IBM 2015 Annual Report Download - page 139

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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
137
The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at December31,
2014. 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) $11,527 $ 1 $ — $11,528 $5,652 $ — $ — $ 5,652
Equity commingled/mutual funds
(2) (3) 85 2,277 — 2,362 126 7,415 — 7,540
Fixed income
Government and related
(4) — 7,883 — 7,883 — 8,159 32 8,191
Corporate bonds
(5) — 18,828 4 18,832 — 2,063 1 2,063
Mortgage and asset-backed securities — 567 20 587 — 238 — 238
Fixed income commingled/mutual funds
(2) (6) 312 3,118 295 3,725 87 9,715 — 9,802
Insurance contracts —————1,053 — 1,053
Cash and short-term investments
(7) 345 2,304 — 2,650 158 393 — 551
Hedge funds — 1,474 889 2,362 — 745 — 745
Private equity
(8) — — 3,287 3,287 — — 513 513
Private real estate
(8) — — 2,942 2,942 — — 664 664
Derivatives
(9) (55) 3 — (53) 2 846 — 848
Other commingled/mutual funds
(2) (10) ————331,513 220 1,766
Subtotal 12,214 36,455 7,437 56,106 6,056 32,139 1,429 39,625
Other
(11) — — — (333) — — — (82)
Fair value of plan assets $12,214 $36,455 $7,437 $55,772 $6,056 $32,139 $1,429 $39,543
(1) Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $55million, representing 0.1percent of the U.S. Plan assets. Non-U.S. Plans include
IBM common stock of $21million, representing 0.1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 $10million, representing 0.02percent of the U.S. Plan assets. Non-U.S. plans include IBM corporate bonds of $4million
representing 0.01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 $16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 $84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.