Emerson 2010 Annual Report Download - page 49

Download and view the complete annual report

Please find page 49 of the 2010 Emerson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 64

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64

2010 Annual Report
47
The fair values of defined benefit plan assets as of September 30, 2010 organized by asset class and by the fair value
hierarchy of ASC 820 as outlined in Note 1 follow:
level 1 level 2 level 3 total %
U.S. Equities $ 879 457 130 1,466 38%
International Equities 533 256 789 20%
Emerging Market Equities 67 136 203 5%
Corporate Bonds 23 449 472 12%
Government Bonds 6 533 539 14%
High Yield Bonds 2 133 135 3%
Other 33 164 119 316 8%
Total $1,543 2,128 249 3,920 100%
ASSET CLASSES
U.S. Equities reflects companies domiciled in the U.S., including multinational companies. International Equities is
comprised of companies domiciled in developed nations outside the U.S. Emerging Market Equities is comprised of
companies domiciled in portions of Asia, Eastern Europe and Latin America.
Government Bonds include investment-grade instruments issued by federal, state and local governments, primarily in
the U.S. Corporate Bonds represent investment-grade debt of issuers primarily from the U.S. High Yield Bonds include
non-investment-grade debt from a diverse group of developed market issuers.
Other includes cash, interests in mixed asset funds investing in commodities, natural resources, agriculture and
exchange-traded real estate funds, life insurance contracts (U.S.) and shares in certain general investment funds of
financial institutions or insurance arrangements (non-U.S.) that typically ensure no market losses or provide for a small
minimum return guarantee.
FAIR VALUE HIERARCHY CATEGORIES
Valuations of Level 1 assets for all classes are based on quoted closing market prices from the principal exchanges
where the individual securities are traded. Cash is valued at cost, which approximates fair value.
Equity securities categorized as Level 2 assets are primarily non-exchange-traded commingled or collective funds
where the underlying securities have observable prices available from active markets. Valuation is based on the net
asset value of fund units held as derived from the fair value of the underlying assets.
Debt securities categorized as Level 2 assets are generally valued based on independent broker/dealer bids or by
comparison to other debt securities having similar durations, yields and credit ratings. Other Level 2 assets are valued
based on a net asset value of fund units held, which is derived from either broker/dealer quotation or market-observed
pricing for the underlying assets.
U.S. equity securities classified as Level 3 are fund investments in private companies. Valuation techniques and inputs
for these assets include discounted cash flow analysis, earnings multiple approaches, recent transactions, transfer-
ability restrictions, prevailing discount rates, volatilities, credit ratings and other factors.
In the Other class, interests in mixed assets funds are Level 2 and U.S. life insurance contracts and non-U.S. general fund
investments and insurance arrangements are Level 3.
A reconciliation of the change in value for Level 3 assets follows:
Beginning balance, September 30, 2009 $221
Gains/(Losses) on assets held 28
Gains/(Losses) on assets sold (9)
Purchases, sales and settlements, net 9
Ending balance, September 30, 2010 $249