Emerson 2011 Annual Report Download - page 43

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The fair values of defined benefit plan assets as of September 30, organized by asset class and by the fair value hierarchy
of ASC 820 as outlined in Note 1, follow:
level 1 level 2 level 3 total %
2011
U.S. equities $ 766 443 145 1,354 35%
International equities 476 291 767 20%
Emerging market equities 59 128 187 5%
Corporate bonds 522 522 14%
Government bonds 509 509 13%
High yield bonds 130 130 3%
Other 120 161 122 403 10%
Total $1,421 2,184 267 3,872 100%
2010
U.S. equities $ 879 457 130 1,466 38%
International equities 533 256 789 20%
Emerging market equities 67 136 203 5%
Corporate bonds 23 449 472 12%
Government bonds 6 533 539 14%
High yield bonds 2 133 135 3%
Other 33 164 119 316 8%
Total $1,543 2,128 249 3,920 100%
ASSET CLASSES
U.S. Equities reflects companies domiciled in the U.S., including multinational companies. International Equities is
comprised of companies domiciled in developed nations outside the U.S. Emerging Market Equities is comprised of
companies domiciled in portions of Asia, Eastern Europe and Latin America. Corporate Bonds represent investment-
grade debt of issuers primarily from the U.S. Government Bonds include investment-grade instruments issued by
federal, state and local governments, primarily in the U.S. High Yield Bonds include non-investment-grade debt from a
diverse group of developed market issuers. Other includes cash, interests in mixed asset funds investing in commodi-
ties, natural resources, agriculture and exchange-traded real estate funds, life insurance contracts (U.S.) and shares in
certain general investment funds of financial institutions or insurance arrangements (non-U.S.) that typically ensure no
market losses or provide for a small minimum return guarantee.
FAIR VALUE HIERARCHY CATEGORIES
Valuations of Level 1 assets for all classes are based on quoted closing market prices from the principal exchanges
where the individual securities are traded. Cash is valued at cost, which approximates fair value. Equity securities
categorized as Level 2 assets are primarily non-exchange-traded commingled or collective funds where the underlying
securities have observable prices available from active markets. Valuation is based on the net asset value of fund units
held as derived from the fair value of the underlying assets. Debt securities categorized as Level 2 assets are generally
valued based on independent broker/dealer bids or by comparison to other debt securities having similar durations,
yields and credit ratings. Other Level 2 assets are valued based on a net asset value of fund units held, which is derived
from either broker/dealer quotation or market-observed pricing for the underlying assets. U.S. equity securities clas-
sified as Level 3 are fund investments in private companies. Valuation techniques and inputs for these assets include
discounted cash flow analysis, earnings multiple approaches, recent transactions, transferability restrictions, prevailing
discount rates, volatilities, credit ratings and other factors. In the Other class, interests in mixed assets funds are Level 2
and U.S. life insurance contracts and non-U.S. general fund investments and insurance arrangements are Level 3.
A reconciliation of the change in value for Level 3 assets follows:
2010 2011
Beginning balance, October 1 $221 249
Gains (Losses) on assets held 28 34
Gains (Losses) on assets sold (9) (9)
Purchases, sales and settlements, net 9 (7)
Ending balance, September 30 $249 267