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 Dates	Amortized Cost				Fair Value
(in millions)	Longest Maturity Dates	June 30, 2018		December 31, 2017		June 30, 2018		December 31, 2017
Stocks	—	*		$	236	$	1,527	$	1,596
Municipal bonds	2057	650		643		753		768
U.S. government and agency securities	2067	1,214		1,235		1,281		1,319
Corporate bonds	2057	623		579		666		643
Short-term investments and receivables/payables¹	One-year	65		110		67		114
Total		$	2,552	$	2,803	$	4,294	$	4,440


*	Effective January 1, 2018, SCE adopted an accounting standards update related to the classification and measurement of financial instruments in which equity investments are measured at fair value. See Note 1 for further information.


¹	Short-term investments include $47 million and $29 million of repurchase agreements payable by financial institutions which earn interest, are fully secured by U.S. Treasury securities and mature by July 2, 2018 and January 2, 2018 as of June 30, 2018 and December 31, 2017, respectively.

Trust fund earnings (based on specific identification) increase the trust fund balance and the asset retirement obligation ("ARO") regulatory liability. Unrealized holding gains, net of losses, were $1.5 billion and $1.6 billion at June 30, 2018 and December 31, 2017, respectively, and other-than-temporary impairments of $159 million and $143 million at the respective periods.

Trust assets are used to pay income taxes arising from trust investing activity. Deferred tax liabilities related to net unrealized gains at June 30, 2018 were $370 million. Accordingly, the fair value of trust assets available to pay future decommissioning costs, net of deferred income taxes, totaled $3.9 billion at June 30, 2018.

For the three months ended June 30, 2018 and 2017, gross realized gains were $26 million and $13 million, respectively. Gross realized losses were $2 million for the three months ended June 30, 2018 and there were no gross realized losses for the three months ended June 30, 2017. For the six months ended June 30, 2018 and 2017, gross realized gains were $87 million and $112 million, respectively, and gross realized losses were $10 million and $16 million respectively. Unrealized losses, net of gains, for equity securities were $5 million and unrealized gains, net of losses, for equity securities were $59 million for the three months ended June 30, 2018 and 2017, respectively. Unrealized losses, net of gains, for equity securities were $68 million and unrealized gains, net of losses, for equity securities were $79 million for the six months ended June 30, 2018 and 2017. Due to regulatory mechanisms, changes in assets of the trusts from income or loss items have no impact on operating revenue or earnings.