AT&T Wireless 2009 Annual Report Download - page 84
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Notes to Consolidated Financial Statements (continued)
Dollars in millions except per share amounts
82 AT&T 09 AR
Assumptions
In determining the projected benefit obligation and the net
pension and postemployment benefit cost, we used the
following significant weighted-average assumptions:
2009 2008 2007
Discount rate for determining
projected benefit obligation
at December 31 6.50% 7.00% 6.50%
Discount rate in effect for
determining net cost (benefit) 7.00% 6.50% 6.00%
Long-term rate of return
on plan assets 8.50% 8.50% 8.50%
Composite rate of compensation
increase for determining
projected benefit obligation
and net pension cost (benefit) 4.00% 4.00% 4.00%
The estimated net loss for pension benefits that will be
amortized from accumulated other comprehensive income
into net periodic benefit cost over the next fiscal year is $683,
and the prior service credit for pension benefits that will be
amortized from accumulated other comprehensive income
into net periodic benefit cost over the next fiscal year is $16.
The estimated net gain for postretirement benefits that will be
amortized from accumulated other comprehensive income
into net periodic benefit cost over the next fiscal year is $8,
and the prior service credit for postretirement benefits that
will be amortized from accumulated other comprehensive
income into net periodic benefit cost over the next fiscal year
is $625.
Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income
Our combined net pension and postretirement cost recognized in our consolidated statements of income was $1,921, $324 and
$1,078 for the years ended December 31, 2009, 2008 and 2007.
The following tables present the components of net periodic benefit obligation cost and other changes in plan assets and
benefit obligations recognized in other comprehensive income:
Net Periodic Benefit Cost
Pension Benefits Postretirement Benefits
2009 2008 2007 2009 2008 2007
Service cost – benefits earned during the period $ 1,070 $ 1,173 $ 1,257 $ 334 $ 429 $ 511
Interest cost on projected benefit obligation 3,355 3,319 3,220 2,434 2,550 2,588
Expected return on plan assets (4,561) (5,602) (5,468) (955) (1,327) (1,348)
Amortization of prior service cost (credit) and transition asset 58 133 142 (469) (360) (359)
Recognized actuarial (gain) loss 656 10 241 (1) (1) 294
Net pension and postretirement cost (benefit)1 $ 578 $ (967) $ (608) $1,343 $ 1,291 $ 1,686
1 During 2009, 2008 and 2007, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 reduced postretirement benefit cost by $255, $263 and $342. This effect is
included in several line items above.
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Pension Benefits Postretirement Benefits
2009 2008 2007 2009 2008 2007
Net loss (gain) $ 435 $13,857 $(2,131) $(1,242) $1,716 $(2,525)
Prior service cost (credit) (392) (16) 139 (322) 32 (28)
Amortization of net loss (gain) 412 4 154 (1) — 181
Amortization of prior service cost (credit) 69 83 78 (223) (222) (223)
Total recognized in net pension and postretirement cost
and other comprehensive income $ 524 $13,928 $(1,760) $(1,788) $1,526 $(2,595)