Halliburton 2015 Annual Report Download - page 89

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72
The following table presents additional information about our international pension plans.
December 31
Millions of dollars 2015 2014
Amounts recognized on the Consolidated Balance Sheets
Accrued employee compensation and benefits $ 20 $ 22
Employee compensation and benefits 155 325
Pension plans in which projected benefit obligation exceeded plan assets
Projected benefit obligation $ 1,042 $ 1,232
Fair value of plan assets 867 884
Pension plans in which accumulated benefit obligation exceeded plan assets
Accumulated benefit obligation $ 964 $ 1,120
Fair value of plan assets 846 860
Fair value measurements of plan assets
Our Level 1 plan asset fair values are based on quoted prices in active markets for identical assets, our Level 2 plan
asset fair values are based on significant observable inputs for similar assets, and our Level 3 plan asset fair values are based on
significant unobservable inputs.
The following table sets forth by level within the fair value hierarchy the fair value of assets held by our international
pension plans.
Millions of dollars Level 1 Level 2 Level 3 Total
Cash and equivalents $
—
$ 46 $
—
$ 46
Common/collective trust funds
Equity funds (a)
—
209
—
209
Bond funds (b)
—
212 38 250
Alternatives funds (c)
—
42 46 88
Real estate funds (d)
—
231
—
231
Other assets 2 19 27 48
Fair value of plan assets at December 31, 2015 $ 2 $ 759 $ 111 $ 872
Common/collective trust funds
Equity funds (a) $
—
$ 320 $
—
$ 320
Bond funds (b)
—
197 70 267
Alternatives fund (c)
—
148
—
148
Real estate funds (d)
—
86
—
86
Other assets 6 33 31 70
Fair value of plan assets at December 31, 2014 $ 6 $ 784 $ 101 $ 891
(a) Strategy is to invest in diversified funds of global common stocks.
(b) Strategy is to invest in diversified funds of fixed income securities of varying geographies and credit quality and
whose cash flows approximate the maturities of the benefit obligation.
(c) Strategy is to invest in a fund of diversifying investments, including but not limited to reinsurance, commodities, and
currencies.
(d) Strategy is to invest in diversified funds of real estate investment trusts and private real estate.
Common/collective trust funds are valued at the net asset value of units held by the plans at year-end. Our investment
strategy varies by country depending on the circumstances of the underlying plan. Risk management practices include
diversification by issuer, industry, and geography, as well as the use of multiple asset classes and investment managers within
each asset class. For our United Kingdom pension plan, which constituted 81% of our international pension plans’ projected
benefit obligation at December 31, 2015 and is no longer accruing service benefits, we implemented an investment strategy in
2014 that aims to achieve full funding of the benefit obligation, with the plan's assets increasingly composed of investments
whose cash flows match the maturities of the obligation.