Estee Lauder 2013 Annual Report Download - page 171

Insurance contracts — These instruments are issued by
insurance companies. The fair value is based on negoti-
ated value and the underlying investment held in separate
account portfolios as well as considering the credit
worthiness of the issuer. The underlying investments are
government, asset-backed and fixed income securities.
Insurance contracts are generally classified as Level 3 as
there are no quoted prices nor other observable inputs
for pricing.
Interests in limited partnerships and hedge fund
investments — One limited partnership investment and
one hedge fund was valued using the NAV provided by
the administrator of the partnership/fund. The NAV is
based on the value of the underlying assets owned by the
partnership/fund, minus its liabilities, and then divided
by the number of shares outstanding. All other limited
partnership investments and hedge fund investments are
private equity funds and the fair values are determined
by the fund managers based on the estimated value
of the various holdings of the fund portfolio. These
investments are primarily classified within Level 3 of the
valuation hierarchy.
THE EST{E LAUDER COMPANIES INC. 169
The following table presents the fair values of the Company’s pension and post-retirement plan assets by asset category
as of June 30, 2013:
Level 1 Level 2 Level 3 Total
(In millions)
Short-term investment funds $ 28.9 $ 27.6 $ — $ 56.5
Government and agency securities — 16.9 — 16.9
Equity securities — 125.6 — 125.6
Debt instruments 94.4 — — 94.4
Commingled funds 248.6 394.6 36.6 679.8
Insurance contracts — — 43.6 43.6
Limited partnerships and hedge fund investments — — 109.2 109.2
Total $371.9 $564.7 $189.4 $1,126.0
The following table presents the fair values of the Company’s pension and post-retirement plan assets by asset category
as of June 30, 2012:
Level 1 Level 2 Level 3 Total
(In millions)
Short-term investment funds $ 79.4 $ 78.4 $ — $ 157.8
Government and agency securities — 35.8 — 35.8
Equity securities 73.6 — — 73.6
Debt instruments — 134.2 — 134.2
Commingled funds 153.6 361.0 37.7 552.3
Insurance contracts — — 38.7 38.7
Limited partnerships and hedge fund investments — — 94.5 94.5
Total $306.6 $609.4 $170.9 $1,086.9
The following table presents the changes in Level 3 plan assets for fiscal 2013:
Limited Partnerships
Commingled Insurance and Hedge Fund
Funds Contracts Investments Total
(In millions)
Balance as of June 30, 2012 $37.7 $38.7 $ 94.5 $170.9
Actual return on plan assets:
Relating to assets still held at the reporting date 0.2 — 0.1 0.3
Relating to assets sold during the year 4.8 2.4 12.7 19.9
Transfers in (out) — — — —
Purchases, sales, issuances and settlements, net (5.2) 1.1 1.9 (2.2)
Foreign exchange impact (0.9) 1.4 — 0.5
Balance as of June 30, 2013 $36.6 $43.6 $109.2 $189.4