ABBOTT LABORATORIES | 2013 | FY | 3


 

 

 
  Defined Benefit
Plans
  Medical and
Dental Plans
 
(in millions)
  2013   2012   2013   2012  

Projected benefit obligations, January 1

  $ 11,322   $ 9,212   $ 1,889   $ 1,657  

Service cost — benefits earned during the year

    303     389     43     61  

Interest cost on projected benefit obligations

    276     460     59     81  

(Gains) losses, primarily changes in discount rates, plan design changes, law changes and differences between actual and estimated health care costs

    (650 )   1,461     (156 )   148  

Benefits paid

    (185 )   (308 )   (60 )   (63 )

Separation of AbbVie Inc. 

    (4,654 )       (450 )    

Other, including foreign currency translation

    20     108     (28 )   5  
                   

Projected benefit obligations, December 31

  $ 6,432   $ 11,322   $ 1,297   $ 1,889  
                   
                   

Plan assets at fair value, January 1

  $ 7,949   $ 6,961   $ 417   $ 389  

Actual return on plans' assets

    727     878     61     48  

Company contributions

    724     379     40     40  

Benefits paid

    (185 )   (302 )   (56 )   (60 )

Separation of AbbVie Inc. 

    (3,107 )            

Other, primarily foreign currency translation

    15     33          
                   

Plan assets at fair value, December 31

  $ 6,123   $ 7,949   $ 462   $ 417  
                   
                   

Projected benefit obligations greater than plan assets, December 31

  $ (309 ) $ (3,373 ) $ (835 ) $ (1,472 )
                   
                   

Long-term assets

  $ 685   $ 69   $   $  

Short-term liabilities

    (11 )   (43 )        

Long-term liabilities

    (983 )   (3,399 )   (835 )   (1,472 )
                   

Net liability

  $ (309 ) $ (3,373 ) $ (835 ) $ (1,472 )
                   
                   

Amounts Recognized in Accumulated Other Comprehensive Income (loss):

                         

Actuarial losses, net

  $ 1,791   $ 4,923   $ 334   $ 701  

Prior service cost (credits)

    20     61     (252 )   (322 )
                   

Total

  $ 1,811   $ 4,984   $ 82   $ 379  
                   
                   

abt:ScheduleOfAccumulatedAndProjectedBenefitObligationsAndFairValueOfPlanAssetsTableTextBlock

 

 

(in millions)
  2013   2012  

Accumulated benefit obligation

  $ 408   $ 8,100  

Projected benefit obligation

    505     9,619  

Fair value of plan assets

        6,243  

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  Basis of Fair Value Measurement  
 
  Outstanding
Balances
  Quoted
Prices in
Active Markets
  Significant
Other
Observable
Inputs
  Significant
Unobservable
Inputs
 
 
  (in millions)
 

December 31, 2013:

                         

Equities:

                         

U.S. large cap (a)

  $ 1,618   $ 741   $ 877   $  

U.S. mid cap (b)

    409     134     275      

International (c)

    1,319     608     711      

Fixed income securities:

                         

U.S. government securities (d)

    453     61     392      

Corporate debt instruments (e)

    378     108     270      

Non-U.S. government securities (f)

    536     305     231      

Other (g)

    77     69     8      

Absolute return funds (h)

    1,474     197     791     486  

Commodities (i)

    170     6     97     67  

Other (j)

    151     149         2  
                   

 

  $ 6,585   $ 2,378   $ 3,652   $ 555  
                   
                   

December 31, 2012:

                         

Equities:

                         

U.S. large cap (a)

  $ 1,831   $ 1,058   $ 773   $  

U.S. mid cap (b)

    491     133     358      

International (c)

    1,607     657     950      

Fixed income securities:

                         

U.S. government securities (d)

    899     172     727      

Corporate debt instruments (e)

    736     355     381      

Non-U.S. government securities (f)

    374     83     291      

Other (g)

    24         24      

Absolute return funds (h)

    2,070     85     1,246     739  

Commodities (i)

    222     9     172     41  

Other (j)

    112     109         3  
                   

 

  $ 8,366   $ 2,661   $ 4,922   $ 783  
                   
                   

Prior year amounts have been revised to conform with the current year's asset classifications.


(a)
A mix of index funds that track the S&P 500 (60 percent in 2013 and 50 percent in 2012) and separate actively managed equity accounts that are benchmarked to the Russell 1000 (40 percent in 2013 and 50 percent in 2012).

(b)
A mix of index funds (70 percent in 2013 and 75 percent in 2012) and separate actively managed equity accounts (30 percent in 2013 and 25 percent in 2012) that track or are benchmarked to the S&P 400 midcap index.

(c)
Primarily separate actively managed pooled investment accounts that are benchmarked to the MSCI and MSCI emerging market indices.

(d)
Index funds not actively managed (50 percent in 2013 and 2012) and separate actively managed accounts (50 percent in 2013 and 2012).

(e)
Index funds not actively managed (40 percent in 2013 and 20 percent in 2012) and separate actively managed accounts (60 percent in 2013 and 80 percent in 2012).

(f)
Primarily United Kingdom, Japan and Irish government-issued bonds.

(g)
Primarily mortgage backed securities.

(h)
Primarily funds invested by managers that have a global mandate with the flexibility to allocate capital broadly across a wide range of asset classes and strategies including, but not limited to equities, fixed income, commodities, interest rate futures, currencies and other securities to outperform an agreed upon benchmark with specific return and volatility targets.

(i)
Primarily investments in liquid commodity future contracts and private energy funds.

(j)
Primarily cash and cash equivalents.

us-gaap:ScheduleOfAllocationOfPlanAssetsTableTextBlock

The weighted average assumptions used to determine benefit obligations for defined benefit plans and medical and dental plans are as follows:

 
  2013   2012   2011  

Discount rate

    4.9 %   4.3 %   5.0 %

Expected aggregate average long-term change in compensation

    5.0 %   5.3 %   5.3 %

        The weighted average assumptions used to determine the net cost for defined benefit plans and medical and dental plans are as follows:

 
  2013   2012   2011  

Discount rate

    4.2 %   5.0 %   5.4 %

Expected return on plan assets

    7.8 %   8.0 %   7.8 %

Expected aggregate average long-term change in compensation

    5.0 %   5.3 %   5.1 %

us-gaap:ScheduleOfAssumptionsUsedTableTextBlock

 

 

 
  2013   2012  
 
  (in millions)
 

January 1

  $ 783   $ 682  

Transfers in (out of) from other categories

    6     6  

Separation of AbbVie, Inc. 

    (165 )    

Actual return on plan assets:

             

Assets on hand at year end

    29     59  

Assets sold during the year

    51     (4 )

Purchases, sales and settlements, net

    (149 )   40  
           

December 31

  $ 555   $ 783  
           
           

us-gaap:ScheduleOfEffectOfSignificantUnobservableInputsChangesInPlanAssetsTableTextBlock

 

 

(in millions)
  Defined
Benefit Plans
  Medical and
Dental Plans
 

2014

  $ 186   $ 71  

2015

    198     73  

2016

    213     74  

2017

    229     76  

2018

    249     77  

2019 to 2023

    1,578     417  

us-gaap:ScheduleOfExpectedBenefitPaymentsTableTextBlock

 

 

 
  2013   2012   2011  

Health care cost trend rate assumed for the next year

    7 %   7 %   7 %

Rate that the cost trend rate gradually declines to

    5 %   5 %   5 %

Year that rate reaches the assumed ultimate rate

    2019     2019     2019  

us-gaap:ScheduleOfHealthCareCostTrendRatesTableTextBlock

 

 

 
  Defined Benefit Plans   Medical and
Dental Plans
 
 
  2013   2012   2011   2013   2012   2011  
 
  (in millions)
 

Service cost — benefits earned during the year

  $ 303   $ 389   $ 332   $ 43   $ 61   $ 55  

Interest cost on projected benefit obligations

    276     460     446     59     81     88  

Expected return on plans' assets

    (396 )   (611 )   (608 )   (36 )   (33 )   (34 )

Settlement

            40              

Amortization of actuarial losses

    169     244     163     34     34     38  

Amortization of prior service cost (credits)

    3     2     4     (35 )   (42 )   (42 )
                           

Total cost

    355     484     377     65     101     105  

Less: Discontinued operations

        (206 )   (176 )       (48 )   (49 )
                           

Net cost — continuing operations

  $ 355   $ 278   $ 201   $ 65   $ 53   $ 56  
                           
                           

us-gaap:ScheduleOfNetBenefitCostsTableTextBlock