Medtronic 2012 Annual Report Download - page 128

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Medtronic, Inc.
Notes to Consolidated Financial Statements (Continued)
111
companies. For private equity funds, the sum of the unfunded commitments is $21 million and the estimated
liquidation period of these funds is expected to be one to 15 years. Real asset investments consist of
commodities, derivatives, Real Estate Investment Trusts, and illiquid real estate holdings. These investments
have redemption and liquidation periods ranging from 30 days to 10 years. If a quoted market price is not
available for a partnership investment, other valuation procedures are utilized to arrive at fair value.
Registered Investment Companies: Valued at the quoted market prices of shares held by the plan at
year-end in the active market on which the individual securities are traded.
Insurance Contracts: Comprised of investments in collective (group) insurance contracts, consisting of
individual insurance policies. The policyholder is the employer and each member is the owner/beneficiary
of their individual insurance policy. These policies are a part of the insurance company’s general portfolio
and participate in the insurer’s profit-sharing policy on an excess yield basis.
The methods described above may produce fair values that may not be indicative of net realizable
value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are
appropriate and consistent with other market participants, the use of different methodologies or assumptions
to determine fair value of certain financial instruments could result in a different fair value measurement
at the reporting date.
During fiscal year 2011, the Company reviewed the hierarchy classification of fixed income mutual
funds. The Company determined these investments had valuation characteristics consistent with Level 2
securities. Consequently, the Company transferred fixed income mutual funds from Level 1 to Level 2.
Additionally, the Company reviewed the hierarchy classification of registered investment companies. The
Company determined these investments had valuation characteristics consistent with Level 2 securities.
Consequently, the Company transferred registered investment companies from Level 1 to Level 2. There
were no transfers from Level 1 or 2 to Level 3 during the fiscal year ended April 27, 2012.
The following tables provide information by level for the retirement benefit plan assets that are
measured at fair value, as defined by U.S. GAAP. See Note 7 for discussion of the fair value measurement
terms of Levels 1, 2, and 3.
U.S. Pension Benefits
Fair Value Fair Value Measurements
at Using Inputs Considered as
_______________________________________
(in millions) April 27, 2012 Level 1 Level 2 Level 3
___________ _____________ __________ __________ __________
Short-term investments . . . . . . . . . . . . . . . . . . . . $ 133 $ 133 $ – $ –
U.S. government securities . . . . . . . . . . . . . . . . . 169 151 18 –
Corporate debt securities . . . . . . . . . . . . . . . . . . 46 – 45 1
Other common stock . . . . . . . . . . . . . . . . . . . . . . 186 186 ––
Equity mutual funds/commingled trusts . . . . . . 316 – 123 193
Fixed income mutual funds . . . . . . . . . . . . . . . . . 62 – 62 –
Partnership units . . . . . . . . . . . . . . . . . . . . . . . . . . 558 ––558
_____________ __________ __________ __________
$1,470 $ 470 $ 248 $ 752
_____________ __________ __________ __________
_____________ __________ __________ __________