PG&E 2010 Annual Report Download - page 106

Fair Value Measurements as of December 31, 2009
(in millions) Level 1 Level 2 Level 3 Total
Pension Benefits:
U.S. Equity $ 411 $ 2,065 $ – $ 2,476
Non-U.S. Equity 316 1,018 – 1,334
Global Equity 162 317 – 479
Absolute Return – – 340 340
Fixed Income:
U.S. Government 585 262 – 847
Corporate 25 2,455 531 3,011
Other (8) 233 190 415
Cash Equivalents 378 31 – 409
Total $ 1,869 $ 6,381 $ 1,061 $ 9,311
Other Benefits:
U.S. Equity $ 88 $ 218 $ – $ 306
Non-U.S. Equity 81 68 – 149
Global Equity –8– 8
Absolute Return – – 32 32
Fixed Income:
U.S. Government 40 15 – 55
Corporate 82 275 124 481
Other (1) 13 17 29
Cash Equivalents 111 – – 111
Total $ 401 $ 597 $ 173 $ 1,171
Other Assets 17
Total Plan Assets at Fair Value $ 10,499
Equity Securities
The U.S., Non-U.S., and combined Global Equity
categories include equity investments in common stock
and commingled funds composed of equity across
multiple industries and regions of the world. Equity
investments in common stock are actively traded on a
public exchange and are therefore considered Level 1
assets. These equity investments are generally valued
based on unadjusted prices in active markets for identical
securities. Commingled funds are maintained by
investment companies for large institutional investors and
are not publicly traded. Commingled funds are composed
primarily of underlying equity securities that are publicly
traded on exchanges, and price quotes for the assets held
by these funds are readily observable and available.
Commingled funds are categorized as Level 2 assets.
Absolute Return
The Absolute Return category includes portfolios of
hedge funds that are valued based on a variety of
proprietary and non-proprietary valuation methods,
including unadjusted prices for publicly traded securities
in active markets. Hedge funds are considered Level 3
assets.
Fixed Income
The Fixed Income category includes U.S. government
securities, corporate securities, and other fixed income
securities.
U.S. government fixed income primarily consists of
U.S. Treasury notes and U.S. government bonds that are
valued based on quoted market prices or evaluated
pricing data for similar securities adjusted for observable
differences. These securities are categorized as Level 1 or
Level 2 assets.
Corporate fixed income primarily includes investment
grade bonds of U.S. issuers across multiple industries that
are valued based on a compilation of primarily observable
information or broker quotes in non-active markets. The
fair value of corporate bonds is determined using recently
executed transactions, market price quotations (where
observable), and bond spreads or credit default swap
spreads obtained from independent external parties such
as vendors and brokers, adjusted for any basis difference
between cash and derivative instruments. These securities
are classified as Level 2 assets. Corporate fixed income
also includes one commingled fund composed of private
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