Mondelez 2014 Annual Report Download - page 90

Table of Contents
Changes in our Level 3 plan assets, which are recorded in other comprehensive earnings / (losses), included:
The increases in Level 3 pension plan investments during 2014 were primarily due to unrealized gains across most of the Level 3
asset categories and net transfers into pooled funds-
fixed income securities offset by the effects of currency. The increases in Level
3 pension plan investments during 2013 were primarily due to net purchases in hedge funds.
The percentage of fair value of pension plan assets was:
For our U.S. plans, our investment strategy is based on our expectation that equity securities will outperform fixed-
income securities
over the long term. We attempt to maintain our target asset allocation by rebalancing between asset classes as we make
contributions and monthly benefit payments. Due to the nature and timing of our expected pension liabilities, in the first quarter of
2014, we strategically reduced the risk level of the investment portfolio relative to the liabilities of our plans by lowering our target
allocation to equity securities (including investments in real estate) to 50% and increasing the fixed-
income allocation target to 50%.
Historically we targeted an allocation of approximately 60% of our plan assets in equity securities and approximately 40% in fixed-
income securities. The strategy uses indexed U.S. equity securities, actively managed and indexed international equity securities
and actively managed U.S. investment grade fixed-income securities (which constitute 95% or more of fixed-
income securities) with
lesser allocations to high yield fixed-income securities. At December 31, 2013, we had a higher allocation to fixed income due to a
voluntary $163 million contribution that was made on December 27, 2013 and temporarily invested in a short-term fixed income
investment at year-end.
87
Asset Category
January 1,
2014
Balance
Net Realized
and Unrealized
Gains/
(Losses)
Net Purchases,
Issuances and
Settlements
Net Transfers
Into/(Out
of) Level 3
Currency
Impact
December 31,
2014
Balance
(in millions)
Pooled funds-
fixed-income securities
$
15
$
(15
)
$
15
$
87
$
(5
)
$
97
Corporate bond and other
fixed-income securities
780
80
(64
)
– (
47
)
749
Real estate
267
37
(2
)
10
(20
)
292
Hedge funds
820
40
20
– (
51
)
829
Private equity
227
45
(19
)
2
(15
)
240
Total Level 3 investments
$
2,109
$
187
$
(50
)
$
99
$
(138
)
$
2,207
Asset Category
January 1,
2013
Balance
Net Realized
and Unrealized
Gains/
(Losses)
Net Purchases,
Issuances and
Settlements
Net Transfers
Into/(Out
of) Level 3
Currency
Impact
December 31,
2013
Balance
(in millions)
Pooled funds-
fixed
-
income securities
$
10
$
(1
)
$
2
$
4
$
–
$
15
Corporate bond and other
fixed
-
income securities
794
17
(48
)
(1
)
18
780
Real estate
239
10
12
–
6
267
Hedge funds
263
(11
)
535
–
33
820
Private equity
210
15
(4
)
–
6
227
Total Level 3 investments
$
1,516
$
30
$
497
$
3
$
63
$
2,109
U.S. Plans
Non
-
U.S. Plans
As of December 31,
As of December 31,
Asset Category
2014
2013
2014
2013
Equity securities
45%
53%
30%
34%
Fixed-income securities
52%
44%
48%
45%
Real estate
3%
3%
4%
4%
Hedge funds
–
–
10%
10%
Private equity
–
–
3%
3%
Cash
–
–
3%
3%
Other
–
–
2%
1%
Total
100%
100%
100%
100%