Windstream 2012 Annual Report Download - page 163

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-65
8. Employee Benefit Plans and Postretirement Benefits, Continued:
The fair values of our pension plan assets were determined using the following inputs as of December 31, 2011:
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) $ 346.4 $ 345.4 $ 0.9 $ 0.1
International equities (b) 142.9 75.5 67.4 —
Agency backed bonds (b) 26.6 — 26.6 —
Asset backed securities (b) 0.8 — 0.8 —
Corporate bonds (b) 213.2 — 213.2 —
Government and municipal bonds (b) 35.0 — 35.0 —
Mortgage backed securities (b) 3.5 — 3.5 —
Pooled funds (c) 25.0 — 25.0 —
Derivatives (f) (0.6) 0.1 (0.7)—
Treasuries (b) 43.8 — 43.8 —
Real estate and private equity funds (d) 33.4 — — 33.4
Cash equivalents and other 71.7 1.2 70.5 —
Guaranteed annuity contract (e) 2.8 — — 2.8
Total investments $ 944.5 $ 422.2 $ 486.0 $ 36.3
Dividends and interest receivable 7.5
Pending trades (3.1)
Total plan assets $ 948.9
(a) Changes in the level 3 investments for the years ended December 31, 2012 and December 31, 2011 are reflected in the
table below.
(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) Valued at fair value as determined by the investment managers. Private equity is initially valued by the investment
managers based upon cost, then adjusted for available market data based upon observations of the trading multiples of
public companies considered comparable to the private companies being valued. Such market data used to determine
adjustments to accounts for cash flows and company-specified issues include current operating performance and future
expectations of the investments, changes in market outlook, and the third-party financing environment. Real estate
investments are valued either at amounts based upon appraisal reports prepared by independent third-party appraisers
or at amounts as determined by internal appraisals performed by the investment manager, which has been agreed to by
an external valuation consultant.
(e) 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.
(f) Consisted primarily of swaps valued based on models that reflect the contractual terms of the instruments.