PG&E 2010 Annual Report Download - page 99

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LEVEL 3 RECONCILIATION
The following tables present reconciliations for assets and liabilities measured and recorded at fair value on a recurring
basis, using significant unobservable inputs (Level 3), for the years ended December 31, 2010 and 2009:
PG&E Corporation
Only PG&E Corporation and the Utility
(in millions) Money
Market
Dividend
Participation
Rights
Price Risk
Management
Instruments
Nuclear
Decommissioning
Trusts Equity
Securities (1)
Long-
Term
Disability
Equity
Securities
Long-
Term
Disability
Corp.
Debt
Securities Other
Liabilities Total
Asset (liability) balance as of
December 31, 2008 $ 12 $ (42) $ (156) $ 5 $ 54 $ 24 $ (2) $ (105)
Realized and unrealized gains (losses):
Included in earnings – 2 – – 12 3 – 17
Included in regulatory assets and
liabilities or balancing accounts – – (61) 1 – – (1) (61)
Purchases, issuances, and settlements (8) 28 – – (43) 86 – 63
Transfers into Level 3 – – – – – – – –
Transfers out of Level 3 – – – (6) (23) (113) – (142)
Asset (liability) balance as of
December 31, 2009 $ 4 $ (12) $ (217) $ – $ – $ – $ (3) $ (228)
Realized and unrealized gains (losses):
Included in earnings – – – – – – – –
Included in regulatory assets and
liabilities or balancing accounts – – (227) – – – 3 (224)
Purchases, issuances, and settlements (4) 12 – – – – – 8
Transfers into Level 3 – – – – – – – –
Transfers out of Level 3 – – – – – – – –
Asset (liability) balance as of
December 31, 2010 $ – $ – $ (444) $ – $ – $ – $ – $ (444)
(1) Excludes deferred taxes on appreciation of investment value.
FINANCIAL INSTRUMENTS
PG&E Corporation and the Utility use the following methods and assumptions in estimating fair value for financial
instruments:
• The fair values of cash, restricted cash and deposits, net accounts receivable, short-term borrowings, accounts payable,
customer deposits, and the Utility’s variable rate pollution control bond loan agreements approximate their carrying
values at December 31, 2010 and 2009.
• The fair values of the Utility’s fixed rate senior notes and fixed rate pollution control bond loan agreements, PG&E
Corporation’s Convertible Subordinated Notes, PG&E Corporation’s fixed rate senior notes, and the ERBs issued by
PERF were based on quoted market prices at December 31, 2010 and 2009.
The carrying amount and fair value of PG&E Corporation’s and the Utility’s debt instruments were as follows (the
table below excludes financial instruments with carrying values that approximate their fair values):
At December 31,
2010 2009
(in millions) Carrying
Amount Fair
Value(2)
Carrying
Amount Fair
Value (2)
Debt (Note 4):
PG&E Corporation (1) $ 349 $ 383 $ 597 $ 1,096
Utility 10,444 11,314 9,240 9,824
Energy recovery bonds (Note 5) 827 862 1,213 1,269
(1) PG&E Corporation Convertible Subordinated Notes were no longer outstanding as of December 31, 2010.
(2) Fair values are determined using readily available quoted market prices.
95