Purchases, sales, and settlements

  
Government debt securities: Valued at the closing prices reported in the active market in which the individual securities are traded (Level 1); or based on observable inputs such as fund values provided by independent fund administrators, pricing of similar agency issues, live trading feeds from several vendors, and benchmark yield (Level 2).  
Corporate debt securities: Valued at the closing prices reported in the active market in which the individual securities are traded (Level 1); or based on observable inputs such as fund values provided by independent fund administrators, or benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. Inputs may be prioritized differently at certain times based on market conditions (Level 2).  
Real estate: Valued at the closing prices reported in the active market in which the individual securities are traded (Level 1); or based on observable inputs such as fund values provided by independent fund administrators (Level 2).   
Insurance contracts: Valued based on the value of the associated insured liabilities.  
Cash and cash equivalents: Consist of cash on deposit with brokers and short-term money market funds and are shown net of receivables and payables for securities traded at period end but not yet settled (Level 1) and cash indirectly held across investment funds (Level 2). All cash and cash equivalents are stated at cost, which approximates fair value.   
Other:  
Level 1: Derivatives valued as closing prices reported in the active market.  
Level 2: Assets held in diversified growth funds, pooled funds, financing funds, and derivatives, where the value of the assets are determined by the investment managers or other independent third parties, based on observable inputs.  
Level 3: Indemnified plan assets and pooled funds (equity, credit, macro-orientated, multi-strategy, cash, and other). The value of indemnified plan assets are determined based on the value of the liabilities that the assets cover. The value of the pooled funds is calculated by the investment managers based on the net asset values of the underlying portfolios.   
    The following table sets forth a summary of changes in the value of the Company's Level 3 assets:

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
| ($ in millions) |  |  |
| Balance as of June 30, 2021 |  | $ | 485  |  |
| Actual return on plan assets |  | (61) |  |
| Purchases, sales, and settlements |  | (17) |  |
| Transfer out of Level 3 |  | (5) |  |
| Foreign currency translation |  | (50) |  |
| Balance as of June 30, 2022 |  | 352  |  |

  
81
