SEC Filings


10-K
CUMMINS INC filed this Form 10-K on 02/11/2019
Entire Document
 

Certain of our assets are valued based on their respective net asset value (NAV) (or its equivalent), as an alternative to estimated fair value due to the absence of readily available market prices. The fair value of each such investment category was as follows:
U.S. and Non-U.S. Equities ($343 million and $428 million at December 31, 2018 and 2017, respectively) - These commingled funds have observable NAVs provided to investors and provide for liquidity either immediately or within a couple of days.
Government Debt ($602 million and $347 million at December 31, 2018 and 2017, respectively) - These commingled funds have observable NAVs provided to investors and provide for liquidity either immediately or within a couple of days.
U.S. and Non-U.S. Corporate Debt ($821 million and $321 million at December 31, 2018 and 2017, respectively) - These commingled funds have observable NAVs provided to investors and provide for liquidity either immediately or within a couple of days.
Real Estate ($147 million and $137 million at December 31, 2018 and 2017, respectively) - This asset type represents different types of real estate including development property, industrial property, individual mortgages, office property, property investment companies and retail property. These funds are valued using NAVs and allow quarterly or more frequent redemptions.
Asset/Mortgage Backed Securities ($2 million and $103 million at December 31, 2018 and 2017, respectively) - This asset type represents investments in fixed- and floating-rate loans. These funds are valued using NAVs and allow quarterly or more frequent redemptions.
The reconciliation of Level 3 assets was as follows:
 
 
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3)
In millions
 
Private Equity
 
Real Estate
 
Total
Balance at December 31, 2016
 
$
148

 
$
64

 
$
212

Actual return on plan assets
 
 
 
 
 
 
Unrealized gains on assets still held at the reporting date
 
24

 
5

 
29

Purchases, sales and settlements, net
 
8

 
(3
)
 
5

Balance at December 31, 2017
 
180

 
66

 
246

Actual return on plan assets
 
 
 
 
 
 
Unrealized gains on assets still held at the reporting date
 
33

 
6

 
39

Purchases, sales and settlements, net
 
34

 
(3
)
 
31

Balance at December 31, 2018
 
$
247

 
$
69

 
$
316


Fair Value of U.K. Plan Assets
In July 2012, the U.K. pension plan purchased an insurance contract that will guarantee payment of specified pension liabilities. The contract defers payment for 10 years and is included in the table below in Level 3 for years ended December 31, 2018 and 2017 at a value of $442 million and $477 million, respectively.

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