IBM 2009 Annual Report Download - page 116

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Notes to Consolidated Financial Statements
INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
($ in millions)
Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans
U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans
For the year ended December 31: 2009 2008 2009 2008 2009 2008 2009 2008
Net loss at January 1 $15,623 $ 2,479 $18,898 $ 9,228 $454 $ 657 $155 $186
Current period loss/(gain) (332) 13,435 (1,107) 10,339 (57) (194) 24 (11)
Curtailments and settlements — — 6 (56) — — — (7)
Amortization of net loss included in net
periodic (income)/cost (411) (291) (624) (612) — (9) (11) (14)
Net loss at December 31 $14,880 $15,623 $17,172 $18,898 $397 $ 454 $167 $155
Prior service costs/(credits) at January 1 $ 168 $ (60) $ (980) $ (1,147) $ (53) $(115) $ (21) $ (28)
Current period prior service costs/(credits) — 222 (370) — — — (5) —
Curtailments and settlements — — 120 38 — — — —
Amortization of prior service (costs)/credits
included in net periodic (income)/cost (10) 7 126 129 39 62 6 7
Prior service costs/(credits) at December 31 $ 159 $ 168 $ (1,104) $ (980) $ (14) $ (53) $ (19) $ (21)
Transition (assets)/liabilities at January 1 $ — $ — $ (1) $ (1) $ — $ — $ 1 $ 1
Amortization of transition assets/(liabilities)
included in net periodic (income)/cost — — 0 0 — — 0 0
Transition (assets)/liabilities at December 31 $ — $ — $ (1) $ (1) $ — $ — $ 1 $ 1
Total loss recognized in Accumulated
other comprehensive income/(loss)* $15,038 $15,791 $16,067 $17,917 $382 $ 401 $148 $135
*
See note N, “Equity Activity,” on page 98 for the total change in the accumulated other comprehensive income/(loss) and the Consolidated Statement of Changes in Equity
for components of net periodic (income)/cost, including the related tax effects, recognized in other comprehensive income/(loss) for the retirement-related benefit plans.
The following table presents the pre-tax estimated net loss, estimated prior service costs/(credits) and estimated transition (assets)/
liabilities of the retirement-related benefit plans that will be amortized from accumulated other comprehensive income/(loss) into net
periodic (income)/cost and recorded in the Consolidated Statement of Earnings in 2010.
Defined Nonpension Post-
Benefit Pension Plans retirement Benefit Plans
($ in millions) U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans
Net loss $476 $ 722 $ — $9
Prior service costs/(credits) 10 (165) (14) (5)
Transition (assets)/liabilities — 0 — —
for future years of service. This amendment resulted in a
decrease in the PBO of $359 million and had no impact on 2009
net periodic (income)/cost.
During the year ended December 31, 2008, the IBM Board
of Directors approved a pension adjustment for certain U.S.
retirees and beneficiaries in the PPP. This adjustment provided
a pension increase to approximately 42,000 IBM retirees who
retired before January 1, 1997. This adjustment resulted in an
increase in the PBO of $222 million and had no impact on 2008
net periodic (income)/cost.
During the year ended December 31, 2008, the company
terminated one of its defined benefit pension plans in Japan that
resulted in a settlement gain of $140 million recorded as part of
2008 net periodic (income)/cost and resulted in a decrease in
the PBO of $157 million.
During the year ended December 31, 2009, the company paid
$140 million for mandatory pension insolvency insurance cover-
age premiums in certain non-U.S. countries (Germany, Canada,
Luxembourg and the U.K.), an increase of $117 million from the
year ended December 31, 2008, driven primarily by premiums
paid in Germany. These premiums relate to the rising level of
plan insolvencies experienced by other companies.
During the year ended December 31, 2009, the company
approved changes to the United Kingdom Pension Plan which
included the elimination of accrued benefits under this plan effec-
tive April 2011. As a result of this action, the company recorded
a curtailment gain of $124 million included in 2009 net periodic
(income)/cost and reduced the PBO by $85 million. The com-
pany also amended its cash balance and defined contribution
plans in Japan to reduce overall benefits for active participants
114