IBM 2014 Annual Report Download - page 137

Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
136
The following table presents the pre-tax net loss and prior service costs/(credits) and transition (assets)/liabilities recognized in OCI and
the changes in the pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in AOCI for the retirement-
related benefit 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
2014 2013 2014 2013 2014 2013 2014 2013
Net loss at January 1 $13,709 $19,488 $19,777 $22,188 $304 $806 $161 $269
Current period loss/(gain) 5,789 (3,989) 3,324 (814) 548 (480) 38 (85)
Curtailments and settlements ——(25) 3——10
Amortization of net loss included
in net periodic (income)/cost (1,056) (1,790) (1,400) (1,600) 0(21) (11) (23)
Net loss at December 31 $18,442 $13,709 $21,676 $19,777 $852 $304 $189 $161
Prior service costs/(credits) at January 1 $ 120 $ 130 $ (496) $ (614)$ 15 $ — $ (32) $ (6)
Current period prior service costs/(credits) ——(1) 0—15 0(31)
Amortization of prior service (costs)/credits
included in net periodic (income)/cost (10) (10)111 119 7—55
Prior service costs/(credits) at December 31 $ 110 $ 120 $ (386) $ (496) $ 23 $ 15 $ (26) $ (32)
Transition (assets)/liabilities at January 1 $ — $ — $ 0 $ 0 $ — $ — $ 0 $ 0
Amortization of transition assets/(liabilities)
included in net periodic (income)/cost ——00——00
Transition (assets)/liabilities at December 31 $ — $ — $ 0 $ 0 $ — $ — $ 0 $ 0
Total loss recognized in accumulated other
comprehensive income/(loss)*$18,552 $13,829 $21,290 $19,281 $875 $319 $163 $129
* See note L, “Equity Activity,” on pages 118 through 121 for the total change in AOCI, and the Consolidated Statement of Comprehensive Income for the components of net periodic
(income)/cost, including the related tax effects, recognized in OCI for the retirement-related benefit plans.
The following table presents the pre-tax estimated net loss, estimated prior service costs/(credits) and estimated transition (assets)/
liabilities of the retirement-related benefit plans that will be amortized from AOCI into net periodic (income)/cost in 2015.
($ in millions)
Defined Benefit
Pension Plans
Nonpension Postretirement
Benefit Plans
U.S. Plans Non-U.S. Plans U.S. Plan Non-U.S. Plans
Net loss $1,659 $1,693 $43 $11
Prior service costs/(credits) 10 (98) (7) (5)
Transition (assets)/liabilities ————
During the year ended December 31, 2013, the company amended
the U.S. nonpension postretirement benefit plan. A plan amend-
ment effective January 1, 2014, which established an HRA for
Medicare eligible participants increased the benefit obligation $91
million. A plan amendment which ended life insurance eligibility
for employees who retire on or after January 1, 2015 reduced the
benefit obligation $76 million.
On March 24, 2014, the Supreme Court of Spain issued a ruling
against IBM Spain in litigation involving its defined benefit and
defined contribution plans. As a result of the ruling, the company
recorded a pre-tax retirement-related obligation of $148 mil-
lion in 2014 in selling, general and administrative expense in the
Consolidated Statement of Earnings. This obligation is reflected in
“Non-U.S. Plans—Multi-employer plans/other costs” in the table
on page 134. To date, the rulings in this case are declaratory only.
In 2012, the High Court in London issued a ruling against IBM
United Kingdom Limited and IBM United Kingdom Holdings Lim-
ited, both wholly owned subsidiaries of the company, in litigation
involving one of IBM UK’s defined benefit plans. As a result of the
ruling, the company recorded an additional pre-tax retirement-
related obligation of $162 million in 2012 in selling, general and
administrative expense in the Consolidated Statement of Earnings.
See note M, “Contingencies and Commitments,” on page 123 for
additional information regarding pension plan litigation matters.