Discontinued Operations

9 Months Ended

Sep. 30, 2012

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

On September 21, 2012, Homer City and an affiliate of GECC entered into the Homer City MTA for the divestiture by Homer City of substantially all of its remaining assets and certain specified liabilities. On October 3, 2012, GECC entered into a Plan Support Agreement ("the PSA") with the holders of approximately 76% of the outstanding principal amount of the secured lease obligation bonds issued by Homer City Funding, LLC as part of the original sale-leaseback transaction. Under the PSA, the parties committed to support and implement a reorganization plan of Homer City Funding, LLC and to solicit votes on a prepackaged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. On October 5, 2012, GECC commenced the solicitation. Homer City Funding, LLC is an affiliate of GECC and not related to Homer City or any other EME affiliate.

Completion of the Homer City MTA is subject to the satisfaction of a number of closing conditions, including the successful restructuring and reorganization of Homer City Funding, LLC and receipt of the regulatory approvals required for the transfer of the Homer City plant to GECC. If an agreement to modify the terms of the bonds is not approved and consummated or if other closing conditions of the Homer City MTA are not met, Homer City may become the subject of bankruptcy proceedings.

EME recorded an impairment charge of $1.03 billion related to Homer City's long-lived assets during the fourth quarter of 2011. Beginning in the third quarter of 2012, Homer City met the definition of a discontinued operation and was classified separately in Edison International's consolidated financial statements. EME recorded a $113 million charge ($68 million after tax) to write down assets held for sale to net realizable value during the third quarter of 2012.

Summarized results of discontinued operations are as follows:

	Three months ended September 30,						Nine months ended September 30,
(in millions)	2012			2011			2012			2011
Total operating revenues	$	121		$	159		$	303		$	409
Total operating expenses	(138		)	(134		)	(385		)	(409		)
Asset impairment and other charges	(113		)	—			(134		)	—
Other income (expense)	5			2			7			(1		)
Income (loss) before income taxes	(125		)	27			(209		)	(1		)
Provision (benefit) for income taxes	(49		)	12			(80		)	2
Income (loss) from operations of discontinued operations	$	(76	)	$	15		$	(129	)	$	(3	)

The assets and liabilities associated with the discontinued operations are segregated on the consolidated balance sheets at September 30, 2012 and December 31, 2011. The carrying amount of the major components of asset and liability of discontinued operations are as follows:

(in millions)	September 30, 2012			December 31, 2011
Cash and cash equivalents	$	55		$	79
Other current assets	114			128
Carrying value adjustment	(108		)	—
Total current assets	61			207
Other long-term assets	—			45
Assets of discontinued operations	61			252
Total current liabilities	61			27
Other long-term liabilities	—			9
Liabilities of discontinued operations	$	61		$	36