Investments

6 Months Ended

Jun. 30, 2020

Regulated Entity, Other Assets, Noncurrent [Abstract]

Investments

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)		June 30, 2020		December 31, 2019		June 30, 2020		December 31, 2019
Stocks	—	N/A		N/A		$	1,710	$	1,765
Municipal bonds	2057	$	1,013	$	822	1,194		970
U.S. government and agency securities	2067	703		996		852		1,115
Corporate bonds	2070	542		597		636		679
Short-term investments and receivables/payables1	One-year	168		32		174		33
Total		$	2,426	$	2,447	$	4,566	$	4,562

¹ Short-term investments include $90 million and $41 million of repurchase agreements payable by financial institutions which earn interest, are fully secured by U.S. Treasury securities and mature by July 1, 2020 and January 2, 2020 as of June 30, 2020 and December 31, 2019, 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 $1.8 billion at both June 30, 2020 and December 31, 2019.

Trust assets are used to pay income taxes arising from trust investing activity. Deferred tax liabilities related to net unrealized gains were $425 million and $449 million at June 30, 2020 and December 31, 2019, respectively. Accordingly, the fair value of trust assets available to pay future decommissioning costs, net of deferred income taxes, totaled $4.1 billion at both June 30, 2020 and December 31, 2019.

The following table summarizes the gains and losses for the trust investments:

	Three months ended June 30,				Six months ended June 30,
(in millions)	2020		2019		2020		2019
Gross realized gains	$	75	$	22	$	114	$	45
Gross realized loss	1		—		3		—
Net unrealized gains (losses) for equity securities	271		38		(105)		206

Due to regulatory mechanisms, changes in assets of the trusts from income or loss items have no impact on operating revenue or earnings.