OG&E 2013 Annual Report Download - page 69

OGE Energy Corp. 63
(In millions, December 31) 2012 Level 1 Level 2
Common stocks
U.S. common stocks $232.2 $232.2 $÷÷÷«–
Foreign common stocks 39.9 39.9 –
U.S. Government obligations
U.S. treasury notes and bonds(A) 138.6 138.6 –
Mortgage-backed securities 55.8 – 55.8
Bonds, debentures and notes(B)
Corporate fixed income and
other securities 98.4 – 98.4
Mortgage-backed securities 13.5 – 13.5
Commingled fund(C) 34.9 – 34.9
Common/collective trust(D) 25.6 – 25.6
Foreign government bonds 3.9 – 3.9
U.S. municipal bonds 0.8 – 0.8
Interest-bearing cash 0.2 0.2 –
Preferred stocks (foreign) –––
Forward contracts
Receivable (foreign currency) 0.4 – 0.4
Payable (foreign currency) (0.4) – (0.4)
Total Plan investments $643.8 $410.9 $232.9
Receivable from broker for securities sold 0.8
Interest and dividends receivable 2.8
Payable to broker for securities purchased (21.4)
Total Plan assets $626.0
(A) This category represents U.S. treasury notes and bonds with a Moody’s Investors Services rating
of Aaa and Government Agency Bonds with a Moody’s Investors Services rating of A1 or higher.
(B) This category primarily represents U.S. corporate bonds with an investment grade rating at
or above Baa3 or BBB- by Moody’s Investors Services, Standard & Poor’s Ratings Services
or Fitch Ratings.
(C) This category represents units of participation in a commingled fund that primarily invested in
stocks of international companies and emerging markets.
(D) This category represents units of participation in an investment pool which primarily invests in
foreign or domestic bonds, debentures, mortgages, equipment or other trust certificates, notes,
obligations issued or guaranteed by the U.S. Government or its agencies, bank certificates of
deposit, bankers’ acceptances and repurchase agreements, high grade commercial paper and
other instruments with money market characteristics with a fixed or variable interest rate. There
are no restrictions on redemptions in the common/collective trust.
The three levels defined in the fair value hierarchy and examples
of each are as follows:
Level 1 inputs are quoted prices in active markets for identical
unrestricted assets or liabilities that are accessible by the Pension Plan
at the measurement date. Instruments classified as Level 1 include
investments in common and preferred stocks, U.S. treasury notes and
bonds, mutual funds and interest-bearing cash.
Level 2 inputs are inputs other than quoted prices in active markets
included within Level 1 that are either directly or indirectly observable at
the reporting date for the asset or liability for substantially the full term
of the asset or liability. Level 2 inputs include quoted prices for similar
assets or liabilities in active markets and quoted prices for identical or
similar assets or liabilities in markets that are not active. Instruments
classified as Level 2 include corporate fixed income and other securi-
ties, mortgage-backed securities, other U.S. Government obligations,
commingled fund, a common/collective trust, U.S. municipal bonds,
foreign government bonds, a repurchase agreement, money market
fund and forward contracts.
For all domestic equity investment managers, no more than eight
percent (five percent for mid-cap and small-cap equity managers) can
be invested in any one stock at the time of purchase and no more than
16 percent (10 percent for mid-cap and small-cap equity managers)
after accounting for price appreciation. Options or financial futures may
not be purchased unless prior approval of the Company’s Investment
Committee is received. The purchase of securities on margin is prohib-
ited as is securities lending. Private placement or venture capital may
not be purchased. All interest and dividend payments must be swept on
a daily basis into a short-term money market fund for re-deployment. The
purchase of any of the Company’s equity, debt or other securities is
prohibited. The purchase of equity or debt issues of the portfolio man-
ager’s organization is also prohibited. The aggregate positions in any
company may not exceed one percent of the fair market value of its
outstanding stock.
Plan Investments
The following tables summarize the Pension Plan’s investments that are
measured at fair value on a recurring basis at December 31, 2013 and
2012. There were no Level 3 investments held by the Pension Plan at
December 31, 2013 and 2012.
(In millions, December 31) 2013 Level 1 Level 2
Common stocks
U.S. common stocks $236.8 $236.8 $÷÷÷«–
Foreign common stocks 39.3 39.3 –
U.S. Government obligations
U.S. treasury notes and bonds(A) 159.8 159.8 –
Mortgage-backed securities 50.3 – 50.3
Bonds, debentures and notes(B)
Corporate fixed income and
other securities 110.6 – 110.6
Mortgage-backed securities 22.3 – 22.3
Commingled fund(C) 29.2 – 29.2
Common/collective trust(D) 26.0 – 26.0
Foreign government bonds 4.0 – 4.0
U.S. municipal bonds 2.0 – 2.0
Interest-bearing cash 0.1 0.1 –
Forward contracts
Receivable (foreign currency) 1.1 – 1.1
Payable (foreign currency) (1.1) – (1.1)
Total Plan investments $680.4 $436.0 $244.4
Receivable from broker for securities sold 11.5
Interest and dividends receivable 3.2
Payable to broker for securities purchased (40.2)
Total Plan assets $654.9