Medtronic 2015 Annual Report Download - page 127

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Medtronic plc
Notes to Consolidated Financial Statements (Continued)
Non-U.S. Plans
Target Allocation
2015 2014
Asset Category
Equity securities 35% 41%
Debt securities 29 22
Other 36 37
Total 100% 100%
Retirement Benefit Plan Asset Fair Values The following is a description of the valuation methodologies used for
retirement benefit plan assets measured at fair value.
Short-term investments: Valued at the closing price reported in the active markets in which the individual security is traded.
U.S. government securities: Certain U.S. government securities are valued at the closing price reported in the active markets in
which the individual security is traded. Other U.S. government securities are valued based on inputs other than quoted prices
that are observable.
Corporate debt securities: Valued based on inputs other than quoted prices that are observable.
Common stock: Valued at the closing price reported in the active markets in which the individual security is traded.
Equity Mutual Funds/Commingled Trusts: Valued based on the year-end net asset values of the investment vehicles. The net
asset values of the investment vehicles are based on the fair values of the underlying investments of the partnerships valued at
the closing price reported in the active markets in which the individual security is traded. Equity mutual funds have a daily
reported net asset value and the Company classifies these investments as Level 2. Commingled trusts do not have a daily
reported net asset value and the Company classifies these investments as Level 3.
Fixed Income Mutual Funds: Valued based on the year-end net asset values of the investment vehicles. The net asset values of
the investment vehicles are based on the fair values of the underlying investments of the partnerships valued based on inputs
other than quoted prices that are observable.
Partnership Units: Valued based on the year-end net asset values of the underlying partnerships. The net asset values of the
partnerships are based on the fair values of the underlying investments of the partnerships. Quoted market prices are used to
value the underlying investments of the partnerships, where the partnerships consist of the investment pools which invest
primarily in common stocks. Partnership units include partnerships, private equity investments, and real asset investments.
Partnerships primarily include long/short equity and absolute return strategies. These investments can be redeemed monthly
with notice periods ranging from 45 to 95 days. As of April 24, 2015, there are two absolute return strategy funds totaling $4
million that are in the process of liquidation. The Company expects to receive the proceeds over the next five years. Private
equity investments consist of common stock and debt instruments of private companies. For private equity funds, the sum of the
unfunded commitments as of April 24, 2015 is $59 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.
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