Income Taxes

9 Months Ended

Sep. 30, 2023

Income Taxes

Income Taxes

Note 8.Income Taxes

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 September 30,						Nine months ended September 30,
(in millions)	2023			2022			2023			2022
Edison International:
Income (loss) from operations before income taxes	$	189		$	(261)		$	1,027		$	119
Provision for income tax at federal statutory rate of 21%		40			(55)			216			25
(Decrease) increase in income tax from:
State tax, net of federal benefit		(16)			(58)			(16)			(79)
Property-related		(47)			(79)			(152)			(172)
Other		—			5			(7)			(9)
Total income tax (benefit) expense	$	(23)		$	(187)		$	41		$	(235)
Effective tax rate		(12.2)	%		(71.6)	%		4.0	%		(197.5)	%
SCE:
Income (loss) from operations before income taxes	$	268		$	(230)		$	1,213		$	252
Provision for income tax at federal statutory rate of 21%		56			(48)			255			53
(Decrease) increase in income tax from:
State tax, net of federal benefit		(11)			(53)			—			(66)
Property-related		(47)			(79)			(152)			(172)
Other		1			3			(7)			(10)
Total income tax (benefit) expense	$	(1)		$	(177)		$	96		$	(195)
Effective tax rate		(0.4)	%		(77.0)	%		7.9	%		(77.4)	%

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

In 2020, Edison International recorded favorable tax positions in connection with the Edison Mission Energy bankruptcy that were fully reserved. Based on information identified during the second quarter of 2023, the Company wrote off the total claim and related reserve in the amount of approximately $268 million.

Tax years that remain open for examination by the IRS and the California Franchise Tax Board ("FTB") are 2020 – 2022 and 2013 – 2022, respectively.