DTE Energy 2009 Annual Report Download - page 38

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The VEBA trusts hold debt and equity securities directly and indirectly through commingled funds and institutional mutual funds.
Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The
commingled funds and institutional mutual funds which hold exchange-traded equity or debt securities are valued based on underlying
securities, using quoted prices in actively traded markets. Non-exchange traded fixed income securities are valued by the trustee
based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class or issue for
each security. The trustees monitor prices supplied by pricing services and may use a supplemental price source or change the primary
price source of a given security if the trustees challenge an assigned price and determine that another price source is considered to be
preferable. MichCon has obtained an understanding of how these prices are derived, including the nature and observability of the
inputs used in deriving such prices. Additionally, MichCon selectively corroborates the fair values of securities by comparison of
market-based price sources.
Fair Value Measurements Using Significant Unobservable Inputs (Level 3):
(in Millions)
HedgeFunds
Similar
Investments
Private
Equityand
Other
Total
Beginning Balance at January 1, 2009 .........................................................
$ 24
$ 12
$ 36
Total realized/unrealized gains (losses) .......................................................
2
1
3
Purchases, sales and settlements ..................................................................
3
1
4
Ending Balance at December 31, 2009
$ 29
$ 14
$ 43
The amount of total gains (losses) for the period attributable
to the change in unrealized gains or losses related to assets
still held at the end of the period ..............................................................
$ 2
$ 1
$ 3
Grantor Trust
The Company maintains a Grantor Trust to fund other postretirement benefit obligations that invests in life insurance contracts and
income securities. Employees and retirees have no right, title or interest in the assets of the Grantor Trust, and the Company can
revoke the trust subject to providing the MPSC with prior notification. MichCon accounts for its investment at fair value with
unrealized gains and losses recorded to earnings. During 2009, $35 million was transferred from the Grantor Trust to fund a
postretirement medical plan trust.
NOTE 16 — RELATED PARTY TRANSACTIONS
The Company has agreements with affiliated companies to provide transportation and storage services and for the purchase of natural
gas. The Company also has an agreement with a DTE Energy affiliate where it is charged for its use of their shared capital assets.
Prior to March 31, 2007, under a service agreement with DTE Energy, various DTE Energy affiliates, including MichCon, provided
corporate support services inclusive of various financial, auditing, tax, legal, treasury and cash management, human resources,
information technology, and regulatory services, which were billed to DTE Energy corporate. As these functions essentially support
the entire DTE Energy Company, total administrative and general expenses billed to DTE Energy corporate by MichCon and the other
affiliates, along with certain interest and financing costs were then billed to various subsidiaries of DTE Energy, including MichCon.
Subsequent to March 31, 2007, a new affiliate company was formed, DTE Energy Corporate Services, LLC, to accumulate the
aforementioned corporate support services type expenses, which previously had been recorded on the various operating units of DTE
Energy Company, including MichCon. These administrative and general expenses incurred by DTE Energy Corporate Services, LLC
were then billed to various subsidiaries of DTE Energy, including MichCon. MichCon participates in a defined benefit retirement plan
sponsored by another affiliate of DTE Energy.