Avon 2013 Annual Report Download - page 107

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The U.S. pension plans include funded qualified plans and unfunded non-qualified plans. As of December 31, 2013, the U.S. qualified
pension plans had benefit obligations of $624.1 and plan assets of $531.1. As of December 31, 2012, the U.S. qualified pension plans had
benefit obligations of $728.8 and plan assets of $529.2. We believe we have adequate investments and cash flows to fund the liabilities
associated with the unfunded non-qualified plans.
During the second quarter of 2012, approximately $40 of assets previously designated and intended to be used solely for postretirement
benefits were transferred to a trust that funds both active and retiree benefits (the “healthcare trust”). We treated the transfer of these
assets as a negative contribution in our net benefit obligation. At December 31, 2013, the balance in this healthcare trust was $1.
Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other
Comprehensive Loss
Pension Benefits
U.S. Plans Non-U.S. Plans Postretirement Benefits
2013 2012 2011 2013 2012 2011 2013 2012 2011
Net Periodic Benefit Cost:
Service cost $ 15.7 $ 15.1 $ 12.8 $ 12.2 $ 18.0 $ 15.4 $ 1.8 $ 1.9 $ 2.0
Interest cost 27.5 29.6 32.6 36.8 39.8 39.7 5.1 5.8 6.4
Expected return on plan assets (37.4) (36.0) (36.2) (40.7) (39.1) (41.1) – – (2.2)
Amortization of prior service credit (.3) (.3) (.3) (.2) (1.3) (1.6) (4.8) (13.2) (16.0)
Amortization of net actuarial losses 47.2 43.7 45.4 12.8 17.6 13.6 2.5 4.1 3.2
Settlements/curtailments – .8 (.3) (4.3) 1.9 1.4 (1.8) (1.0) (.8)
Other – – – .7 .7 .6 – – –
Net periodic benefit cost $ 52.7 $ 52.9 $ 54.0 $ 17.3 $ 37.6 $ 28.0 $ 2.8 $ (2.4) $ (7.4)
Other Changes in Plan Assets and
Benefit Obligations Recognized in
Other Comprehensive (Loss) Income:
Actuarial (gains) losses $ (80.8) $ 37.7 $ 89.2 $(14.8) $ 31.0 $ 62.7 $(22.9) $ 4.7 $ 5.2
Prior service cost (credit) – – – – 4.8 (4.6) (1.3) – –
Amortization of prior service credit .3 .3 .2 7.9 2.4 1.6 7.1 14.6 17.0
Amortization of net actuarial losses (47.2) (43.7) (45.4) (17.7) (21.8) (14.9) (3.4) (4.1) (3.2)
Foreign currency changes – – – .5 10.4 (2.9) (.2) (.2) (.3)
Total recognized in other comprehensive (loss)
income*
$(127.7) $ (5.7) $ 44.0 $(24.1) $ 26.8 $ 41.9 $(20.7) $ 15.0 $18.7
Total recognized in net periodic benefit cost and
other comprehensive (loss) income $ (75.0) $ 47.2 $ 98.0 $ (6.8) $ 64.4 $ 69.9 $(17.9) $ 12.6 $11.3
* Amounts represent the pre-tax effect included within other comprehensive (loss) income. The net of tax amounts are included within the Consolidated
Statements of Comprehensive Income.
The amounts in AOCI that are expected to be recognized as components of net periodic benefit cost during 2014 are as follows:
Pension Benefits Postretirement
BenefitsU.S. Plans Non-U.S. Plans
Net actuarial loss $42.9 $9.3 $ 1.9
Prior service credit (.3) (.1) (4.6)
A V O N 2013 F-37