Equifax 2012 Annual Report Download - page 67

65
Equifax 2012 Annual Report
Fair Value of Plan Assets. The fair value of the pension assets at
December 31, 2012, is as follows:
Fair Value Measurements at Reporting
Date Using:
Description
Fair Value at
December 31,
20112
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(In millions)
Large-Cap Equity
(1)
$ 94.5 $ 94.5 $ — $ —
Small and Mid-Cap Equity
(1)
19.6 19.6 — —
International Equity
(1)(2)
109.3 67.4 41.9 —
Fixed Income
(1)(2)
162.4 11.2 151.2 —
Private Equity
(3)
36.0 — — 36.0
Hedge Funds
(4)
89.1 — — 89.1
Real Assets
(1)(5)
29.3 18.2 — 11.1
Cash
(1)
7.8 7.8 — —
Total $548.0 $218.7 $193.1 $136.2
(1) Fair value is based on observable market prices for the assets.
(2) For the portion of this asset class categorized as Level 2, fair value is
determined using dealer and broker quotations, certain pricing models,
bid prices, quoted prices for similar assets and liabilities in active
markets, or other inputs that are observable or can be corroborated by
observable market data.
(3) Private equity investments are initially valued at cost. Fund managers
periodically review the valuations utilizing subsequent company- specific
transactions or deterioration in the company’s financial performance to
determine if fair value adjustments are necessary. Private equity invest-
ments are typically viewed as long term, less liquid investments with
return of capital coming via cash distributions from the sale of underlying
fund assets. The Plan intends to hold these investments through each
fund’s normal life cycle and wind down period. As of December 31,
2012, we had $24.2 million of remaining commitments related to these
private equity investments.
(4) Fair value is reported by the fund manager based on observable market
prices for actively traded assets within the funds, as well as financial
models, comparable financial transactions or other factors relevant to
the specific asset for assets with no observable market. These invest-
ments are redeemable quarterly with a range of 30 − 90 days notice.
(5) For the portion of this asset class categorized as Level 3, fair value is
reported by the fund manager based on a combination of the following
valuation approaches: current replacement cost less deterioration and
obsolescence, a discounted cash flow model of income streams and
comparable market sales. As of December 31, 2012, we had
$7.8 million of remaining commitments related to the real asset
investments.
The following table shows a reconciliation of the beginning and end-
ing balances for assets valued using significant unobservable inputs:
(In millions)
Private
Equity Hedge Funds Real Assets
Balance at December 31, 2011 $33.0 $ 92.9 $ 9.8
Return on plan assets:
Unrealized 1.0 4.7 0.6
Realized 1.6 1.0 —
Purchases 6.5 5.9 1.2
Sales (6.1) (15.4) (0.5)
Balance at December 31, 2012 $36.0 $ 89.1 $11.1
The fair value of the postretirement assets at December 31, 2012, is
as follows:
Fair Value Measurements at
Reporting Date Using:
Description
Fair Value at
December 31,
2012
Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(In millions)
Large-Cap Equity
(1)
$ 4.1 $4.1 $ — $ —
Small and Mid-Cap Equity
(1)
0.8 0.8 — —
International Equity
(1)(2)
3.6 2.9 0.7 —
Fixed Income
(1)(2)
5.9 0.5 5.4 —
Private Equity
(3)
1.6 — — 1.6
Hedge Funds
(4)
3.8 — — 3.8
Real Assets
(1)(5)
1.3 0.8 — 0.5
Cash
(1)
0.3 0.3 — —
Total $21.4 $9.4 $6.1 $5.9
(1) Fair value is based on observable market prices for the assets.
(2) For the portion of this asset class categorized as Level 2, fair value is
determined using dealer and broker quotations, certain pricing models,
bid prices, quoted prices for similar assets and liabilities in active
markets, or other inputs that are observable or can be corroborated by
observable market data.
(3) Private equity investments are initially valued at cost. Fund managers
periodically review the valuations utilizing subsequent company- specific
transactions or deterioration in the company’s financial performance to
determine if fair value adjustments are necessary. Private equity invest-
ments are typically viewed as long term, less liquid investments with
return of capital coming via cash distributions from the sale of underlying
fund assets. The Plan intends to hold these investments through each
fund’s normal life cycle and wind down period.
(4) Fair value is reported by the fund manager based on observable market
prices for actively traded assets within the funds, as well as financial
models, comparable financial transactions or other factors relevant to
the specific asset for assets with no observable market. These invest-
ments are redeemable quarterly with a range of 30 – 90 days notice.
(5) For the portion of this asset class categorized as Level 3, fair value is
reported by the fund manager based on a combination of the following
valuation approaches: current replacement cost less deterioration and
obsolescence, a discounted cash flow model of income streams and
comparable market sales.
Gross realized and unrealized gains and losses, purchases and sales
for Level 3 postretirement assets were not material for the twelve
months ended December 31, 2012.