Union Pacific 2010 Annual Report Download - page 66

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66
investments, pricing inputs are not readily observable. Asset valuations are developed by the general
partners that manage the partnerships. These valuations are based on the application of public market
multiples to private company cash flows, market transactions that provide valuation information for
comparable companies, and other methods. Holdings of limited partnership interests are classified as
Level 3 investments.
Real Estate Partnerships and Funds – Most of the real estate investments are partnership interests
similar to those described in the Venture Capital and Partnerships category. This category also includes
real estate investments held in less commonly used structures such as private real estate investment
trusts and pooled separate accounts. Valuations for the holdings in this category are not based on readily
observable inputs and are primarily derived from property appraisals. Interests in private real estate
partnerships, investment funds and pooled separate accounts are classified as Level 3 investments.
Common Trust and Other Funds – Common trust funds are comprised of shares or units in commingled
funds that are not publicly traded. The underlying assets in these funds (equity securities, fixed income
securities, and commodity-related securities) are publicly traded on exchanges and price quotes for the
assets held by these funds are readily available. Holdings of common trust funds are classified as Level 2
investments.
This category also includes an investment in a limited liability company that invests in publicly-traded
convertible securities. The limited liability company investment is a fund that invests in both long and
short positions in convertible securities, stocks, and fixed income securities. The underlying securities
held by the fund are traded actively on exchanges and price quotes for these investments are readily
available. Interest in the limited liability company is classified as a Level 2 investment.
Other Investments – This category includes several miscellaneous assets such as commodity hedge
fund investments. These investments have valuations that are based on observable inputs and are
classified as Level 2 investments.
As of December 31, 2010, the pension plan assets measured at fair value on a recurring basis were as
follows:
Quoted Prices Significan
t
in Active Othe
r
Significan
t
Markets fo
r
Observable Unobservable
Identical Inputs Inputs Inputs
Millions (Level 1) (Level 2) (Level 3) Tota
l
Plan assets:
Temporary cash investments $ 23 $ - $ - $ 23
Registered investment companies 9 259 - 268
U.S. government securities - 142 - 142
Corporate bonds & debentures - 311 - 311
Corporate stock 573 7 - 580
Venture capital and buyout partnerships - - 169 169
Real estate partnerships and funds - - 99 99
Common trust and other funds - 776 - 776
Other investments - 29 - 29
Total plan assets at fair value $ 605 $ 1,524 $ 268 2,397
Other assets [a] 7
Total plan assets $ 2,404
[a] Other assets include accrued receivables and pending broker settlements.