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Weighted฀average฀assumptions฀used฀to฀determine฀benefit฀obligations฀for฀these฀plans฀are฀as฀follows฀for฀the฀years฀ended฀฀
December฀31:
฀ ฀U.S.฀Pension฀Benefits฀ Non-U.S.฀Pension฀Benefits
฀ 2004฀ 2003฀ 2004฀ 2003
Discount฀rate฀ 6.00%฀ 6.25%฀ 5.67%฀ 5.48%฀
Rate฀of฀compensation฀increase฀ 3.50%฀ 3.50%฀ 3.53%฀ 3.36%฀
The฀accumulated฀benefit฀obligation฀(“ABO”)฀is฀the฀actuarial฀present฀value฀of฀pension฀benefits฀attributed฀to฀employee฀service฀to฀
date฀and฀present฀compensation฀levels.฀The฀ABO฀differs฀from฀the฀PBO฀in฀that฀the฀ABO฀does฀not฀include฀any฀assumptions฀about฀
future฀compensation฀levels.฀The฀ABO฀for฀all฀U.S.฀plans฀was฀$201.8฀million฀and฀$174.6฀million฀at฀December฀31,฀2004฀and฀2003,฀
respectively.฀The฀ABO฀for฀all฀non-U.S.฀plans฀was฀$252.5฀million฀and฀$245.0฀million฀at฀December฀31,฀2004฀and฀2003,฀respectively.
Information฀for฀the฀plans฀with฀ABOs฀in฀excess฀of฀plan฀assets฀is฀as฀follows฀at฀December฀31:
฀ ฀U.S.฀Pension฀Benefits฀ Non-U.S.฀Pension฀Benefits
฀ 2004฀ 2003฀ 2004฀ 2003
Projected฀benefit฀obligation฀ $฀ 78.6฀ $฀ 56.3฀ $฀ 256.3฀ $฀ 264.1฀
Accumulated฀benefit฀obligation฀ ฀ 76.6฀ ฀ 55.2฀ ฀ 248.2฀ ฀ 240.8฀
Fair฀value฀of฀plan฀assets฀ ฀ 40.3฀ ฀ 19.0฀ ฀ 153.3฀ ฀ 129.7
The฀components฀of฀net฀periodic฀benefit฀cost฀are฀as฀follows฀for฀the฀years฀ended฀December฀31:
฀ U.S.฀Pension฀Benefits฀ Non-U.S.฀Pension฀Benefits
฀ 2004฀ 2003฀ 2002฀ 2004฀ 2003฀ 2002
Service฀cost฀ $฀ 20.6฀ $฀ 16.6฀ $฀ 13.8฀ $฀ 2.1฀ $฀ 5.4฀ $฀ 4.0฀
Interest฀cost฀ ฀ 10.6฀ ฀ 9.1฀ ฀ 8.4฀ ฀ 12.7฀ ฀ 12.1฀ ฀ 10.5฀
Expected฀return฀on฀plan฀assets฀ ฀ (20.7)฀ ฀ (15.0)฀ ฀ (18.3)฀ ฀ (9.2)฀ ฀ (8.1)฀ ฀ (9.4)฀
Amortization฀of฀prior฀service฀cost฀ ฀ 0.1฀ ฀ –฀ ฀ 0.5฀ ฀ –฀ ฀ (0.1)฀ ฀ –฀
Recognized฀actuarial฀loss฀ ฀ 4.0฀ ฀ 6.5฀ ฀ 2.1฀ ฀ 4.6฀ ฀ 2.9฀ ฀ 1.5฀
Recognized฀curtailment฀gain฀ ฀ –฀ ฀ –฀ ฀ –฀ ฀ (2.1)฀ ฀ –฀ ฀ –฀
Recognized฀settlement฀gain฀ ฀ –฀ ฀ –฀ ฀ –฀ ฀ (1.1)฀ ฀ –฀ ฀ –
Net฀periodic฀benefit฀cost฀ $฀ 14.6฀ $฀ 17.2฀ $฀ 6.5฀ $฀ 7.0฀ $฀ 12.2฀ $฀ 6.6
Weighted฀average฀assumptions฀used฀to฀determine฀net฀costs฀for฀these฀plans฀are฀as฀follows฀for฀the฀years฀ended฀December฀31:
฀ U.S.฀Pension฀Benefits฀ Non-U.S.฀Pension฀Benefits
฀ 2004฀ 2003฀ 2002฀ 2004฀ 2003฀ 2002
Discount฀rate฀ ฀ 6.25%฀ ฀ 6.75%฀ ฀ 7.00%฀ ฀ 5.37%฀ ฀ 5.82%฀ ฀5.83%
Expected฀rate฀of฀return฀on฀plan฀assets฀ ฀ 8.50%฀ ฀ 8.50%฀ ฀ 9.00%฀ ฀ 7.28%฀ ฀7.41%฀ ฀7.38%
Rate฀of฀compensation฀increase฀ ฀ 3.50%฀ ฀ 4.00%฀ ฀ 4.50%฀ ฀ 2.50%฀ ฀ 3.40%฀ ฀3.41%
In฀selecting฀the฀expected฀rate฀of฀return฀on฀plan฀assets,฀we฀consider฀the฀average฀rate฀of฀earnings฀expected฀on฀the฀funds฀invested฀
or฀to฀be฀invested฀to฀provide฀for฀the฀benefits฀of฀these฀plans.฀This฀includes฀considering฀the฀trusts’฀asset฀allocation฀and฀the฀expected฀
returns฀likely฀to฀be฀earned฀over฀the฀life฀of฀the฀plans.
The฀weighted฀average฀asset฀allocations฀by฀asset฀category฀for฀the฀plans฀are฀as฀follows฀at฀December฀31:
฀ Percentage฀of฀Plan฀Assets
฀ U.S.฀Pension฀Benefits฀ Non-U.S.฀Pension฀Benefits
฀ Target฀ 2004฀ 2003฀ Target฀ 2004฀ 2003
Equity฀securities฀ ฀ 68%฀ ฀ 68%฀ ฀ 59%฀ ฀ 68%฀ ฀ 65%฀ ฀ 65%
Debt฀securities฀ ฀ 25%฀ ฀ 23%฀ ฀ 27%฀ ฀ 26%฀ ฀ 21%฀ ฀ 18%
Real฀estate฀ ฀ 7%฀ ฀ 8%฀ ฀ 11%฀ ฀ –฀ ฀ 9%฀ ฀ 10%
Other฀ ฀ –฀ ฀ 1%฀ ฀ 3%฀ ฀ 6%฀ ฀ 5%฀ ฀ 7%
Total฀ ฀ 100%฀ ฀ 100%฀ ฀ 100%฀ ฀ 100%฀ ฀ 100%฀ ฀ 100%
2004฀Form฀10-K฀฀฀฀฀59