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Income Taxes | 9 Months Ended
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Sep. 30, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | 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) | 2014 |  | 2013 |  | 2014 |  | 2013
Edison International: |  |  |  |  |  |  |
Income from continuing operations before income taxes | $ | 744 |  |  | $ | 665 |  |  | $ | 1,414 |  |  | $ | 863 |
Provision for income tax at federal statutory rate of 35% | 260 |  |  | 233 |  |  | 495 |  |  | 302 |
Increase (decrease) in income tax from: |  |  |  |  |  |  |
State tax, net of federal benefit | 28 |  |  | 22 |  |  | 34 |  |  | 5 |
Property-related | (73 | ) |  | (57 | ) |  | (179 | ) |  | (121 | )
Change related to uncertain tax positions | 10 |  |  | (5 | ) |  | (4 | ) |  | 13 |
San Onofre OII settlement | — |  |  | — |  |  | (40 | ) |  | — |
Other | (5 | ) |  | (16 | ) |  | (22 | ) |  | (26 | )
Total income tax expense from continuing operations | $ | 220 |  |  | $ | 177 |  |  | $ | 284 |  |  | $ | 173 |
Effective tax rate | 29.6 | % |  | 26.6 | % |  | 20.1 | % |  | 20.0 | %
SCE: |  |  |  |  |  |  |
Income from continuing operations before income taxes | $ | 755 |  |  | $ | 685 |  |  | $ | 1,466 |  |  | $ | 913 |
Provision for income tax at federal statutory rate of 35% | 264 |  |  | 240 |  |  | 513 |  |  | 319 |
Increase (decrease) in income tax from: |  |  |  |  |  |  |
State tax, net of federal benefit | 31 |  |  | 21 |  |  | 42 |  |  | 12 |
Property-related | (73 | ) |  | (57 | ) |  | (179 | ) |  | (121 | )
Change related to uncertain tax positions | 9 |  |  | (6 | ) |  | (1 | ) |  | 11 |
San Onofre OII settlement | — |  |  | — |  |  | (40 | ) |  | — |
Other | (7 | ) |  | (15 | ) |  | (25 | ) |  | (25 | )
Total income tax expense from continuing operations | $ | 224 |  |  | $ | 183 |  |  | $ | 310 |  |  | $ | 196 |
Effective tax rate | 29.7 | % |  | 26.7 | % |  | 21.1 | % |  | 21.5 | %
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. The accounting treatment for these temporary differences results in recording regulatory assets and liabilities for amounts that would otherwise be recorded to deferred income tax expense. Property-related items include recognition of income tax benefits from repair deductions for income tax purposes. During the first quarter of 2014, SCE recorded flow through tax benefits related to repair deductions and other tax items under the San Onofre OII settlement. The tax benefits were offset by estimated refunds to customers included as part of the pre-tax charge of $231 million. See Note 9 for further details. Tax Disputes Tax Years 2003 – 2006 The IRS examination phase of tax years 2003 through 2006 was completed in the fourth quarter of 2010, which included proposed adjustments for the following two items:
• | A proposed adjustment increasing the taxable gain on the 2004 sale of EME's international assets, which if sustained, would result in a federal tax liability of approximately $212 million, including interest and penalties through September 30, 2014.
• | A proposed adjustment to disallow a component of SCE's percentage repair allowance deduction, which if sustained, would result in a federal tax liability of approximately $102 million, including interest through September 30, 2014.
Edison International disagrees with the proposed adjustments and filed a protest with the IRS in the first quarter of 2011. Edison International anticipates that the IRS will issue a deficiency notice for the tax, interest and possibly penalties at the conclusion of the IRS appeals process. After the receipt of such deficiency notice, Edison International will have 90 days to file a petition in United States Tax Court. If a petition is not timely filed, Edison International anticipates after the expiration of the 90-day period, the IRS will assess the underpayment of tax, interest and penalties, if any, and demand payment. Although Edison International disagrees with the proposed adjustments, it has made a $189 million deposit during the second quarter of 2014 to stop the accrual of interest. Edison International has tentatively reached an agreement with the IRS regarding SCE's percentage repair allowance deduction, which if finalized, would result in a federal tax liability of approximately $14 million, including interest through September 30, 2014. It is reasonably possible that Edison International will complete the 2003 – 2006 federal income tax audit cycle during the next twelve months which would effectively settle open tax positions. Edison International estimates tax benefits of approximately $50 million, including interest, may be recognized in income depending on the final outcome of the IRS audit. Tax Years 2007 – 2009 The IRS examination phase of tax years 2007 through 2009 was completed during the first quarter of 2013. Edison International received a Revenue Agent Report from the IRS on February 28, 2013 which included a proposed adjustment to disallow a component of SCE's percentage repair allowance deduction (similar to the 2003 – 2006 tax years). The proposed adjustment to disallow a component of SCE's percentage repair allowance deduction, if sustained, would result in a federal tax liability of approximately $76 million, including interest through September 30, 2014. Edison International has tentatively reached an agreement with the IRS regarding SCE’s percentage repair allowance deduction, which if finalized, would result in a federal tax liability of approximately $16 million, including interest through September 30, 2014. During the second quarter of 2014, SCE revised its liability for uncertain tax positions related to percentage repair allowance deduction for 2003-2010 which resulted in income tax benefits of $29 million. Tax Years 2010 – 2012 A Revenue Agent Report from the IRS is expected to be received from the examination phase of tax years 2010 through 2012 within the next six months. After receipt of the Revenue Agent Report, SCE expects to update its assessment of uncertain tax positions.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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