Raytheon 2013 Annual Report Download - page 120

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
110
(12) Equity hedge fund strategies invest in global public equity securities, equity related options and derivatives and employ short selling with the objective
of generating higher risk-adjusted returns than traditional investments in equity.
(13) Macro fund strategies invest in futures, broad market indices and other financial instruments and seek to either generate positive returns regardless of
market conditions or take advantage of global capital flows.
(14) Multi-strategy funds allocate investments tactically across all asset classes globally based upon relative valuations to achieve maximum returns.
(15) Private equity funds are predominantly invested in the U.S. and Western Europe.
(16) The Plan participated in a securities lending program with the Trustee as of December 31, 2012 and exited the program by December 31, 2013. The
program allowed the Trustee to loan securities, which are assets of the Plan, to approved brokers (Borrowers). The Trustee requires Borrowers, pursuant
to a security loan agreement, to deliver collateral to secure each loan. The Plan bears the risk of loss with respect to the unfavorable change in fair
value of the invested cash collateral. The market value of securities on loan is reflected in the various asset categories above. Loaned securities were
predominantly U.S. equities, International equities, corporate bonds and U.S. Government bonds or treasuries. Cash collateral obligations of $15 million
were received for securities on loan as of December 31, 2012. Cash collateral was invested in a separately maintained and managed cash collateral
investment account.
(17) As of December 31, 2013 and December 31, 2012, this category included $106 million and $192 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
Dec 31,
2012
Actual return
on plan
assets(1)
Purchases,
issuances,
settlements
Transfers in
and/or out of
Level 3
Ending
Balance at
Dec 31,
2013
Fixed-income securities
Fixed-income hedge funds $ 67 $ 39 $ (99) $ — $ 7
Other funds
Absolute return funds
Relative value — 11 135 — 146
Event driven 72 30 53 — 155
Equity hedge 5 1 — — 6
Macro 32 1 (23) — 10
Multi-strategy 80 13 32 — 125
Private equity funds 397 85 116 — 598
Private real estate funds 249 49 31 — 329
Insurance contracts 25 — 1 — 26
Other 192 — (86) — 106
Total $ 1,119 $ 229 $ 160 $ — $ 1,508