Dow Chemical 2015 Annual Report Download - page 136
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126
For pension plan assets classified as Level 3 measurements, total fair value is based on significant unobservable inputs
including assumptions where there is little, if any, market activity for the investment. Investment managers or fund managers
provide valuations of the investment on a monthly or quarterly basis. These valuations are reviewed for reasonableness based
on applicable sector, benchmark and company performance. Adjustments to valuations are made where appropriate. Where
available, audited financial statements are obtained and reviewed for the investments as support for the manager’s investment
valuation.
The following table summarizes the changes in fair value of Level 3 pension plan assets for the years ended December 31, 2014
and 2015:
Fair Value Measurement of Level 3
Pension Plan Assets Equity
Securities
Fixed
Income
Securities
Alternative
Investments
Other
Investments Total
In millions
Balance at January 1, 2014 $ 12 $ 237 $ 2,761 $ 40 $ 3,050
Actual return on plan assets:
Relating to assets sold during 2014 — 22 139 — 161
Relating to assets held at Dec 31, 2014 (12) (7) 191 1 173
Purchases, sales and settlements 32 63 300 (1) 394
Transfers out of Level 3, net — (3) — — (3)
Foreign currency impact — (1) (49) — (50)
Balance at December 31, 2014 $ 32 $ 311 $ 3,342 $ 40 $ 3,725
Actual return on plan assets:
Relating to assets sold during 2015 — 18 233 — 251
Relating to assets held at Dec 31, 2015 — (9) 58 (2) 47
Purchases, sales and settlements 2 (27) (90) — (115)
Transfers out of Level 3, net (6) (1) 5 — (2)
Foreign currency impact — 1 (27) — (26)
Balance at December 31, 2015 $ 28 $ 293 $ 3,521 $ 38 $ 3,880
NOTE 19 – LEASED PROPERTY
Leased Property
The Company routinely leases premises for use as sales and administrative offices, warehouses and tanks for product storage,
motor vehicles, railcars, computers, office machines and equipment under leases. In addition, the Company leases aircraft in the
United States. At the termination of the leases, the Company has the option to purchase certain leased equipment and buildings
based on a fair market value determination.
Rental expenses under leases, net of sublease rental income, were $600 million in 2015, $539 million in 2014 and $490 million
in 2013. Future minimum rental payments under leases with remaining noncancelable terms in excess of one year are as
follows:
Minimum Lease Commitments at December 31, 2015
In millions
2016 $ 302
2017 277
2018 249
2019 230
2020 215
2021 and thereafter 1,500
Total $ 2,773