Pepsi 2012 Annual Report Download - page 94

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Plan assets measured at fair value as of fiscal year-end 2012 and 2011 are categorized consistently by level in both years,
and are as follows:
2012 2011
Total Level 1 Level 2 Level 3 Total
U.S. plan assets*
Equity securities:
U.S. common stock(a) $ 626 $ 626 $ – $ – $ 514
U.S. commingled funds(b) 3,106 – 3,106 – 3,003
International common stock(a) 1,597 1,597 – – 1,089
International commingled fund(c) 948 – 948 – 776
Preferred stock(d) 20 – 20 – 19
Fixed income securities:
Government securities(d) 1,287 – 1,287 – 1,032
Corporate bonds(d)(e) 2,962 – 2,962 – 2,653
Mortgage-backed securities(d) 110 – 110 – 24
Other:
Contracts with insurance companies(f) 27 – – 27 24
Real estate commingled funds(g) 331 – – 331 –
Cash and cash equivalents 117 117 – – 78
Sub-total U.S. plan assets 11,131 $ 2,340 $ 8,433 $ 358 9,212
Dividends and interest receivable 51 50
Total U.S. plan assets $ 11,182 $ 9,262
International plan assets
Equity securities:
U.S. commingled funds(b) $ 278 $ – $ 278 $ – $ 246
International commingled funds(c) 863 – 863 – 729
Fixed income securities:
Government securities(d) 202 – 202 – 171
Corporate bonds(d) 230 – 230 – 196
Fixed income commingled funds(h) 600 – 600 – 530
Other:
Contracts with insurance companies(f) 35 – – 35 30
Currency commingled funds(i) 64 – 64 – 52
Real estate commingled fund(g) 60 – – 60 56
Cash and cash equivalents 125 125 – – 16
Sub-total international plan assets 2,457 $ 125 $ 2,237 $ 95 2,026
Dividends and interest receivable 6 5
Total international plan assets $ 2,463 $ 2,031
(a) Based on quoted market prices in active markets.
(b) Based on the fair value of the investments owned by these funds that track various U.S. large, mid-cap and small company indices. Includes one large-cap fund that repre-
sents 25% and 30%, respectively, of total U.S. plan assets for 2012 and 2011.
(c) Based on the fair value of the investments owned by these funds that track various non-U.S. equity indices.
(d) Based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes that are not observable.
(e) Corporate bonds of U.S.-based companies represent 22% and 24%, respectively, of total U.S. plan assets for 2012 and 2011.
(f ) Based on the fair value of the contracts as determined by the insurance companies using inputs that are not observable.
(g) Based on the appraised value of the investments owned by these funds as determined by independent third parties using inputs that are not observable.
(h) Based on the fair value of the investments owned by these funds that track various government and corporate bond indices.
( i ) Based on the fair value of the investments owned by these funds. Includes managed hedge funds that invest primarily in derivatives to reduce currency exposure.
  * 2012 and 2011 amounts include $365million and $190million, respectively, of retiree medical plan assets that are restricted for purposes of providing health benefits for
U.S. retirees and their beneficiaries.
The change in Level 3 plan assets for 2012 is as follows:
Balance,
End of
2011
Return on
Assets Held
at Year End
Return
on Assets
Sold
Purchases
and Sales,
Net
Balance,
End of
2012
Real estate commingled funds $ 56 $ 15 $ 1 $ 319 $ 391
Contracts with insurance companies 54 9 – (1) 62
Total $ 110 $ 24 $ 1 $ 318 $ 453
2012 PEPSICO ANNUAL REPORT92
Notes to Consolidated Financial Statements