FairPoint Communications 2009 Annual Report Download - page 142

Table of Contents
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


Pension plan assets at December 31, 2009 include an additional transfer of assets from Verizon of $33.3 million, which was received on
February 5, 2010, as well as a pending transfer of assets from Verizon estimated to be $0.2 million.
The plans' portfolio strategy emphasizes a long-term equity orientation, significant global diversification and financial and operating risk controls.
The plans' diversification seeks to minimize the concentration of risk. Assets are allocated according to long-term risk and return estimates. Both active
and passive management approaches are used depending on perceived market efficiencies and various other factors.
The fair values for the pension plans by asset category at December 31, 2009 are as follows:
A reconciliation of the beginning and ending balance of pension plan assets that are measured at fair value using significant unobservable (Level 3)
inputs as of December 31, 2009 is as follows:
Cash and cash equivalents include short-term investment funds, primarily in diversified portfolios of investment grade money market instruments
and are valued using quoted market prices, and thus classified within Level 1 of the fair value hierarchy.
Equity securities are investments in common stock of domestic and international corporations in a variety of industry sectors and are valued using
quoted market prices, and are classified within Level 1 of the fair value hierarchy.
Fixed income securities are investments in corporate bonds. The fair values of fixed income securities are based on observable prices and are
classified within Level 2 of the fair value hierarchy.
Hedge funds seek to maximize absolute returns using a broad range of strategies to enhance returns and provide diversification. The fair values of
hedge funds are estimated using net asset value per share (NAV) of the investments. The Company has the ability to redeem these investments at NAV
on a limited basis, and thus has classified hedge funds within Level 3 of the fair value hierarchy.
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     
Cash and cash equivalents $ 18,972 $ 18,972 $ — $ —
Equity securities 41,569 41,569 — —
Fixed income securities 52,045 — 52,045 —
Hedge funds 14,202 — — 14,202
Funds receivable from Verizon 33,553 — — 33,553
Other assets 2,263 — — 2,263
Total $ 162,604 $ 60,541 $ 52,045 $ 50,018
  

   
Balance at December 31, 2008 $ — $ 32,094 $ — $ 32,094
Actual gain (loss) on plan assets (798) 1,459 — 661
Purchases and sales — — — —
Transfers in and/or out of Level 3 15,000 — 2,263 17,263
Balance at December 31, 2009 $ 14,202 $ 33,553 $ 2,263 $ 50,018