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	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Stocks	—	*		$	236	$	1,600	$	1,596
Municipal bonds	2057	662		643		752		768
U.S. government and agency securities	2067	1,270		1,235		1,317		1,319
Corporate bonds	2050	565		579		607		643
Short-term investments and receivables/payables¹	One-year	52		110		54		114
Total		$	2,549	$	2,803	$	4,330	$	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 $79 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 October 1, 2018 and January 2, 2018 as of September 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 September 30, 2018 and December 31, 2017, respectively, and other-than-temporary impairments of $151 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 September 30, 2018 were $382 million. Accordingly, the fair value of trust assets available to pay future decommissioning costs, net of deferred income taxes, totaled $3.9 billion at September 30, 2018.

For the three months ended September 30, 2018 and 2017, gross realized gains were $28 million and $22 million, respectively, and gross realized losses were $7 million and $3 million, respectively. For the nine months ended September 30, 2018 and 2017, gross realized gains were $115 million and $134 million, respectively, and gross realized losses were $17 million and $19 million respectively. Unrealized gains, net of losses, for equity securities were $72 million and $62 million for the three months ended September 30, 2018 and 2017, respectively. Unrealized gains, net of losses, for equity securities were $4 million and $141 million for the nine months ended September 30, 2018 and 2017, respectively. Due to regulatory mechanisms, changes in assets of the trusts from income or loss items have no impact on operating revenue or earnings.