CenterPoint Energy 2009 Annual Report Download - page 118

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96
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Netting
Adjustments (1)
Balance
as of
December 31,
2009
(in millions)
Assets
Corporate equities ......................
.
$ 301 $ — $ — $ — $ 301
Investments, including money
market funds ..........................
.
41 — —
— 41
Derivative assets ........................
.
1 77 5 (29) 54
Total assets ...............................
.
$ 343 $ 77 $ 5 $ (29) $ 396
Liabilities
Indexed debt securities
derivative ...............................
.
$ — $ 201 $ —
$— $ 201
Derivative liabilities ...................
.
12 194 11 (124) 93
Total liabilities .........................
.
$ 12 $ 395 $ 11 $ (124) $ 294
__________
(1) Amounts represent the impact of legally enforceable master netting agreements that allow CenterPoint
Energy to settle positive and negative positions and also include cash collateral of $95 million posted with
the same counterparties.
The following tables present additional information about assets or liabilities, including derivatives that are
measured at fair value on a recurring basis for which CenterPoint Energy has utilized Level 3 inputs to determine
fair value:
Fair Value Measurements Using Significant
Unobservable Inputs (Level 3)
Derivative assets and liabilities, net
Year Ended December 31,
2008 2009
(in millions)
Beginning balance .................................................................................... $ (3) $ (58)
Total unrealized gains or (losses):
Included in earnings .............................................................................. (11) (1)
Included in regulatory assets ................................................................. (10) (16)
P
urchases, sales, other settlements, ne
t
.................................................... (35) 69 (1)
N
et transfers into Level 3………………………………………………. 1
—
Ending balance ......................................................................................... $ (58) $ (6)
The amount of total gains for the period included in earnings
attributable to the change in unrealized gains or losses relating to
assets still held at the reporting date ..................................................... $7 $ 1
__________
(1) Purchases, sales, other settlements, net include a $41 million loss and a $66 million gain in 2008 and 2009,
respectively, associated with price stabilization activities of CenterPoint Energy’s Natural Gas Distribution
business segment.
(6) Indexed Debt Securities (ZENS) and Time Warner Securities
(a) Investment in Time Warner Securities
In 1995, CenterPoint Energy sold a cable television subsidiary to TW and received TW convertible preferred
stock (TW Preferred) as partial consideration. In July 1999, CenterPoint Energy converted its 11 million shares of
TW Preferred into 45.8 million shares of TW common stock (TW Common). In March 2009, TW spun off its
ownership of Time Warner Cable Inc. (TWC) by distributing 0.08367 shares of TWC common stock (TWC
Common) for every share of TW Common held. Subsequently, in March 2009 TW declared a 1-for-3 reverse stock
split. In December 2009, TW spun off its ownership in AOL Inc. (AOL) by distributing one share of AOL common