The following table presents the changes in the Level 3 fair-value category in the Company’s U.K. pension plans for the years ended December 31, 2016 and December 31, 2015 (in millions):
Fair Value Measurements Using Level 3 Inputs
Annuities
Balance at January 1, 2015
$
836
Actual return on plan assets:
Relating to assets still held at December 31, 2015
(32
)
Purchases, sales and settlements—net
58
Foreign exchange
(35
)
Balance at December 31, 2015
827
Actual return on plan assets:
Relating to assets still held at December 31, 2016
7
Purchases, sales and settlements—net
1,248
Foreign exchange
(309
)
Balance at December 31, 2016
$
1,773
84
The fair values of the Company’s other major pension plan assets at December 31, 2016 and December 31, 2015 , by asset category, are as follows (in millions):
Fair Value Measurements Using
Balance at December 31, 2016
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Cash and cash equivalents
$
11
$
11
$
—
$
—
Equity investments:
Pooled funds:
Global (1)
322
—
—
—
North America (1)
36
—
—
—
Derivatives (1)
20
—
—
—
Fixed income investments:
Fixed income securities (2)
166
—
166
—
Derivatives (2)
37
—
37
—
Pooled funds:
Fixed income securities (1)
469
—
—
—
Other investments:
Alternative investments (1) (3)
9
—
—
—
Pooled funds:
REITS (1) (4)
6
—
—
—
Total
$
1,076
$
11
$
203
$
—
(1)
Certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note.
(2)
Consists of corporate and government bonds and fixed income derivatives.
(3)
Consists of limited partnerships, private equity and hedge funds.
(4)
Consists of property funds and trusts holding direct real estate investments.
85
Fair Value Measurements Using
Balance at December 31, 2015
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
Significant Unobservable Inputs
(Level 3)
Cash and cash equivalents
$
11
$
11
$
—
$
—
Equity investments:
Pooled funds:
Global (1)
270
—
—
—
North America (1)
37
—
—
—
Derivatives (1)
21
—
—
—
Fixed income investments:
Fixed income securities (2)
30
—
30
—
Derivatives (2)
48
—
48
—
Pooled funds:
Fixed income securities (1)
576
—
—
—
Derivatives (1)
12
—
—
—
Other investments:
Alternative investments (1) (3)
9
—
—
—
Pooled funds:
Commodities (1)
2
—
—
—
REITS (1) (4)
3
—
—
—
Total
$
1,019
$
11
$
78
$
—
(1)
Certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the above table are intended to permit reconciliation of the fair values to the amounts presented in the plan assets contained in this Note.
(2)
Consists of corporate and government bonds and fixed income derivatives.
(3)
Consists of limited partnerships, private equity and hedge funds.
(4)
Consists of property funds and trusts holding direct real estate investments.
