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89
(Millions)
Fair Value
At Dec. 31,
Fair Value Measurements
Using Inputs Considered as
Asset Class
2009
Level 1
Level 2
Level 3
Equities
U.S. equities ...................................................
$
377
$
377
$
—
$
—
Non-U.S. equities ............................................
39
39
—
—
EAFE index funds ...........................................
19
—
19
—
Index funds .....................................................
31
—
31
—
Total Equities ......................................................
$
466
$
416
$
50
$
—
Fixed Income
U.S. government securities ............................
$
167
$
45
$
122
$
—
Non-U.S. government securities .....................
5
—
5
—
Preferred securities .........................................
1
1
—
—
U.S. corporate bonds ......................................
63
4
59
—
Non-U.S. corporate bonds ..............................
10
—
10
—
Asset backed securities ..................................
2
—
2
—
Collateralized mortgage obligations ...............
7
—
7
—
Private placements .........................................
11
—
7
4
Derivative instruments ....................................
(2
)
—
(2
)
—
Other ...............................................................
2
—
—
2
Total Fixed Income .............................................
$
266
$
50
$
210
$
6
Private equity
Buyouts ...........................................................
$
52
$
—
$
—
$
52
Distressed debt ...............................................
17
—
—
17
Growth equity ..................................................
1
1
—
—
Mezzanine ......................................................
3
—
—
3
Real estate ......................................................
4
—
—
4
Secondary .......................................................
5
—
—
5
Other ...............................................................
75
—
—
75
Venture capital ................................................
89
—
—
89
Total Private Equity ............................................
$
246
$
1
$
—
$
245
Absolute Return
Hedge funds and hedge fund of funds ...........
$
34
$
—
$
31
$
3
Bank loan funds ..............................................
19
—
—
19
Total Absolute Return .........................................
$
53
$
—
$
31
$
22
Commodities ......................................................
$
12
$
—
$
5
$
7
Cash and Cash Equivalents ...............................
$
48
$
43
$
5
$
—
Total ....................................................................
$
1,091
$
510
$
301
$
280
Other items to reconcile to fair value of plan
assets .............................................................
$
(16
)
Fair value of plan assets ....................................
$
1,075
Publicly traded equities are valued at the closing price reported in the active market in which the individual securities
are traded. Index funds are valued at the NAV as determined by the custodian of the fund. The NAV is based on the
fair value of the underlying assets owned by the fund, minus its liabilities then divided by the number of units
outstanding. Private placement funds are valued using the most recent general partner statement of fair value,
updated for any subsequent partnership interests’ cash flows or expected changes in fair value.
Fixed income includes derivative investments such as credit default swaps, interest rate swaps and futures contracts
that are used to help manage risks. U.S. government and government agency bonds and notes are valued at the
closing price reported in the active market in which the individual security is traded. Corporate and other bonds and
notes are valued at either the yields currently available on comparable securities of issuers with similar credit ratings
or valued under a discounted cash flows approach that maximizes observable inputs, such as current yields of
similar instruments, but includes adjustments for certain risks that may not be observable such as credit and liquidity
risks. Swaps and derivative instruments are valued by the custodian using market swap curves and market derived
inputs.