Target 2014 Annual Report Download - page 64

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Fair Value Measurements Fair Value at January 31, 2015 Fair Value at February 1, 2014
(millions) Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3
Cash and cash equivalents $ 211 $ 7 $ 204 $ — $ 150 $ 6 $ 144 $ —
Common collective trusts (a) 1,102 — 1,102 — 1,000 — 1,000 —
Government securities (b) 349 —349 — 282 — 282 —
Fixed income (c) 624 —624 — 541 — 541 —
Balanced funds (d) 1,152 — 1,152 — 903 — 903 —
Private equity funds (e) 171 — — 171 221 — — 221
Other (f) 175 — 51 124 170 — 43 127
Total plan assets $ 3,784 $ 7 $ 3,482 $ 295 $ 3,267 $ 6 $ 2,913 $ 348
(a) Passively managed index
funds with holdings in domestic and international equities.
(b) Investments in government securities and passively managed index funds with holdings in long-term government bonds.
(c) Investments in corporate bonds, mortgage-backed securities and passively managed index funds with holdings in long-term corporate
bonds.
(d) Investments in equities, nominal and inflation-linked fixed income securities, commodities and public real estate.
(e) Includes investments in venture capital, mezzanine and high-yield debt, natural resources and timberland funds.
(f) Investments in multi-strategy hedge funds (including domestic and international equity securities, convertible bonds and other alternative
investments), real estate and derivative investments.
Level 3 Reconciliation
Balance at
Beginning of
(millions) Period
Actual Return on Plan Assets (a)
Purchases,
Sales and
Settlements
Transfer in
and/or out
of Level 3
Balance at
End of
Period
Relating to Relating to
Assets Still Held Assets Sold
at the Reporting During the
Date Period
2013
Private equity funds $
Other
236 $
122
7 $
14
26 $
1
(48) $
(10)
—
—
$ 221
127
2014
Private equity funds $
Other
221 $
127
(21) $
6
13 $
5
(42) $
(14)
—
—
$ 171
124
Plan Assets
Our asset allocation policy is designed to reduce the long-term cost of funding our pension obligations. The plan invests
with both passive and active investment managers depending on the investment's asset class. The plan also seeks
to reduce the risk associated with adverse movements in interest rates by employing an interest rate hedging program,
which may include the use of interest rate swaps, total return swaps and other instruments.
Asset Category Current Targeted Actual Allocation
Allocation 2014 2013
Domestic equity securities (a) 19% 19% 21%
International equity securities 12 12 12
Debt securities 25 28 26
Balanced funds 30 31 28
Other (b) 14 10 13
Total 100% 100% 100%
(a) Equity securities include our common stock in amounts substantially less than 1 percent of total plan assets as of January 31, 2015 and
February 1, 2014.
(b) Other assets include private equity, mezzanine and high-yield debt, natural resources and timberland funds, multi-strategy hedge funds,
derivative instruments and a 4 percent allocation to real estate.
(a) Represents
realized and unrealized gains (losses) from changes in values of those financial instruments only for the period in which the
instruments were classified as Level 3.
59