The fair values of the plan assets held by the Company by asset category for fiscal years 2013 and 2012 are as follows (in thousands):
| Fair Value Measurements Using Inputs Considered as: | ||||||||||||||||||||
| Fair Value at August 31, 2013 |
Asset Allocation | Level 1 | Level 2 | Level 3 | ||||||||||||||||
|
Asset Category |
||||||||||||||||||||
|
Cash and cash equivalents |
$ | 4,686 | 3 | % | $ | 4,686 | $ | — | — | |||||||||||
|
Equity Securities: |
||||||||||||||||||||
|
Global equity securities(a) |
26,110 | 18 | % | — | 26,110 | — | ||||||||||||||
|
U.K. equity securities(b) |
20,923 | 15 | % | — | 20,923 | — | ||||||||||||||
|
Canadian equity securities(c) |
8,935 | 6 | % | — | 8,935 | — | ||||||||||||||
|
Debt Securities: |
||||||||||||||||||||
|
U.K. corporate bonds(d) |
43,949 | 31 | % | — | 43,949 | — | ||||||||||||||
|
U.K. government bonds(e) |
14,257 | 10 | % | — | 14,257 | — | ||||||||||||||
|
Canadian government bonds(f) |
7,934 | 6 | % | — | 7,934 | — | ||||||||||||||
|
Other Investments: |
||||||||||||||||||||
|
Insurance contracts(g) |
12,114 | 9 | % | — | — | 12,114 | ||||||||||||||
|
Commercial real estate(h) |
1,956 | 1 | % | — | — | 1,956 | ||||||||||||||
|
Commercial mortgages(i) |
1,190 | 1 | % | — | — | 1,190 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Fair value of plan assets |
$ | 142,054 | 100 | % | $ | 4,686 | $ | 122,108 | $ | 15,260 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Fair Value Measurements Using Inputs Considered as: | ||||||||||||||||||||
| Fair Value at August 31, 2012 |
Asset Allocation | Level 1 | Level 2 | Level 3 | ||||||||||||||||
|
Asset Category |
||||||||||||||||||||
|
Cash and cash equivalents |
$ | 4,370 | 3 | % | $ | 4,370 | $ | — | — | |||||||||||
|
Equity Securities: |
||||||||||||||||||||
|
Global equity securities(a) |
22,649 | 17 | % | — | 22,649 | — | ||||||||||||||
|
U.K. equity securities(b) |
18,544 | 14 | % | — | 18,544 | — | ||||||||||||||
|
Canadian equity securities(c) |
8,247 | 6 | % | — | 8,247 | — | ||||||||||||||
|
Debt Securities: |
||||||||||||||||||||
|
U.K. corporate bonds(d) |
42,983 | 32 | % | — | 42,983 | — | ||||||||||||||
|
U.K. government bonds(e) |
13,562 | 10 | % | — | 13,562 | — | ||||||||||||||
|
Canadian government bonds(f) |
8,757 | 7 | % | — | 8,757 | — | ||||||||||||||
|
Insurance Contracts: |
||||||||||||||||||||
|
Insurance contracts(g) |
11,046 | 8 | % | — | — | 11,046 | ||||||||||||||
|
Commercial real estate(h) |
1,987 | 2 | % | — | — | 1,987 | ||||||||||||||
|
Commercial mortgages(i) |
1,285 | 1 | % | — | — | 1,285 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Fair value of plan assets |
$ | 133,430 | 100 | % | $ | 4,370 | $ | 114,742 | $ | 14,318 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (a) | Global equity securities are categorized as Level 2 and include investments that aim to capture global equity market returns by tracking the Financial Times (London) Stock Exchange (“FTSE”) AW-World (ex-UK) Index and other similar indexes in Canada. |
| (b) | U.K. equity securities are categorized as Level 2 and include investments in a diversified portfolio that aims to capture the returns of the U.K. equity market. The portfolio tracks the FTSE All-Share Index and invests only in U.K. securities. |
| (c) | Canadian equity securities are categorized as Level 2 and include investments in diversified portfolios that aim to capture the returns of Canadian small capitalization and dividend paying equities. The portfolios track the BMO Small Cap Index and the S&P/TSX Capped Equity Index and invest only in Canadian securities. |
| (d) | U.K. corporate bonds are categorized as Level 2 and include U.K. corporate issued fixed income investments which are managed and tracked to the respective benchmark (AAA-AA-A Bonds-Over 15Y Index). |
| (e) | U.K. government bonds are categorized as Level 2 and include U.K. government-issued fixed income investments which are managed and tracked to the respective benchmark (FTSE U.K. Over 15 Years Gilts Index and FTSE U.K. Over 5 Years Index-Linked). |
| (f) | Canadian government bonds are categorized as Level 2 and include Canadian government-issued fixed income investments which are managed and tracked to the respective benchmark (DEX Universe Bond Index). |
| (g) | The assets related to The Netherlands plan consist of an insurance contract that guarantees the payment of the funded pension entitlements, as well as provides a profit share to the Company. The profit share in this contract is not based on actual investments, but, instead on a notional investment portfolio that is expected to return a pre-defined rate. Insurance contract assets are recorded at fair value, which is determined based on the cash surrender value of the insured benefits which is the present value of the guaranteed funded benefits. Insurance contracts are valued using unobservable inputs (Level 3 inputs), primarily by discounting expected future cash flows relating to benefits paid from a notional investment portfolio in order to determine the cash surrender value of the policy. The unobservable inputs consist of estimated future benefits to be paid throughout the duration of the policy and estimated discount rates, which both have an immaterial impact on the fair value estimate of the contract. |
| (h) | Commercial real estate investments are categorized as Level 3 and primarily consist of commercial properties located throughout the various provinces of Canada. The portfolio tracks the IPD Canadian Property Index and invests only in Canadian properties. These investments are recorded at their estimated fair value and are valued using unobservable inputs (Level 3 inputs), primarily by obtaining quarterly independent market appraisals. The unobservable inputs consist of estimated unrealized gains and losses due to changes in real estate market conditions, which have an immaterial impact on the fair value calculations of the real estate investments held. |
| (i) | Commercial mortgage investments are categorized as Level 3 and primarily consist of mortgages on commercial properties located throughout the various provinces of Canada. The portfolio tracks the DEX Conventional Residential Mortgage Index and invests only in Canadian mortgages. These investments are recorded at their estimated fair value and are valued using unobservable inputs (Level 3 inputs), primarily by calculating expected future cash flows at interest rates applicable to new mortgages of similar types and terms. The unobservable inputs consist of estimated unrealized gains and losses due to defaults and other real estate market events and estimated interest rates, which both have an immaterial impact on the fair value calculations of the mortgage investments held. |