Baker Hughes 2009 Annual Report Download - page 133

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2009 Form 10-K 59
The table below presents the fair values of the assets in the U.S. Plan at December 31, 2009, by asset category and by levels of
fair value as further defined in Note 10 of Notes to Consolidated Financial Statements.
Asset Category Level 1 Level 2 Level 3 Total Asset Value
Fixed Income(a) $ – $ 95 $ – $ 95
Non-U.S. Equity(b) – 78 – 78
U.S. Small Cap Equity(c) – 55 – 55
S&P 500 Index Fund(d) – 48 – 48
U.S. Large Cap Growth Equity(e) – 30 – 30
U.S. Large Cap Value Equity(f) – 23 – 23
Real Estate Fund(g) – – 13 13
Real Estate Investment Trust Equity – 4 – 4
Total $ – $ 333 $ 13 $ 346
(a) A pooled fund with a strategy of investing in fixed income securities. The current allocation includes: 35% in U.S. Government securities; 34% in residential mortgage
backed; 26% in corporate bonds; and 5% in index-linked, commercial mortgage-backed and asset-backed securities and cash.
(b) Multi-manager strategy investing in common stocks of non-U.S. listed companies using both value and growth approaches.
(c) Multi-manager strategy investing in common stocks of smaller U.S. listed companies using both value and growth approaches.
(d) A passively managed commingled fund investing in common stocks of the S&P 500 Index.
(e) Multi-manager growth strategy investing in common stocks of U.S. listed, large capitalization companies.
(f) Multi-manager value strategy investing in common stocks of U.S. listed, large capitalization companies.
(g) Commingled fund investing in a diversified portfolio of U.S. based properties. The current allocation includes: 30% Office, 28% Apartments, 24% Retail, 12% Indus-
trial and 6% Hotel.
Plan Assets – Non-U.S. Pension Plans
The investment policy of the Baker Hughes U.K. pension
plan, (the “U.K. Plan”) covers the asset allocation that the
Trustees believe is the most appropriate for the U.K. Plan in
the long term taking into account the nature of the liabilities
they expect to have to meet.
The suitability of the asset allocation and investment policy
is reviewed after every actuarial valuation of the U.K. Plan and
will take the form of an asset and liability modeling study (if
required). As part of the review, the Trustees will examine the
impact on the volatility of the U.K. Plan’s funding level arising
from decisions made about the investment arrangements,
including decisions about the investment strategy, about active
and passive management and about manager selection. The
Trustees will consider the likely impact on their ability to pay
benefits should the U.K. Plan fail to be fully funded on both
an ongoing and discontinuance basis. The review will also take
into account the risk of changes in the Plan’s funding position
resulting from changes in the U.K. Plan’s liabilities.
The table below presents the fair values of the assets in our non-U.S. pension plans at December 31, 2009, by asset category
and by levels of fair value as further defined in Note 10 of Notes to Consolidated Financial Statements.
Asset Category Level 1 Level 2 Level 3 Total Asset Value
U.K. Equity Index Fund(a) $ – $ 68 $ – $ 68
Global Equity Strategy(b) – 54 – 54
Over 15 Yrs U.K. Gilt Index Fund(c) – 44 – 44
Corporate Bond Index Fund Over 15 Years(d) – 39 – 39
U.K. Property Fund(e) – – 19 19
Sterling Liquidity Fund(f) – 10 – 10
Over 5 Yrs Index Linked Index Fund(g) – 7 – 7
Insurance contracts – – 7 7
Total $ – $ 222 $ 26 $ 248
(a) Invests passively in securities to achieve returns in line with the Financial Times (London) Stock Exchange (“FTSE”) All-Share Index.
(b) Invests in global securities from the world’s developed markets, including the U.S. and, on an annualized basis, seeks to outperform the Morgan Stanley Capital Inter-
national World Index by 3%, over a complete market cycle.
(c) Invests passively in securities to achieve returns in line with the FTSE U.K. Gilts Over 15 Year Index.
(d) Invests passively in securities to achieve returns in line with the iBoxx £ non-gilts, over 15 years index.
(e) Invests in a diversified range of property throughout the U.K., principally in the retail, office and industrial/warehouse sectors.
(f) Invests in securities to receive an investment return that is consistent with the security of capital and a high degree of liquidity.
(g) Invests passively in securities to receive returns in line with the FTSE U.K. Gilts Index-Linked Over 5 Years Index.