ADT 2010 Annual Report Download - page 224

TYCO INTERNATIONAL LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. Retirement Plans (Continued)
levels. The Company’s asset allocations by level within the fair value hierarchy as of September 24,
2010 are presented in the table below for the Company’s material defined benefit plans.
September 24, 2010
($ in millions) Level 1 Level 2 Level 3 Total
Equity securities:
U.S. equity securities ........................... $221 $ 198 $— $ 419
Non-U.S. equity securities ....................... 155 441 — 596
Fixed income securities:
Government and government agency securities ........ 25 183 — 208
Corporate debt securities ........................ — 318 — 318
Mortgage and other asset-backed securities .......... — 97 — 97
Real estate investments ........................... 1 — 3 4
Cash and cash equivalents ......................... 47 — — 47
Total ........................................ $449 $1,237 $ 3 $1,689
The table below presents a rollforward of the Company’s real estate investments measured at fair
value on a periodic basis using significant unobservable inputs (level 3) from September 25, 2009 to
September 24, 2010:
Fair Value Measurements Using
Significant Unobservable Inputs
(Level 3)
Balance as of September 25, 2009 ........................ $13
Purchases, sales, issuances, and settlements, net .............. (10)
Balance as of September 24, 2010 ........................ $ 3
Equity securities consist primarily of publicly traded U.S. and non-U.S. equities. Publicly traded
securities are valued at the last trade or closing price reported in the active market in which the
individual securities are traded. Certain equity securities are held within commingled funds which are
valued at the unitized net asset value (‘‘NAV’’) or percentage of the net asset value as determined by
the custodian of the fund. These values are based on the fair value of the underlying net assets owned
by the fund.
Fixed income securities consist primarily of government and agency securities, corporate debt
securities, and mortgage and other asset-backed securities. When available, fixed income securities are
valued at the closing price reported in the active market in which the individual security is traded.
Government and agency securities and corporate debt securities are valued using the most recent bid
prices or occasionally the mean of the latest bid and ask prices when markets are less liquid. Asset-
backed securities including mortgage backed securities are valued using broker/dealer quotes when
available. When quotes are not available, fair value is determined utilizing a discounted cash flow
approach, which incorporates other observable inputs such as cash flows, underlying security structure
and market information including interest rates and bid evaluations of comparable securities. Certain
fixed income securities are held within commingled funds which are valued utilizing NAV as
136 2010 Financials