Fixed income securities  — The fair value of fixed income securities is determined by either direct or indirect quoted market  prices. When the value of assets held in separate accounts is not published, the value is based on the value of the underlying  holdings, which are primarily direct quoted market prices on regulated financial exchanges. Hedge funds  — The fair value of hedge funds is accounted for by a custodian.  The custodian obtains valuations from  underlying managers based on market quotes for the most liquid assets and alternative methods for assets that do not have  sufficient trading activity to derive prices.  We review with the custodian the methods used by the underlying managers to value  the assets. We believe this is an appropriate methodology to obtain the fair value of these assets. Insurance contracts  — The fair value of insurance contracts is determined by reference to the contract provided by the  insurance company. The fair values of the insurance contracts are based on the underlying investments included in the contract. Real estate  — The fair value of investments in real estate is provided by fund managers.  The fund managers value the real  estate investments via independent third party appraisals on a periodic basis.  Assumptions used to revalue the properties are  updated every quarter. We believe this is an appropriate methodology to obtain the fair value of these assets. For the component  of the real estate portfolio under development, the investments are carried at cost until they are completed and valued by a third  party appraiser. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or  reflective of future fair values. Furthermore, while we believe the valuation methods are appropriate and consistent with other  market participants, the use of dif ferent methodologies or assumptions to determine the fair value of certain financial  instruments could result in a dif ferent fair value measurement at the reporting date. Cash and cash equivalents  — The fair value of cash and cash equivalents is set equal to its cost. Investment policy  — Target asset allocations of U.S. pension plans are established through an investment policy , which is  updated periodically and reviewed by an Investment Committee, comprised of certain company of ficers and directors. The  investment policy allows for a flexible asset allocation mix which is intended to provide appropriate diversification to lessen  market volatility while assuming a reasonable level of economic risk. Our policy recognizes that properly managing the relationship between pension assets and pension liabilities serves to  mitigate the impact of market volatility on our funding levels.  The investment policy permits plan assets to be invested in a  number of diverse categories, including a Growth Portfolio, an Immunizing Portfolio and a Liquidity Portfolio.  These sub- portfolios are intended to balance the generation of incremental returns with the management of overall risk. The Growth Portfolio is invested in a diversified pool of assets in order to generate an incremental return with an  acceptable level of risk. The Immunizing Portfolio is a hedging portfolio that may be comprised of fixed income securities and  overlay positions. This portfolio is designed to of fset changes in the value of the pension liability due to changes in interest  rates. The Liquidity Portfolio is a cash portfolio designed to meet short-term liquidity needs and reduce the plans’  overall risk.  As a result of our diversification strategies, there are no significant concentrations of risk within the portfolio of investments. The allocations among portfolios may be adjusted to meet changing objectives and constraints.  We expect that as the  funded status of the plans changes, we will increase or decrease the size of the Growth Portfolio in order to manage the risk of  losses in the plan. As of December 31, 2014, the Growth Portfolio (U.S. and non-U.S. equities, core and high-yield fixed  income, hedge fund of funds, real estate, emer ging market debt and cash) comprises 46% of total assets, the Immunizing  Portfolio (long duration U.S. Treasury strips, corporate bonds and cash) comprises  53% and the Liquidity Portfolio (cash and  short-term securities) comprises 1%. During 2014, the mid-points of the target ranges were 45.5% for the Growth Portfolio,  53.5% for the Immunizing Portfolio and  5% for the Liquidity Portfolio. Significant assumptions  — The significant weighted-average assumptions used in the measurement of pension benefit  obligations at December 31 of each year and the net periodic benefit cost for each year are as follows: 67