Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Components of Income Tax (Benefit) Expense by Location of Taxing Jurisdiction

The components of income tax (benefit) expense by location of taxing jurisdiction are:

	Edison International						SCE
	Years ended December 31,
(in millions)	2020		2019		2018		2020		2019		2018
Current:
Federal	$	13	$	—	$	(57)	$	12	$	—	$	(51)
State	(22)		6		(155)		(26)		14		(93)
	(9)		6		(212)		(14)		14		(144)
Deferred:
Federal	(230)		(243)		(386)		(207)		(206)		(354)
State	(66)		(41)		(141)		(56)		(37)		(198)
	(296)		(284)		(527)		(263)		(243)		(552)
Total continuing operations	(305)		(278)		(739)		(277)		(229)		(696)
Discontinued operations1	—		—		(34)		—		—		—
Total	$	(305)	$	(278)	$	(773)	$	(277)	$	(229)	$	(696)

1     In the fourth quarter of 2018, Edison International and SCE recognized tax benefits related to a settlement with the California Franchise Tax Board for tax years 1994 – 2006. See further discussion in Tax Disputes below.

Components of Net Accumulated Deferred Income Tax Liability

The components of net accumulated deferred income tax liability are:

	Edison International				SCE
	December 31,
(in millions)	2020		2019		2020		2019
Deferred tax assets:
Property	$	590	$	478	$	540	$	435
Wildfire-related1	1,134		847		1,134		847
Nuclear decommissioning trust assets in excess of nuclear ARO liability	515		449		515		449
Loss and credit carryforwards2	1,991		1,515		683		253
Regulatory asset	841		739		841		739
Pension and postretirement benefits other than pensions, net	163		170		35		40
Other	513		408		527		416
Sub-total	5,747		4,606		4,275		3,179
Less: valuation allowance3	35		35		—		—
Total	5,712		4,571		4,275		3,179
Deferred tax liabilities:
Property	8,879		8,244		8,871		8,234
Regulatory liability	1,111		570		1,111		570
Nuclear decommissioning trust assets	515		449		515		449
Other	514		320		499		310
Total	11,019		9,583		10,996		9,563
Accumulated deferred income tax liability, net4	$	5,307	$	5,012	$	6,721	$	6,384

1     Relates to accrued estimated losses for wildfire-related claims, net of expected recoveries from insurance and FERC customers, and contributions to the Wildfire Insurance Fund. For further information, see Note 12 and Note 1.

2     As of December 31, 2020, deferred tax assets for net operating loss and tax credit carryforwards are reduced by unrecognized tax benefits of $270 million and $190 million for Edison International and SCE, respectively.

3     As of December 31, 2020, Edison International has recorded a valuation allowance of $31 million for non-California state net operating loss carryforwards, and $4 million for California capital losses generated from sale of SoCore Energy in 2018, which are estimated to expire before being utilized.

4     Included in "Deferred income taxes and credits" on the consolidated balance sheets.

Summary of Net Operating Loss and Tax Credit Carryforwards

The amounts of net operating loss and tax credit carryforwards (after-tax) are as follows:

	Edison International				SCE
	December 31, 2020
(in millions)	Loss Carryforwards		Credit Carryforwards		Loss Carryforwards		Credit Carryforwards
Expire in 2021	$	4	$	—	$	4	$	—
Expire between 2022 to 2025	31		—		26		—
Expire between 2029 to 2042	1,192		515		380		50
No expiration date1	509		10		413		—
Total	$	1,736	$	525	$	823	$	50

1Under Tax Reform, federal net operating losses generated after December 31, 2017 can carryforward indefinitely.

Reconciliation of Income Tax Expense

The table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to the income tax provision:

	Edison International									SCE
	Years ended December 31,
(in millions)	2020			2019			2018			2020			2019			2018
Income (loss) from continuing operations before income taxes	$	566		$	1,127		$	(1,089)		$	665		$	1,301		$	(885)
Provision for income tax at federal statutory rate of 21%	119			237			(229)			140			273			(186)
Increase in income tax from:
Items presented with related state income tax, net:
State tax, net of federal benefit	(61)			(22)			(168)			(52)			(13)			(155)
Property-related	(320)			(303)			(275)			(320)			(303)			(275)
Change related to uncertain tax positions1	(15)			—			(66)			(19)			—			(71)
Deferred tax re-measurement2	—			(88)			—			—			(88)			—
2018 GRC Final Decision	—			(80)			—			—			(80)			—
Corporate-owned life insurance cash surrender value	(8)			(8)			(8)			(8)			(8)			(8)
Other	(20)			(14)			7			(18)			(10)			(1)
Total income tax benefit from continuing operations	$	(305)		$	(278)		$	(739)		$	(277)		$	(229)		$	(696)
Effective tax rate	(53.9)		%	(24.7)		%	(67.9)		%	(41.7)		%	(17.6)		%	(78.6)		%

1    In 2020, Edison International and SCE recognized tax expense and benefit, respectively, primarily due to the re-measurement of uncertain tax positions related to the 2010 – 2012 California state tax filings currently under audit. In 2018, Edison International and SCE recognized tax benefits related to a settlement with the California Franchise Tax Board for tax years 1994 – 2006. See further discussion in Tax Disputes below.

2     Relates to changes in the allocation of deferred tax re-measurement between customers and shareholders as a result of a CPUC resolution issued in February 2019. The resolution determined that customers are only entitled to excess deferred taxes which were included when setting rates, while other deferred tax re-measurement belongs to the shareholders.

Reconciliation of Unrecognized Tax Benefits

The following table provides a reconciliation of unrecognized tax benefits for continuing and discontinued operations:

	Edison International						SCE
	December 31,
(in millions)	2020		2019		2018		2020		2019		2018
Balance at January 1,	$	370	$	338	$	432	$	282	$	249	$	331
Tax positions taken during the current year:
Increases	55		46		41		56		47		42
Tax positions taken during a prior year:
Increases1	274		6		—		4		6		—
Decreases2	(20)		(20)		(108)		(22)		(20)		(121)
Settlements with taxing authorities3	—		—		(27)		—		—		(3)
Balance at December 31,	$	679	$	370	$	338	$	320	$	282	$	249

1    Edison International recorded favorable tax positions in 2020 in connection with the Edison Mission Energy ("EME") bankruptcy that required a revaluation of the reserve for uncertain tax positions.

2     Decrease in 2018 was related to re-measurement as a result of a settlement with the California Franchise Tax Board for tax years 1994 – 2006.

3     In 2018, Edison International reached a settlement with the California Franchise Tax Board for tax years 1994 – 2006.

Schedule of Interest and Penalties Related to Income Tax Liabilities

The total amount of accrued interest and penalties related to income tax liabilities for continuing and discontinued operations are:

	Edison International				SCE
	Years ended December 31,
(in millions)	2020		2019		2020		2019
Accrued interest and penalties	$	52	$	56	$	23	$	29

The net after-tax interest and penalties recognized in income tax expense (benefit) for continuing and discontinued operations are:

	Edison International						SCE
	December 31,
(in millions)	2020		2019		2018		2020		2019		2018
Net after-tax interest and penalties tax expense (benefit)	$	4	$	4	$	(62)	$	6	$	3	$	(25)