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85
The fair values of the assets held by the international pension plans by asset class are as follows:
Fair Value Measurements Using Inputs Considered as
Fair Value at
(Millions)
Level 1
Level 2
Level 3
Dec. 31,
Asset Class
2013
2012
2013
2012
2013
2012
2013
2012
Equities
Growth equities
$
733
$ 628
$
190
$ 133
$
―
$ ―
$
923
$
761
Value equities
653
468
14
23
―
―
667
491
Core equities
19
88
668
376
5
5
692
469
Total Equities
$
1,405
$ 1,184
$
872
$ 532
$
5
$ 5
$
2,282
$
1,721
Fixed Income
Domestic government debt
$
199
$ 297
$
539
$ 694
$
3
$ ―
$
741
$
991
Foreign government debt
28
170
657
445
1
2
686
617
Corporate debt securities
1
―
638
630
20
18
659
648
Mortgage backed debt
―
―
75
31
―
―
75
31
Other debt obligations
―
―
391
268
13
16
404
284
Total Fixed Income
$
228
$ 467
$
2,300
$ 2,068
$
37
$ 36
$
2,565
$
2,571
Private Equity
Private equity funds
$
―
$ ―
$
―
$ ―
$
22
$ 22
$
22
$
22
Real estate
3
3
87
42
53
49
143
94
Total Private Equity
$
3
$ 3
$
87
$ 42
$
75
$ 71
$
165
$
116
Absolute Return
Hedge funds
$
―
$ ―
$
62
$ 75
$
56
$ 50
$
118
$
125
Insurance
―
―
―
―
492
433
492
433
Derivatives
2
―
3
20
―
―
5
20
Other
―
―
2
24
2
2
4
26
Total Absolute Return
$
2
$ ―
$
67
$ 119
$
550
$ 485
$
619
$
604
Cash and Cash Equivalents
$
112
$ 211
$
14
$ 21
$
―
$ ―
$
126
$
232
Total
$
1,750
$ 1,865
$
3,340
$ 2,782
$
667
$ 597
$
5,757
$
5,244
Other items to reconcile to fair
value of plan assets
$
1
$
(22)
Fair value of plan assets
$
5,758
$
5,222
Equities consist primarily of mandates in public equity securities managed to the Morgan Stanley Capital All Country
World Index. Publicly traded equities are valued at the closing price reported in the active market in which the individual
securities are traded.
Fixed Income investments include domestic and foreign government, corporate, mortgage backed and other debt.
Governments, corporate bonds and notes and mortgage backed securities are valued at the closing price reported if
traded on an active market or at yields currently available on comparable securities of issuers with similar credit ratings or
valued under a discounted cash flow approach that maximizes observable inputs, such as current yields of similar
instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity risks.
Private equity funds consist of both active and passive mandates. Partnership interests are valued using the most recent
general partner statement of fair value, updated for any subsequent partnership interests’ cash flows or expected changes
in fair value. Real estate consists of property funds and REITS (Real Estate Investment Trusts). Property funds are valued
using the most recent partnership statement of fair value, updated for any subsequent partnership interests’ cash flows.
REITS are valued at the closing price reported in the active market in which it is traded.
Absolute return consists of private partnership interests in hedge funds, insurance contracts, derivative instruments,
hedge fund of funds, and bank loan funds. Insurance consists of insurance contracts, which are valued using cash
surrender values which is the amount the plan would receive if the contract was cashed out at year end. Derivative
instruments consist of interest rate swaps that are used to help manage risks. Hedge funds are valued at the NAV as
determined by the independent administrator or custodian of the fund.
Other items to reconcile to fair value of plan assets include the net of interest receivables, amounts due for securities sold,
amounts payable for securities purchased and interest payable.