Estee Lauder 2015 Annual Report Download - page 110

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THE EST{E LAUDER COMPANIES INC. 107
Insurance contracts — The fair values are based on
negotiated value and the underlying investments held in
separate account portfolios as well as considering the
creditworthiness of the issuer. The underlying investments
are primarily government, asset-backed and fixed income
securities. Insurance contracts are generally classified as
Level 3 as there are no quoted prices or other observable
inputs for pricing.
Interests in limited partnerships and hedge fund
investments — The fair values are determined using the
NAV provided by the administrator of the partnership/
fund. Those investments where the Company has the
ability to redeem at the measurement date or within
the near term without redemption restrictions are classi-
fied within Level 2 of the valuation hierarchy. When the
Company is unable to redeem in the near term, these
investments are classified within Level 3.
The following table presents the fair values of the Company’s pension and post-retirement plan assets by asset category
as of June 30, 2015:
Level 1 Level 2 Level 3 Total
(In millions)
Cash and cash equivalents $ 2.8 $ — $ — $ 2.8
Short-term investment funds — 53.1 — 53.1
Government and agency securities — 30.5 — 30.5
Equity securities 22.8 — — 22.8
Debt instruments — 168.9 — 168.9
Commingled funds 247.5 550.4 35.0 832.9
Insurance contracts — — 40.4 40.4
Limited partnerships and hedge fund investments — 106.8 14.0 120.8
Total $273.1 $909.7 $89.4 $1,272.2
The following table presents the fair values of the Company’s pension and post-retirement plan assets by asset category
as of June 30, 2014:
Level 1 Level 2 Level 3 Total
(In millions)
Short-term investment funds $ 22.4 $ 28.0 $ — $ 50.4
Government and agency securities — 39.7 — 39.7
Equity securities 44.1 — — 44.1
Debt instruments — 173.8 — 173.8
Commingled funds 251.2 504.4 34.5 790.1
Insurance contracts — — 51.2 51.2
Limited partnerships and hedge fund investments — 52.2 67.0 119.2
Total $317.7 $798.1 $152.7 $1,268.5
The following table presents the changes in Level 3 plan assets for fiscal 2015:
Limited Partnerships
Commingled Insurance and Hedge Fund
Funds Contracts Investments Total
(In millions)
Balance as of June 30, 2014 $34.5 $51.2 $67.0 $152.7
Actual return on plan assets:
Relating to assets still held at the reporting date 3.1 2.4 1.8 7.3
Relating to assets sold during the year 1.1 — 0.1 1.2
Transfers in (out) — — (54.6) (54.6)
Purchases, sales, issuances and settlements, net (1.0) (3.7) (0.3) (5.0)
Foreign exchange impact (2.7) (9.5) — (12.2)
Balance as of June 30, 2015 $35.0 $40.4 $14.0 $ 89.4