Kodak 2011 Annual Report Download - page 105

Major Non-U.S. Plans
December 31, 2010
For the Company’s major non-U.S. defined benefit pension plans, equity investments are invested broadly in local equity, developed international and
emerging markets. Fixed income investments are comprised primarily of long duration government and corporate bonds with some emerging market
debt. Real estate investments include investments in primarily office, industrial, and retail properties. Other investments include private equity, hedge
funds, and insurance contracts. Private equity investments are comprised of limited partnerships and fund-of-fund investments that invest in distressed
investments, venture capital and leveraged buyout funds. Absolute return investments are comprised of hedge funds that use equity long-short strategies.
Cash and cash equivalents are valued utilizing cost approach valuation techniques. Equity securities and debt securities are valued using a market
approach based on the closing price on the last business day of the year (if the securities are traded on an active market), or based on the proportionate
share of the estimated fair value of the underlying assets (net asset value). Other investments are valued using a combination of market, income, and
cost approaches, based on the nature of the investment. Absolute return investments are primarily valued based on net asset value derived from
observable market inputs. Real estate investments are valued primarily based on independent appraisals and discounted cash flow models, taking into
consideration discount rates and local market conditions. Private equity investments are valued primarily based on independent appraisals, discounted
cash flow models, cost, and comparable market transactions, which include inputs such as discount rates and pricing data from the most recent equity
financing. Insurance contracts are primarily valued based on contract values, which approximate fair value.
Some of the plans’ assets, primarily absolute return, real estate, and private equity, do not have readily determinable market values due to the nature of
these investments. For these investments, fund manager or general partner estimates were used where available. The estimates for the absolute return
assets are derived from observable inputs, based on the fair value of the underlying positions, which have readily available market prices. For
investments with lagged pricing, the Company used the available net asset values, and also considered expected return, subsequent cash flows and
material events.
For all of the Company’s major defined benefit pension plans, investment managers are selected that are expected to provide best-in-class asset
management for their particular asset class, and expected returns greater than those expected from existing salable assets,
(in millions)
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total
Cash and cash equivalents
$
-
$
173
$
-
$
173
Equity securities
77
420
-
497
Debt securities:
Government Bonds
-
413
-
413
Inflation
-
Linked Bonds
-
338
65
403
Investment Grade Bonds
-
111
-
111
Global High Yield & Emerging Market Debt
-
203
-
203
Other:
Absolute Return
-
76
-
76
Real Estate
-
4
77
81
Private Equity
-
2
301
303
Insurance Contracts
-
378
-
378
Derivatives with unrealized gains
1
3
-
4
Derivatives with unrealized losses
-
(8
)
-
(8
)
$
78
$
2,113
$
443
$
2,634
103