Income Taxes

6 Months Ended

Jun. 30, 2020

Effective Tax Rate

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



	Three months ended June 30,									Six months ended June 30,
(in millions)	2020			2019			2020			2019
Edison International:
Income from operations before income taxes	$	352		$	344		$	481		$	540
Provision for income tax at federal statutory rate of 21%	74			72			101			113
Increase (decrease) in income tax from:
State tax, net of federal benefit	6			2			(7)			(5)
Property-related	(69)			(74)			(147)			(143)
Change related to uncertain tax position¹	—			—			(15)			—
Deferred tax re-measurement²	—			—			—			(69)
2018 GRC Decision	—			(80)			—			(80)
Other	(7)			2			(12)			(6)
Total income tax expense (benefit)	$	4		$	(78)		$	(80)		$	(190)
Effective tax rate	1.1		%	(22.7)		%	(16.6)		%	(35.2)		%
SCE:
Income from operations before income taxes	$	437		$	381		$	611		$	599
Provision for income tax at federal statutory rate of 21%	92			80			129			126
Increase (decrease) in income tax from:
State tax, net of federal benefit	11			3			(1)			(2)
Property-related	(69)			(74)			(147)			(143)
Change related to uncertain tax positions¹	(1)			—			(18)			—
Deferred tax re-measurement²	—			—			—			(69)
2018 GRC Decision	—			(80)			—			(80)
Other	(7)			3			(12)			(5)
Total income tax expense (benefit)	$	26		$	(68)		$	(49)		$	(173)
Effective tax rate	5.9		%	(17.8)		%	(8.0)		%	(28.9)		%

¹Primarily relates to the re-measurement of uncertain tax positions related to the 2010 – 2012 California state tax filings currently under audit.

²Relates 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.

The CPUC requires flow-through ratemaking treatment for the current tax benefit arising from certain property-related and other temporary differences which reverse over time. Flow-through items reduce current authorized revenue requirements in SCE's rate cases and result in a regulatory asset for recovery of deferred income taxes in future periods. The difference between the authorized amounts as determined in SCE's rate cases, adjusted for balancing and memorandum account activities, and the recorded flow-through items also result in increases or decreases in regulatory assets with a corresponding impact on the effective tax rate to the extent that recorded deferred amounts are expected to be recovered in future rates. For further information, see Note 11.

Tax Disputes

Tax years that remain open for examination by the IRS and the California Franchise Tax Board are 2016 – 2018 and 2010 – 2018, respectively. Tax years 2007 – 2012 are currently subject to a settlement proceeding with the California Franchise Tax Board. Edison International does not expect to resolve these tax years within the next 12 months. Any impacts cannot be reasonably estimated until further progress is made.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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