background image
(5) Fixed income mutual funds invest primarily in fixed income securities.
(6) Other securities include corporate bonds, insurance contracts and mortgage-backed securities.
(7) Includes investments in hedge funds, venture capital funds, limited partnerships, private real estate, bank capital
and collateral debt obligations such as private placement real estate funds.
Assets held in defined benefit plans in the Philippines, Taiwan and Thailand were less than $1 million and are
not presented in the above table. There were no significant movements of assets between any level categories in 2013
or 2012.
Fair Value Valuation Techniques
Equity securities are valued at the closing price reported on the stock exchange on which the individual securities
are traded. Equity commingled/mutual funds are typically valued using the net asset value ("NAV") provided by the
investment manager or administrator of the fund. The NAV is based on the value of the underlying assets owned by
the fund, minus liabilities and divided by the number of shares or units outstanding. These assets are classified as
either Level 1 or Level 2, depending on availability of quoted market prices for identical or similar assets.
If available, fixed income securities are valued using the close price reported on the major market on which the
individual securities are traded and are classified as Level 1. The fair value of other fixed income securities is typically esti-
mated using pricing models and quoted prices of securities with similar characteristics, and is generally classified as Level 2.
Cash includes money market accounts that are valued at their cost plus interest on a daily basis, which approx-
imates fair value. Short-term investments represent securities with original maturities of one year or less. These assets
are classified as either Level 1 or Level 2.
Alternative investment valuations require significant judgment due to the absence of quoted market prices, the
inherent lack of liquidity and the long-term nature of the underlying assets. These assets are valued based on
individual fund manager valuation models utilizing available and relevant market data. These investments are classi-
fied as Level 3.
Cash Flows
The Company's expected employer contributions for 2014 are $13 million for its Japanese defined benefit pen-
sion plans.
Estimated Future Benefits Payments
Annual benefit payments from the Japanese defined benefit pension plans are estimated to range from $6 million
to $10 million annually over the next five years.
Note 14.
On the Closing Date, the Company completed the Acquisition of all the issued and outstanding paid-up share
capital of HGST from Hitachi Ltd. ("Hitachi"). HGST is a developer and manufacturer of storage devices. As a result
of the Acquisition, HGST became an indirect wholly-owned subsidiary of the Company. The aggregate purchase price
of the Acquisition was approximately $4.7 billion and was funded with $3.7 billion of existing cash and cash from
new debt, as well as 25 million newly issued shares of the Company's common stock with a fair value of $877 million.
The fair value of the newly issued shares of the Company's common stock was determined based on the closing market
price of the Company's shares of common stock on the date of the Acquisition, less a 10% discount for lack of market-
ability as the shares issued were subject to a restriction that limited their trade or transfer for one year from the Clos-
ing Date. The purchase price consideration originally included preliminary estimates of the working capital assets