Time Warner Cable 2012 Annual Report Download - page 116

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TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2011
Fair Value Measurements
Fair Value Level 1 Level 2 Level 3
Cash..................................................$ 2 $ 2 $ — $ —
Common stocks:
Domestic(a) .......................................... 667 667 — —
International(a) ........................................ 289 289 — —
Mutual funds(a) ......................................... 53 53 — —
Commingled equity funds(b) ............................... 174 — 174 —
Other equity securities(c) .................................. 5 5 — —
U.S. Treasury debt securities(a) ............................. 214 214 — —
Corporate debt securities(d) ................................ 225 — 225 —
Commingled bond funds(b) ................................ 183 — 183 —
Collective trust funds(e) ................................... 374 — 374 —
U.S. government asset-backed debt securities(f) ................ 29 — 29 —
Corporate asset-backed debt securities(g) ..................... 9 — 9 —
Other fixed-income securities(h) ............................ 39 — 39 —
Other investments(i) ...................................... 29 1 — 28
Total investments assets .................................. 2,292 $ 1,231 $ 1,033 $ 28
Accrued investment income ............................... 7
Accrued liabilities ....................................... (7)
Fair value of plan assets ..................................$ 2,292
(a) Common stocks, mutual funds and U.S. Treasury debt securities are valued at the closing price reported on the active market on which the individual
securities are traded.
(b) Commingled equity funds and commingled bond funds 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.
(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) 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 indices and research
reports, spreads, bids and offers.
(g) 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 indices and 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.
106