US Bank 2013 Annual Report Download - page 118

quoted prices in markets that are less active and was
classified as Level 2. The qualified pension plans invest in
hedge funds and private equity funds whose fair values are
determined using the net asset value provided by the fund
administrators. The Company’s ability to redeem at net asset
value is currently restricted, and accordingly, the
investments in hedge and private equity funds are classified
as Level 3. Additionally, the qualified pension plans invest in
limited partnership interests, and in debt securities whose
fair values are determined by the Company by analyzing the
limited partnerships’ audited financial statements and by
averaging the prices obtained from independent pricing
services, respectively. These securities are classified as
Level 3.
The following table summarizes the plan investment assets measured at fair value at December 31:
Pension Plans
Postretirement
Welfare Plan
2013 2012 2013 2012
(Dollars in Millions) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Level 1 Level 1
Cash and cash equivalents ............................ $ 62 $ – $ – $ 119 $ – $ – $92 $105
Debt securities ......................................... 217 343 – 151 114 7 – –
Corporate stock
Domestic equity securities .......................... 217 – – 275 – – – –
Mid-small cap equity securities (a).................. 148 – – 173 – – – –
International equity securities ....................... 229 – – 285 – – – –
Real estate equity securities (b) ..................... 137 – – 132 – – – –
Collective investment funds
Domestic equity securities .......................... – 538 – – 400 – – –
Mid-small cap equity securities (c).................. –58 – –59 – – –
Emerging markets equity securities ................. –58 – –61 – – –
International equity securities ....................... – 472 – – 362 – – –
Mutual funds
Money market ....................................... ––– –7–––
Debt securities ...................................... – 177 – – 129 – – –
Emerging markets equity securities ................. –75 – –71 – – –
Hedge funds (d) ....................................... ––103 ––– – –
Other................................................... – (7) 4 – (7) 3 – –
Total (e) ............................................. $1,010 $1,714 $107 $1,135 $1,196 $10 $92 $105
(a) At December 31, 2013 and 2012, securities included $141 million and $164 million in domestic equities, respectively and $7 million and $9 million in international equities, respectively.
(b) At December 31, 2013 and 2012, securities included $67 million and $66 million in domestic equities, respectively, and $70 million and $66 million in international equities, respectively.
(c) At December 31, 2013 and 2012, securities included $26 million and $24 million in domestic equities, respectively, $22 million and $16 million in international equities, respectively, and
$10 million and $19 million in cash and cash equivalents, respectively.
(d) This category consists of several investment strategies diversified across several hedge fund managers.
(e) Total investment assets of the pension plans exclude obligations to return cash collateral to qualified borrowers of $20 million at December 31, 2012, under security lending
arrangements.
The following table summarizes the changes in fair value for all plan investment assets measured at fair value using significant
unobservable inputs (Level 3) for the years ended December 31:
2013 2012 2011
(Dollars in Millions)
Debt
Securities
Hedge
Funds Other
Debt
Securities Other
Debt
Securities Other
Balance at beginning of period .................. $7 $ – $3 $7 $6 $8 $6
Unrealized gains (losses) relating to assets
still held at end of year ..................... – – – 1 (2) – (9)
Purchases, sales, and settlements, net ....... (7) 103 1 (1) (1) (1) 9
Balance at end of period ........................ $ – $103 $4 $ 7 $ 3 $ 7 $ 6
The following benefit payments are expected to be paid from the retirement plans for the years ended December 31:
(Dollars in Millions)
Pension
Plans
Postretirement
Welfare Plan (a)
Medicare Part D
Subsidy Receipts
2014 ................................................................................... $ 169 $15 $2
2015 ................................................................................... 177 14 2
2016 ................................................................................... 189 13 2
2017 ................................................................................... 200 12 2
2018 ................................................................................... 205 11 2
2019 – 2023 ........................................................................... 1,205 44 8
(a) Net of expected retiree contributions and before Medicare Part D subsidy.
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