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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Components of Income Tax (Benefit) Expense by Location of Taxing Jurisdiction | The components of income tax (benefit) expense by location of taxing jurisdiction are:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |  |  |  |  |  |  |
Federal | $ | 13 |  |  | $ | — |  |  | $ | (57) |  |  | $ | 12 |  |  | $ | — |  |  | $ | (51) |
State | (22) |  |  | 6 |  |  | (155) |  |  | (26) |  |  | 14 |  |  | (93) |
| (9) |  |  | 6 |  |  | (212) |  |  | (14) |  |  | 14 |  |  | (144) |
Deferred: |  |  |  |  |  |  |  |  |  |  |
Federal | (230) |  |  | (243) |  |  | (386) |  |  | (207) |  |  | (206) |  |  | (354) |
State | (66) |  |  | (41) |  |  | (141) |  |  | (56) |  |  | (37) |  |  | (198) |
| (296) |  |  | (284) |  |  | (527) |  |  | (263) |  |  | (243) |  |  | (552) |
Total continuing operations | (305) |  |  | (278) |  |  | (739) |  |  | (277) |  |  | (229) |  |  | (696) |
Discontinued operations 1 | — |  |  | — |  |  | (34) |  |  | — |  |  | — |  |  | — |
Total | $ | (305) |  |  | $ | (278) |  |  | $ | (773) |  |  | $ | (277) |  |  | $ | (229) |  |  | $ | (696) |
1 In the fourth quarter of 2018, Edison International and SCE recognized tax benefits related to a settlement with the California Franchise Tax Board for tax years 1994 – 2006. See further discussion in Tax Disputes below.
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) | 2020 |  | 2019 |  | 2020 |  | 2019
Deferred tax assets: |  |  |  |  |  |  |
Property | $ | 590 |  |  | $ | 478 |  |  | $ | 540 |  |  | $ | 435 |
Wildfire-related 1 | 1,134 |  |  | 847 |  |  | 1,134 |  |  | 847 |
Nuclear decommissioning trust assets in excess of nuclear ARO liability | 515 |  |  | 449 |  |  | 515 |  |  | 449 |
Loss and credit carryforwards 2 | 1,991 |  |  | 1,515 |  |  | 683 |  |  | 253 |
Regulatory asset | 841 |  |  | 739 |  |  | 841 |  |  | 739 |
Pension and postretirement benefits other than pensions, net | 163 |  |  | 170 |  |  | 35 |  |  | 40 |
Other | 513 |  |  | 408 |  |  | 527 |  |  | 416 |
Sub-total | 5,747 |  |  | 4,606 |  |  | 4,275 |  |  | 3,179 |
Less: valuation allowance 3 | 35 |  |  | 35 |  |  | — |  |  | — |
Total | 5,712 |  |  | 4,571 |  |  | 4,275 |  |  | 3,179 |
Deferred tax liabilities: |  |  |  |  |  |  |
Property | 8,879 |  |  | 8,244 |  |  | 8,871 |  |  | 8,234 |
Regulatory liability | 1,111 |  |  | 570 |  |  | 1,111 |  |  | 570 |
Nuclear decommissioning trust assets | 515 |  |  | 449 |  |  | 515 |  |  | 449 |
Other | 514 |  |  | 320 |  |  | 499 |  |  | 310 |
Total | 11,019 |  |  | 9,583 |  |  | 10,996 |  |  | 9,563 |
Accumulated deferred income tax liability, net 4 | $ | 5,307 |  |  | $ | 5,012 |  |  | $ | 6,721 |  |  | $ | 6,384 |
1 Relates to accrued estimated losses for wildfire-related claims, net of expected recoveries from insurance and FERC customers, and contributions to the Wildfire Insurance Fund. For further information, see Note 12 and Note 1. 2 As of December 31, 2020, deferred tax assets for net operating loss and tax credit carryforwards are reduced by unrecognized tax benefits of $270 million and $190 million for Edison International and SCE, respectively. 3 As of December 31, 2020, Edison International has recorded a valuation allowance of $31 million for non-California state net operating loss carryforwards, and $4 million for California capital losses generated from sale of SoCore Energy in 2018, which are estimated to expire before being utilized. 4 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, 2020
(in millions) | Loss Carryforwards |  | Credit Carryforwards |  | Loss Carryforwards |  | Credit Carryforwards
Expire in 2021 | $ | 4 |  |  | $ | — |  |  | $ | 4 |  |  | $ | — |
Expire between 2022 to 2025 | 31 |  |  | — |  |  | 26 |  |  | — |
Expire between 2029 to 2042 | 1,192 |  |  | 515 |  |  | 380 |  |  | 50 |
No expiration date 1 | 509 |  |  | 10 |  |  | 413 |  |  | — |
Total | $ | 1,736 |  |  | $ | 525 |  |  | $ | 823 |  |  | $ | 50 |
1 Under Tax Reform, federal net operating losses generated after December 31, 2017 can carryforward indefinitely.
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) | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Income (loss) from continuing operations before income taxes | $ | 566 |  |  | $ | 1,127 |  |  | $ | (1,089) |  |  | $ | 665 |  |  | $ | 1,301 |  |  | $ | (885) |
Provision for income tax at federal statutory rate of 21% | 119 |  |  | 237 |  |  | (229) |  |  | 140 |  |  | 273 |  |  | (186) |
Increase in income tax from: |  |  |  |  |  |  |  |  |  |  |
Items presented with related state income tax, net: |  |  |  |  |  |  |  |  |  |  |
State tax, net of federal benefit | (61) |  |  | (22) |  |  | (168) |  |  | (52) |  |  | (13) |  |  | (155) |
Property-related | (320) |  |  | (303) |  |  | (275) |  |  | (320) |  |  | (303) |  |  | (275) |
Change related to uncertain tax positions 1 | (15) |  |  | — |  |  | (66) |  |  | (19) |  |  | — |  |  | (71) |
Deferred tax re-measurement 2 | — |  |  | (88) |  |  | — |  |  | — |  |  | (88) |  |  | — |
2018 GRC Final Decision | — |  |  | (80) |  |  | — |  |  | — |  |  | (80) |  |  | — |
Corporate-owned life insurance cash surrender value | (8) |  |  | (8) |  |  | (8) |  |  | (8) |  |  | (8) |  |  | (8) |
Other | (20) |  |  | (14) |  |  | 7 |  |  | (18) |  |  | (10) |  |  | (1) |
Total income tax benefit from continuing operations | $ | (305) |  |  | $ | (278) |  |  | $ | (739) |  |  | $ | (277) |  |  | $ | (229) |  |  | $ | (696) |
Effective tax rate | (53.9) | % |  | (24.7) | % |  | (67.9) | % |  | (41.7) | % |  | (17.6) | % |  | (78.6) | %
1 In 2020, Edison International and SCE recognized tax expense and benefit, respectively, primarily due to the re-measurement of uncertain tax positions related to the 2010 – 2012 California state tax filings currently under audit. In 2018, Edison International and SCE recognized tax benefits related to a settlement with the California Franchise Tax Board for tax years 1994 – 2006. See further discussion in Tax Disputes below. 2 Relates to changes in the allocation of deferred tax re-measurement between customers and shareholders as a result of a CPUC resolution issued in February 2019. The resolution determined that customers are only entitled to excess deferred taxes which were included when setting rates, while other deferred tax re-measurement belongs to the shareholders.
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) | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Balance at January 1, | $ | 370 |  |  | $ | 338 |  |  | $ | 432 |  |  | $ | 282 |  |  | $ | 249 |  |  | $ | 331 |
Tax positions taken during the current year: |  |  |  |  |  |  |  |  |  |  |
Increases | 55 |  |  | 46 |  |  | 41 |  |  | 56 |  |  | 47 |  |  | 42 |
Tax positions taken during a prior year: |  |  |  |  |  |  |  |  |  |  |
Increases 1 | 274 |  |  | 6 |  |  | — |  |  | 4 |  |  | 6 |  |  | — |
Decreases 2 | (20) |  |  | (20) |  |  | (108) |  |  | (22) |  |  | (20) |  |  | (121) |
Settlements with taxing authorities 3 | — |  |  | — |  |  | (27) |  |  | — |  |  | — |  |  | (3) |
Balance at December 31, | $ | 679 |  |  | $ | 370 |  |  | $ | 338 |  |  | $ | 320 |  |  | $ | 282 |  |  | $ | 249 |
1 Edison International recorded favorable tax positions in 2020 in connection with the Edison Mission Energy ("EME") bankruptcy that required a revaluation of the reserve for uncertain tax positions. 2 Decrease in 2018 was related to re-measurement as a result of a settlement with the California Franchise Tax Board for tax years 1994 – 2006. 3 In 2018, Edison International reached a settlement with the California Franchise Tax Board for tax years 1994 – 2006.
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) | 2020 |  | 2019 |  | 2020 |  | 2019
Accrued interest and penalties | $ | 52 |  |  | $ | 56 |  |  | $ | 23 |  |  | $ | 29 |
The net after-tax interest and penalties recognized in income tax expense (benefit) for continuing and discontinued operations are:
| Edison International |  | SCE
| December 31,
(in millions) | 2020 |  | 2019 |  | 2018 |  | 2020 |  | 2019 |  | 2018
Net after-tax interest and penalties tax expense (benefit) | $ | 4 |  |  | $ | 4 |  |  | $ | (62) |  |  | $ | 6 |  |  | $ | 3 |  |  | $ | (25) |

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