PG&E 2010 Annual Report Download - page 97

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Fair Value Measurements at December 31, 2009
(in millions) Level 1 Level 2 Level 3 Total
Assets:
Money market investments $ 189 $ – $ 4 $ 193
Nuclear decommissioning trusts
U.S. equity securities (1) 762 6 – 768
Non-U.S. equity securities 344 – – 344
U.S. government and agency securities 653 51 – 704
Municipal securities 189 – 90
Other fixed income securities – 108 – 108
Total nuclear decommissioning trusts (2) 1,760 254 – 2,014
Rabbi trusts
Equity securities 21 – – 21
Life insurance contracts 60 – – 60
Total rabbi trusts 81 – – 81
Long-term disability trust
U.S. equity securities (1) 52 23 – 75
Corporate debt securities (1) – 113 – 113
Total long-term disability trust 52 136 – 188
Total assets $ 2,082 $ 390 $ 4 $ 2,476
Liabilities:
Dividend participation rights (3) $–$–$12$12
Price risk management instruments (Note 10)
Electric (4) 2 73 157 232
Gas (5) 1 – 60 61
Total price risk management instruments 3 73 217 293
Other liabilities –– 3 3
Total liabilities $ 3 $ 73 $ 232 $ 308
(1) Level 2 balances include commingled funds, which are composed primarily of securities traded publicly on exchanges. Price quotes for the assets
held by the funds are readily observable and available.
(2) Excludes deferred taxes on appreciation of investment value.
(3) The dividend participation rights were associated with PG&E Corporation’s Convertible Subordinated Notes, which were no longer outstanding as
of December 31, 2010.
(4) Balances include the impact of netting adjustments of $108 million to Level 1, $48 million to Level 2, and $19 million to Level 3. Includes natural
gas for electric portfolio.
(5) Balances include the impact of netting adjustments of $13 million to Level 3. Includes natural gas for core customers.
MONEY MARKET INVESTMENTS
PG&E Corporation invests in money market funds that
seek to maintain a stable net asset value. These funds
invest in high-quality, short-term, diversified money
market instruments, such as treasury bills, federal agency
securities, certificates of deposit, and commercial paper
with a maximum weighted average maturity of 60 days or
less. PG&E Corporation’s investments in these money
market funds are generally valued using unadjusted
quotes in an active market for identical assets and are thus
classified as Level 1 instruments. Money market funds are
recorded as cash and cash equivalents in PG&E
Corporation’s Consolidated Balance Sheets.
TRUST ASSETS
The assets held by the nuclear decommissioning trusts,
the rabbi trusts related to the non-qualified deferred
compensation plans, and the long-term disability trust are
composed primarily of equity securities and debt
securities. In general, investments held in the trusts are
exposed to various risks, such as interest rate, credit, and
market volatility risks. It is reasonably possible that
changes in the market values of investment securities
could occur in the near term, and such changes could
materially affect the trusts’ fair value.
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