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Income Taxes | 9 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Current and Deferred Taxes In December 2017, SCE recorded estimated deferred taxes related to Tax Reform related changes to bonus depreciation rules for property acquired and placed into service after September 27, 2017. In August 2018, the Internal Revenue Service and United States Treasury Department issued proposed regulations which taxpayers may rely on when determining bonus depreciation for such property. The application of the proposed regulations had an immaterial impact on Edison International's and SCE's consolidated statements of income and balance sheets. 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) | 2018 |  | 2017 |  | 2018 |  | 2017
Edison International: |  |  |  |  |  |  |
Income from continuing operations before income taxes | $ | 627 |  |  | $ | 432 |  |  | $ | 1,127 |  |  | $ | 1,119 |
Provision for income tax at federal statutory rate of 21% and 35%, respectively 1 | 132 |  |  | 151 |  |  | 237 |  |  | 392 |
Increase in income tax from: |  |  |  |  |  |  |  |  |
State tax, net of federal benefit | 26 |  |  | 7 |  |  | 21 |  |  | 23 |
Property-related 2 | (76 | ) |  | (201 | ) |  | (214 | ) |  | (396 | )
Change related to uncertain tax positions | 1 |  |  | — |  |  | 1 |  |  | (17 | )
Shared-based compensation 3 | (1 | ) |  | (4 | ) |  | (1 | ) |  | (50 | )
Other | 1 |  |  | (22 | ) |  | (1 | ) |  | (35 | )
Total income tax expense (benefit) from continuing operations | $ | 83 |  |  | $ | (69 | ) |  | $ | 43 |  |  | $ | (83 | )
Effective tax rate | 13.2 | % |  | (16.0 | )% |  | 3.8 | % |  | (7.4 | )%
SCE: |  |  |  |  |  |  |
Income from continuing operations before income taxes | $ | 653 |  |  | $ | 462 |  |  | $ | 1,288 |  |  | $ | 1,249 |
Provision for income tax at federal statutory rate of 21% and 35%, respectively 1 | 137 |  |  | 162 |  |  | 270 |  |  | 437 |
Increase in income tax from: |  |  |  |  |  |  |
State tax, net of federal benefit | 29 |  |  | 12 |  |  | 33 |  |  | 34 |
Property-related 2 | (76 | ) |  | (201 | ) |  | (214 | ) |  | (396 | )
Change related to uncertain tax positions | (1 | ) |  | (1 | ) |  | (2 | ) |  | (13 | )
Shared-based compensation 3 | (1 | ) |  | (1 | ) |  | (1 | ) |  | (10 | )
Other | (2 | ) |  | (6 | ) |  | (8 | ) |  | (18 | )
Total income tax expense (benefit) from continuing operations | $ | 86 |  |  | $ | (35 | ) |  | $ | 78 |  |  | $ | 34 |
Effective tax rate | 13.2 | % |  | (7.6 | )% |  | 6.1 | % |  | 2.7 | %
1 | Tax Reform reduced the federal corporate income tax rate from 35% to 21%, effective January 1, 2018.
2 In March 2017, SCE received the final decision on claims against, and counterclaims of, Mitsubishi Heavy Industries, Inc. and related companies (together, "MHI") from the arbitration tribunal, the International Chamber of Commerce. With the resolution of the insurance claim against Nuclear Electric Insurance Limited ("NEIL") in October 2015 and the conclusion of the arbitration proceeding against MHI, a tax abandonment loss of $691 million and $1.13 billion for federal and state income tax purposes, respectively, was claimed in the first six months of 2017, resulting in a flow-through tax benefit of approximately $39 million, impacting the 2017 effective tax rate. In addition, during the third quarter of 2017, SCE recorded $70 million ($118 million pre-tax) of tax benefits related to tax accounting method changes resulting from the filing of SCE's 2016 tax returns. Incremental tax benefits related to repair deductions and tax accounting method changes are required to be flowed back to customers. 3 Includes state taxes for Edison International and SCE of $10 million and $2 million, respectively, for the nine months ended September 30, 2017. 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. Unrecognized Tax Benefits The following table provides a reconciliation of unrecognized tax benefits:
| Edison International |  | SCE
(in millions) | 2018 |  | 2017 |  | 2018 |  | 2017
Balance at January 1, | $ | 432 |  |  | $ | 471 |  |  | $ | 331 |  |  | $ | 371 |
Tax positions taken during the current year: |  |  |  |  |  |  |
Increases | 31 |  |  | 39 |  |  | 31 |  |  | 39 |
Tax positions taken during a prior year: |  |  |  |  |  |  |
Increases | — |  |  | 1 |  |  | — |  |  | 1 |
Decreases | (11 | ) |  | (5 | ) |  | (11 | ) |  | (4 | )
Decreases for settlements during the period 1 | — |  |  | (83 | ) |  | — |  |  | (78 | )
Balance at September 30, | $ | 452 |  |  | $ | 423 |  |  | $ | 351 |  |  | $ | 329 |
1 In the first quarter of 2017, Edison International settled all open tax positions with the IRS for taxable years 2007 through 2012. Tax Disputes In the first quarter of 2017, Edison International settled all open tax positions with the IRS for taxable years 2007 through 2012. Edison International has previously made cash deposits to cover the estimated tax and interest liability from this audit cycle and expects a $7 million refund of this deposited amount. Tax years that remain open for examination by the IRS and the California Franchise Tax Board are 2015 – 2017 and 2010 – 2017, respectively. Edison International has settled all open tax positions with the IRS for taxable years prior to 2013. It is reasonably possible that Edison International could reach a settlement with the California Franchise Tax Board for tax years 1994 – 2006 within the next six months for which incremental cash and earnings benefits could result. Upon achievement of a settlement, SCE will update its assessment of uncertain tax positions for all pending tax years. Tax years 2007 – 2009 are currently under protest with the California Franchise Tax Board.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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