IBM 2012 Annual Report Download - page 131

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130 Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
130
The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December 31, 2011.
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 To t a l Level 1 Level 2 Level 3 To t a l
Equity
Equity securities (a) $13,618 $ 11 $ — $13,629 $6,426 $ — $ — $ 6,427
Equity commingled/mutual funds (b)(c) 32 1,877 — 1,909 240 7,751 — 7,991
Fixed income
Government and related (d) — 15,105 29 15,134 — 8,479 96 8,575
Corporate bonds (e) — 7,387 12 7,398 — 1,409 39 1,447
Mortgage and asset-backed securities — 838 45 883 — 36 — 36
Fixed income commingled/mutual funds (b)(f) 262 715 246 1,223 72 7,136 — 7,209
Insurance contracts — — — — — 988 — 988
Cash and short-term investments (g) 286 2,390 — 2,675 145 361 — 506
Hedge funds — 1,140 713 1,853 — 417 — 417
Private equity (h) 0 — 4,098 4,098 — — 262 262
Private real estate (h) — — 2,790 2,790 — — 580 580
Derivatives (i) 10 (15)— (6)(2) 866 — 864
Other commingled/mutual funds (b)(j) — — — — 9 114 — 123
Subtotal 14,207 29,446 7,932 51,586 6,890 27,557 977 35,425
Other (k) — — — (368) — — — (62)
Fair value of plan assets $14,207 $29,446 $7,932 $51,218 $6,890 $27,557 $977 $35,362
(a) Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $132 million, representing 0.3 percent of the U.S. Plan assets. Non-U.S. Plans include
IBM common stock of $35 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) The U.S. Plan includes IBM corporate bonds of $13 million, representing 0.03 percent of the U.S. Plan assets.
(f) Invests in predominantly fixed income securities.
(g) Includes cash and cash equivalents and short-term marketable securities.
(h) Includes limited partnerships and venture capital partnerships.
(i) Primarily includes interest rate derivatives and, to a lesser extent, forwards, exchange traded and other over-the-counter derivatives.
(j) Invests in both equity and fixed income securities.
(k) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets.
The U.S. nonpension postretirement benefit plan assets of $38 million were invested in cash, categorized as Level 1 in the fair value hierarchy.
The non-U.S. nonpension postretirement benefit plan assets of $112 million, primarily in Brazil, and, to a lesser extent, in Mexico and South
Africa, were invested primarily in government and related fixed income securities and corporate bonds, categorized as Level 2 in the fair
value hierarchy.