Discover 2011 Annual Report Download - page 142

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130
As a fundamental operating principle, any restrictions on the underlying assets apply to a respective derivative product.
This includes percentage allocations and credit quality. The purpose of the use of derivatives is to enhance investment in the
underlying assets, not to circumvent portfolio restrictions.
Fair Value Measurements. The Qualified Plan’s assets are stated at fair value. Quoted market prices in active markets are
the best evidence of fair value and are used as the basis for the measurement, if available. If a quoted market price is not
available, the estimate of the fair value is based on the best information available in the circumstances. The table below
presents information about the Qualified Plan assets and indicates the level within the fair value hierarchy, as defined by ASC
820, with which each item is associated. For a description of the fair value hierarchy, see Note 22: Fair Value Disclosures.
(Dollars in thousands):
Assets
Cash and cash equivalents
Fixed income securities - U.S. treasuries
Fixed income securities - corporate debt
Futures contracts
Registered Investment Company - International equity fund
Common Collective Trusts:
International equity fund
Domestic large cap equity fund
Domestic small cap equity fund
Total assets
Liabilities
Futures contracts
Total liabilities
Net assets
For the Year Ended November 30, 2011
Level 1
$ 4,648
65,460
—
10
19,373
—
—
—
89,491
224
224
$ 89,267
Level 2
$—
—
158,847
—
—
17,592
57,353
10,153
243,945
—
—
$ 243,945
Level 3
$—
—
—
—
—
—
—
—
—
—
—
$—
Total
$ 4,648
65,460
158,847
10
19,373
17,592
57,353
10,153
333,436
224
224
$ 333,212
Net Asset
Allocation
1%
20%
48%
—%
6%
5%
17%
3%
100%
—%
—%
100%
There were no transfers between Levels 1 and 2 within the fair value hierarchy for the years ended November 30, 2011 and
2010.
Long-duration U.S fixed income fund
Registered Investment Company - International equity fund
Common Collective Trusts:
International equity fund
Domestic large cap equity fund
Domestic small cap equity fund
Total
For the Year Ended November 30, 2010
Level 1
$—
19,400
—
—
—
$ 19,400
Level 2
$ 205,695
—
18,062
68,624
9,207
$ 301,588
Level 3
$—
—
—
—
—
$—
Total
$ 205,695
19,400
18,062
68,624
9,207
$ 320,988
Net Asset
Allocation
64%
6%
6%
21%
3%
100%
The investments that are categorized as Level 2 assets primarily consist of fixed income securities, common collective
trusts and a group annuity contract consisting of a domestic equity fund and a stable value product. The common collective
trusts and the domestic equity fund are public investment vehicles valued using the Net Asset Value (“NAV”) provided by the
administrator of the fund. The NAV is quoted on a private market that is not active; however, the unit price is based on
underlying investments that are traded on an active market. The fair value of the stable value product is calculated as the
present value of future cash flows.
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