Hess 2014 Annual Report Download - page 86

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71
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
71
fund values, which reflect the NAV per fund share derived indirectly from observable inputs or from quoted prices in less liquid
markets of the underlying securities, are classified as Level 2.
Other investments consist of exchange-traded real estate investment trust securities, as well as commingled fund and limited
partnership investments in hedge funds, private equity, real estate and diversified commodities. Exchange-traded securities are
classified as Level 1. Commingled fund values reflect the NAV per fund share and are classified as Level 2 or 3. Private equity and
real estate limited partnership values reflect information reported by the fund managers, which include inputs such as cost, operating
results, discounted future cash flows, market based comparable data and independent appraisals from third-party sources with
professional qualifications. Hedge funds, private equity and non-exchange-traded real estate investments are classified as Level 3.
The following tables provide changes in financial assets that are measured at fair value based on Level 3 inputs that are held by
institutional funds classified as:
Private Real
Fixed Hedge Equity Estate
Income* Funds Funds Funds Total
(In millions)
Balance at January 1, 2013................................................................ $ 2 $ 255 $ 75 $ 45 $ 377
Actual return on plan assets .............................................................. — 26 11 2 39
Purchases, sales or other settlements................................................. 1 10 3 — 14
N
et transfers in (out) of Level 3 ........................................................ — — — — —
Balance at December 31, 2013 .......................................................... 3 291 89 47 430
Actual return on plan assets .............................................................. — 9 15 — 24
Purchases, sales or other settlements................................................. (1) 2 1 1 3
N
et transfers in (out) of Level 3 ........................................................ — — — — —
Balance at December 31, 2014 .......................................................... $ 2 $ 302 $ 105 $ 48 $ 457
* Fixed Income includes treasury and government issued, government related, mortgage-backed and corporate securities.
The Corporation has budgeted contributions of approximately $55 million to its funded pension plans in 2015.
Estimated future benefit payments by the funded and unfunded pension plans and the postretirement medical plan, which reflect
expected future service, are as follows (in millions):
2015 ....................................................................................................................................................................................... $ 157
2016 ....................................................................................................................................................................................... 112
2017 ....................................................................................................................................................................................... 118
2018 ....................................................................................................................................................................................... 121
2019 ....................................................................................................................................................................................... 129
Years 2020 to 2024 ................................................................................................................................................................ 694
The Corporation also contributes to several defined contribution plans for eligible employees. Employees may contribute a portion
of their compensation to the plans and the Corporation matches a portion of the employee contributions. The Corporation recorded
expense of $32 million in 2014, $41 million in 2013 and $40 million in 2012 for contributions to these plans.