IBM 2011 Annual Report Download - page 127

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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies 125
The following table presents the changes in benefit obligations and plan assets of the company’s retirement-related benefit plans, excluding
defined contribution plans.
($ in millions)
Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans
U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans
2011 2010 2011 2010*2011 2010 2011 2010
Change in benefit obligation
Benefit obligation at January 1 $51,293 $48,354 $42,584 $41,308 $ 5,123 $ 5,100 $ 872 $ 767
Service cost ——505 508 33 33 11 9
Interest cost 2,456 2,601 1,843 1,841 236 262 67 59
Plan participants’ contributions ——53 57 228 235 ——
Acquisitions/divestitures, net (0) —(48) (75)(0) —(1) 1
Actuarial losses/(gains) 3,551 3,573 812 1,656 244 123 47 32
Benefits paid from trust (3,121) (3,145)(1,995) (1,957)(623) (641)(7) (7)
Direct benefit payments (95) (92)(462) (457)(32) (5)(27) (25)
Foreign exchange impact ——(423) (225)——(60) 37
Medicare/Government subsidies ————65 16 ——
Amendments/curtailments/settlements/other —1(8) (73)———0
Benefit obligation at December 31 $54,085 $51,293 $42,861 $42,584 $ 5,273 $ 5,123 $ 901 $ 872
Change in plan assets
Fair value of plan assets at January 1 $50,259 $47,269 $35,722 $34,305 $ 35 $ 33 $ 120 $ 104
Actual return on plan assets 4,080 6,135 1,052 2,983 0013 17
Employer contributions ——728 801 397 408 00
Acquisitions/divestitures, net ——(27) (10)—(0)(0) (0)
Plan participants’ contributions ——53 57 228 235 ——
Benefits paid from trust (3,121) (3,145)(1,995) (1,957)(623) (641)(7) (7)
Foreign exchange impact ——(537) (396)——(15) 6
Amendments/curtailments/settlements/other ——367** (61)————
Fair value of plan assets at December 31 $51,218 $50,259 $35,362 $35,722 $ 38 $ 35 $ 112 $ 120
Funded status at December 31 $ (2,866) $ (1,034) $ (7,499) $ (6,861) $(5,235) $(5,088)$(789) $(752)
Accumulated benefit obligation+$54,085 $51,293 $42,063 $41,630 N/A N/A N/A N/A
* Excludes a defined benefit pension plan in Brazil due to restrictions on the use of plan assets imposed by governmental regulations.
** Includes the reinstatement of certain plan assets in Brazil due to a 2011 government ruling allowing certain previously restricted plan assets to be returned to IBM. Beginning June
2011, the assets will be returned to IBM monthly over a three year period, with approximately $200 million expected to be returned during 2012. The remaining surplus in Brazil at
December 31, 2011 remains excluded from total plan assets due to continued restrictions imposed by the government on the use of those plan assets.
+ Represents the benefit obligation assuming no future participant compensation increases.
N/A—Not applicable
The following table presents the net funded status recognized in the Consolidated Statement of Financial Position.
($ in millions)
Defined Benefit Pension Plans Nonpension Postretirement Benefit Plans
U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans
2011 2010 2011 2010 2011 2010 2011 2010
Prepaid pension assets $ 0 $ 596 $ 2,843 $ 2,471 $ 0 $ 0 $ 0 $ 1
Current liabilities—compensation and benefits (96) (94)(304) (289)(437) (421)(22) (22)
Noncurrent liabilities—retirement and nonpension
postretirement benefit obligations (2,770) (1,536) (10,038) (9,044)(4,798) (4,667)(768) (731)
Funded status—net $(2,866) $(1,034) $ (7,499) $(6,861)$(5,235) $(5,088)$(789) $(752)
The table on page 126 presents the pre-tax net loss and prior service costs/(credits) and transition (assets)/liabilities recognized in other
comprehensive income/(loss) and the changes in the pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized
in accumulated other comprehensive income/(loss) for the retirement-related benefit plans.