Raytheon 2010 Annual Report Download - page 115

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(10) As of December 31, 2010 and December 31, 2009, this category included $2 million and $21 million of cash on deposit with a broker for future
margin requirements and $61 million and $66 million of net receivables and payables which consisted primarily of pending trades, interest,
dividends and other payable expenses.
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
(In millions)
Beginning
Balance at
December 31, 2009
Actual return on
plan assets(1)
Purchases,
issuances,
settlements
Transfers
in and/or
out of
Level 3
Ending
Balance at
December 31,
2010
U.S. equity
U.S. equity hedge funds $ 19 $ 3 $ — $— $ 22
Fixed-income securities
Non-investment grade bonds 49 (11) (38) — —
Fixed-income hedge funds 207 7 (122) — 92
Other funds
Private equity funds 242 21 (11) — 252
Private real estate funds 125 17 14 — 156
Hedge funds — 1 20 — 21
Insurance contracts 22 — 1 — 23
Other 66 — (5) — 61
Total $730 $ 38 $(141) $— $627
(In millions)
Beginning
Balance at
December 31,
2008
Actual return on
plan assets(1)
Purchases,
issuances,
settlements
Transfers
in and/or
out of
Level 3
Ending
Balance at
December 31,
2009
U.S. equities
All capitalization $ 2 $ (2) $ — $— $ —
U.S. equity hedge funds 15 4 — — 19
Fixed-income securities
Non-investment grade bonds 53 (29) 25 — 49
Fixed-income hedge funds 301 60 (154) — 207
Other funds
Private equity funds 272 (23) (7) — 242
Private real estate funds 185 (70) 10 — 125
Hedge funds 51 16 (67) — —
Insurance contracts 24 2 (4) — 22
Other 86 — (20) — 66
Total $989 $(42) $(217) $— $730
(1) The actual return on plan assets for assets still held at December 31, 2010 and December 31, 2009 was $52 million and $14 million, respectively.
The Plan limits the use of derivatives through direct or separate account investments such that the derivatives used are
liquid and able to be readily valued in the market. Derivative usage in separate account structures is limited to hedging
purposes or to gain market exposure in a non-speculative manner. The fair market value of the Plan’s derivatives through
direct or separate account investments was less than $1 million and $2 million as of December 31, 2010 and
December 31, 2009, respectively.
In addition, assets are held in trust for non-U.S. Pension Benefits plans, primarily in the U.K. and Canada which are
governed locally in accordance with specific jurisdictional requirements. These assets are overseen by local management
in Canada and by trustees with a combination of members representing plan participants and local management in the
U.K. Investments in the non-U.S. Pension Benefits plans consist primarily of fixed-income securities and equity securities
and had a fair market value of $597 million and $545 million at December 31, 2010 and December 31, 2009, respectively.
107