating expenses, maintenanceexpenses, property and other taxes and interest charges.

The decline in xg75 net income, as compared with xg74,was at tributable largely to an extraordinary increase infuel expenses which offset increased revenues by a con-siderable margin. Higher interest charges further con-tributed to the decline. These factors were only partiallyoffset by lower taxes on income and an increased non-cashcredit forADC.

Revenues IncreaseTotal operating revenues for xg76 were $x.8 billion,up$x49 million,or g%, over the $x.7 billion reported for xg75.For xg75, operating revenues increased by $x85 million,orxz%, over xg74.

Increased revenues for xg76 reflected a 4.6% rise inenergy consumption by the Company's customers and a

4.6% increase in average revenue per kwh billed. Operat-ing revenues for the year included a net reduction of $x3milliondue to the operation of the Energy Cost AdjustmentClause (ECAC) previously discussed in this Report and inNote 3 of the Notes to Financial Statements.

The higher average revenue per kwh billed resultedprincipally from a partial general rate increase of approxi-mately $ 8o millionauthorized by the CPUC in Decemberxg75 and an increase in resale rates authorized by theFederal Power Commission which became effective onFebruary x, xg76, subject to refund. The annual effect offuel cost adjustments which were authorized on a quarterlybasis in xg74 were primarily responsible for the increase inrevenues in xg75 as kwh consumption rose only slightly.

Expenses Rise

Fuel expense continued to rise during xg76. However, themagnitude of the increase, amounting to $5o million,or6.5%, was significantly less than the $z64 million,or 5z%,increase recorded in xg75 over xg74. It should be noted,however, that the operation of ECAC procedures, whichhave been utilized since May xg76, is designed to offsetany increases or decreases in energy costs.

The decreased availability of natural gas fuel and ofenergy from the Company's hydroelectric plants necessi-tated an increased use of low-sulfur oil which, togetherwith increased prices for gas, coal and nuclear fuels,

Net IncomeNet income forxl776 was Szzzmillion,up xg%from xg7y.

230

230

Earnings andDividendsPer Share ofCommon Stock

+ Earnings

+ Dividends

100r

30

Earnings for 'x976were $ y.7o pershare, up from theSy.o7 recordedfor the sameperiod a year ago.

million S o

2972 2973 2974 2973 2976

dollars S o

2972 2973 2976 2973 2976

resulted in the extreme increase in fuel expense in x975over x974. These factors continued to have an upwardinfluence during x976. Their impact on x976 fuel expense,however, was moderated by a greater availability of pur-chased energy. In addition, the average price of fuel oilwhich had risen in'1975 contributing to the increase infuel expense over x974, declined slightly in x976.

Other operating expenses increased by xx% in x976, as

compared with x975, despite a continuation of the internalcost control measures which had contributed significantlyto holding expenses for x975 at virtually the x974 level.

The increase in x976 was attributable largely to an 8.5%wage increase and to the write-offof $7 millionof theaccumulated costs of the abandoned Kaiparowits PowerProject. This write-off,however, was largely offset by therelated income tax recovery.

Maintenance expenses, which increased by only z%%uo in

1975 over x974, increased by ax% in x976 over x975. Thelatter is largely the result of a greater number of generatingunits undergoing major periodic maintenance during 1976.

Taxes on income decreased by 6.5% in x976, as com-

pared with x975, despite a moderate increase in incomebefore taxes and ADC,because of increased tax deductionsand credits. Lower income before taxes and increased

tax deductions and credits accounted for a 57% decrease

in taxes on income in x975, as compared with x974.Interest charges and preferred stock dividend require-

ments rose by 9.4% and 5.4%, respectively, in x976. These

increases reflected the impact of the sale of additional long-term debt and senior securities during x976 and x975.

increase in ADCcontributed significantly to increasedearnings by partially offsetting the higher financing costsincurred in connection with new construction, they didnot provide cash offsets. The Company in its last rateincrease application sought permission to partially discon-tinue the recording of ADCby requesting that a portionof non-operative construction work-in-progress be allowedin rate base in order to improve cash earnings. However,the CPUC denied the request in its decision relating to thatapplication.

SCE Raises $245 MillionTwo issues of securities were sold during x976 whichraised approximately $z5z millionin new capital to helpfinance the Company's continuing construction programand to refund three maturing bond issues totaling$ 8x million.

A $xz5 millionoffering of z5-year First and RefundingMortgage Bonds, Series GG, was sold on March x4 at a

cost to the Company of 9%%uo.

An offering of 5 millionshares of common stock wassold to the public on December 8 at $zzt/s per share withnet proceeds totaling approximately $xo7 million.

Also during the year, 556,x9x shares of common stockwere issued under the Employee Stock Purchase Plan withnet proceeds totaling approximately $xx.5 million. In addi-tion, 87,656 shares of common stock were issued under theDividend Reinvestment and Stock Purchase Plan with netproceeds totaling approximately $x.S million.

Allowance for Funds Used During Construction

ADC increased by $xx million,or 78%, in x976 over '1975

and by $xx million,or 66%, in x975 over x974 due to the

large and growing construction work-in-progress balance

primarily related to construction at the Company's So%%uo

owned San Onofre Nuclear Generating Station. While the

Distributionof IncomeTotal fuel andpurchased powerexpense for 1976was $ 9oy million,representing 48%of Edison's totalincome. In con-trast, fuel andpurchased powerin egypt repre-sented only ay%of total income.

811781

615

518

// / r roy// r r r0 r rrr

rr

r

D e o

D e

/r r//

/'

/// r

Reinvested Earnings s

Reinvested Earnings s%

CDMZaS gi

~ 39563D $$

1,881

1,788

1i659

1i521

'1~ '596

595 os. o

195

million $ o

1971 1976

Aprivate placement of $6z millionof Sz3 par valuePreference Stock with an annual dividend rate of 7.373%was made on February x3, xg77.

Current financing plans for the remainder of the yearcall for the issuance ofup to Sago millionin securities.Except for shares issued under the Employee Stock Pur-chase Plan and the Dividend Reinvestment and StockPurchase Plan, an offering of common stock is not antici-pated.

the purchase price of all new shares of SCE common stockpurchased with reinvested dividends. The discount is com-parable to the costs that ordinarily would be incurred inoffering stock to the public.

Further information regarding the Plan, including theProspectus by which securities issued under the Plan areoffered, maybe obtained by writing to the Secretary,Southern California Edison Company, P.O. Box Soo,Rosemead, California 91770.

Discount Added to Dividend Reinvestment PlanEffective January x, xg77, common stock shareholders en-rolled in the Company's Dividend Reinvestment and StockPurchase Plan became eligible to receive a 3% discount on

Report: of Independent Public Accountants

To the Shareholders and the Board of Directors,Southern California Edison Company:

We have examined the balance sheets and statements ofcapital stock and long-term debt of Southern CaliforniaEdison Company (a California corporation) as of December3x 1976 and 1975, and the related statements of income,earnings reinvested in the business, additional paid-incapital and changes in financial position for the years thenended. Our examination was made in accordance withgenerally accepted auditing standards, and accordinglyincluded such tests of the accounting records and suchother auditing procedures as we consider necessary in thecircumstances.

As discussed further in Note 2 of Notes to FinancialStatements, the California Public Utilities Commission onApril27, 1976, issued a decision concluding that theoperation of the average-year basis fuel clause adjust-ments previously included in the Company's ratesresulted in "overcollections" of revenues under the Com-

pany's fuel adjustment clause billings to customers. TheCompany is contesting such decision and has petitionedfor review by the California Supreme Court and oralargument was heard February 8, 1977. The ultimate effectof this matter and the accounting treatment of the accumu-lated differences resulting from alleged net "overcollec-tions" is dependent upon the final outcome of judicial pro-ceedings, which cannot be predicted with certainty.

In our opinion, subject to the effect on the financialstatements of adjustments, ifany, that may result fromthe outcome of the matter mentioned in the precedingparagraph, the financial statements referred to above pre-sent fairly the financial position of the Company as ofDecember 31 1976 and 1975, and the results of its opera-tions and the changes in its financial position for the yearsthen ended, in conformity with generally accepted ac-

counting principles consistently applied during the periods.

Los Angeles, CaliforniaFebruary To, x977

ARTHUR ANDKRSEN Sc CO.

Operating Revenues and Kilowatt-Hour Consumption

Class of Service Operating Revenues (ooo) Kilowatt-HourConsumption (ooo)

Residential............Agricultural...........Commercial...........IndustrialPublic AuthoritiesInterdepartmentalResaleEnergy Cost AdjustmentsOtherTotal .

% ofx976 total

32.425

25.623 7

9.'1

6.6(0 7)o.8

'100.0

x976

$ 589,39745,338

464I254430I427166,o38

27120I459(12,684)13,528

>975

$ 564,38937.5 21

4131458389,829T53,850

2997I439

X.XI500

$T,816 784 $x,668,0T5

change

442o.8'12 3T0.479(4.8)

23.6

T7.6

8.9

%of2976 total

26.o2.4

24:129. T'10.5

79

x976X3I946I809

1I275,643T2I95'1I69715,622,6o3

5,621,955914

4,265,757

>975

13,493,387T,o74,6o6

12I036~12915,o55,646

5,578,669962

4,o88,1o9

change

3 418.7

7.63.8o.8

(5 0)43

Too 0 53I685I'378 51,3271508 4 6

Southern California Edison Company

Statements of Income Year Ended December 51,

1975 1975

Thousands of Doltars

Operating Revenues: Sales (Notes x, 2, g, and 4) ..Other .

Total operating revenues (Note xx)

$1,803,256

x3,528

x,Sx6,784

$1,656,515

1.1 @500

x,668,ox 5

Operating Expenses: Fuel (Notes 2, 5, and 4) .

Purchased power .

Other operation expenses (Notes 4 anrl 6)......Maintenance (Note x) ..Provision for depreciation (Notes x and 5) .....Taxes on income —current and deferred (Note 5) .

Property and other taxes .

Total operating expenses

sx8,932

84,5x5

223,647

x13,x88

x24,8oz

53,855

xo2,126

'II521I065

768,843

55,983

20xi385

93,716

I20I4'Io

57,623

93,568

'1I391I528

Operating Income (Note xx) 295r719 276,487

Other Income and Income Deductions: Allowance for funds used during

construction (Note 1) .

Other —net (Notes 5, 8, aml xo).........Total other income and income deductions .

47i610

x6,4x6

64,o26

26,773

9,587

36,36o

Total Income before Interest Charges 359.745 3x2,847

Interest Charges: Interest on long-term debt

Other interest and amortization (Note 1)Total interest charges .

'134I423

3i600

x38,o23

124I674

II5XIx26,x85

Net Income (Notes 2, 5, anrl xx) 22Xr722 x86,662

Dividends on Cumulative Preferred and Preference Stock 41r75'1 39,604

Earnings Available for Common and Original Preferred Stock 79I97 8 47.05

Weighted Average Shares of Common and Original Preferred Stock Outstandingand Common Stock Equivalents (ooo) 48,678 47 965

Earnings Per Share (Notes 2 3 9 and xx):Primary

Fully diluted$3 07

$2.94

Earnings Per Share (Note 2) —Adjusted for the possible effect of the April27,

x976 PUC Decision: Primary

Fully diluted .

$3.86

$ 3.66

$2.86

$274

X4 The accompanying notes are an integral part of these statements.

Southern California Edison Company

Statements of Changes in Financial Position Year Ended December 5x,

1976 1975

Thousands of Dollars

Funds Provided By:Operations- Net income (Notes 2 and 5)

Non-fund items-Depreciation

Equity in earnings of unconsolidated

subsidiaries (Note x)Allowance for funds used during

construction(Note x) ...........Foreign exchange gain—net of taxes

(Note 8)

Investment tax credit deferred —net

(Note 5)Other—net

—Earnings distributed from unconsolidated

subsidiaries

Total from operations

x24/802 '120/4xo

(96s) (290)

(47 6x0) (26 773)

(2,78 X)

x6,366

XS,X98

6,624

5.746

'I/000

330/729

3/500

295,879

8 22X/722 5 X86/662

Long-term financing— Preferred stock

Long-term debt

Common stockTotal from long-term financing

'1 26/263

X23,951

50/000

X6X,64X

250/2X4 2X1/64X

Other sources— Construction advances and otherDecrease in working capital

Total from other sources

5/529'140,43x

l45/960

9/404

9/404

Total funds provided $ 726/903 $ 5x6/924

Funds Applied To: Construction additions —net..............Less —allowance for funds used

during construction (Note x) ............Funds used for construction expenditures ..

Advances to unconsolidated subsidiaries .....Dividends

Repayment of long-term debt

Other-net .

Increase in working capital .

47,6xo

500/326

5/900

x25/loxSo,84o

x4,736

26,773

38x,x3o

8/375x2o,x86

7/233

8 547,936 $ 407,903

Total funds applied $ 726/903 $ 516/924

Working Capital Changes: Temporary investments and notes payable-net .

Fuel stock .

Refundable energy cost adjustments —net

(Note 5) .

Other

X3/95o

('1 20/282)

(XO,X22)

(23.977)

$ (xx6,673)

40/385

83/52X

Increase (Decrease) in working capital $ (x4o.43x) 8

The accompanying notes are art integral part of these statements. X5

Southern California Edison Company

Balance SheetsAsseTs

December 31,

1976 1975

Thousands of Dollars

UtilityPlant: Utilityplant, at original cost less

contributions (Notes 2 and 4) ..............Less —Accumulated provision for depreciation

(Note 2) .

Net utility plant .

Construction work in progress (Note 6)........Nuclear fuel, at amortized cost...............Total utilityplant

T,258,327

3,440,206

938I2942T,6o6

4 400 T06

I,'I49I3 I'I3,340,764

632,5o8

24I750

3I998I022

$4,698,533 $4 490 075

Other Property and Investments: Real estate and other, at cost —less

accumulated provision for depreciation ..Subsidiary companies, at equity

(Notes 2 and 20)Total other property and investments .....

TT,o6T

84,o27

g5,o88

T3I555

78,T27

gT,682

Current Assets: Cash (Note 4) .

Receivables, less reserves for uncollectibleaccounts of $7,634,ooo and $4,885,ooo atrespective dates (Notes 2 and 8)...........

Fuel stock, at cost (first-in, first-out) .........Materials and supplies, at average cost.......Prepayments and other (taxes, insurance, etc.)

(Note g) .....Total current assets

8,4T2

T26,448

T96,37T

24i559

65,5o2

42Tr292

T5.033

T22I759

3T6,653

28,8g T

47,8%5

53 IIT5T

Deferred Debits: Unamortized debt expense (Note 2) ..Other deferred charges

Total deferred debits

T3r473

T7,3gS

3o,87T

$4i947i357

T3I309

T6,T43

29I452

$4,65o,3o7

The accompanying notes are an integral part of these balance sheets.

CAPITALIZATIONAND LIABILITIES

December 31,

1976 1975

Thousands of Dollars

Shareholders'quity:

Long-Term Debt (Notes T and 8)

Original preferred stock .

Cumulative preferred stock

Preference stock .

Common stock, including additional

stated capital

Total capital stock —stated value ...Additional paid-in capital .

Earnings reinvested in the business ..Total shareholders'quity .

Total capitalization

$ 4,000

533.755

74,998

442I74'l

T.o55.494

427I422

835,5o7

2I3TSI423

2,T5T,86T

4i470i284

4,ooo

533I755

74I998

395I709T,oo8,462

350i503

742,7o6

2,ToT,67T

2~0331038

4IT34i709

Current Liabilities: Accounts payable

Commercial paper payable (Note 4) ......Current maturities of long-term debt......Taxes accrued (Note 5)Interest accrued

Customer deposits

Dividends declared .

Energy cost adjustment balancing account(Note g) .

OtherTotal current liabilities

T25IT30

36I050

85,487

38,T5o

l3Il0927I'1 90

2TI39T

T2 80T

359,3oS

l07I90250I000

So,84o

84,835

36,695

TT,943

24I820

'12I54'T

409i576

Commitments and Contingencies (Note 4)

Reserves and Deferred Credits: Customer advances for construction ....Other deferred credits

Accumulated deferred income taxes andinvestment tax credits (Note 5) ......

Pension reserves (Note 7)Insurance, casualty and other reserves...Total reserves and deferred credits .....

.. ~ 25,385

6,7o2

'l9I982

T5q99T

53.95720i067

TT,654 T3JT25

TT7,765 l06I022

0 34IT58

22p766

$4.947.35 7 $4i650p307

The accompanying notes are an integral part of these balance sheets. T7

Southern California Edison Company

Statements of Earnings Reinvested in the BusinessYear Ended December 5x,

2976 1975

Thousands ofDollars'alance

at January T

Add: Net income$74 2I706

22'II722

g64,428

$ 677,839T86,662

864,5oI

Deduct:

Balance at December 3T

Dividends declared on capital stock—

Original preferredCumulative preferredPreference .

Common —$T.68 per share for Tg76 and Tg75 .

Capital stock expense

8o6

37,85T

'3I900

82I544

3,82o

T28,92T

$ 835,5o7

8o6

35.7o5

3I900

79I775Ti609

T2TI795

$742I706

Statements of Additional Paid-in CapitalYear Enrled December 5x,

x976 >975

Thousands of Dollars

Balance at January T

Balance at December 3T

Premium received on sale of common stock

$ 35oI5o3

76,9T9

$427I422

$35or5o3

$35oI5o3

TS The accompanying notes are an integral part of these statements.

Southern California Erjison Company

Statements of Capital StockShares

Outstanding

Redemption

Price

Per Share

December 5x, x976

December 5x,1976 1975

Thousanrls of Dollars

Original Preferred —5%, prior, cumulative,participating, not redeemable; authorized48o,ooo shares, par value $8'/8 per share...........

Cumulative Preferred —authorized x2,000,000 shares,

par value $25 per share (a)4.o8% Series ...............4.24% Series

4.32% Series ...............4.78% Series .. ~.... ~.......5.8o% Series ...............8.85% Series ...............g.zo% Series ...............

Sxoo Cumulative Preferred —authorized 6,ooo,oooshares, par value Sxoo per share (a)

7.325% Series............7.58% Series.............8.7o% Series ................8.g6% Series................

48o,ooo

'II000I000II20 0~000

l,6531429x,296,76g21200~000

2ioooiooo2IOOOIOOO

750ioo0750IOOO

500IOOO

500IOOO

$ 25.5025'.80

28.7525.8o

25.6527. 20

27 25

II5.00xo8.oo2'I1.00I'IX.OO

25IOOO

30iooo4x.3363214'19

55IOOO

50IOOO

50iooo

25'Iooo

30IOOO

42,33632i4T955~00050~0005'OIOOO

75iooo75iooo50,00050,000

75IOOO

75IOOO

50IOOO

50IOOO

4,ooo S 4,000

533r755 533.755Preference —authorized xo,ooo,ooo shares,

par value $ 25 per share (a) (c) (f)5.20% Convertible Series

Common —authorized go,ooo,ooo shares,

par value $8x/8 per share, includingadditional stated capital (b) (c) (d) ...........

Total capital stock- stated value (e)

2,999,900

53/128~730

25.00 74,998 74I998

442I74'I 395.709

fll055p494 1~0081462

(a) Allseries of Cumulative Preferred, $xooCumulative Preferred and Preference Stockare redeemable at thc option of the Company.The various series of Sxoo Cumulative Pre-ferred Stock and the Cumulative PreferredStock s.s5% Series and g.zo% Series, are sub-ject to certain restrictions on redemption forrefunding purposes. Thc $xoo Cumulative Pre-ferred Stock, 7.525% Series has a cumulativesinking fund provision requiring the redemp-tion of 5o,ooo shares annually at Sxoo pershare, plus accumulated unpaid dividends,commencing July 5x, xg85, and continuing un-tilall shares are redeemed.(b) Transactions in the capital stock accountsfor xg76 reflect the issuance of 5,645+47shares of Common Stock issued as follows:87,656sharesunder the DividendReinvestment

and Stock Purchase Plan, 556,xgx sharesunder the Employee Stock Purchase P!an and5,ooo,ooo shares issued on December 8, xg76.(c) Under a prescribed formula, the conver-sion prices of convertible securities areadjusted when additional shares of CommonStock are sold by the Company. At December5x, xg76 and xg75 there were 2 xx2 606 andz,ox6,96o shares of Common Stock, respec-tively, reserved for conversion of PreferenceStock, 5.xo% Convertible Series at thc ad-justed conversion prices of $ 55.5o and $ 57.oo.

There were x,sg6,X54 and x,so4,868 sharesof Common Stock reserved at Dcccmber 5x,xg76 and xg75, respectively, for conversionof the 5'/s% Convertible Debentures, Duexgso, at the adjusted conversion prices of oneshare of Common Stock for each $ 59.5o and

$4x.5o principal amount of such debentures.During January 'x977 the adjusted conversionprice changed to $5g.oo with x,gxo,565 sharesreserved for conversion.(d) At Deccmbcr '3x 'x976 there werc gx2

544'nd

X,745,8og authorized and unissued sharesof Common Stock reserved for the sale andissuance under provisions of the Company'sDividend Reinvestment and Stock PurchasePlan and Employee Stock Purchase Plan,respectively.(e) The Company's Articles of Incorporationauthorize the issue of z,ooo~oo shares ofSxoo Prefercncc Stock, Sxoo par value, noneof which was outstanding at December 5x,x976 or X975.(f) The Company intends to issue duringFebruary xg77, zgso~oo shares of Prefer-ence Stock, 7 575% Series, Sx5 par value.

The accompanying notes are an integral part of these statements. '19

Southern California Edison Company

Statements of Long-term Debt December 31,

1976 1975

Thousands of Dollars

First and Refunding Mortgage Bonds (a): Series C,Series D,Series E,Series F,Series G,Series H,Series I,Series J,Series K,Series L,Series M,Series N,Series 0,Series P,Series Q,Series R,Series S,Series T,Series U,Series V,Series W,Series X,Series Y,Series Z,Series AA,Series BB,Series CC,Series DDP,Series EE,Series FF,Series GG,

Due Tg76 (2 /s%)........Due xg76 (3'/s%)........Duexg78 (3 /8%)........Duexg7g (3%) ..........DuexgSx (3 /s%)........Due T982 (4 /4%)........Due xg82 (4 /4%) ........Due xg82 (4'/s%) ........DueT983 (4 /8%) ........Due xg85 (5%)Due'1985 (4 /8%)........Due Tg86 (4'/2%)........Due xg87 (4'/4%)........Due Tg87 (4 /4%)........Due xg88 (4 /8%)........Due xgSg (4/8%) ........Due Tggo (4%%) ........Due T99T (5 /4%) ........Due xggx (6'/8%)........Due xggz (5 /s%) .....Due T993 (6/s%) ........Due 1994 (7 /8%) ~ ~ ~ ~ ~ ~ ~ ~

Due 1994 (8'/s%) . ~...Due xgg5 (7 /8%) ........Due xgg6 (8%)..........Duexgg7(7/s%) ... ~ ..Duexggg (8/4%%uo)...... ~ ~

Due T999 (7%) .... ~ ~ ~ . ~ ~

Due TgSx (g%) ..........Due 2ooo (87/s%) ........Due 2oox (87/s%)........

30IOOO30IOOO40IOOO

37I50040IOOO40IOOO50IOOO30IOOO6o,ooo30IOOO40rooo50IOOO6o,ooo6o,ooo6o,ooo75,000So,ooo8o,ooo

'100,00075,000

TOOIOOO

TOOIOOO

IooroooI25IOOOTOOIOOO

T5r030TOOIOOO

'150,000T25,000

35,ooo30IOOO30IOOO

30IOOO40IOOO

37r50040IOOO40IOOO50IOOO30iooo6o,ooo30IOOO40,00050IOOO6o,ooo6o,ooo6o,ooo75IOOOSo,oooSo,ooo

Too,ooo75,000

TooroooIOOIOOOTOOIOOO

'125IOOO'Ioorooo

'15r030Toorooo'150,000

First Mortgage Bonds (Calectric) (a)Convertible Debentures (b)Promissory Notes (Note 8)

Principal amounts outstandingCurrent maturities of long-term debt (c)Unamortized premium or (discount) —net

Total long-term debt

Due xg76-Tggx (2 /s%-5 /s%%uo) .

Due TgSo (3'/8%)............Due xg7g-xg83 (5'/s%).......

TI982i5307xr50074I902T7I952

2,x46,884

4r977

'1,922r53087r34074rg0225,g68

2/IIor740(So,84o)

3,x38$21T5T186T $2i033i038

(a) Allmortgage bonds are secured byutilityplant, substantially all of which issubject to a lien under the trust indentures.Additional First and Refunding MortgageBonds may be issued subject to the provisionsof the applicable trust indentures. Each ofthe bond indentures requires special depositswith the trustees, which are based primarilyupon the amount of bonds outstanding.These deposit requirements of $6a,po9zoo in1976 were satisfied by property additions andreplacements. The Company expects tomaintain these requirements in the same

manner in 1977. The First and RefundingMortgage Bonds, Series DDP, are subject toa mandatory sinking fund commencing onJuly 1, 1990.(b) At December 31, 1976 and 197S the3'/s% Convertible Debentures, Due 1980,were convertible at thc adjusted rate of oneshare of Common Stock for each $39.50 and$4x.so, rcspcctively, of the principal amount ofsuch debentures. During January 1977 theadjusted conversion price changed to $ 5a.oo.Any such debentures which arc converted maynot be reissued.

(c) Current maturities of long-term debt atDcccmber 31, 1975 included First andRefunding Mortgage Bonds, Series C, DueFebruary 15, 1976 of $35,000,000, Series D,Due August 15, 1976 of $30,000,000 and FirstMortgage Bonds (Calectric) 3%%uo Series, DueJune1,1976 of $15+40,000. The amount oflong-term debt maturing in the five yearssubsequent to December 31, 1976, willbe:none for 1977; $35+00,000 for 1978;$35@01,000 for 1979; $ 86,010,000 for 1980;and $144,95a,ooo for '1981.

20 The accompanying notes are an integral part of these statements.

Southern California Edison Company

Notes to Financial Statements

Note I —Summary of Significant Accounting PoliciesThe accounting records of the Company are maintainedin accordance with the uniform system of accounts pre-scribed by the Federal Power Commission (FPC) andadopted by the California Public Utilities Commission(PUC).

Additions to utilityplant and replacements of retire-ment units of property are capitalized at original costless contributions, which cost includes labor, material,indirect charges for engineering, supervision, transporta-tion, etc., and an allowance for funds used duringconstruction. Maintenance is charged with the cost ofrepairs and minor renewals; plant accounts with thereplacement of property units; and the depreciationreserve with the cost, less net salvage, of property unitsretired.

Allowance for funds used during construction (ADC)is the generally accepted utilityaccounting proceduredesigned to capitalize the cost of both debt and equityfunds used to finance plant additions during constructionperiods and to restore net income to that which wouldhave been experienced without the construction programthrough a transfer of such costs from the income state-ment to the balance sheet as utilityplant constructionwork in progress. Although ADC is reported under otherincome and income deductions, itdoes not representcurrent cash earnings. Such costs are recovered fromratepayers as a cost of service through provisions for de-preciation in future periods. The ADC rate authorizedby the PUC was 8% Eor xg76 and x975.

Depreciation of utilityplant is computed on a straight-line remaining lifebasis for financial statement purposesand approximated z.g% of average depreciable plant forthe years xg76 and xg75. Current income tax expensehas been reduced by the current tax reductions arisingfrom the use of liberalized methods and lives in com-puting depreciation for income tax purposes and a portionof investment tax credits. Provisions are being made tonormalize the effect ofcertain additional investment taxcredits made available by the Tax Reduction Act ofxg75.

Debt premium or discount and related expenses arebeing amortized to income over the lives of the issues towhich they pertain.

Customers are billed monthly, except for most residen-tial customers who are billed bimonthly. Revenues, ex-clusive oE energy cost adjustments, are recorded whencustomers are billed.

Variations between Energy Cost Adjustment Clause(ECAC) revenues and the related energy costs included inrates are deferred (effective as of May x, xg76) until suchvariations are refunded to or recovered from utilitycustomers through adjustments provided for under theCompany's ECAC. The income tax effects of such defer-rals also are deferred.

Investments in unconsolidated subsidiary companies,all of which are whollyowned, are stated on an equitybasis.

Note 2 —Fuel Adjustment ClauseThe PUC issued a decision on April27 x976 in which itrevised the basis of adjusting charges for utilityservicebecause of changes in fuel costs. In its decision thePUC departed from its previously adopted average-yearconcept and utilization of projected fuel expenses andtested the past performance of the fuel adjustment clauseby utilizingcertain recorded fuel costs. This resulted inthe PUC concluding that the Company had made past"overcollections" of revenues which, when calculatedpursuant to the Company's understanding of the meth-od specified in the decision, would amount to approxi-mately Sx33 200 ooo as of April3o, xg76. Thedecision also reflected the PUC's intention to amortizesuch "overcollections" in future rate adjustmentsover a period up to three years. The Company believesportions of the decision involve unlawful retroac-tive rate-making and inappropriate calculations for test-ing the past performance of the fuel adjustment clause.After the PUC denied the Company's petition for rehear-ing of portions of such decision, the Company petitionedfor review by the California Supreme Court and oralargument was heard February 8, xg77. The ultimate effectof this matter and the accounting treatment of the accumu-lated differences resulting from alleged net "overcollec-tions" is dependent upon the final outcome of judicialproceedings, which cannot be predicted with certainty.

The outcome of litigation involving the alleged"overcollections" could possibly affect previously re-

portedd

earnings per share. Based on the Company'sunderstanding of the method and timing recommendedby the PUC Staff, the possible effect on previouslyreported primary earnings per share, would be reductionsof 4g to $2 5x Eor x9721 3g to $2 67 for x973 / Sx 30 to $2 80EOI x974'nd zxg to Sz.86 for x975 and an increase of x6gto $3.86 for xg76, resulting from "undercollections"during the 4 months ended April3o, xg76.

Ifthe PUC's position with regard to the alleged net"overcollections" is not reversed by the courts, the PUChas indicated that it would then determine, in conformitywith the final outcome of such judicial proceedings, theamount of the "overcollections" through April30 x976.

On September 5 x975 a class action complaint wasfiled in Los Angeles County Superior Court allegingmisrepresentation and fraud by the Company in over-stating the cost of fuel to the PUC in rate proceedingsbefore itwith the result that the PUC approved electricrates in excess of those which would have been approvedin the absence of such alleged fraud. The complaint hasnot as of the date hereof been served on the Company. Italleges damages to the Company's customers, on whosebehalf the action was filed, in a total amount in excess ofSx4o,ooo,ooo, plus exemplary damages of no less thanSxoo,ooo,ooo. Because the Company believes that suchcharges are unfounded, it intends, among other things,to categorically deny the allegations of fraud and mis-representation and to defend vigorously the action.

2x

Southern California Edison CompanyNotes to Financial Statements (continued)

Note 3 —Energy Cost Adjustment Clause (ECAC)Pursuant to PUC resolutions subsequently adopted toimplement its decision of April27 x976 a new ECAC,superseding the Company's former fuel adjustmentclause, was included in the Company's filed tariffs effec-tive October L3 x976. The new ECAC requires monthlyentries to adjust the results of operations and maintaina balancing account for over-or-undercollections.Pursuant to such resolutions, based on calculationscovering the period from May x, xg76 to December 3x,x976 the Company recorded a net reduction in revenuesof Sxz,684,ooo for such period.

Note 4 —Commitments and ContingenciesConstruction program-The Company has significant purchase commitments inconnection with its continuing construction program. Theconstruction program is currently estimated at$5og,ooo,ooo for xg77. In addition long-term commit-ments approximating a minimum of $7.x billionexisted atDecember 3x, xg76 under the Company's fuel supplyand transportation arrangements.

On June x, xg73 the Company entered into a partici-pation agreement with certain other utilities to constructthe Kaiparowits Power Project in southern Utah. SuchProject was abandoned and cancelled during Aprilxg76.Of the Company's approximate Sx6,zoo,ooo invest-ment in the Project approximately Sxx,zoo,ooo has beenidentified for write-offwhich is offset by income taxbenefits of approximately $5,goo,ooo. Earnings for xg76were reduced by approximately Sg6o,ooo as a resultof the write-offwhile the earnings effect for each of thesubsquent four years willbe approximately Sx,o8o,ooo.

Although the ratemaking treatment of this abandon-ment has not yet been determined, the PUC's actionregarding the Kaiparowits Power Project is not expectedto have a material financial impact on the Company.

Government licenses—Major hydroelectric plants together with certain reser-voirs are located in whole or in part on lands of theUnited States under Government licenses and permitswhich expire between xg77 and zoog. Such licenses andpermits contain numerous restrictions and obligations,including the right of the United States to acquire theprojects, under certain conditions, upon payment ofspecified compensation.

Revenues—Pursuant to FPC procedures, the Company has increasedrates during the years x973 through xg76 for cer-tain of its resale customers pending final determina-tion of these rate increases by the FPC. Additionalrevenues of approximately $x7x,3oo,ooo and Sg6,zoo,ooobilled thereunder through December 3x, xg76 and xg75,respectively, are subject to refund with interest to theextent that any of the increases are subsequently

determined by the FPC to be inappropriate. The Companybelieves that, based on present facts, the amount ofrevenues, ifany, which may be required to be refundedwould not have a significant effect on net income in anyof the related periods.

Leases and Rentals-The Company rents or leases automotive equipment,computer equipment, nuclear fuel, office space and otherincidental equipment and property. The total annualgross lease expenses in xg76 were less than x% ofoperating revenues.

The present value of the minimum commitments ofnon-capitalized financing leases is less than 5% of capi-talization. The majority of the Company's expensesunder lease commitments is charged to other operationexpenses. The impact on net income, had these com-mitments been capitalized, would not have beensignificant.

Compensating balances and short-tenn debt-In order to continue lines of credit with various banks,which amounted to approximately Sx6x,ooo,ooo andSx57 ooo,ooo at December 3x, xg76 and xg75, respec-tively, the Company maintains deposits aggregatingapproximately $x5,ooo,ooo, which are not legally re-stricted as to withdrawal. None of such lines of creditwas used at such dates. Of such lines of credit, $3,ooo,ooomay be utilized only for the repayment of commercialpaper. The variation between cash reported on the Com-pany's balance sheets and the minimum aggregate depos-its recorded by the banks is "float",which is due to timingdifferences in recording deposits and withdrawals by theCompany and the banks.

The Company has an additional Sx5o,ooo,ooo lineof credit which may be utilized only Eor the purchase offuel oil through the use of bankers'cceptances, noneof which was outstanding at any time during x976.

There were no notes payable to banks outstanding atany time during xg76 or x975.

The maximum amount of commercial paper outstand-ing during xg76 and xg75 was Sg5,o5o,ooo and$55,ooo,ooo, respectively, with average daily borrowingsoutstanding during such periods of $33,83g,ooo and$2,847,000 respectively. The approximate weightedaverage interest rate for these borrowings (total interestdivided by average daily borrowings) was 5.zo~io Eorx976 and 5.67% Eor xg75.

22

Legal matters-In connection with a charge filed with the Federal EqualEmployment Opportunity Commission (EEOC) onJanuary 3x, x972 against the Company and two laborunions, the EEOC determined in xg73 and xg74 that withrespect to certain of the allegations there was reasonablecause to believe that the Company and the unionswere engaging in employment practices which werein violation of the CivilRights Act of xg64 with regardto women and certain minorities. While denying that ithas engaged in any unlawful practices, the Company ismeeting in conciliation with the EEOC, the two unionsand the representatives of the plaintiffs mentioned belowin an attempt to resolve the charge and suit allegingdiscriminatory practices.

During xg74, a class action suit was filed against theCompany and the two labor unions in Federal Court. Thissuit alleges that the defendants have engaged and arecontinuing to engage in unlawful employment practices,with respect to Blacks and Mexican-Americans, whichare in violation of certain civilrights acts and encom-passes a number of the issues raised by the EEOC deter-mination mentioned above. On May 25'976 a secondclass action was filed against the Company in the samecourt. This suit alleges that the Company has engagedand is continuing to engage in unlawful employmentpractices with respect to women, which are in violation ofa civilrights act and encompasses a number of issuesraised by the EEOC determination mentioned above.No class has been certified in either action. Iftheplaintiffs in either or both actions should prevail againstthe Company, the courts, in addition to awarding mone-tary damages and back pay to the prevailing class mem-bers (the minorityplaintiffs'claim is in excess ofSzo,ooo,ooo and female plaintiffs'laim is in excess ofSxo,ooo,ooo), could enjoin any employment practicesthey determine are unlawful and order that the Companyundertake further affirmative action with respect to fu-ture hiring and promotional practices, as well as suchother equitable relief as the courts deem appropriate.Settlements, consent decrees and decisions arising out ofcharges filed against other employers under such civilrights acts have resulted in the imposition of uneconomi-cal hiring, promotional and other employment practicesand requirements, as well as substantial monetary awardsor settlements.

In the opinion of Company counsel, although thereare no controlling judicial precedents concerning a num-ber of issues presented by the charge and the cases, theCompany has a number of defenses which should be

sustained by a court and which, among other things, havethe effect of limiting,eliminating or mitigating claims formonetary damages. The Company believes, based on itsinvestigations to date, that the amount of any recoveryfor monetary damages, including back pay, should nothave a material effect on the financial condition of the

„Company.

In addition to the above class actions, actions could beinstituted by the EEOC ifthe matter is not resolved inconciliation, or by others raising issues other than thoseincluded in the class actions now pending. Also, otherproceedings alleging discrimination could be institutedagainst the Company by other federal agencies for thetermination of contracts for the processing ofnuclearfuel, the sale or purchase of power or purchase of water,and of easements, rights-of-way and permits over federallands on which certain Company generation, transmissionand distribution facilities are located or are planned to belocated in the future.

Note 5 —Taxes on IncomeAs required by the PUC, no provisions are made for in-come tax reductions (net) which result from reportingcertain transactions Eor income tax purposes in a perioddifferent from that in which they are reported in thefinancial statements. The most significant of these trans-actions is the deduction of additional depreciation inincome tax returns as a result of using liberalized methodsand lives. Provisions to account for the deferral of incometaxes due to accelerated amortization were permitted bythe PUC in certain prior years, and the accumulatedamounts deferred are being amortized to income as suchtaxes become payable.

Additional investment tax credits (ITC) have beenmade available to the Company under provisions of theTax Reduction Act ofxg73 (Act), provided that the poli-cies adopted for accounting purposes are also applied forratemaking purposes by the regulatory authorities exer-cising jurisdiction over the Company's rates. Pursuant toprovisions of the Act, the Company elected Eor account-ing and ratemaking purposes to defer the additionalITC and amortize the credits ratably over the book livesof the properties generating such credits by reducingincome tax expense. The PUC included certain provisionsin its December xg76 rate decision which could adverselyaffect the Company's right to utilize such additional'ITC,aggregating $z3,goo,ooo as of December 3x x976. TheCompany is seeking from the PUC a rehearing or recon-sideration and modification of such decision. Althoughthe loss of the ITC would significantly increase theCompany's income tax liability,itwould not materiallyaffect previously reported net income because only$3oo,ooo has been amortized to date.

Pursuant to FPC procedure, the Company is providing,effective January x, xg76, deferred income taxes Eor cer-tain timing differences. The related revenues are beingcollected subject to refund.

Income tax expense for xg76 was reduced by$ 6,zsg,ooo previously charged to income tax expensein xg7x but which was determined to no longer be re-quired as a result of the Internal Revenue Service auditof the Company's xg7x tax return.

Southern California Erlisori CompanyNotes to Financial Statements (continuerl)

Supplementary information regarding taxes on incomeincluded in operating expenses is set forth below:

Year Ended Dcccnibcr 31,1976 1975

Thousands of DollarsComputed "expected" current federal

income taxAdjustments:

Excess of tax over book depreciation ..Allowance foi funds used during

constructionRemoval costs expenscd for tax

purposesRepair allowance ..................Administrative and general expenses

capitalizedEnergy cost adjustment balancing

accountState taxes on income ...............Foreign exchange gain ..............Other timing differences ............Investment tax credit ...............Application of federal tax

provision in prior periods no longerrequired.

Federal tax provision .................State tax provision ...................Total current provision for taxes

on income .

Deferred taxes:Amortization of previously deferred

taxes on income ..................Investmcnt tax credit, net ...........Energy cost adjustment balancing

account (current) .................F.P.C. jurisdiction ..................Foreign exchange gain ..............

Total provision for defcrrcd taxes ......Total taxes on income ................Taxes on income (credit) allocated to

other income .

Taxes on income Included inoperating expenses .................

Pretax income .

Effective tax rate (Total taxes on income —'.

Pretax income) ..........,........

$ 129i472 $115,917

(25,387) (25,585)

(22,853) (12+51)

(4,63o)(5,76o)

(6,786)

(4.453)

(6,7o8)

6,257(5,586)(3.147)

57(3o,x87)

(xx,27x)

(3.694)(x3,458)

(6 285)

25px65x4i344

37,89712,48x

39i5o9 5oi378

(2,144)x6,366

(xx,269)2,'122

Si4548@529

48,o3S

5,8x7

(2.144)6,624

4,48o

54,858

2,765

$ 53,855

$ 269,76o

$ 57,623

$24xi52x

'7.8%

22.7%%uo

Note 6 —Research and DevelopmentResearch and Development (R&D)expenditures areexpensed currently ifthey are of a general nature. Plantrelated R&Dexpenditures are accumulated in construc-tion work in progress (CWIP) until a determination ismade whether or not such projects willresult in construc-tion of electric plant. Ifno construction of electric plantultimately results, the expenditures are charged to opera-ting expense. The balance of R&Dexpenditures includedin CWIP at December 5x, xg76 and T975 was $ '14 2x2 oooand Sxo,997,ooo, respectively.

Year Ended Deccniber 32,2976 1975

Thousands of Dollars

Note 7 —Retirement PlansThe Company's current pension program is based on atrusteed non-contributory pension plan. Since Januaryx, xg66, the required Company contributions have beendetermined on the basis of a level premium fundingmethod. Past service costs incurred prior to that datehave been funded. Pension costs are funded or reservedfor on an actuarial basis and amounted to $25,4x7,ooo forxg76, and $25,7oz,ooo for xg75. Accumulated pensionfunds and reserves exceed vested benefits under theprogram.

Under the employee stock purchase plan adopted tosupplement employees'ncome after retirement, employ-ees may elect to contribute specified percentages of theircompensation to a trustee for the purchase of CompanyCommon Stock and the Company contributes to the planan amount equal to one-half of the aggregate contri-butions of employees, less forfeitures. The Company'scontribution amounted to $ 2,46x,ooo for xg76, and$2 473 ooo Eoi'X975.

Note 8 —Long-Term Debt Payable in Foreign CurrencyThe Company has entered into a financing agreement,as amended, with certain English banks pursuant towhich it issued promissory notes payable in poundssterling. These notes are secured by a pledge of theCompany's customer accounts receivable. AtDecember5T %975 these promissory notes were recorded at histori-cal exchange rates and the Company had an unrecognizedexchange gain of approximately $5,276,ooo.

On June 28, f976 the Company entered into forwardexchange contracts with a United States bank to pur-chase, at various times from February xg79 to Augustxg85, pounds sterling in the aggregate principal amountofZxx,828,624 to repay the promissory notes payablereferred to above. The forward contracts secured thetotal cumulative exchange gain on the promissory notesat the date of the contracts and generated, in addition, apremium of $5,o44,ooo which represents the differencesbetween the rates of the contracts and the spot rate atthedate of the contracts. The premium is being amortizedto income over the lives of the forward exchangecontracts.

In xg76 and in accordance with Financial AccountingStandard No. 8, the Company began recording the gainor loss associated with the above mentioned promissorynotes payable and forward contracts as foreign exchangegains or losses. During the year ended December 5x,x976 an accumulated net foreign exchange gain of$6,255,ooo was recorded. The promissory notes payablehave been reduced by the amount of such accumulatedforeign exchange gain and premium. The Company hasbeen advised that the PUC has issued an Order Institut-ing Investigation relating to the accounting and/orratemaking treatment for foreign currency translationgains or losses. Although the outcome of such investiga-tion cannot be predicted with certainty, it is not believedthat the possible effect of such investigation on theCompany's financial position would be significant.

R&D expcnsedR&D charged to CVVIP-net .

Total R&D expenditures ....

$ xo,887 $ 9,636

5p55x 4,814

$x6,438 $ x4,45o

24

Southern California Edison Company

Capital Stock-Price and Dividend Information

Calendar Quarter -1975High 2nd I.ow Sales Prices ($)

Calendar Quarter —%976

'I 2 3 4 'I 2 5

Class of Stock High Low !Bgh Low High Low High Low High Low High Low High Low High Low

QuarterlyDividends

PaidPer

Share (a)

Original PreferredCumulative

Preferred:4.08%%uo

4.24%4.52%4.78%5.8o%8.85%%uo

g.2o%$ xoo Cumulative

Preferred:7.325% (b)7.58%8.7o%8.96%

Preference 5.2o%Convertible

Common

'X9 /8 '17 /8 20 '17 /8 20 '18 /8 '19 '17 /<

%%'/e To'/<%%$/< 1%

15'/< Toe/<

%3I/< %2

%6 1524 /< 25 /826 23I/8

T ?I/8%5'/e

%41/&

%4'/<

%7I/<

25'/e

%%1/8 Toe/e

I2 %0$/<12$/e To'/815'/8 %18/e

%6$/e %4$/<24$ /< 23I/<25i/< 23$/8

11'/8Txi/81%'/8

%2</8

%51/8

22'/8

I2</$ 1'I12'/e %1

%2$/8 XXI/<

'14 %2I/O'%6$/8 %5I/I

25 25

87 /$ 76 85 78 1883 77 84 77101</$ 89 95 89 /< 95 /$ 88 95 88

104 92 98 92 97 89 /8 g7 92 /<

'16 /8 "13 '15 /8 '14 '15 /8 '13 /I 'I5 '15 /8

%9$/< '17 /8 2lr/8 '16$ /< 20 /8 '17 20 'IS

21$/8 18$ /< 2% 19

%2'/< xor/8% %8/»

'14 'IT /8

%4'/8

17 15$/<

26 25'/826'/8

%2'/< %1'/8

%28/< %1'/8

%21/8 1%$/814I/8 '12I/O

%7I/$ %6'/e

26 25 /828 24$/8

%6% %4'/<2%'/8 19'/e

15'/8 %4'/<20I/8 '18$/8

go 83 87$ /8 81$/<'X05 92 /< '100 9X /<'10281< 99 '102 96$ /<

%2'/e 11'/<%%'/I

8/8 '11$/8'X4 /8 15%7$/8 %6'/<261/< 241/&

28i/8 25 il<

12'/I151/8

%3$/8

15 I/I%8'/$

2727'/8

1'1$/8%%'/8

12%5'/<

%6'/I24$ /<

26

o.25'/80.26'/80.27O.2g'/8o.56I/<o.555'/eo.57I/8

90I/< 82 g6T02 94 105 /I1o4'/8 g7$ /8 To5

84'/I99$ /8

Tool/<

1.S5 /81.89I/I2 I71/I2.24

'I7 '15

25 /8 'Ig /8%7 T5$/825'/8 2%I/I

0.32I/80.42

25 'Ig /8 22 20 $ 0.42

(a) Quarterly dividends Iverc paid at the rates inrlicaie<i in each qunrier of 1975 ritid1976 except for the Cumulative Prcferrerl9.20% series urhich coinmencerl k<ring the ihirrlquarter of %975 at the rate of $o.651667 per share for the initial rlivirlcndonly.

(b) There are no prices as this issue is a private placement and shares nre noi irnrlerl.

Note 9 —Earnings Per SharePrimary earnings per share are based on the weightedaverage shares of Common and Original Preferred Stockoutstanding and Common Stock Equivalents attributableto the Employee Stock Purchase Plan in each period, giv-ing effect to. the participating provisions of the OriginalPreferred Stock, and after providing Eor preferred andpreference dividend requirements. Fully diluted earningsper share also give effect to the dilution which would re-sult from the conversion of the Preference Stock, 5.2o%Convertible Series and the 5I/8% Convertible Debentures.

Note 10 —Subsidiary CompaniesNone of the Company's five wholly-owned subsidiariesis considered significant Eor financial reporting purposes.Mono Power Company (Mono), a non-public utilityis

engaged primarily in the acquisition and development ofreal property and interests therein. Mono has enteredinto agreements to conduct uranium, oil, coal, gas andgeothermal exploration and development, substantiallyall of the costs and benefits of which willbe reflected inthe Company's energy costs.

Note 11 —Quarterly Financial DataA summary of audited quarterly financial informationis as follows:

Calendar Quarter —Tg76

2 9 4

OperatingRevenues (ooo) ....

OperatingIncome (ooo) ......

Net Income (ooo) ...Earnings Per Share:

Primary ..........Fully Diluted .....

$438g849 $437g890 $460p336 $479@709

65,2%7

46,9x87XI554

50.775

84,%88

65,o58

74,76o

58,971

.76~75

.84

.So97

%07 93

'Subject io the effect of adjustments, ifany, that may result fromthe final disposition of the PUC decisiorr discussed iriNote 2.

An adjustment was recorded reducing current yearincome tax expense Eor prior year tax provisions no longerrequired in the amount of $ 6,285,ooo which had the effectof increasing fourth quarter %976 earnings by S.%.5 pershare.

Availabilityof Replacement Cost Data (Unaudited)The Company is subject to the jurisdiction of certainregulatory commissions which authorize rates of returnon the Company's investment in utilityplant. Undercurrent ratemaking policy, the Company recovers,through future depreciation charges, the historical invest-ment in productive capacity. The ratemaking processdoes not allow the Company to recover the excess ofreplacement cost over historical cost which may be in-curred in the future. However, when actual replace-ments of productive capacity are made, the related higherdepreciation expense is recoverable under establishedregulatory practice.

Due to the cumulative impact of inflation,'when theCompany replaces an asset with one having an equiva-lent productive capacity, it is required to make a capitalinvestment that is significantly greater than the histori-cal cost of such asset reported in the Company's finan-cial statements.

In compliance with reporting requirements of theSecurities and Exchange Commission, additional replace-ment cost information is disclosed in the Company'sannual report to the Commission on Form xo-K, which isexpected fo be available to shareholders after March 5%,

1977 upon written request to the Company's Treasurer.

25

Southern California Edison Company

Summary of Operations and ComparativeStatistics of Progress xg66-xgy6 Tg76 <975

Summary of Operationsin thousands

Operating Revenues .

Operating Expenses .

Fuel (a) .

Taxes on Income —current and deferred (a) ....Allowance for Funds Used During ConstructionInterest Charges .

Net IncomeEarnings Available for Common

and Original Preferred Stock .............Weighted Average Shares of Common

and Original Preferred Stock Outstandingand Common Stock Equivalents...........

Per Share Data (b):Primary Earnings .

Fully Diluted EarningsDividends Declared on Common Stock.....

Sx,Sx6,784TI52TI065

sxs,g3253,85547,6xo

x38,o2322TI722

Sx,668,ox5'1I39TI528

768,84357,62326,773

T26,T85x86,662

48,678 47,965

$370$ 35TST.68

$3 07-$2.94$x.68

179I97T $ T47~058

Balance Sheet Datain thousands

Gross UtilityPlantAccumulated Provision for Depreciation ..

Percent of Gross UtilityPlant........Long-Term Debt (c):

BondsDebentures .

Other .

Preferred &Preference Stock...........Common Stock, Including Additional

Stated CapitalAdditional Paid-in CapitalEarnings Reinvested in the Business .....Capital Structure (percent):

Long-Term Debt:BondsDebenturesOther

Preferred &Preference Stock.........Common Equity

Book Value Per Common Share.........

$5,658,433xl258,327

22.2

2,o55,g6675~22420,67T

6x2,753

442I74T427I422835p507

46.o

Tj0,4

T3738.2

$3x.89

$5.T47.333'I,'149I3TT.

223

xi93T.75775I3T325,g68

6x2,753

395I709350i50374 2I706

'I

46.7x.S

0.7x4.836.o

$3x.x3

Operating andConsumption Data

Operating Capacity (kw) (d) ...............Total Energy Requirement (kwh transmitted)

(ooo)Percent Output:

ThermalHydro-Company PlantsPurchased Power & Other Sources ........

Kilowatt-Hour Consumption (ooo) ..........Number of CustomersAverage Annual Kwh Consumption.... ~....

Per Residential CustomerNumber of EmployeesMain System Peak (kw)

75 2

4320.5

53,685,3782IST4I403

76.28.4

l5.45TI327I508

2I749I68o

13,024xx,oSx,ooo

5,596T2i940

Top x93iooo

T4 065 748 T3 656,648

591427~927 56I279I23 1

26 (a) Included in Operating Expenses.

(b) See Note 2 of the Notes to Financial Statements regarding a possible effect on previously reported earnings pershare for the years Tg7z-xg76.

2974 z973 1972 z97z 1970 >969 T968 1967 1966

$I/483/432T,172,768

505/209T35/T37

x6,x63lX2/959218/298

$1,o7g,348845,3oS32T/080

48/274'10/'190

97,728147,73x

$ g3x/2x67'11/564220/630

46,3827/'152

91/752137/350

$ 802/434612/732x64,8gx

38,54215,85982,3oS

'I27/297

$ 72o,66x535,846x26,5g2

X7/007

77,633127.495

$ 642/X24482 663IIX/35736,48ox7/47x68,246

xo7,869

$ 588,82g44o,6461Tx,825

37/592'10/007

58,76o99/894

$ 552/2404LT/059

98,97445/785

6,762

50/49899/329

$ 515,85g388,45o

g8,58645,286

5,67943.73490/79 1

T82/6XO $ XXS/889 $ 'I'12/'17'I $ '105/752 $ LXO/497 95/'152 $ 89p4'19 $ 90/805 $ 85/'163

44/580 43,965 43,965 43/04X 40/963 40/501 39,348 37,963 37,963

$4.xo$ 3.8S

$ x.68

$ 2.7o

$2.6o

$x.56

$2 55

$ 2.46

$x.56

$2.46

$237$x.5x'/s

$2.7o

$ 259$x.5o

$ 235$ 2.27

$x.4o

$2.28

$2.x4$1.4o

$2.3g$2.32

$1.36'/4

$ 2.24

$2.18

$x.25

$4,766,x75I/05X/024

22.1

$4,458,631958/2X0

215

$4/233p06785X 910

20.'I

$3/998/045 $3/737/837 $3/46x/836 $3/xSS/708 $2/880p652 $2/59l/120

779/409 707p928 649p702 592/366 559/36X 508/407

195 xS.g 18.8 x8.6 x9.4 xg.6

1,863,g5x75/40114/327

562/753

'1,640/349

75.4906,87x

512/753

I/705/13975/579

7/991437/753

x,584,84o74/902

7/991362,753

x,484,84o74,987

43862,753

x,384,84o74,987

262,753

'I/2TO/000

74,987

262 755

X/'II0/000

74,987

T/030/000

74,987

187,755 176,967

395'/709 362/376 362/376

350,503 316,636 3T6,636

$ 677/839 $ 573/261 $ 5l3/866

362/376 337/360 337p360 324/857 3X2/357 3X2/357

3'16/636 243/437 243/437 202p599 X62/774 '162/774

$ 470/754 $ 4'30/477 $ 38'lp040 $ 342/7X2 $ 30Sp54'I $ 269/407

473'1.9

0.4

14336.1

$29 77

47.02.20.2

147359

$ 28.54

50.02.20.2

x2.834.8

$27.xS

4992.3

0.3'11.4

36.x$26.2o

5o.62.6

'12.4

344$24.72

5x.62.8

g.835.8

$ 23 53

50. T

3L

X0.9

359$22.09

51535

8.7

36.3$2o.72

5093.7

8.7

36.7$ '19.69

13/494p849 I'3p447/095 12p615/665 I2/458p I65 xop904/845 'I0/238p627 9/277/51 5 8/594/91 5 7/767/91 5

55/X05p988 57p730/'121 55/686/776 52/672/084 49p674/757 46p344/845 42/905/380 39/847/438 36/739,03X

752Xo.o

x4.85'1,089/981

2,6gx,691

84.99.06.x

54.092/9342/626/492

86.6

6,47.0

52/309/9062,566,34x

So.o

8.4xx.6

48,856,4932.497.342

82.59.28.3

45,88x,o762/438/584

791127

8.2

42,6ox,6o62,383/25x

88.38.2

353g,365,oSS

2/33 /751

84,o

15 2

o.S

36,4x8,8912/277,976

88.4T0.9

0.7

33,686,6522/22 5/2 25

5,541 5,885x3,46S x3,g27

9p997/000 Xo/253/000

5/777x3,269

9pSX5pooo

5/642x2,83x

9/350/000

5/240'12/299

8/274pooo

5,031I'I/91'I

7 804 000

4/609XX/090

7/425/000

4/425xo,662

7/001/000

4.094'Io/370

6p173pooo

(c) The years subsequent to 1971 include unamortized premium or discount related to each category of long-term debt.

(d) Includes 1,363,433 kw available from others in 1976 and 1/104 333 kw for 1973.27

Board of Directors

Jack K. HortonNorman Barker, Jr.Edward W. CarterWarren Christopher»WilliamB. Coberly, Jr.Terrell C. DrinkwaterWilliamR. GouldStanton G. Hale

Carla A. Hills"»

Frederick G. Larkin, Jr.T. M. McDaniel, Jr.John V. Newman

Gerald H. PhippsHenry T. Segerstrom

H. Russell Smith

Richard R. Von Hagen

Chairman of the BoardChairman of the Board, United California Bank, Los AngelesChairman of the Board, Carter Haloley Hale Stores, Inc., Los AngelesPartner, Law Firm of Messrs. O'Melveny &Myers, Los AngelesPresident, California Cotton OilCorporation, Los AngelesRetired AirlineExecutive, Los AngelesExecutive Vice PresidentConsultant, currently under contract to Pacific Mutual Life insurance Company,

Los AngelesAttorney and former Secretary of the U.S. Department of Housingand Urban

Development, Plashington, D.C.Chairman of the Board, Security Pacific National Bank, Los AngelesPresidentPresident, CBS-Sony California, Inc„doing business as Utt Development Co.

(Citrus Production), OxnardPresident, Gerald H. Phipps, Inc. (General Contractors), DenverGeneral Partner, C. J. Segerstrom &Sons

(Real Estate Development and Farming), Costa MesaChairman of the Board, Avery international

(Manufacturer ofSelf-Adhesive Prorhlcts), San MarinoPresident, Lloyd Corporation, Ltd.

(Real Estate Development and OilProduction), Beverly Hills'Rcslgncd from the Board of Directors on January 20, 1977, to accept appointment as u.s. Deputy Sccrctary of State."Elected to the Board of Directors on february 17, 1977.

Executive Officers

Jack K. HortonT. M. McDaniel, Jr.WilliamR. GouldHoward P. AllenH. Fred ChristieA. ArenalJ. H. DrakeDavid J. FogartyJoe T. Head, Jr.A. L. MaxwellJack B. MooreEdward A. Myers, Jr.WilliamH. SeamanRobert E. UmbaughG.E. WilcoxRollinE. WoodburyMichael L. NoelJ. C. Bobek

Chairman of the Board and Chief Executive OfficerPresidentExecutive Vice PresidentExecutive Vice PresidentSenior Vice President and Chief Financial OfficerVice President (System Development)Vice President (Engineering and Construction)Vice President (Custolner Service)Vice President (Power Supply)Vice President and ComptrollerVice President (Advanced Engineering)Vice President (Conservation, Communications andVice President (Fuel Supply)Vice President (Administration)Vice President (Personnel)Vice President and General CounselTreasurerSecretary

Revenue Services)

X971 Annual Shareholders'eetingThe annual meeting of shareholders of SouthernCalifornia Edison Company willbe held at xo a.m.,Thursday, April2x x977 at the Company's CorporateHeadquarters, 2244 Walnut Grove Avenue, Rosemead,California 9x77o. Telephone (exp) g7z-xzxz.

Statistical Supplement

A comprehensive financial and statistical supplement tothis report is available in limited quantity. Ifyou wish a

copy, please write to the Treasurer, Southern CaliforniaEdison Company, p.o. Box 8oo, Rosemead,California 9x77o.

Stock Transfer Agents

Southern California Edison CompanyRosemead, CaliforniaBankers Trust CompanyNew York, New York

Registrars of Stock

Security Pacific National BankLos Angeles, CaliforniaManufacturers Hanover Trust CompanyNero York, New York

Stock Exchange Listings

Common Stock:New York Stock ExchangePacific Stock Exchange

Preferred and Preference Stocks:American Stock ExchangePacific Stock Exchange

Ticker Symbol

SCE (Common Stock)

This Annual Report and the statements and statisticscontained herein have been assembled forgeneralinformative purposes and are not intended to induce,or for use in connection with, any sale or purchase ofsecurities. Under no circumstances is this report or any,part of its contents to be considered a prospectus, or as

an offer fo sell, or the solicitation of an offer to buy,any securities.

Southern California Edison Company, za44 Walnut Grove Avenue, Rosemead, California g1770