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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Current and Deferred Taxes The components of income tax expense (benefit) by location of taxing jurisdiction are:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |  |  |  |  |  |  |
Federal | $ | 1 |  |  | $ | — |  |  | $ | 2 |  |  | $ | 3 |  |  | $ | — |  |  | $ | — |
State | 7 |  |  | — |  |  | 13 |  |  | 48 |  |  | 5 |  |  | 2 |
| 8 |  |  | — |  |  | 15 |  |  | 51 |  |  | 5 |  |  | 2 |
Deferred: |  |  |  |  |  |  |  |  |  |  |
Federal | 59 |  |  | 101 |  |  | (103) |  | 118 |  |  | 149 |  |  | (44) |
State | (50) |  |  | 7 |  |  | (74) |  |  | (49) |  |  | 30 |  |  | (67) |
| 9 |  |  | 108 |  |  | (177) |  | 69 |  |  | 179 |  |  | (111) |
Total | $ | 17 |  |  | $ | 108 |  |  | $ | (162) |  | $ | 120 |  |  | $ | 184 |  |  | $ | (109) |
The components of net accumulated deferred income tax liability are:
| Edison International |  | SCE
| December 31,
(in millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Deferred tax assets: |  |  |  |  |  |  |
Property | $ | 943 |  |  | $ | 894 |  |  | $ | 929 |  |  | $ | 877 |
Wildfire-related 1 | 254 |  |  | 356 |  |  | 251 |  |  | 354 |
Nuclear decommissioning trust assets in excess of nuclear ARO liability | 373 |  |  | 380 |  |  | 373 |  |  | 380 |
Loss and credit carryforwards 2 | 3,703 |  |  | 3,486 |  |  | 2,242 |  |  | 2,103 |
Regulatory balances | 610 |  |  | 626 |  |  | 610 |  |  | 626 |
Pension and postretirement benefits other than pensions, net | 117 |  |  | 127 |  |  | 21 |  |  | 25 |
Leases | 335 |  |  | 345 |  |  | 335 |  |  | 345 |
Other | 177 |  |  | 159 |  |  | 167 |  |  | 147 |
Sub-total | 6,512 |  |  | 6,373 |  |  | 4,928 |  |  | 4,857 |
Less: valuation allowance 3 | 17 |  |  | 17 |  |  | — |  |  | — |
Total | 6,495 |  |  | 6,356 |  |  | 4,928 |  |  | 4,857 |
Deferred tax liabilities: |  |  |  |  |  |  |
Property | 11,220 |  |  | 10,627 |  |  | 11,202 |  |  | 10,611 |
Regulatory balances | 1,299 |  |  | 1,450 |  |  | 1,299 |  |  | 1,450 |
Nuclear decommissioning trust assets | 373 |  |  | 380 |  |  | 373 |  |  | 380 |
Leases | 335 |  |  | 345 |  |  | 335 |  |  | 345 |
Other | 187 |  |  | 187 |  |  | 155 |  |  | 158 |
Total | 13,414 |  |  | 12,989 |  |  | 13,364 |  |  | 12,944 |
Accumulated deferred income tax liability, net 4 | $ | 6,919 |  |  | $ | 6,633 |  |  | $ | 8,436 |  |  | $ | 8,087 |
1 Relates to estimated losses accrual 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, 2024, unrecognized tax benefits of $397 million and $327 million for Edison International and SCE, respectively, are presented net against the deferred tax asset for the loss and tax credit carryforwards. As of December 31, 2023, the unrecognized tax benefits netted against deferred tax assets and tax credit carryforwards were $363 million and $299 million for Edison International and SCE, respectively. 3 As of December 31, 2024 and 2023, Edison International has recorded $17 million valuation allowance on deferred tax assets. The $17 million valuation allowance is related to non-California state net operating loss carryforwards which are expected to expire before being utilized. 4 Included in "Deferred income taxes and credits" on the consolidated balance sheets. 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, 2024
(in millions) | Loss Carryforwards |  | Credit Carryforwards |  | Loss Carryforwards |  | Credit Carryforwards
Expire in 2025 | $ | 7 |  |  | $ | — |  |  | $ | 7 |  |  | $ | — |
Expire between 2026 to 2029 | 28 |  |  | — |  |  | 12 |  |  | — |
Expire between 2030 to 2044 | 1,719 |  |  | 699 |  |  | 786 |  |  | 290 |
No expiration date 1 | 1,623 |  |  | 24 |  |  | 1,448 |  |  | 26 |
Total | $ | 3,377 |  |  | $ | 723 |  |  | $ | 2,253 |  |  | $ | 316 |
1 Under the Tax Cut and Jobs Act signed into law on December 22, 2017 ("Tax Reform"), net operating losses generated after December 31, 2017 can carryforward indefinitely. Edison International consolidates for federal income tax purposes, but not for financial accounting purposes, a group of wind projects referred to as Capistrano Wind. The amount of net operating loss and tax credit carryforwards recognized as part of deferred income taxes includes $107 million and $106 million related to Capistrano Wind for 2024 and 2023, respectively. The tax attributes not utilized as of December 31, 2024 will be available for the Edison International consolidated group to utilize in the future. When the remaining Capistrano tax attributes are used in the future by Edison International, payments will be made to those entities under a tax allocation agreement. Under the tax allocation agreement, Edison International has recorded a corresponding liability as part of other long-term liabilities related to its obligation to make payments to Capistrano Wind when these tax benefits are realized. 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:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Income from operations before income taxes | $ | 1,563 |  |  | $ | 1,515 |  |  | $ | 662 |  |  | $ | 1,914 |  |  | $ | 1,781 |  |  | $ | 845 |
Provision for income tax at federal statutory rate of 21% | 328 |  |  | 318 |  |  | 139 |  |  | 402 |  |  | 374 |  |  | 177 |
(Decrease) increase in income tax from: |  |  |  |  |  |  |  |  |  |  |
State tax, net of federal income tax effect | (24) |  |  | 3 |  |  | (70) |  |  | — |  |  | 23 |  |  | (57) |
Property-related | (279) |  |  | (205) |  |  | (219) |  |  | (279) |  |  | (205) |  |  | (219) |
Corporate-owned life insurance cash surrender value | (9) |  |  | (8) |  |  | (9) |  |  | (9) |  |  | (8) |  |  | (9) |
Other | 1 |  |  | — |  |  | (3) |  |  | 6 |  |  | — |  |  | (1) |
Total income tax expense (benefit) | $ | 17 |  |  | $ | 108 |  |  | $ | (162) |  |  | $ | 120 |  |  | $ | 184 |  |  | $ | (109) |
Effective tax rate | 1.1 | % |  | 7.1 | % |  | (24.5) | % |  | 6.3 | % |  | 10.3 | % |  | (12.9) | %
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. For further information, see Note 11. In the third quarter of 2024, SCE generated an investment tax credit of approximately $231 million, primarily from 200MW and 112.5MW utility owned storage projects. The tax benefits associated with these credits will be recognized and returned to customers as the credits are utilized. Under the Inflation Reduction Act of 2022, 15% corporate alternative minimum tax ("CAMT") is imposed on corporations with average adjusted financial statement income exceeding $1.0 billion over a specified 3-year period. Both Edison International and SCE are not subject to CAMT in 2024. Accounting for Uncertainty in Income Taxes Authoritative guidance related to accounting for uncertainty in income taxes requires an enterprise to recognize, in its financial statements, the best estimate of the impact of a tax position by determining if the weight of available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained upon examination. The guidance requires the disclosure of all unrecognized tax benefits, which includes both the reserves recorded for tax positions on filed tax returns and the unrecognized portion of affirmative claims. Unrecognized Tax Benefits The following table provides a reconciliation of unrecognized tax benefits:
| Edison International |  | SCE
(in millions) | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Balance at January 1, | $ | 430 |  |  | $ | 646 |  |  | $ | 613 |  |  | $ | 418 |  |  | $ | 374 |  |  | $ | 340 |
Tax positions taken during the current year: |  |  |  |  |  |  |  |  |  |  |
Increases | 66 |  |  | 65 |  |  | 54 |  |  | 66 |  |  | 65 |  |  | 54 |
Tax positions taken during a prior year: |  |  |  |  |  |  |  |  |  |  |
Increases | 1 |  |  | 13 |  |  | — |  |  | — |  |  | 4 |  |  | — |
Decreases 1 | (34) |  |  | (294) |  |  | (21) |  |  | (27) |  |  | (25) |  |  | (20) |
Balance at December 31, | $ | 463 |  |  | $ | 430 |  |  | $ | 646 |  |  | $ | 457 |  |  | $ | 418 |  |  | $ | 374 |
1 The Edison International decrease in 2023 was mainly related to a write-off of a reserve for a claim related to the Edison Mission Energy bankruptcy. As of December 31, 2024, if recognized, $72 million of unrecognized tax benefits would impact Edison International's effective tax rate and $66 million of the unrecognized tax benefits would impact SCE's effective tax rate. Tax Disputes Tax years that remain open for examination by the Internal Revenue Service and Franchise Tax Board are 2021 – 2023 and 2013 – 2018 & 2020 - 2023, respectively. Accrued Interest and Penalties The total amount of accrued interest and penalties related to income tax liabilities are:
| Edison International |  | SCE
| December 31,
(in millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Accrued interest and penalties | $ | — |  |  | $ | — |  |  | $ | 36 |  |  | $ | 28 |
The net after-tax interest and penalties recognized in income tax (benefit) expense are:
| Edison International |  | SCE
| Years ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Net after-tax interest and penalties tax expense | $ | — |  | $ | — |  | $ | — |  |  | $ | 7 |  | $ | 4 |  | $ | 2 |

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