Pfizer 2013 Annual Report Download - page 93

Notes to Consolidated Financial Statements
Pfizer Inc. and Subsidiary Companies
92
2013 Financial Report
A. Components of Net Periodic Benefit Costs and Changes in Other Comprehensive Loss
The following table provides the annual cost (including costs reported as part of discontinued operations) and changes in Other comprehensive
income/(loss) for our benefit plans:
Year Ended December 31,
Pension Plans
U.S.
Qualified(a)
U.S.
Supplemental
(Non-Qualified)(b) International(c) Postretirement Plans(d)
(MILLIONS OF DOLLARS) 2013 2012 2011 2013 2012 2011 2013 2012 2011 2013 2012 2011
Service cost $ 301 $ 357 $ 351 $26 $35 $ 36 $ 216 $ 215 $ 243 $61 $68$68
Interest cost 666 697 734 67 62 72 378 406 443 166 182 195
Expected return on plan
assets (999) (983)(871)———(407) (424) (437) (55) (46) (35)
Amortization of:
Actuarial losses 355 306 145 51 41 36 129 93 86 46 33 17
Prior service credits (7) (10) (8)(2)(3) (3) (5) (7) (5) (44) (49) (53)
Curtailments —(62) (4)—(9) (1) (20) (16) (14) (11) (65) (68)
Settlements 113 145 99 40 33 24 22 714———
Special termination benefits —823 —30 26 455—63
Net periodic benefit costs
reported in Income 429 458 469 182 189 190 317 279 335 163 129 127
(Income)/cost reported in
Other comprehensive
income/(loss) (3,044) 461 1,879 (255)110 36 (569) 759 (365) (736) 267 421
(Income)/cost recognized in
Comprehensive income $(2,615) $ 919 $2,348 $ (73) $ 299 $ 226 $ (252) $1,038 $ (30) $(573) $ 396 $ 548
(a) 2013 v. 2012––The decrease in net periodic benefit cost for our U.S. qualified plans was primarily driven by (i) lower service cost resulting from cost reduction
initiatives, (ii) lower settlements and (iii) higher expected return on plan assets resulting from an increased plan asset base partially offset by the curtailment
gain in the second quarter of 2012 resulting from the decision to freeze the defined benefit plans in the U.S. and Puerto Rico. Also, the decrease in the discount
rate resulted in lower interest costs, as well as an increase in the amounts amortized for actuarial losses. 2012 v. 2011––The decrease in net periodic benefit
cost for our U.S. qualified plans was primarily driven by (i) higher expected return on plan assets (resulting from contributions made to the plan in 2011 that
increased the plan asset base), (ii) lower interest costs, (iii) a decrease in special termination benefits, and (iv) higher curtailments resulting from the decision to
freeze the defined benefit plans in the U.S. and Puerto Rico largely offset by higher settlements and an increase in the amounts amortized for actuarial losses
(resulting from a decrease in the discount rate and lower than expected actual returns in 2011).
(b) 2013 v. 2012––The decrease in net periodic benefit cost for our U.S. supplemental (non-qualified) pension plans was primarily driven by special termination
benefits in 2012, partially offset by an increase in the amounts amortized for actuarial losses resulting from a decrease in the discount rate, and the curtailment
gain in the second quarter of 2012 resulting from the decision to freeze the defined benefit plans in the U.S. and Puerto Rico. 2012 v. 2011––The net periodic
benefit cost for our U.S. supplemental (non-qualified) pension plans was largely unchanged as the curtailment gain resulting from the decision to freeze the
defined benefit plans in the U.S. and Puerto Rico was more than offset by higher settlement activity.
(c) 2013 v. 2012––The increase in net periodic benefit costs for our international pension plans was primarily driven by (i) an increase in the amounts amortized for
actuarial losses resulting from changes in assumptions, (ii) lower expected return on plan assets driven by lower expected rate of return in certain significant
plans, (iii) higher settlements and (iv) 2012 curtailment gains, partially offset by lower interest costs resulting from the decrease in discount rates. 2012 v.
2011––The decrease in net periodic benefit costs for our international pension plans was primarily driven by restructuring activities in the U.K. and Ireland in
2011. Also, the decrease in discount rates resulted in lower interest costs, as well as an increase in the amounts amortized for actuarial losses.
(d) 2013 v. 2012––The increase in net periodic benefit cost for our postretirement plans was primarily driven by 2012 curtailment gains, partially offset by higher
expected return on plan assets and 2012 special termination benefits. Also, the decrease in the discount rate resulted in lower interest costs, as well as an
increase in the amounts amortized for actuarial losses. 2012 v. 2011––The net periodic benefit cost for our postretirement plans was largely unchanged, as an
increase in amounts amortized for actuarial plan losses was partially offset by higher expected return on plan assets.
The following table provides the amounts in Accumulated other comprehensive loss expected to be amortized into 2014 net periodic benefit
costs:
Pension Plans
(MILLIONS OF DOLLARS)
U.S.
Qualified
U.S.
Supplemental
(Non-Qualified) International
Postretirement
Plans
Actuarial losses $ (62) $ (30)$ (98) $ (5)
Prior service credits and other 7 27 58
Total $ (55) $ (28)$ (91)$ 53