Windstream 2010 Annual Report Download - page 162

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
8. Employee Benefit Plans and Postretirement Benefits, Continued:
The fair values of the Company’s pension plan assets were determined using the following inputs as of
December 31, 2009:
Quoted Price in
Active
Markets for
Identical Assets
Significant
Other
Observable
Inputs
(a)
Significant
Unobservable
Inputs
(Millions)
Fair
Value Level 1 Level 2 Level 3
Domestic equities (b) $207.7 $147.1 $ 60.1 $0.5
International equities (b) 121.3 56.6 64.7 -
Agency backed bonds (b) 34.7 - 34.7 -
Asset backed securities (b) 19.6 - 19.6 -
Corporate bonds (b) 171.9 - 171.9 -
Government and municipal bonds (b) 9.8 - 9.8 -
Mortgage backed securities (b) 34.8 - 34.8 -
Pooled funds (c) 25.0 - 25.0 -
Treasuries (b) 28.1 - 28.1 -
Treasury inflation protected securities (c) 43.1 - 43.1 -
Cash equivalents and other 88.5 1.0 87.5 -
Guaranteed annuity contract (d) 3.9 - - 3.9
Total investments $788.4 $204.7 $579.3 $4.4
Dividends and interest receivable 4.3
Pending trades (8.7)
Total plan assets $784.0
(a) Changes in the level 3 investments were inconsequential for the years ended December 31, 2010 and 2009.
(b) Valued at their quoted market price on the last day of the year. Securities traded in markets that are not
considered active are valued based on quoted market prices, broker or dealer quotes or alternative pricing
sources with reasonable levels of price transparency.
(c) Valued by reference to the funds’ underlying assets and are based on the unit values as reported by the fund
manager on the last business day of the year. The underlying assets are mostly comprised of publicly traded
equity securities and fixed income securities. These securities are valued at the official closing price of, or
the last reported sale prices as of the close of business or, in the absence of any sales, at the latest available
bid price.
(d) Based on the value of the underlying contracts adjusted to market value, which recognizes that either long-
term assets would have to be sold before contract maturity or new contributions by other contract holders
would have to be exchanged for funds being transferred, precluding these contributions from being invested
at the current rate of return.
There have been no significant changes in the methodology used to value investments from prior year. The
valuation methods used may produce a fair value calculation that may not be indicative of net realizable value or
reflective of future fair values. Furthermore, although the valuation methods are consistent with other market
participants, the use of different methodologies or assumptions to determine the fair value of certain financial
instruments could result in a different fair value measurement at the reporting date.
Information regarding the healthcare cost trend rate was as follows for the years ended December 31:
2010 2009
Healthcare cost trend rate assumed for next year 9.00% 9.00%
Rate that the cost trend ultimately declines to 5.00% 5.00%
Year that the rate reaches the terminal rate 2017 2016
F-62