Berkshire Hathaway 2013 Annual Report Download - page 61

Notes to Consolidated Financial Statements (Continued)
(21) Pension plans
Several of our subsidiaries individually sponsor defined benefit pension plans covering certain employees. Benefits under
the plans are generally based on years of service and compensation, although benefits under certain plans are based on years of
service and fixed benefit rates. Our subsidiaries make contributions to the plans, generally, to meet regulatory requirements.
Additional amounts may be contributed on a discretionary basis.
The components of net periodic pension expense for each of the three years ending December 31, 2013 are as follows
(in millions).
2013 2012 2011
Service cost ......................................................................... $254 $247 $191
Interest cost ......................................................................... 547 583 568
Expected return on plan assets .......................................................... (634) (610) (579)
Amortization of actuarial losses and other ................................................. 225 220 102
Net pension expense .................................................................. $392 $440 $282
The accumulated benefit obligation is the actuarial present value of benefits earned based on service and compensation
prior to the valuation date. The projected benefit obligation (“PBO”) is the actuarial present value of benefits earned based upon
service and compensation prior to the valuation date and, if applicable, includes assumptions regarding future compensation
levels. Benefit obligations under qualified U.S. defined benefit pension plans are funded through assets held in trusts. Pension
obligations under certain non-U.S. plans and non-qualified U.S. plans are unfunded. PBOs of non-qualified U.S. plans and non-
U.S. plans which are not funded through assets held in trusts were approximately $1.0 billion as of December 31, 2013 and
2012. MidAmerican’s pension plans cover employees of its various regulated subsidiaries. The costs associated with these
regulated operations are generally recoverable through the regulated rate making process.
Reconciliations of the changes in Plan assets and PBOs related to MidAmerican’s pension plans and all other pension plans
for each of the two years ending December 31, 2013 are in the following tables (in millions).
2013 2012
MidAmerican All other Consolidated MidAmerican All other Consolidated
Benefit Obligations
Accumulated benefit obligation at end of year ..... $4,664 $8,101 $12,765 $4,037 $8,878 $12,915
PBO at beginning of year ..................... $4,284 $9,789 $14,073 $3,863 $9,129 $12,992
Service cost ............................ 46 208 254 44 203 247
Interest cost ............................ 172 375 547 183 400 583
Benefits paid ........................... (275) (505) (780) (219) (660) (879)
Business acquisitions .................... 823 — 823 — 8 8
Actuarial (gains) or losses and other ........ (44) (975) (1,019) 413 709 1,122
PBO at end of year .......................... $5,006 $8,892 $13,898 $4,284 $9,789 $14,073
Plan Assets
Plan assets at beginning of year ................ $3,651 $6,785 $10,436 $3,245 $5,905 $ 9,150
Employer contributions .................. 150 274 424 193 456 649
Benefits paid ........................... (275) (505) (780) (219) (660) (879)
Actual return on plan assets ............... 497 1,849 2,346 341 1,088 1,429
Business acquisitions .................... 818 — 818 — 6 6
Other ................................. 47 (14) 33 91 (10) 81
Plan assets at end of year ..................... $4,888 $8,389 $13,277 $3,651 $6,785 $10,436
Net funded status – net liability ................ $ 118 $ 503 $ 621 $ 633 $3,004 $ 3,637
59