AT&T Wireless 2007 Annual Report Download - page 74

Notes to Consolidated Financial Statements (continued)
Dollars in millions except per share amounts
72
| 2007 AT&T Annual Report
Our December 31, 2006, obligations and funded status include benefit obligations of $11,013 for pension benefits and
$11,461 for postretirement benefits, and plan assets of $17,628 and $5,269, respectively, related to BellSouth. Additionally,
our December 31, 2006, obligations and funded status include benefit obligations of $635 for pension benefits and $209
for postretirement benefits, and plan assets of $548 and $0, respectively, related to AT&T Mobility.
The following table presents this reconciliation and shows the change in the projected benefit obligation for the years ended
December 31:
Pension Benefits Postretirement Benefits
2007 2006 2007 2006
Benefit obligation at beginning of year $55,949 $46,176 $44,137 $35,225
Service cost – benefits earned during the period 1,257 1,050 511 435
Interest cost on projected benefit obligation 3,220 2,507 2,588 1,943
Amendments 246 — — —
Actuarial loss (gain) (2,044) (1,499) (4,752) (3,386)
Special termination benefits 56 25 7 2
Settlements (15) — — —
Benefits paid (5,312) (3,958) (2,316) (1,772)
Transferred from AT&T Mobility — 635 — 209
Transferred from BellSouth — 11,013 — 11,461
Other 165 — 210 20
Benefit obligation at end of year $53,522 $55,949 $40,385 $44,137
The following table presents the change in the value of plan assets for the years ended December 31 and the plans’ funded status
at December 31:
Pension Benefits Postretirement Benefits
2007 2006 2007 2006
Fair value of plan assets at beginning of year $69,284 $48,755 $ 17,145 $ 11,417
Actual return on plan assets 6,833 6,311 1,209 1,379
Benefits paid1 (5,312) (3,958) (1,694) (920)
Contributions — — 255 —
Transferred from AT&T Mobility — 548 — —
Transferred from BellSouth — 17,628 — 5,269
Other 5 — 84 —
Fair value of plan assets at end of year $70,810 $69,284 $ 16,999 $ 17,145
Funded (unfunded) status at end of year2 $17,288 $13,335 $(23,386) $(26,992)
1 At our discretion, certain postretirement benefits are paid from AT&T cash accounts and do not reduce Voluntary Employee Beneficiary Association (VEBA) assets. Future benefit
payments may be made from VEBA trusts and thus reduce those asset balances.
2 Funded status is not indicative of our ability to pay ongoing pension benefits nor of our obligation to fund retirement trusts. Required pension funding is determined in accordance with
ERISA regulations.
Amounts recognized on our consolidated balance sheets at
December 31 are listed below:
Pension Benefits Postretirement Benefits
2007 2006 2007 2006
Postemployment
benefit $17,288 $13,335 $ — $ 772
Current portion
employee benefit
obligation1 — — (249) (973)
Employee benefit
obligation2 — — (23,137) (26,791)
Net amount recognized $17,288 $13,335 $(23,386) $(26,992)
1Included in “Accounts payable and accrued liabilities.”
2Included in “Postemployment benefit obligation.”
Amounts included in our accumulated other comprehensive
income that have not yet been recognized in net periodic
benefit cost at December 31 are listed below:
Pension Benefits Postretirement Benefits
2007 2006 2007 2006
Net loss $ 661 $4,271 $ 1,125 $ 6,124
Prior service cost
(benefit) 722 624 (2,355) (2,669)
Total $1,383 $4,895 $(1,230) $ 3,455
The accumulated benefit obligation for our pension plans
represents the actuarial present value of benefits based on
employee service and compensation as of a certain date and
does not include an assumption about future compensation
levels. The accumulated benefit obligation for our pension
plans was $51,357 at December 31, 2007, and $53,662 at
December 31, 2006.