ADT 2012 Annual Report Download - page 179
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The net periodic benefit cost for the defined benefit pension plan for 2012, 2011 and 2010 is as follows
($ in millions):
2012 2011 2010
Service cost ............................................. $— $ 1 $ 1
Interest cost ............................................. 3 3 3
Expected return on plan assets .............................. (4) (4) (3)
Amortization of net actuarial loss ............................ 1 1 2
Net periodic benefit cost ................................... $— $ 1 $ 3
Weighted-average assumptions used to determine net periodic
pension cost during the year:
Discount rate ............................................ 4.5% 5.0% 5.5%
Expected return on plan assets .............................. 8.0% 8.0% 8.0%
Rate of compensation increase .............................. N/A 4.0% 4.0%
During fiscal 2011, the Company froze its active U.S. pension plan. As a result, the Company amortizes its
actuarial gains and losses over the average remaining life expectancy of the pension plan participants.
The estimated net actuarial loss for the pension benefit plan that will be amortized from accumulated other
comprehensive income into net periodic benefit cost over the next fiscal year is expected to be $1 million.
The change in benefit obligations, plan assets and the amounts recognized on the Consolidated and
Combined Balance Sheets for the defined benefit plan as of September 28, 2012 and September 30, 2011 is as
follows ($ in millions):
September 28,
2012
September 30,
2011
Change in benefit obligations:
Benefit obligations as of beginning of year ....... $ 72 $67
Service cost ............................... — 1
Interest cost ............................... 3 3
Actuarial loss .............................. 9 5
Benefits and administrative expenses paid ....... (3) (4)
Benefit obligations as of end of year ............ $ 81 $72
Change in plan assets:
Fair value of plan assets as of beginning of year . . . $ 48 $ 47
Actual return on plan assets ................... 5 1
Employer contributions ...................... 2 4
Benefits and administrative expenses paid ....... (3) (4)
Fair value of plan assets as of end of year ........ $ 52 $48
Funded status .............................. $(29) $(24)
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