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NotestoConsolidatedFinancialStatements
INTERNATIONALBUSINESSMACHINESCORPORATION ANDSUBSIDIARYCOMPANIES
90_ NotestoConsolidatedFinancialStatements
ThechangesinthebenefitobligationsandplanassetsofthesignificantdefinedbenefitpensionandU.S.nonpensionpostretirement
benefitplansasofDecember31,2005and2004were:
(Dollarsinmillions)
NONPENSIONPOSTRETIREMENT
SIGNIFICANTDEFINEDBENEFITPENSIONPLANS BENEFITPLANS
U.S. PLANS NON-U.S. PLANS U.S.PLANS
2005 2004 2005 2004 2005 2004
Changeinbenefitobligation:
Benefitobligationatbeginning ofyear $«44,637 $«42,104 $«38,730 $«31,875 $«5,894 $«6,181
Servicecost 682 652 694 611 45 40
Interestcost 2,463 2,453 1,639 1,620 324 337
Planparticipants’ contributions «——55 50 ——
Acquisitions/divestitures,net 57 —(14) 93 (7) —
Settlementofcertainlegalclaims «—320 ————
Actuariallosses/(gains) 2,237 1,856 2,323 3,729 343 (146)
Benefitspaidfromtrust (2,896) (2,748) (1,430) (1,305) ——
Directbenefitspayments «— —(288) (287) (519) (518)
Foreignexchangeimpact ««— «— «(4,543) «2,352 ««— «—
Medicaresubsidy ««—«— «—«— (188) «—
Planamendments/curtailments/settlements (775) —(482) (8) ——
Benefitobligationatendofyear 46,405 44,637 36,684 38,730 5,892 5,894
Changeinplanassets:
Fairvalueofplanassetsat
beginningofyear 44,845 41,679 31,140 26,546 50 14
Actualreturnonplanassets 4,880 5,214 5,080 2,588 1—
Employercontribution 1,715 700 561 1,085 500 35
Acquisitions/divestitures,net (2) —17 59 ——
Planparticipants’ contributions «——55 50 171 187
Benefitspaidfromtrust (2,896) (2,748) (1,430) (1,305) (656) (186)
Planassettransfer ——(195) ———
Foreignexchangeimpact «— —(3,718) 2,117 «— —
Fairvalueofplanassetsatend ofyear 48,542 44,845 31,510 31,140 66 50
Fairvalueofplanassetsin excess/
(deficit) ofbenefitobligation 2,137 208 (5,174) (7,590) (5,826) (5,844)
Unrecognizednetactuariallosses 11,617 11,874 12,028 14,737 970 846
Unrecognizedpriorservicecosts 122 461 (705) (160) (239) (301)
Unrecognizednettransitionassets «——3(3) «— —
Netprepaidassets/(accrued benefit
liabilities)recognizedintheConsolidated
Statement ofFinancialPosition $«13,876 $«12,543 $«««6,152 $««««6,984 $«(5,095) $«(5,299)
Amountsrecognizedinthe
ConsolidatedStatementof
FinancialPositioncaptionsinclude:
Prepaidpensionassets $«13,876 $«12,543 $«««6,458 $««««7,476 $«««««««—$«««««««—
Intangibleassets «——38 44 ——
Totalprepaidpensionassets «13,876 12,543 6,496 7,520 ——
Retirementandnonpension
postretirementbenefitobligation «——(6,516) (8,429) (5,095) (5,299)
Accumulated losses
notaffectingretainedearnings «——4,081 5,088 ——
Deferredtaxassets(investments
andsundryassets) «——2,091 2,805 ——
Netamountrecognized $«13,876 $«12,543 $«««6,152 $«««««6,984 $«(5,095) $«(5,299)
Accumulatedbenefitobligation $«46,184 $«43,327 $«35,051 $«««36,755 ««— —