Income Taxes (Tables)

6 Months Ended

Jun. 30, 2011

Income Taxes

Reconciliation of Income Tax Expense

			Three months ended June 30,						Six months ended June 30,
(in millions)			2011			2010			2011			2010
Income from continuing operations before income taxes			$	254		$	220		$	535		$	612
Provision for income tax at federal statutory rate of 35%				89			77			187			214
Increase (decrease) in income tax from:
	Items presented with related state income tax, net:
		Global Settlement related1		—			(138	)		—			(138	)
		Change in tax accounting method for asset removal costs2		—			(40	)		—			(40	)
	State tax – net of federal benefit			4			16			13			23
	Health care legislation3			—			—			—			39
	Production and housing credits			(19	)		(19	)		(36	)		(34	)
	Property-related and other			(12	)		(32	)		(37	)		(50	)
Total income tax expense from continuing operations			$	62		$	(136	)	$	127		$	14
Effective tax rate				24%			(62%	)		24%			2%

¹

During the second quarter of 2010, Edison International recognized a $138 million earnings benefit resulting from the acceptance by the California Franchise Tax Board of the tax positions finalized with the Internal Revenue Service ("IRS") in 2009 as part of the Global Settlement.

²

During the second quarter of 2010, the IRS approved Edison International's request to change its tax accounting method for asset removal costs primarily related to SCE's infrastructure replacement program. As a result, Edison International recognized a $40 million earnings benefit (of which $28 million relates to asset removal costs incurred prior to 2010) from deducting asset removal costs earlier in the construction cycle. These deductions were recorded on a flow-through basis.

³

During the first quarter of 2010, Edison International recorded a $39 million non-cash charge to reverse previously recognized federal tax benefits eliminated by the federal health care legislation enacted in March 2010. The health care law eliminated the federal tax deduction for retiree health care costs to the extent those costs are eligible for federal Medicare Part D subsidies.

Reconciliation of Unrecognized Tax Benefits

(in millions)		2011			2010
Balance at January 1,		$	565		$	664
Tax positions taken during the current year:
	Increases		26			35
Tax positions taken during a prior year:
	Increases		14			127
	Decreases		(10	)		(40	)
	Decreases for settlements during the period		—			(82	)
Balance at June 30,		$	595		$	704