Avon 2014 Annual Report Download - page 109

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The U.S. pension plans include a funded qualified plan and unfunded non-qualified plans. As of December 31, 2014, the U.S. qualified
pension plan had benefit obligations of $673.1 and plan assets of $506.5. As of December 31, 2013, the U.S. qualified pension plan had
benefit obligations of $624.1 and plan assets of $531.1. We believe we have adequate investments and cash flows to fund the liabilities
associated with the unfunded non-qualified plans.
Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other
Comprehensive Loss
Pension Benefits
Postretirement BenefitsU.S. Plans Non-U.S. Plans
2014 2013 2012 2014 2013 2012 2014 2013 2012
Net Periodic Benefit Cost:
Service cost $ 14.1 $ 15.7 $ 15.1 $ 8.5 $ 12.2 $ 18.0 $ 1.1 $ 1.8 $ 1.9
Interest cost 27.8 27.5 29.6 36.5 36.8 39.8 4.9 5.1 5.8
Expected return on plan assets (35.8) (37.4) (36.0) (43.3) (40.7) (39.1) – – –
Amortization of prior service credit (.3) (.3) (.3) (.1) (.2) (1.3) (4.5) (4.8) (13.2)
Amortization of net actuarial losses 45.1 47.2 43.7 9.8 12.8 17.6 1.4 2.5 4.1
Settlements/curtailments 38.0 – .8 2.7 (4.3) 1.9 (2.7) (1.8) (1.0)
Other – – – .6 .7 .7 – – –
Net periodic benefit cost $ 88.9 $ 52.7 $ 52.9 $ 14.7 $ 17.3 $ 37.6 $ .2 $ 2.8 $ (2.4)
Other Changes in Plan Assets and
Benefit Obligations Recognized in
Other Comprehensive (Loss) Income:
Actuarial losses (gains) $105.9 $ (80.8) $ 37.7 $ 99.2 $(14.8) $ 31.0 $ 3.6 $(22.9) $ 4.7
Prior service (credit) cost (2.0) – – – – 4.8 – (1.3) –
Amortization of prior service credit .3 .3 .3 .1 7.9 2.4 7.3 7.1 14.6
Amortization of net actuarial losses (81.5) (47.2) (43.7) (13.1) (17.7) (21.8) (1.7) (3.4) (4.1)
Foreign currency changes – – – (31.3) .5 10.4 (.1) (.2) (.2)
Total recognized in other comprehensive (loss)
income*
$ 22.7 $(127.7) $ (5.7) $ 54.9 $(24.1) $ 26.8 $ 9.1 $(20.7) $15.0
Total recognized in net periodic benefit cost
and other comprehensive (loss) income $111.6 $ (75.0) $ 47.2 $ 69.6 $ (6.8) $ 64.4 $ 9.3 $(17.9) $12.6
* 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.
In an effort to reduce our pension benefit obligations, in March 2014, we offered former employees who are vested and participate in the
PRA a payment that would fully settle our pension plan obligation to those participants who elected to receive such payment. The election
period ended during the second quarter of 2014 and the payments were made in June 2014 from our plan assets. As a result of the lump-
sum payments made, in the second quarter of 2014, we recorded a settlement charge of $23.5. Because the settlement threshold was
exceeded in the second quarter of 2014, settlement charges of $5.4 and $7.5 were also recorded in the third and fourth quarters of 2014,
respectively, as a result of additional payments from the PRA. These settlement charges were allocated between Global Expenses and the
operating results of North America.
The amounts in AOCI that are expected to be recognized as components of net periodic benefit cost during 2015 are as follows:
Pension Benefits Postretirement
BenefitsU.S. Plans Non-U.S. Plans
Net actuarial loss $46.4 $11.4 $ 2.1
Prior service credit (.7) (.1) (4.1)
A V O N 2014 F-35