IBM 2015 Annual Report Download - page 138

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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
136
Defined Benefit Pension Plan Assets
The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December31,
2015. 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
(1) $11,210 $ 1 $ — $11,211 $4,631 $ 0 $ — $ 4,631
Equity commingled/mutual funds
(2) (3) 99 2,036 — 2,134 90 6,200 — 6,290
Fixed income
Government and related
(4) — 9,854 — 9,854 — 7,482 16 7,499
Corporate bonds
(5) — 17,088 2 17,090 — 1,896 4 1,899
Mortgage and asset-backed securities — 633 10 643 — 219 — 219
Fixed income commingled/mutual funds
(2) (6) 313 192 401 907 38 9,082 — 9,120
Insurance contracts —————1,079 — 1,079
Cash and short-term investments
(7) 244 2,305 — 2,549 142 467 — 610
Hedge funds — 1,419 912 2,331 — 659 — 659
Private equity
(8) — — 2,790 2,790 — — 582 582
Private real estate
(8) — — 2,429 2,429 — — 661 661
Derivatives
(9) (82) 2 — (80) (1) 481 — 480
Other commingled/mutual funds
(2) (10) ————1151,637 317 2,069
Subtotal 11,784 33,531 6,544 51,859 5,016 29,202 1,580 35,798
Other
(11) — — — (143) — — — (50)
Fair value of plan assets $11,784 $33,531 $6,544 $51,716 $5,016 $29,202 $1,580 $35,748
(1) Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $34million, representing 0.1percent of the U.S. Plan assets. Non-U.S. Plans include
IBM common stock of $14million, representing 0.04percent of the non-U.S. Plans assets.
(2) Commingled funds represent pooled institutional investments.
(3) Invests in predominantly equity securities.
(4) Includes debt issued by national, state and local governments and agencies.
(5) The U.S. Plan includes IBM corporate bonds of $23million, representing 0.04percent of the U.S. Plan assets. Non-U.S. plans include IBM corporate bonds of $1million
representing 0.004percent of the non-U.S. Plan assets.
(6) Invests in predominantly fixed-income securities.
(7) Includes cash and cash equivalents and short-term marketable securities.
(8) Primarily includes limited partnerships.
(9) Includes interest rate derivatives, forwards, exchange traded and other over-the-counter derivatives.
(10) Invests in both equity and fixed-income securities.
(11) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets.
The U.S. nonpension postretirement benefit plan assets of $71million were invested in cash, categorized as Level1 in the fair value hier-
archy. The non-U.S. nonpension postretirement benefit plan assets of $59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.