Time Warner Cable 2010 Annual Report Download - page 115

(c)
Other equity securities consist of real estate investment trusts and preferred stocks, which are valued at the closing price reported on the active
market on which the individual securities are traded.
(d)
Corporate debt securities are valued based on observable prices from the new issue market, benchmark quotes, secondary trading and dealer
quotes. An option adjusted spread model is incorporated to adjust spreads of issues that have early redemption features and final spreads are added
to the U.S. Treasury curve.
(e)
Collective trust funds primarily consist of short-term investment strategies comprised of instruments issued or fully guaranteed by the U.S.
government and/or its agencies and are valued using the net asset value provided by the administrator of the fund. The net asset value is based on
the value of the underlying assets owned by the fund, less liabilities, and then divided by the number of units outstanding.
(f)
Corporate asset-backed debt securities primarily consist of pass-through mortgage-backed securities issued by U.S. and foreign corporations
valued using available trade information, dealer quotes, market color (including indices and market research reports), spreads, bids and offers.
(g)
U.S. government asset-backed debt securities consist of pass-through mortgage-backed securities issued by the Federal Home Loan Mortgage
Corporation and the Federal National Mortgage Association valued using available trade information, dealer quotes, market color (including
indices and market research reports), spreads, bids and offers.
(h)
Other fixed-income securities consist of foreign government debt securities and U.S. government agency debt securities, which are valued based
on observable prices from the new issue market, benchmark quotes, secondary trading and dealer quotes. An option adjusted spread model is
incorporated to adjust spreads of issues that have early redemption features and final spreads are added to the U.S. Treasury curve.
(i)
Other investments primarily consist of private equity investments, such as those in limited partnerships that invest in operating companies that are
not publicly traded on a stock exchange, and hedge funds. Private equity investments are valued using inputs such as trading multiples of
comparable public securities, merger and acquisition activity and pricing data from the most recent equity financing taking into consideration
illiquidity. Hedge funds are valued using the net asset value provided by the administrator of the fund, which is based on the value of the
underlying assets owned by the fund, less liabilities, and then divided by the number of units outstanding.
Changes in the fair value of investment assets valued using significant unobservable inputs (Level 3) from January 1
through December 31 are presented below (in millions):
2010 2009
Balance at beginning of year .............................................. $ 29 $ 25
Purchases and sales:
Purchases ........................................................... 3 6
Sales .............................................................. (5) (4)
Purchases (sales), net .................................................... (2) 2
Actual return on plan assets still held at end of year ............................. 1 2
Balance at end of year ................................................... $ 28 $ 29
Expected Cash Flows
After considering the funded status of the qualified pension plans, movements in the discount rate, investment
performance and related tax consequences, the Company may choose to make contributions to the qualified pension plans
in any given year. As of December 31, 2010, there were no minimum required contributions for the Company’s qualified
pension plans. For the Company’s nonqualified pension plan, contributions will continue to be made to the extent benefits
are paid. The Company contributed $104 million to the pension plans during 2010, and may make discretionary cash
contributions to the qualified pension plans in 2011.
Benefit payments for the pension plans are expected to be $26 million in 2011, $31 million in 2012, $35 million in
2013, $41 million in 2014, $48 million in 2015 and $389 million in 2016 to 2020.
Defined Contribution Plan
TWC employees also participate in a defined contribution plan, the TWC Savings Plan, for which the expense for
employer matching contributions totaled $64 million in 2010, $61 million in 2009 and $63 million in 2008. The
Company’s contributions to the TWC Savings Plan are primarily based on a percentage of the employees’ elected
contributions and are subject to plan provisions.
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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)