Sears 2012 Annual Report Download - page 86

SEARS HOLDINGS CORPORATION
Notes to Consolidated Financial Statements—(Continued)
86
Investment Assets at Fair Value at
Sears Canada January 28, 2012
millions Total Level 1 Level 2 Level 3
Cash equivalents and short-term investments . . . . . . . . . . . . . . . . . . . . $ 7 $ — $ 7 $ —
Equity securities:
U.S. companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 189 1 —
International companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 30 — —
Common collective trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306 — 306 —
Fixed income securities:
Corporate bonds and notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 560 — 560 —
U.S. government and agencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 — 2 —
Mortgage-backed and asset-backed . . . . . . . . . . . . . . . . . . . . . . . . . . 73 — 9 64
Municipal and foreign government. . . . . . . . . . . . . . . . . . . . . . . . . . . 57 — 57 —
Hedge and pooled equity funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 — — 16
Total investment assets at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,241 $ 219 $ 942 $ 80
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Refundable deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Accounts receivable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 484
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (480)
Net assets available for plan benefits . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,296
Equity securities, which include common and preferred stocks and registered investment companies (mutual
funds), are actively traded and valued at the closing price reported in the active market in which the security is
traded and are assigned to Level 1.
Common collective trusts are portfolios of underlying investments held by investment managers and are
valued at the unit value reported by the investment managers as of the end of each period presented. Collective
short-term investment funds are stated at net asset value (NAV) as determined by the investment managers.
Investment managers value the underlying investments of the funds at amortized cost, which approximates fair
value, and have assigned a Level 2 to the valuation of those investments. Fixed income securities are assigned to
Level 2 as they are primarily valued by institutional bid evaluation, which determines the estimated price a dealer
would pay for a security and which is developed using proprietary models established by the pricing vendors for this
purpose.
Certain corporate and mortgage-backed debt securities are assigned to Level 3 based on the relatively low
position in the preferred hierarchy of the pricing source. Valuation of the Plan's non-public limited partnerships
requires significant judgment by the general partners due to the absence of quoted market value, inherent lack of
liquidity, and the long-term nature of the assets, and may result in fair value measurements that are not indicative of
ultimate realizable value. Hedge funds consist of fund-of-funds investments and direct hedge funds and are assigned
to Level 3. The fund-of-funds investments are primarily valued using a market approach based on the NAVs
calculated by the fund and are not publicly available. Direct hedge funds are primarily valued by each fund's third
party administrator based on the valuation of the underlying type of security held and are not publicly available. All
hedge fund investments are in the process of being redeemed.