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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Sources of Income (Loss) Before Income Taxes | Edison International's sources of income before income taxes are:
|  | Years ended December 31,
(in millions) |  | 2017 |  | 2016 |  | 2015
Income from continuing operations before income taxes |  | $ | 949 |  |  | $ | 1,590 |  |  | $ | 1,568 |
Income from discontinued operations before income taxes |  | — |  |  | 1 |  |  | 15 |
Income before income tax |  | $ | 949 |  |  | $ | 1,591 |  |  | $ | 1,583 |
Components of Income Tax Expense (Benefit) by Location of Taxing Jurisdiction | The components of income tax expense (benefit) by location of taxing jurisdiction are:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
Current: |  |  |  |  |  |  |  |  |  |  |
Federal | $ | (221 | ) |  | $ | (46 | ) |  | $ | 18 |  |  | $ | (253 | ) |  | $ | 75 |  |  | $ | 72 |
State | 4 |  |  | 33 |  |  | 19 |  |  | (81 | ) |  | 93 |  |  | 127 |
| (217 | ) |  | (13 | ) |  | 37 |  |  | (334 | ) |  | 168 |  |  | 199 |
Deferred: |  |  |  |  |  |  |  |  |  |  |
Federal | 570 |  |  | 176 |  |  | 340 |  |  | 265 |  |  | 112 |  |  | 298 |
State | (72 | ) |  | 14 |  |  | 109 |  |  | 39 |  |  | (24 | ) |  | 10 |
| 498 |  |  | 190 |  |  | 449 |  |  | 304 |  |  | 88 |  |  | 308 |
Total continuing operations | 281 |  |  | 177 |  |  | 486 |  |  | (30 | ) |  | 256 |  |  | 507 |
Discontinued operations | — |  |  | (11 | ) |  | (21 | ) |  | — |  |  | — |  |  | — |
Total | $ | 281 |  |  | $ | 166 |  |  | $ | 465 |  |  | $ | (30 | ) |  | $ | 256 |  |  | $ | 507 |
Components of Net Accumulated Deferred Income Tax Liability | The components of net accumulated deferred income tax liability are:
| Edison International |  | SCE
| December 31,
(in millions) | 2017 |  | 2016 |  | 2017 |  | 2016
Deferred tax assets: |  |  |  |  |  |  |
Property and software related | $ | 358 |  |  | $ | 549 |  |  | $ | 357 |  |  | $ | 548 |
Nuclear decommissioning trust assets in excess of nuclear ARO liability | 404 |  |  | 348 |  |  | 404 |  |  | 348 |
Loss and credit carryforwards 1 | 1,346 |  |  | 1,418 |  |  | 150 |  |  | — |
Regulatory asset 2 | 812 |  |  | 15 |  |  | 812 |  |  | 15 |
Pension and postretirement benefits other than pensions | 214 |  |  | 300 |  |  | 86 |  |  | 93 |
Other | 277 |  |  | 419 |  |  | 236 |  |  | 408 |
Sub-total | 3,411 |  |  | 3,049 |  |  | 2,045 |  |  | 1,412 |
Less valuation allowance | 28 |  |  | 24 |  |  | — |  |  | — |
Total | 3,383 |  |  | 3,025 |  |  | 2,045 |  |  | 1,412 |
Deferred tax liabilities: |  |  |  |  |  |  |
Property-related | 6,970 |  |  | 10,330 |  |  | 6,962 |  |  | 10,330 |
Capitalized software costs | 160 |  |  | 237 |  |  | 160 |  |  | 237 |
Regulatory liability | 158 |  |  | 134 |  |  | 158 |  |  | 134 |
Nuclear decommissioning trust assets | 404 |  |  | 348 |  |  | 404 |  |  | 348 |
Postretirement benefits other than pensions | 36 |  |  | 13 |  |  | 36 |  |  | 13 |
Other | 140 |  |  | 202 |  |  | 133 |  |  | 148 |
Total | 7,868 |  |  | 11,264 |  |  | 7,853 |  |  | 11,210 |
Accumulated deferred income tax liability, net 3 | $ | 4,485 |  |  | $ | 8,239 |  |  | $ | 5,808 |  |  | $ | 9,798 |
1 | As of December 31, 2017, Edison International has recorded a valuation allowance of $28 million for non-California state net operating loss carryforwards estimated to expire unused. In addition, as of December 31, 2017, deferred tax assets for net operating loss and tax credit carryforwards are reduced by unrecognized tax benefits of $77 million and $75 million for Edison International and SCE, respectively.
2 Includes an $809 million deferred tax asset, related to certain regulatory liabilities established as part of Tax Reform discussed below.
3 | Included in deferred income taxes and credits on the consolidated balance sheets.
Summary of Net Operating Loss and Tax Credit Carryforwards | The amounts of net operating loss and tax credit carryforwards (after-tax) are as follows:
| Edison International |  | SCE
| December 31, 2017
(in millions) | Loss Carryforwards |  | Credit Carryforwards |  | Loss Carryforwards |  | Credit Carryforwards
Expire between 2018 to 2036 | $ | 901 |  |  | $ | 451 |  |  | $ | 162 |  |  | $ | 25 |
No expiration date | — |  |  | 71 |  |  | — |  |  | 38 |
Total 1 | $ | 901 |  |  | $ | 522 |  |  | $ | 162 |  |  | $ | 63 |
Reconciliation of Income Tax Expense | The table below provides a reconciliation of income tax expense computed at the federal statutory income tax rate to the income tax provision:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
Income from continuing operations before income taxes | $ | 949 |  |  | $ | 1,590 |  |  | $ | 1,568 |  |  | $ | 1,106 |  |  | $ | 1,755 |  |  | $ | 1,618 |
Provision for income tax at federal statutory rate of 35% | 332 |  |  | 556 |  |  | 549 |  |  | 387 |  |  | 614 |  |  | 566 |
Increase in income tax from: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Items presented with related state income tax, net: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Regulatory asset write-off 1 | — |  |  | — |  |  | 382 |  |  | — |  |  | — |  |  | 382 |
State tax, net of federal benefit | 2 |  |  | 29 |  |  | 5 |  |  | 8 |  |  | 43 |  |  | 34 |
Property-related 2 | (439 | ) |  | (362 | ) |  | (341 | ) |  | (439 | ) |  | (362 | ) |  | (341 | )
Change related to uncertain tax positions | (18 | ) |  | (4 | ) |  | (67 | ) |  | (13 | ) |  | (8 | ) |  | (94 | )
Revised San Onofre Settlement Agreement 3 | 25 |  |  | — |  |  | — |  |  | 25 |  |  | — |  |  | — |
Share-based compensation 4 | (55 | ) |  | (28 | ) |  | — |  |  | (11 | ) |  | (13 | ) |  | — |
Deferred tax re-measurement 5 | 466 |  |  | — |  |  | — |  |  | 33 |  |  | — |  |  | — |
Other | (32 | ) |  | (14 | ) |  | (42 | ) |  | (20 | ) |  | (18 | ) |  | (40 | )
Total income tax expense (income)from continuing operations | $ | 281 |  |  | $ | 177 |  |  | $ | 486 |  |  | $ | (30 | ) |  | $ | 256 |  |  | $ | 507 |
Effective tax rate | 29.6 | % |  | 11.1 | % |  | 31.0 | % |  | (2.7 | )% |  | 14.6 | % |  | 31.3 | %
1 Includes federal and state.
2 | Includes incremental repair benefits. See discussion of repair deductions below. In addition, during 2017, SCE recorded $80 million ($135 million pre-tax) of tax benefits related to tax accounting method changes resulting from the filing of SCE's 2016 tax returns.
3 Includes the write-off of an unrecovered tax regulatory asset related to the Revised San Onofre Settlement Agreement. See Note 11 for further information.
4 | Includes state taxes of $(11) million and $(2) million for Edison International and SCE, respectively, for the year ended December 31, 2017. Includes state taxes of $(4) million and $(1) million for Edison International and SCE, respectively, for the year ended December 31, 2016. Refer to Note 1 for further information.
5 | In 2017, Edison International and SCE recorded a charge to earnings related to the re-measurement of deferred taxes resulting from Tax Reform. See further discussion above.
Reconciliation of Unrecognized Tax Benefits | The following table provides a reconciliation of unrecognized tax benefits for continuing and discontinued operations:
| Edison International |  | SCE
| December 31,
(in millions) | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
Balance at January 1, | $ | 471 |  |  | $ | 529 |  |  | $ | 576 |  |  | $ | 371 |  |  | $ | 353 |  |  | $ | 441 |
Tax positions taken during the current year: |  |  |  |  |  |  |  |  |  |  |
Increases | 51 |  |  | 36 |  |  | 54 |  |  | 51 |  |  | 36 |  |  | 48 |
Tax positions taken during a prior year: |  |  |  |  |  |  |  |  |  |  |
Increases | — |  |  | 2 |  |  | 66 |  |  | — |  |  | — |  |  | 23 |
Decreases 1 | (7 | ) |  | (96 | ) |  | (165 | ) |  | (13 | ) |  | (18 | ) |  | (159 | )
Decreases for settlements during the period 2 | (83 | ) |  | — |  |  | (2 | ) |  | (78 | ) |  | — |  |  | — |
Balance at December 31, | $ | 432 |  |  | $ | 471 |  |  | $ | 529 |  |  | $ | 331 |  |  | $ | 371 |  |  | $ | 353 |
1 | Decreases in prior year tax positions for 2016 relate to state tax receivables on various claims. Due to the tax risks associated with these claims, the tax benefits were fully reserved at the time the asset was recorded. During 2016, the Company has determined that it will not recognize these assets so the tax benefit and related tax reserve were written off. Decreases in tax positions for 2015 relate primarily to re-measurement of uncertain tax positions in connection with receipt of the Internal Revenue Service ("IRS") Revenue Agent Report in June 2015. See discussions in Tax Disputes below.
2 | In the first quarter of 2017, Edison International settled all open tax positions with the IRS for taxable years 2007 through 2012.
Schedule of Interest and Penalties Related to Income Tax Liabilities | The total amount of accrued interest and penalties related to income tax liabilities for continuing and discontinued operations are:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2017 |  | 2016 |  | 2017 |  | 2016
Accrued interest and penalties | $ | 115 |  |  | $ | 128 |  |  | $ | 41 |  |  | $ | 41 |
The net after-tax interest and penalties recognized in income tax expense for continuing and discontinued operations are:
| Edison International |  | SCE
| December 31,
(in millions) | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
Net after-tax interest and penalties tax expense (benefit) | $ | 6 |  |  | $ | 6 |  |  | $ | (9 | ) |  | $ | 4 |  |  | $ | 2 |  |  | $ | (14 | )

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