IBM 2014 Annual Report Download - page 104

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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
103
NOTE D.
FINANCIAL INSTRUMENTS
Fair Value Measurements
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following tables present the company’s financial assets and financial liabilities that are measured at fair value on a recurring basis
at December31, 2014 and 2013.
($ in millions)
At December 31, 2014: Level 1 Level 2 Level 3 To tal
Assets
Cash equivalents
(1)
Time deposits and certificates of deposit $ — $3,517 $— $3,517
Commercial paper — 764 — 764
Money market funds 662 — — 662
U.S. government securities — 410 — 410
Other securities — 6 — 6
Total 662 4,697 — 5,359 (5)
Debt securities—noncurrent
(2) 1 8 — 9
Trading security investments
(2) 74 — — 74
Available-for-sale equity investments
(2) 243 — — 243
Derivative assets
(3)
Interest rate contracts — 633 — 633
Foreign exchange contracts — 775 — 775
Equity contracts — 24 — 24
Total — 1,432 — 1,432 (6)
Total assets $980 $6,138 $— $7,118 (6)
Liabilities
Derivative liabilities
(4)
Foreign exchange contracts — 177 — 177
Equity contracts — 19 — 19
Total liabilities $ — $ 196 $— $ 196 (6)
(1) Included within cash and cash equivalents in the Consolidated Statement of Financial Position.
(2) Included within investments and sundry assets in the Consolidated Statement of Financial Position.
(3)
The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments and sundry assets in the Consolidated Statement of
Financial Position at December31, 2014 were $751 million and $681 million, respectively.
(4)
The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Statement of Financial Position at
December31, 2014 were $165 million and $31 million, respectively.
(5) Available-for-sale securities with carrying values that approximate fair value.
(6)
If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated Statement of Financial Position, the total derivative asset and liability
positions would have been reduced by $97 million each.