HP 2014 Annual Report Download - page 121

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 4: Retirement and Post-Retirement Benefit Plans (Continued)
HP extended to all employees participating in the EER program the opportunity to continue
health care coverage at active employee contribution rates for up to 24 months following retirement. In
addition, for employees not grandfathered into certain employer-subsidized retiree medical plans, HP
provided up to $12,000 in employer credits under the RMSA. These items resulted in an additional
special termination benefit STB expense of $227 million, which was offset by net curtailment gains of
$37 million, due primarily to the resulting accelerated recognition of the existing prior service benefit.
The entire STB and approximately $30 million in curtailment gains were recognized in fiscal 2012. HP
reported this net expense as a restructuring charge in the Consolidated Statements of Earnings.
Fair Value of Plan Assets
The table below sets forth the fair value of plan assets by asset category within the fair value
hierarchy.
As of October 31, 2014
U.S. Defined Benefit Plans Non-U.S. Defined Benefit Plans Post-Retirement Benefit Plans
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
In millions
Asset Category:
Equity securities
U.S. ................... $1,787 $ — $ — $ 1,787 $2,935 $ 30 $ — $ 2,965 $— $ — $ — $ —
Non-U.S. ................ 1,268 — — 1,268 4,050 742 80 4,872 — — — —
Debt securities
Corporate ................ — 3,283 7 3,290 — 2,935 — 2,935 — 20 — 20
Government(1) .............. — 2,204 — 2,204 — 1,787 — 1,787 — 22 — 22
Alternative Investments
Private Equity(2) ............ — — 1,284 1,284 — 2 51 53 — — 271 271
Hybrids(3) ................ — — 3 3 114 2,466 43 2,623 — — 1 1
Hedge Funds(4) ............. — 346 263 609 — 103 285 388 — — — —
Real Estate Funds ............ — — — — 220 277 543 1,040 — — — —
Insurance Group Annuity Contracts . . — — — — — 44 79 123 — — — —
Common Collective Trusts and 103-12
Investment Entities(5) ......... — 854 — 854 — — — — — 55 — 55
Registered Investment Companies(6) . . 68 314 — 382 — — — — 86 1 — 87
Cash and Cash Equivalents(7) ...... 161 66 — 227 573 — — 573 — 6 — 6
Other(8) ................... (24) 95 — 71 79 130 2 211 (4) — — (4)
Total .................... $3,260 $7,162 $1,557 $11,979 $7,971 $8,516 $1,083 $17,570 $82 $104 $272 $458
(1) Includes debt issued by national, state and local governments and agencies.
(2) Includes limited partnerships such as equity, buyout, venture capital, real estate and other similar funds that invest in the U.S. and
internationally where foreign currencies are hedged.
(3) Includes a fund that invests in both private and public equities primarily in the U.S. and the United Kingdom, as well as emerging
markets across all sectors. The fund also holds fixed income and derivative instruments to hedge interest rate and inflation risk. In
addition, the fund includes units in transferable securities, collective investment schemes, money market funds, cash and deposits.
(4) Includes limited partnerships that invest both long and short primarily in common stocks and credit, relative value, event driven equity,
distressed debt and macro strategies. Management of the hedge funds has the ability to shift investments from value to growth strategies,
from small to large capitalization stocks and bonds, and from a net long position to a net short position.
(5) Department of Labor 103-12 IE (Investment Entity) designation is for plan assets held by two or more unrelated employee benefit plans
which includes limited partnerships and venture capital partnerships.
(6) Includes publicly and privately traded Registered Investment Entities.
(7) Includes cash and cash equivalents such as short-term marketable securities.
(8) Includes international insured contracts, derivative instruments and unsettled transactions.
113