E-Z-GO 2010 Annual Report Download - page 87

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75
The fair value of total pension plan assets by major category and level in the fair value hierarchy as defined in Note 9 is as follows:
(In millions)
Level 1
Level 2
Level 3
January 1, 2011
Cash and equivalents
$ 3
$ 178
$ ―
Equity securities:
Domestic
1,052
469
―
International
688
251
―
Debt securities:
National, state and local governments
39
570
―
Corporate debt
10
432
―
Asset-backed securities
2
103
―
Private equity partnerships
―
―
324
Real estate
―
―
337
Hedge funds
—
—
101
Total
$ 1,794
$ 2,003
$ 762
January 2, 2010
Cash and equivalents
$ 9
$ 128
$ ―
Equity securities:
Domestic
900
409
―
International
610
220
―
Debt securities:
National, state and local governments
―
504
―
Corporate debt
―
463
―
Asset-backed securities
―
148
―
Private equity partnerships
―
―
313
Real estate
―
―
301
Total
$ 1,519
$ 1,872
$ 614
Cash equivalents and equity and debt securities include comingled funds, which represent investments in funds offered to institutional
investors that are similar to mutual funds in that they provide diversification by holding various equity and debt securities. Since these
comingled funds are not quoted on any active market and are valued based on the relative dispersion of the underlying equity and debt
investments and their individual prices at any given time, they are classified as Level 2. Debt securities are valued based on same day
actual trading prices, if available. If such prices are not available, we use a matrix pricing model with historical prices, trends and
other factors.
Private equity partnerships represent investments in funds, which, in turn, invest in stocks and debt securities of companies that, in
most cases, are not publicly traded. These partnerships are valued using income and market methods that include cash flow
projections and market multiples for various comparable companies.
Real estate includes owned properties and investments in partnerships. Owned properties are valued using certified appraisals at least
every three years, which then are updated at least annually by the real estate investment manager, who considers current market trends
and other available information. These appraisals generally use the standard methods for valuing real estate, including forecasting
income and identifying current transactions for comparable real estate to arrive at a fair value. Real estate partnerships are valued
similar to private equity partnerships, with the general partner using standard real estate valuation methods to value the real estate
properties and securities held within their fund portfolios. We believe these assumptions are consistent with assumptions that market
participants would use in valuing these investments.
Hedge funds represent an investment in a diversified fund of hedge funds of which we are the sole investor. The fund invests in
portfolio funds that are not publicly traded and are managed by various portfolio managers. Investments in portfolio funds are
typically valued on the basis of the most recent price or valuation provided by the relevant fund’s administrator. The administrator for
the fund aggregates these valuations with the other assets and liabilities to calculate the net asset value of the fund.