FORM 10-K

61 For U.S. plan assets, which represent the majority of our plan assets, asset allocation target ranges are established consistent with our investment objectives, and the assets are rebalanced periodically. For Non-U.S. plan assets, allocations are based on expected cash flow needs and assessments of the local practices and markets. Our target allocation ranges are as follows: U.S. Plan Assets Domestic equity securities 20% to 35% International equity securities 8% to 19% Global equities 0% to 12% Debt securities 27% to 38% Real estate 7% to 13% Private investment partnerships 5% to 11% Hedge funds 0% to 5% Non-U.S. Plan Assets Equity securities 58% to 61% Debt securities 31% to 34% Real estate 8% The fair value of our pension plan assets by major category and valuation method is as follows: December 30, 2017 December 31, 2016 (In millions) Level 1 Level 2 Level 3 Not Subject to Leveling Level 1 Level 2 Level 3 Not Subject to Leveling Cash and equivalents $ 22 $ 10 $ — $ 149 $ 26 $ 8 $ — $ 156 Equity securities: Domestic 1,404 — — 665 1,262 — — 618 International 919 — — 636 773 — — 510 Mutual funds 387 — — — 309 — — — Debt securities: National, state and local governments 645 289 — 56 341 246 — 44 Corporate debt — 912 — 148 — 769 — 121 Asset-backed securities — — — 103 — 45 — 100 Private investment partnerships — — — 591 — — — 506 Real estate — — 460 284 — — 494 292 Hedge funds — — — 197 — — — 254 Total $ 3,377 $ 1,211 $ 460 $ 2,829 $ 2,711 $ 1,068 $ 494 $ 2,601 Cash and equivalents, equity securities and debt securities include comingled funds, which represent investments in funds offered to institutional investors that are similar to mutual funds in that they provide diversification by holding various equity and debt securities. Since these comingled funds are not quoted on any active market, they are priced based on the relative value of the underlying equity and debt investments and their individual prices at any given time; these funds are not subject to leveling within the fair value hierarchy. Debt securities are valued based on same day actual trading prices, if available. If such prices are not available, we use a matrix pricing model with historical prices, trends and other factors. Private investment partnerships represents interests in funds which invest in equity, debt and other financial assets. These funds are generally not publicly traded so the interests therein are valued using income and market methods that include cash flow projections and market multiples for various comparable investments. Real estate includes owned properties and limited partnership interests in real estate partnerships. Owned properties are valued using certified appraisals at least every three years that are updated at least annually by the real estate investment manager based on current market trends and other available information. These appraisals generally use the standard methods for valuing real estate, including forecasting income and identifying current transactions for comparable real estate to arrive at a fair value. Limited partnership interests in real estate partnerships are valued similarly to private investment partnerships, with the general partner using standard real estate valuation methods to value the real estate properties and securities held within their portfolios. Neither private investment nor real estate partnerships are subject to leveling within the fair value hierarchy. The hedge funds category represents an investment in a diversified fund of hedge funds of which we are the sole investor. The fund invests in portfolio funds that are not publicly traded and are managed by various portfolio managers. Investments in portfolio funds are typically valued on the basis of the most recent price or valuation provided by the fund’s administrator. The administrator for