DTE Energy 2010 Annual Report Download - page 38

36
Fair Value Measurements Using Significant Unobservable Inputs (Level 3):
(in Millions)
HedgeFunds
and Similar
Investments
Private
Equity and
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
Healthcare Legislation
In March 2010, the Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act
(HCERA) were enacted into law (collectively, the “Act”). The Act is a comprehensive health care reform bill. A provision of the
PPACA repeals the current rule permitting deduction of the portion of the drug coverage expense that is offset by the Medicare Part D
subsidy, effective for taxable years beginning after December 31, 2012.
MichCon’s retiree healthcare plan includes the provision of postretirement prescription drug coverage (“coverage”) which is included
in the calculation of the recorded other postemployment benefit (OPEB) obligation. Because the Company’ s coverage meets certain
criteria, MichCon is eligible to receive the Medicare Part D subsidy. With the enactment of the Act, the subsidy will continue to not be
subject to tax, but an equal amount of prescription drug coverage expenditures will not be deductible. Income tax accounting rules
require the impact of a change in tax law be recognized in continuing operations in the Consolidated Statements of Operations in the
period that the tax law change is enacted.
This change in tax law required a remeasurement of the Deferred Tax Asset related to the OPEB obligation and the Deferred Tax
Liability related to the OPEB Regulatory Asset. The net impact of the remeasurement is $4 million and has been deferred as a
Regulatory Asset as the traditional rate setting process allows for the recovery of income tax costs.
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.