Chevron 2009 Annual Report Download - page 65

Chevron Corporation 2009 Annual Report 63
FS-PB
Note 21 Employee Benefit Plans – Continued
Level 1: Fair values of these assets are measured using
unadjusted quoted prices for the assets or the prices of identi-
cal assets in active markets that the plans have the ability
to access.
Level 2: Fair values of these assets are measured based
on quoted prices for similar assets in active markets; quoted
prices for identical or similar assets in inactive markets; inputs
other than quoted prices that are observable for the asset; and
inputs that are derived principally from or corroborated by
observable market data by correlation or other means. If the
asset has a contractual term, the Level 2 input is observable
for substantially the full term of the asset. The fair values for
Level 2 assets are generally obtained from third-party broker
quotes, independent pricing services and exchanges.
Level 3: Inputs to the fair value measurement are
unobservable for these assets. Valuation may be performed
using a financial model with estimated inputs entered into
the model.
The fair value measurements of the company’s pension
plans for 2009 are below:
U.S. Int’l
Total Fair Value Level 1 Level 2 Level 3 Total Fair Value Level 1 Level 2 Level 3
Equities
U.S.1 $ 2,115 $ 2,115 $ – $ – $ 370 $ 370 $ – $ –
International 977 977 – – 492 492 – –
Collective Trusts/Mutual Funds2 1,264 3 1,261 – 789 94 695 –
Fixed Income
Government 713 149 564 – 506 54 452 –
Corporate 430 – 430 – 371 17 336 18
Mortgage-Backed Securities 149 – 149 – 2 – – 2
Other Asset Backed 90 – 90 – 19 – 19 –
Collective Trusts/Mutual Funds2 326 – 326 – 230 14 216 –
Mixed Funds3
8 8 – – 102 14 88 –
Real Estate4 479 – – 479 131 – – 131
Cash and Cash Equivalents 743 743 – – 207 207 – –
Other5
10 (57) 16 51 16 (3) 18 1
Total at December 31, 2009 $ 7,304 $ 3,938 $ 2,836 $ 530 $ 3,235 $ 1,259 $ 1,824 $ 152
1 U.S. equities include investments in the company’s common stock in the amount of $29 at December 31, 2009.
2 Collective Trusts/Mutual Funds for U.S. plans are entirely index funds; for International plans, they are mostly index funds. For these index funds, the Level 2 designation is based
on the restriction that advance notification of redemptions, typically two business days, is required.
3 Mixed funds are composed of funds that invest in both equity and fixed income instruments in order to diversify and lower risk.
4 The year-end valuations of the U.S. real estate assets are based on internal appraisals by the real estate managers, which are updates of third-party appraisals that occur at least once
a year for each property in the portfolio.
5 The “Other” asset category includes net payables for securities purchased but not yet settled (Level 1); dividends, interest- and tax-related receivables (Level 2); insurance contracts
and investments in private-equity limited partnerships (Level 3).
The effect of fair-value measurements using significant unobservable inputs on changes in Level 3 plan assets for the period
are outlined below:
Fixed Income
Mortgage-
Backed
U.S. Equities Corporate Securities Real Estate Other Total
Total at December 31, 2008 $ 1 $ 23 $ 2 $ 763 $ 52 $ 841
Actual Return on Plan Assets:
Assets held at the reporting date (1) 2 – (178) – (177)
Assets sold during the period – 5 – 8 – 13
Purchases, Sales and Settlements – (12) – 17 – 5
Transfers in and/or out of Level 3 – – – – – –
Total at December 31, 2009 $ – $ 18 $ 2 $ 610 $ 52 $ 682