First Data 2012 Annual Report Download - page 104

FIRST DATA CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(a) The plans value transfers into Level 3 utilizing values as of the beginning of the period.
Registered investment companies. The Company’s domestic plan has investments in shares of mutual funds, primarily large
cap, international and global equity funds, that are registered with the Securities and Exchange Commission. Prices of these funds are
based on Net Asset Values (“NAV”) calculated by the funds and are publicly reported on national exchanges. The plan measures fair
value of these investments using the NAV provided by the fund managers.
Fixed income securities. The Company’s domestic plan has investments in several fixed income securities, primarily corporate
bonds. The bonds were valued under a market approach using observable inputs including reported trades, benchmark yields,
broker/dealer quotes, issuer spreads and other standard inputs.
Private investment funds—redeemable. The Company’s domestic and United Kingdom plans are invested in shares or units of
several private investment funds, not the underlying assets. Redeemable private investment funds include collective trusts, comingled
funds, pooled funds, limited partnerships and limited liability corporations. The funds calculate NAV on a periodic basis and are
available only from the fund managers. Private investment funds are redeemable at the NAV.
Private investment funds—non-redeemable. The Company’s domestic plan has investments in several partnerships (limited
p
artnership and limited liability corporations) for which the plan has a limited ability to redeem or transfer its interests; therefore, there
is an illiquid market in which the plan can exit these investments. As a result, the plan measures fair value of these investments using
estimates of fair value which come from partner capital statements provided by the partnerships.
Insurance annuity contracts. The Company’s United Kingdom Plan is invested in several insurance annuity contracts. The
value of these contracts is calculated by estimating future payments and discounting them to present value. As a result, there is no
market for the Plan to exit these investments.
Contributions. Contributions to the plans in 2013 are expected to be approximately $42 million.
The estimated future benefit payments, which reflect expected future service, are expected to be as follows:
The Company’s post-retirement health care and other insurance benefits for retired employees are limited and immaterial.
104
Fair Value Measurement Using Significant
Unobservable Inputs (Level 3)
(in millions)
Insurance
annuit
y
contracts
Private investment funds
non-redeemable
Beginning balance as of January 1, 2011 $4.4 $ 0.3
Transfer in from level 2 (a)
—
1.4
Settlements
—
(0.7)
Ending balance as of December 31, 2011 4.4 1.0
Actual return on plan assets
—
0.1
Settlements (1.1) (1.0)
Ending balance as of December 31, 2012
$3.3
$ 0.1
Year ended December 31,
(in millions) Amount
2013 $26.4
2014 27.3
2015 29.3
2016 32.1
2017 33.6
2018-2022 199.6