Intel 2012 Annual Report Download - page 85

79
U.S. Intel Minimum Pension Plan assets measured at fair value on a recurring basis consisted of the following investment
categories as of December 29, 2012 and December 31, 2011:
December 29, 2012
Fair Value Measured at Reporting
Date Using
(In Millions)
Level 1
Level 2
Level 3
Total
Equity securities:
Hedge fund pool..................................................................................
$ —
$ 92
$ —
$ 92
Fixed income:
Global Bond Fund—common collective trusts ....................................
—
17
—
17
Global Bond Fund—government bonds..............................................
177
81
—
258
Global Bond Fund—asset-backed securities ......................................
—
—
83
83
Global Bond Fund—corporate bonds..................................................
72
142
—
214
Global Bond Fund—other ...................................................................
1
9
—
10
Total assets measured at fair value.....................................................
$ 250
$ 341
$ 83
$ 674
Cash ........................................................................................................
10
Total U.S. pension plan assets at fair value........................................
$ 684
December 31, 2011
Fair Value Measured at Reporting
Date Using
(In Millions)
Level 1
Level 2
Level 3
Total
Equity securities:
Hedge fund pool..................................................................................
$ —
$ 97
$ —
$ 97
Fixed income:
Global Bond Fund—common collective trusts ....................................
—
51
—
51
Global Bond Fund—government bonds..............................................
94
166
—
260
Global Bond Fund—asset-backed securities ......................................
—
—
78
78
Global Bond Fund—corporate bonds..................................................
—
147
—
147
Global Bond Fund—other ...................................................................
—
6
—
6
Total assets measured at fair value.....................................................
$ 94
$ 467
$ 78
$ 639
Cash ........................................................................................................
9
Total U.S. pension plan assets at fair value........................................
$ 648
The Global Bond Fund investment strategy seeks to invest in fixed-income securities that provide protection from both
deflation and inflation while providing current income. Government bonds include bonds issued or deemed to be
guaranteed by government entities and include instruments such as non-U.S. government bonds, U.S. Treasury
securities, and U.S. agency securities. Corporate bonds include both U.S. and non-U.S. bonds with the majority held in
high-quality bonds. We classified asset-backed securities in the Global Bond Fund as Level 3, as we have used
unobservable inputs to the valuations that were significant to the fair value measurements. During 2012, approximately
$90 million of government bonds and corporate bonds was transferred from Level 2 to Level 1, primarily based on the
increased market activity for the underlying securities. Our policy is to reflect transfers in and transfers out at the
beginning of the period in which a change in circumstances resulted in the transfer.
Non-U.S. Plan Assets
The investments of the non-U.S. plans are managed by insurance companies, third-party trustees, or pension funds,
consistent with regulations or market practice of the country where the assets are invested. The investment manager
makes investment decisions within the guidelines set by Intel or local regulations. The investment manager evaluates
performance by comparing the actual rate of return to the return on other similar assets. Investments managed by
qualified insurance companies or pension funds under standard contracts follow local regulations, and we are not actively
involved in their investment strategies. For the assets that we have discretion to set investment guidelines, the assets are
invested in developed country equities and fixed-income debt instruments, either through index funds or direct investment.
In general, the investment strategy is designed to accumulate a diversified portfolio among markets, asset classes, or
individual securities to reduce market risk and to assure that the pension assets are available to pay benefits as they
come due. The average expected long-term rate of return for the non-U.S. plan assets is 5.2%.