Ford 2014 Annual Report Download - page 143

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FORD MOTOR COMPANY AND SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS
NOTE 12. RETIREMENT BENEFITS (Continued)
Private equity and real estate investments are less liquid. External investment managers typically report valuations
reflecting initial cost or updated appraisals, which are adjusted for cash flows, and realized and unrealized gains/losses.
Private equity and real estate funds do not have readily available market quotations, and therefore are valued using the
NAV provided by the investment sponsor or third party administrator. These assets typically are categorized as Level 3 in
the fair value hierarchy, due to the inherent restrictions on redemptions that may affect our ability to sell the investment at
its NAV in the near term. Valuations may be lagged 1 month to 6 months. The NAV will be adjusted for cash flows
(additional investments or contributions, and distributions) through year-end. We may make further adjustments for any
known substantive valuation changes not reflected in the NAV. For 2014 and 2013, we made adjustments of $88 million
and $123 million, respectively, to adjust for private equity-lagged valuations. For 2014 and 2013, we made adjustments of
$33 million and $0, respectively, to adjust for real estate-lagged valuations.
The Ford-Werke GmbH (“Ford-Werke”) funded defined benefit plan is funded through a group insurance contract and
exists in a pooled structure with other policy holders. The contract value represents the value of the underlying assets
held by the insurance company (primarily bonds) at the guaranteed rate of return. The adjustment to fair value to
recognize contractual returns is a significant unobservable input; therefore the contract is Level 3.
FS-37