Emerson 2013 Annual Report Download - page 48

46 Emerson > 2013 Annual Report
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 percentage
2013
U.S. equities $1,078 560 121 1,759 35%
International equities 563 632 1,195 24%
Emerging market equities 263 263 5%
Corporate bonds 524 524 10%
Government bonds 22 614 636 13%
High yield bonds 159 159 3%
Other 178 168 129 475 10%
Total $1,841 2,920 250 5,011 100%
2012
U.S. equities $ 926 559 129 1,614 35%
International equities 442 495 937 21%
Emerging market equities 68 197 265 6%
Corporate bonds 528 528 12%
Government bonds 551 551 12%
High yield bonds 148 148 3%
Other 183 181 121 485 11%
Total $1,619 2,659 250 4,528 100%
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 represents investment-grade
debt of issuers primarily from the U.S. Government Bonds includes investment-grade instruments issued by federal, state
and local governments, primarily in the U.S. High Yield Bonds includes noninvestment-grade debt from a diverse group of
developed market issuers. Other includes cash, interests in mixed asset funds investing in commodities, 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 nonexchange-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 market-
observed pricing for the underlying assets or broker/dealer quotation. U.S. equity securities classified 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:
2012 2013
Beginning balance $267 250
Gains (Losses) on assets held 9 25
Gains (Losses) on assets sold (16) (22)
Purchases, sales and settlements, net (10) (3)
Ending balance $250 250