Macy's 2014 Annual Report Download - page 77

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-30
The fair values of the Pension Plan assets as of February 1, 2014, excluding interest and dividend receivables and
pending investment purchases and sales, by asset category are as follows:
Fair Value Measurements
Total
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
(millions)
Cash and cash equivalents............................................ $ 211 $ — $ 211 $ —
Equity securities:
U.S. ........................................................................ 834 354 480 —
International .......................................................... 748 — 748 —
Fixed income securities:
U. S. Treasury bonds............................................. 221 — 221 —
Other Government bonds...................................... 39 — 39 —
Agency backed bonds ........................................... 22 — 22 —
Corporate bonds.................................................... 388 — 388 —
Mortgage-backed securities and forwards ............ 95 — 95 —
Asset-backed securities......................................... 20 — 20 —
Pooled funds.......................................................... 454 — 454 —
Other types of investments:
Real estate ............................................................. 214 — — 214
Hedge funds .......................................................... 167 — — 167
Private equity ........................................................ 167 — — 167
Total.............................................................................. $ 3,580 $ 354 $ 2,678 $ 548
Corporate bonds consist primarily of investment grade bonds of U.S. issuers from diverse industries.
The fair value of the real estate, hedge funds and private equity investments represents the reported net asset value of
shares or underlying assets of the investment. Private equity and real estate investments are valued using fair values per the
most recent financial reports provided by the investment sponsor, adjusted as appropriate for any lag between the date of
the financial reports and the Company’s reporting date. The real estate investments are diversified across property types
and geographical areas primarily in the United States of America. Private equity investments generally consist of limited
partnerships in the United States of America, Europe and Asia. The hedge fund investments are through a fund of funds
approach.
Due to the nature of the underlying assets of the real estate, hedge funds and private equity investments, changes in
market conditions and the economic environment may significantly impact the net asset value of these investments and,
consequently, the fair value of the Pension Plan’s investments. These investments are redeemable at net asset value to the
extent provided in the documentation governing the investments. However, these redemption rights may be restricted in
accordance with the governing documents. Redemption of these investments is subject to restrictions including lock-up
periods where no redemptions are allowed, restrictions on redemption frequency and advance notice periods for
redemptions. As of January 31, 2015 and February 1, 2014, certain of these investments are generally subject to lock-up
periods, ranging from two to fourteen years, certain of these investments are subject to restrictions on redemption
frequency, ranging from daily to twice per year, and certain of these investments are subject to advance notice
requirements, ranging from sixty-day notification to ninety-day notification. As of January 31, 2015 and February 1, 2014,
the Pension Plan had unfunded commitments related to certain of these investments totaling $115 million and $150 million,
respectively.