Investments

We have investments in debt and equity securities held in Nuclear Decommissioning Trusts and Coal Reclamation Escrow Accounts. These investments are classified as available for sale securities, and as a result we record the investments at their fair value on our Consolidated Balance Sheets. See Note 13 for a discussion of how fair value is determined and the classification of the investments within the fair value hierarchy. Because of the ability of APS to recover decommissioning and coal reclamation costs in rates, and in accordance with the regulatory treatment, APS has deferred realized and unrealized gains and losses (including other-than-temporary impairments on investment securities) in other regulatory liabilities. The costs of securities sold are determined on the basis of specific identification.

Nuclear Decommissioning Trusts

To fund the costs APS expects to incur to decommission Palo Verde, APS established external decommissioning trusts in accordance with NRC regulations. Third-party investment managers are authorized to buy and sell securities per stated investment guidelines. The trust funds are invested in fixed income securities and equity securities. The following table includes the unrealized gains and losses based on the original cost of the investment and summarizes the fair value of APS’s nuclear decommissioning trust fund assets at December 31, 2017 and December 31, 2016 (dollars in thousands):



	December 31, 2017							December 31, 2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses			Fair Value		Total Unrealized Gains		Total Unrealized Losses
Equity securities	$	417,390	$	248,623	$	—		$	353,261	$	188,091	$	—
Fixed income securities	446,277		11,537		(2,996		)	425,530		9,820		(4,962		)
Cash and cash equivalents	7,224		—		—			—		—		—
Net receivables (a)	109		—		—			795		—		—
Total	$	871,000	$	260,160	$	(2,996	)	$	779,586	$	197,911	$	(4,962	)


(a)	Net receivables/(payables) relate to pending purchases and sales of securities.

The following table sets forth approximate gains and losses and proceeds from the sale of securities by the nuclear decommissioning trust funds (dollars in thousands):



	Nuclear Decommissioning
	Year Ended December 31,
	2017			2016			2015
Realized gains	$	21,813		$	11,213		$	5,189
Realized losses	(13,146		)	(10,106		)	(6,225		)
Proceeds from the sale of securities (a)	542,246			633,410			478,813


(a)	Proceeds are reinvested in the trust/account.

Coal Reclamation Escrow Accounts

APS has investments restricted for coal mine reclamation funding related to Four Corners. As of December 31, 2017, APS’s coal reclamation escrow accounts are invested in fixed income securities with a fair value of $30 million. The realized and unrealized gains and losses relating to these fixed income securities was immaterial for the twelve months ended December 31, 2017 and December 31, 2016. The proceeds from the sale of securities for the twelve months ended December 31, 2017 was $4 million. There were no proceeds from the sale of securities for the twelve months ended December 31, 2016. The proceeds are reinvested in the escrow accounts.

4CA also has investments restricted for coal mine reclamation funding relating to Four Corners invested in fixed income securities. The 4CA fixed income investments have a fair value of $2 million as of December 31, 2017. The realized and unrealized gains and losses relating to these fixed income securities was immaterial for the twelve months ended December 31, 2017 and 2016.

Fixed Income Securities Contractual Maturities

The fair value of fixed income securities, summarized by contractual maturities, at December 31, 2017 is as follows (dollars in thousands):



	Nuclear Decommissioning Trusts		Escrow Accounts		Total
Less than one year	$	24,668	$	455	$	25,123
1 year – 5 years	100,289		2,494		102,783
5 years – 10 years	129,239		8,615		137,854
Greater than 10 years	192,081		20,453		212,534
Total	$	446,277	$	32,017	$	478,294