Investments

9 Months Ended

Sep. 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)		September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Stocks	—	N/A		N/A		$	1,753	$	1,765
Municipal bonds	2057	$	1,048	$	822	1,240		970
U.S. government and agency securities	2067	707		996		846		1,115
Corporate bonds	2070	479		597		565		679
Short-term investments and receivables/payables1	One-year	236		32		246		33
Total		$	2,470	$	2,447	$	4,650	$	4,562

¹    Short-term investments include $122 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 October 1, 2020 and January 2, 2020 as of September 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 $1.9 billion and $1.8 billion at September 30, 2020 and December 31, 2019, respectively.

Trust assets are used to pay income taxes arising from trust investing activity. Deferred tax liabilities related to net unrealized gains were $495 million and $449 million at September 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 $4.2 billion and $4.1 billion at September 30, 2020 and December 31, 2019, respectively.

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

	Three months ended September 30,				Nine months ended September 30,
(in millions)	2020		2019		2020		2019
Gross realized gains	$	51	$	19	$	165	$	64
Gross realized loss	(2)		(1)		(5)		(1)
Net unrealized gains for equity securities	110		3		5		209

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