IBM 2010 Annual Report Download - page 124

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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies122
The U.S. nonpension postretirement benefit plan assets of $33 million were invested in fixed income commingled/mutual funds, categorized
as Level 1 in the fair value hierarchy. The non-U.S. nonpension postretirement benefit plan assets of $104 million, primarily in Brazil, and,
to a lesser extent, in Mexico and South Africa, were invested primarily in government and related fixed income securities, categorized as
Level 2 in the fair value hierarchy.
The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December 31,
2009. The U.S. Plan consists of the Qualified PPP and the Non-U.S. Plans consist of all plans sponsored by the company’s subsidiaries.
($ in millions)
U.S. Plan Non-U.S. Plans
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Equity:
Equity securities
(a) $15,205 $ 56 $ — $15,261 $7,012 $ — $ — $ 7,012
Equity commingled/mutual funds
(b)(c) 303 1,085 26 1,413 386 8,923 — 9,309
Fixed income:
Government and related
(d) — 10,880 — 10,880 — 6,231 — 6,231
Corporate bonds — 7,264 — 7,264 — 1,467 — 1,467
Mortgage and asset-backed securities — 1,403 37 1,440 — 21 — 21
Fixed income commingled/mutual funds
(b)(e) 369 1,064 192 1,625 45 6,835 — 6,880
Insurance contracts — 1 — 1 — 1,143 — 1,143
Cash and short-term investments
(f) 243 2,460 — 2,703 98 236 — 333
Hedge funds — 214 587 800 — — — —
Private equity
(g) — — 3,877 3,877 — — 93 93
Private real estate
(g) — — 2,247 2,247 — — 492 492
Derivatives (h) 18 (221) — (203) 62 (7) — 55
Other commingled/mutual funds
(b)(i) — (0) — — — 1,190 — 1,190
Subtotal 16,138 24,205 6,964 47,308 7,602 26,038 585 34,226
Other (j) — — — (39) — — — 80
Fair value of plan assets $16,138 $24,205 $6,964 $47,269 $7,602 $26,038 $585 $34,305
(a) Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $122 million, representing 0.3 percent of the U.S. Plan assets. Non-U.S. Plans include
IBM common stock of $45 million, representing 0.1 percent of the non-U.S. Plans assets.
(b) Commingled funds represent pooled institutional investments.
(c) Invests in predominantly equity securities.
(d) Includes debt issued by national, state and local governments and agencies.
(e) Invests in predominantly fixed income securities.
(f) Includes cash and cash equivalents and short-term marketable securities.
(g) Includes limited partnerships and venture capital partnerships.
(h) Primarily includes interest rate derivatives and, to a lesser extent, forwards, exchange traded and other over-the-counter derivatives.
(i) Invests in both equity and fixed income securities.
(j) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets.