Kodak 2006 Annual Report Download - page 109

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Pension (income) expense for all defined benefit plans included:
2006 2005 2004
(in millions) U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S.
Service cost $ 92 $ 35 $ 116 $ 41 $ 119 $ 38
Interest cost 325 180 346 167 381 169
Expected return on plan assets (525) (224) (518) (208) (534) (198)
Amortization of:
Transition asset — (1) — (1) — (1)
Prior service cost 1 13 1 25 1 (17)
Actuarial loss 8 82 33 66 28 48
Pension (income) expense before
special termination benefits, curtailments
and settlements (99) 85 (22) 90 (5) 39
Special termination benefits 15 41 — 101 — 52
Curtailment (gains) losses (50) (6) — 21 8 —
Settlement (gains) losses (27) (8) 54 11 — —
Net pension (income) expense (161) 112 32 223 3 91
Other plans including unfunded plans — 22 — 18 — 7
Total net pension (income) expense (161) 134 32 241 3 98
Net pension expense (income) from
discontinued operations 1 — (54) — — —
Net pension (income) expense
from continuing operations $ (160) $ 134 $ (22) $ 241 $ 3 $ 98
The estimated actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into net periodic pension cost
over the next fiscal year are $79 million and $2 million, respectively.
The special termination benefits of $56 million, $101 million and $52 million for the years ended December 31, 2006, 2005 and 2004, respectively,
were incurred as a result of the Company’s restructuring actions and, therefore, have been included in restructuring costs and other in the Consolidat-
ed Statement of Operations for those respective periods. In addition, curtailment and settlement charges totaling $50 million and $30 million for 2006,
$21 million and $11 million for 2005, and $8 million and $0 million for 2004 were also incurred as a result of the Company’s restructuring actions and,
therefore, have been included in restructuring costs and other in the Consolidated Statement of Operations for those respective periods.
In connection with the divestiture of RSS, the final asset transfer was completed in November 2005. In connection with the final asset transfer, a
one-time settlement charge of $54 million was recognized during the fourth quarter of 2005 in discontinued operations. See Note 22, “Discontinued
Operations.”
The Japanese Welfare Pension Insurance Law (JWPIL) was amended in June 2001 to permit employers with Employees’ Pension Funds (EPFs) to
separate the pay related portion of the old-age pension benefits under the JWPIL (Substitutional Portion) from the EPF. This obligation and related
plan assets are transferred to a government agency, thereby relieving the EPF from paying the substitutional portion of benefits. The Kodak Japan
Limited EPF completed the transfer of the substitutional portion to the Japanese Government in December 2004. The effect of the transfer resulted
in a one-time credit due to the derecognition of future salary increases in the amount of $3 million, a one-time credit due to the government subsidy
from the transfer of liabilities and related plan assets of $25 million and a one-time charge due to the accelerated recognition of unrecognized loss in
accordance with SFAS No. 88 settlement accounting in the amount of $20 million.