Investments

Nuclear Decommissioning Trusts

Future decommissioning costs related to SCE's nuclear assets are expected to be funded from independent decommissioning trusts.

The following table sets forth amortized cost and fair value of the trust investments (see Note 4 for a discussion of fair value of the trust investments):



	Longest Maturity Date	Amortized Cost				Fair Value
		December 31,
(in millions)		2017		2016		2017		2016
Stocks	—	$	236	$	319	$	1,596	$	1,547
Municipal bonds	2054	643		659		768		766
U.S. government and agency securities	2067	1,235		1,131		1,319		1,191
Corporate bonds	2057	579		600		643		659
Short-term investments and receivables/payables¹	One-year	110		75		114		79
Total		$	2,803	$	2,784	$	4,440	$	4,242


¹	Short-term investments include $29 million and $114 million of repurchase agreements payable by financial institutions which earn interest, are fully secured by U.S. Treasury securities and mature by January 2, 2018 and January 4, 2017 as of December 31, 2017 and 2016, respectively.

Trust fund earnings (based on specific identification) increase the trust fund balance and the ARO regulatory liability. Unrealized holding gains, net of losses, were $1.6 billion and $1.5 billion at December 31, 2017 and 2016, respectively, and other-than-temporary impairments of $143 million and $170 million at the respective periods.

Trust assets are used to pay income taxes. Deferred tax liabilities related to net unrealized gains at December 31, 2017 were $404 million. Accordingly, the fair value of trust assets available to pay future decommissioning costs, net of deferred income taxes, totaled $4.0 billion at December 31, 2017.

Gross realized gains were $244 million, $92 million and $326 million for the years ended December 31, 2017, 2016 and 2015, respectively. Gross realized losses were $23 million, $19 million and $26 million for the years ended December 31, 2017, 2016 and 2015, respectively. Due to regulatory mechanisms, changes in assets of the trusts from income or loss items have no impact on operating revenue or earnings.

Acquisitions

On December 31, 2015, Edison Energy acquired three businesses for an aggregate purchase price of approximately $100 million, of which $90 million was allocated to goodwill and identifiable intangibles. Under the terms of the acquisition of one of the agreements, the sellers were entitled to additional consideration (earn-out) in the event that certain financial thresholds were achieved. During the second quarter of 2016, Edison Energy entered into an agreement to buy-out this earn-out provision and recorded an after-tax charge of $13 million. The buy-out was completed, together with modification to employment contracts, in order to align long-term incentive compensation.

During 2016 and 2017, a subsidiary of SoCore Energy acquired 100% equity interests in six solar garden development projects (42 MWdc) in Minnesota from SunEdison for $19.4 million. SoCore Energy also reimbursed SunEdison $2.6 million of project-specific interconnection costs.