Windstream 2015 Annual Report Download - page 208

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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F-78
8. Employee Benefit Plans and Postretirement Benefits, Continued:
(a) The money market fund is based on the fair value of the underlying assets held as determined by the fund manager on
the last business day of the year. The underlying assets are mostly comprised of certificates of deposit, time deposits and
commercial paper valued at amortized cost.
(b) The guaranteed annuity contract is 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 their
current state of return.
(c) Units in common collective trust funds are valued by reference to the funds’ underlying assets and are based on the net
asset value as reported by the fund manager on the last business day of the Plan 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) Government and agency securities, corporate bonds and asset backed securities, common and preferred stocks, and
registered investment companies traded in active markets on securities exchanges are valued at their quoted market prices
on the last day of the Plan 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. Securities
that trade infrequently and therefore have little or no price transparency are valued using best estimates, including
unobservable inputs.
(e) Derivative financial instruments consist primarily of swaps and are valued at fair value based on models that reflect the
contractual terms of the instruments. Inputs include primarily observable market information, such as swap curves,
benchmark yields, rating updates and interdealer broker quotes at the end of the Plan year.
(f) Hedge fund of funds hold a portfolio of other investment funds instead of directly investing in specific securities,
commodities or other financial instruments. The funds are valued based on the net asset value of the fund determined by
the fund manager on the last business day of the Plan year. The net asset value is derived from the fair value of each
underlying fund comprising the hedge fund of funds.
(g) The real estate fund is valued based on the net asset value of the fund on the last business day of the Plan year. The net
asset value is derived from the fair value of the underlying net assets of the fund. Private equity funds consist of investments
in limited partnerships and are valued based on the Plan’s capital account balance at year end as reported in the audited
financial statements of the partnership. This category also includes the contributed real estate properties we are leasing
back from the plan. The fair value of these properties is based on independent appraisals.
(h) Other investments consists of investments in foreign currency, which are valued at their quoted market price on the last
day of the Plan year.