DTE Energy 2011 Annual Report Download - page 36

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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. The Company has obtained an understanding of how these
prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, the Company
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)
Beginning Balance at January 1, 2011
Total realized/unrealized gains (losses):
Realized gains (losses)
Unrealized gains (losses)
Purchases, sales and settlements:
Purchases
Sales
Ending Balance at December 31, 2011
The amount of total gains (losses) for the period attributable the change in
unrealized gains or losses related to assets still held at the end of the
period
Hedge Funds and
Similar Investments
$ 27
(1)
1
23
(18)
$ 32
$ 2
Private Equity and
Other
$ 18
1
(7)
16
(8)
$ 20
$(6)
Total
$ 45
—
(6)
39
(26)
$ 52
$(4)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3):
(in Millions)
Beginning Balance at January 1, 2010
Total realized/unrealized gains (losses)
Purchases, sales and settlements
Ending Balance at December 31, 2010
The amount of total gains (losses) for the period attributable the change in
unrealized gains or losses related to assets still held at the end of the
period
Hedge Funds and
Similar Investments
$ 29
3
(5)
$ 27
$ 2
Private Equity and
Other
$ 14
3
1
$ 18
$ 2
Total
$ 43
6
(4)
$ 45
$ 4
Healthcare Legislation
In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act were
enacted into law (collectively, the “Act”). The Act is a comprehensive health care reform bill. A provision of the Act 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