Boeing 2011 Annual Report Download - page 102

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Common and preferred stock equity securities are primarily valued using a market approach based on
the quoted market prices of identical instruments. Common/collective/pooled funds are typically
common or collective trusts valued at their net asset values (NAVs) that are calculated by the
investment manager or sponsor of the fund and have daily or monthly liquidity. Active currency
managers, through an overlay program, invest in a broad set of currency derivatives. Derivatives
leveled in the table above are over-the-counter and are primarily valued using an income approach
with inputs that include benchmark yields, swap curves, cash flow analysis, rating agency data and
interdealer broker rates. Exchange-traded derivative positions are reported in accordance with
changes in daily variation margin which is settled daily and therefore reflected in the payables and
receivables portion of the table.
Private equity valuations are reported by the fund manager and are based on the valuation of the
underlying investments, which include inputs such as cost, operating results, discounted future cash
flows and market based comparable data.
Real estate and real asset fund values are primarily reported by the fund manager and are based on
valuation of the underlying investments, which include inputs such as cost, discounted future cash
flows, independent appraisals and market based comparable data. Publically traded REITs and
infrastructure stocks are valued using a market approach based on quoted market prices of identical
instruments. Exchange-traded commodities futures positions are reported in accordance with changes
in daily variation margin which is settled daily and therefore reflected in the payables and receivables
portion of the table.
Global strategies are primarily limited liability company (LLC) or mutual fund structures. The LLCs are
primarily valued using a market approach based on NAVs calculated by the fund and have monthly
liquidity. Global strategies mutual funds are valued using a market approach based on the quoted
market prices of identical instruments.
Hedge funds consist of fund-of-fund LLC or commingled fund structures and direct hedge funds. The
LLCs are primarily valued using a market approach based on NAVs calculated by the fund and are not
publicly available. Liquidity for the LLCs is monthly and is subject to liquidity of the underlying hedge
funds. The commingled fund NAV is calculated by the manager on a daily basis and has monthly
liquidity. Direct hedge funds are primarily valued by each fund’s third party administrator based on
valuation of the underlying securities and instruments and primarily applying a market or income
valuation methodology depending on the specific type of security or instrument, equity, fixed income,
currency or derivative, held. Direct hedge fund NAVs based on valuation of the underlying holdings are
not publicly available and have monthly liquidity.
Some of our assets, primarily our private equity, real estate and real assets, hedge funds and global
strategies, do not have readily determinable market values given the specific investment structures
involved and the nature of the underlying investments. For the December 31, 2011 and 2010 plan
asset reporting, publicly traded asset pricing was used where possible. For assets without readily
determinable values, estimates were derived from investment manager discussions focusing on
underlying fundamentals and significant events. For those investments reported on a one-quarter
lagged basis (primarily LPs) we use net asset values, adjusted for subsequent cash flows and
significant events.
90