2.2.0.25falsefalse0210 - Disclosure - Fair Value Measurementstruefalsefalse1falsefalseUSDfalsefalse1/1/2010 - 12/31/2010
USD ($)
USD ($) / shares
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<!-- Begin Block Tagged Note 10 - us-gaap:FairValueDisclosuresTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>10. FAIR VALUE MEASUREMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Fair value measurements are based on inputs of observable and unobservable market data that a
market participant would use in pricing the asset or liability. The use of observable inputs is
maximized where available and the use of unobservable inputs is minimized for fair value
measurement and reflects a three-tier fair value hierarchy that prioritizes inputs to valuation
techniques used for fair value measurement.
</div>
<div style="margin-top: 6pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Level 1 consists of observable market data in an active market for identical assets or
liabilities.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Level 2 consists of observable market data, other than that included in Level 1, that is
either directly or indirectly observable.</td>
</tr>
<tr>
<td style="font-size: 6pt"> </td>
</tr>
<tr valign="top" style="font-size: 10pt; color: #000000; background: transparent">
<td width="3%" nowrap="nowrap" align="left"><b>•</b></td>
<td width="1%"> </td>
<td>Level 3 consists of unobservable market data. The input may reflect the assumptions of
the Company of what a market participant would use in pricing an asset or liability. If
there is little available market data, then the Company’s own assumptions are the best
available information.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">In the case of multiple inputs being used in a fair value measurement, the lowest level input
that is significant to the fair value measurement represents the level in the fair value
hierarchy in which the fair value measurement is reported.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010, assets and liabilities measured at fair value on a recurring basis
during the period, together with the level of the fair value hierarchy in which they fall, were
as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="52%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Fair Value Measurements Using</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Quoted Prices</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>in Active</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Markets for</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Other</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Significant</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Identical</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Observable</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Unobservable</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Assets</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Inputs</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>As of December 31, 2010:</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 1)</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 2)</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>(Level 3)</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Total</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="15"><i style="font-size: 8pt">(in millions)</i></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Assets:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Energy-related derivatives
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">10</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest rate derivatives
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">10</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Foreign currency derivatives
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">3</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Nuclear decommissioning trusts:<sup style="font-size: 85%; vertical-align: text-top">(a)</sup>
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Domestic equity
</div></td>
<td> </td>
<td> </td>
<td align="right">604</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">60</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">664</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">U.S.
Treasury and government agency securities
</div></td>
<td> </td>
<td> </td>
<td align="right">20</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">220</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">240</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Municipal bonds
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">53</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Corporate bonds
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">220</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">220</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Mortgage and asset backed securities
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">119</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">119</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">74</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Cash equivalents and restricted cash
</div></td>
<td> </td>
<td> </td>
<td align="right">351</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">351</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other
</div></td>
<td> </td>
<td> </td>
<td align="right">9</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">51</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">79</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">984</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">820</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">19</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">1,823</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<tr valign="top"><!-- Blank Space -->
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Liabilities:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Energy-related derivatives
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">206</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">206</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Interest rate derivatives
</div></td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">207</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">207</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="17" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div style="margin-top: 3pt">
<table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left">
<tr>
<td width="3%"></td>
<td width="1%"></td>
<td width="96%"></td>
</tr>
<tr valign="top">
<td nowrap="nowrap" align="left">(a)</td>
<td> </td>
<td>Includes the investment securities pledged to creditors and collateral received,
and excludes receivables related to investment income, pending investment sales, and payables
related to pending investment purchases and the lending pool. See Note 1 under “Nuclear
Decommissioning” for additional information.</td>
</tr>
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Valuation Methodologies</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The energy-related derivatives primarily consist of over-the-counter financial products for
natural gas and physical power products including, from time to time, basis swaps. These are
standard products used within the energy industry and are valued using the market approach. The
inputs used are mainly from observable market sources, such as forward natural gas prices, power
prices, implied volatility, and LIBOR interest rates. Interest rate and foreign currency
derivatives are also standard over-the-counter financial products valued using the market
approach. Inputs for interest rate derivatives include LIBOR interest rates, interest rate
futures contracts, and occasionally implied volatility of interest rate options. Inputs for
foreign currency derivatives are from observable market sources. See Note 11 for additional
information on how these derivatives are used.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">“Other investments” include investments in funds that are valued using the market approach and
income approach. Securities that are traded in the open market are valued at the closing price
on their principal exchange as of the measurement date. Discounts are applied in accordance
with GAAP when certain trading restrictions exist. For investments that are not traded in the
open market, the price paid will have been determined based on market factors including
comparable multiples and the expectations regarding cash flows and business plan execution. As
the investments mature or if market conditions change materially, further analysis of the fair
market value of the investment is performed. This analysis is typically based on a metric, such
as multiple of earnings, revenues, earnings before interest and income taxes, or earnings
adjusted for certain cash changes. These multiples are based on comparable multiples for
publicly traded companies or other relevant prior transactions.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">For fair value measurements of investments within the nuclear decommissioning trusts and rabbi
trust funds, specifically the fixed income assets using significant other observable inputs and
unobservable inputs, the primary valuation technique used is the market approach. External
pricing vendors are designated for each of the asset classes in the nuclear decommissioning
trusts and rabbi trust funds with each security discriminately assigned a primary pricing
source, based on similar characteristics.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">A market price secured from the primary source vendor is then used in the valuation of the
assets within the trusts. As a general approach, market pricing vendors gather market data
(including indices and market research reports) and integrate relative credit
information, observed market movements, and sector news into proprietary pricing models, pricing
systems, and mathematical tools. Dealer quotes and other market information including live
trading levels and pricing analysts’ judgment are also obtained when available.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010, the fair value measurements of investments calculated at net asset
value per share (or its equivalent), as well as the nature and risks of those investments, were
as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="45%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="5%"> </td>
<td width="7%"> </td>
<td width="3%"> </td>
<td width="12%"> </td>
<td width="1%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Fair</b></td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Unfunded</b></td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Redemption</b></td>
<td> </td>
<td nowrap="nowrap" align="center"><b>Redemption</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>As of December 31, 2010:</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Value</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Commitments</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Frequency</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>Notice Period</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><i style="font-size: 8pt">(in millions)</i></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Nuclear decommissioning trusts:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Corporate bonds – commingled funds
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">65</td>
<td> </td>
<td> </td>
<td align="center" valign="bottom">None</td>
<td> </td>
<td align="center" valign="bottom">Daily</td>
<td> </td>
<td align="center" valign="bottom">1 to 3 days</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:30px; text-indent:-15px">Other – commingled funds
</div></td>
<td> </td>
<td> </td>
<td align="right">67</td>
<td> </td>
<td> </td>
<td align="center" valign="bottom">None</td>
<td> </td>
<td align="center" valign="bottom">Daily</td>
<td> </td>
<td align="center" valign="bottom">Not applicable</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Trust-owned life insurance
</div></td>
<td> </td>
<td> </td>
<td align="right">86</td>
<td> </td>
<td> </td>
<td align="center" valign="bottom">None</td>
<td> </td>
<td align="center" valign="bottom">Daily</td>
<td> </td>
<td align="center" valign="bottom">15 days</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Cash equivalents and restricted cash:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">351</td>
<td> </td>
<td> </td>
<td align="center" valign="bottom">None</td>
<td> </td>
<td align="center" valign="bottom">Daily</td>
<td> </td>
<td align="center" valign="bottom" nowrap="nowrap">Not applicable</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Other:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
<td> </td>
<td align="center" valign="bottom"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Money market funds
</div></td>
<td> </td>
<td> </td>
<td align="right">2</td>
<td> </td>
<td> </td>
<td align="center" valign="bottom">None</td>
<td> </td>
<td align="center" valign="bottom">Daily</td>
<td> </td>
<td align="center" valign="bottom">Not applicable</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The commingled funds in the nuclear decommissioning trusts are invested primarily in a
diversified portfolio of high grade money market instruments, including, but not limited to,
commercial paper, notes, repurchase agreements, and other evidences of indebtedness with a
maturity not exceeding 13 months from the date of purchase. The commingled funds will, however,
maintain a dollar-weighted average portfolio maturity of 90 days or less. The assets may be
longer term investment grade fixed income obligations having a maximum five-year final maturity
with put features or floating rates with a reset rate date of 13 months or less. The primary
objective for the commingled funds is a high level of current income consistent with stability
of principal and liquidity. The corporate bonds — commingled funds represent the investment of
cash collateral received under the Funds’ managers’ securities lending program that can only be
sold upon the return of the loaned securities. See Note 1 under “Nuclear Decommissioning” for
additional information.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Alabama Power’s nuclear decommissioning trust includes investments in Trust-Owned Life Insurance
(TOLI). The taxable nuclear decommissioning trust invests in the TOLI in order to minimize the
impact of taxes on the portfolio and can draw on the value of the TOLI through death proceeds,
loans against the cash surrender value, and/or the cash surrender value, subject to legal
restrictions. The amounts reported in the table above reflect the fair value of investments the
insurer has made in relation to the TOLI agreements. The nuclear decommissioning trust does not
own the underlying investments, but the fair value of the investments approximates the cash
surrender value of the TOLI policies. The investments made by the insurer are in commingled funds.
The commingled funds primarily include investments in domestic and international equity securities
and predominantly high-quality fixed income securities. These fixed income securities include U.S.
Treasury and government agency fixed income securities, non-U.S. government and agency fixed income
securities, domestic and foreign corporate fixed income securities, and, to some degree, mortgage
and asset backed securities. The passively managed funds seek to replicate the performance of a
related index. The actively managed funds seek to exceed the performance of a related index
through security analysis and selection.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The money market funds are short-term investments of excess funds in various money market mutual
funds, which are portfolios of short-term debt securities. The money market funds are regulated
by the Securities and Exchange Commission and typically receive the highest rating from credit
rating agencies. Regulatory and rating agency requirements for money market funds include
minimum credit ratings and maximum maturities for individual securities and a maximum weighted
average portfolio maturity. Redemptions are available on a same day basis up to the full amount
of the Company’s investment in the money market funds.
</div>
<!-- Folio -->
<!-- /Folio -->
</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 0pt">
<b>
</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Changes in the fair value measurement of the Level 3 items using significant unobservable inputs
for the year ended December 31, 2010 were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="88%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Level 3</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Other</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><i style="font-size: 8pt">(in millions)</i></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Beginning balance at December 31, 2009
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">35</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:30px; text-indent:-15px">Total gains (losses) — realized/unrealized:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Included in earnings
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(1</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:45px; text-indent:-15px">Included in OCI
</div></td>
<td> </td>
<td> </td>
<td align="right">5</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:45px; text-indent:-15px">Transfers out of Level 3
</div></td>
<td> </td>
<td nowrap="nowrap" align="right"> </td>
<td align="right">(20</td>
<td nowrap="nowrap">)</td>
</tr>
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"><b>Ending balance at December 31, 2010</b>
</div></td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>19</b></td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td colspan="5" align="left" style="border-top: 3px double #000000"> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">Transfers in and out of the levels of fair value hierarchy are recognized as of the end of the
reporting period. The value of one of the investments was reclassified from Level 3 to Level 1
because the securities began trading on the public market. The reclassification is reflected in
the table above as a transfer out of Level 3 at its fair value.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">As of December 31, 2010 and 2009, other financial instruments for which the carrying amount did not
equal fair value were as follows:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="76%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td style="border-bottom: 1px solid #000000"> </td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Carrying Amount</b></td>
<td style="border-bottom: 1px solid #000000"> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td>
</tr>
<tr style="font-size: 10pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="11"><i style="font-size: 8pt">(in millions)</i></td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Long-term debt:
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:75px; text-indent:-15px"><b>2010</b>
</div></td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>19,356</b></td>
<td> </td>
<td> </td>
<td align="right"><b>$</b></td>
<td align="right"><b>20,073</b></td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:75px; text-indent:-15px">2009
</div></td>
<td> </td>
<td align="right">$</td>
<td align="right">19,145</td>
<td> </td>
<td> </td>
<td align="right">$</td>
<td align="right">19,567</td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">The fair values were based on either closing market prices (Level 1) or closing prices of
comparable instruments (Level 2).
</div>
</div>
<!--DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd" -->
<!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
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