Baker Hughes 2009 Annual Report Download - page 131

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2009 Form 10-K 57
The amounts recognized in the consolidated balance sheet consist of the following as of December 31:
U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits
2009 2008 2009 2008 2009 2008
Noncurrent assets $ – $ 4 $ – $ 11 $ – $ –
Current liabilities (2) (2) (4) (1) (18) (15)
Noncurrent liabilities (27) (15) (75) (40) (139) (143)
Net amount recognized $ (29) $ (13) $ (79) $ (30) $ (157) $ (158)
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 $366 million and $293 million at December 31, 2009 and 2008, respec-
tively. The ABO for all non-U.S. plans was $313 million and $220 million at December 31, 2009 and 2008, 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 Other Postretirement Benefits
2009 2008 2009 2008 2009 2008
Projected benefit obligation $ 375 $ 17 $ 327 $ 43 n/a n/a
Accumulated benefit obligation 366 17 313 36 $ 157 $ 158
Fair value of plan assets 346 – 248 2 n/a n/a
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 Other Postretirement Benefits
2009 2008 2009 2008 2009 2008
Discount rate 5.9% 6.4% 5.6% 6.4% 5.9% 6.4%
Rate of compensation increase 4.0% 4.0% 4.1% 4.0% n/a n/a
Social security increase 3.5% 3.5% 3.1% 3.1% n/a n/a
The development of the discount rate for our U.S. plans was based on a bond matching model whereby a hypothetical bond
portfolio of high-quality, fixed-income securities is selected that will match the cash flows underlying the projected benefit obliga-
tion. The discount rate assumption for our non-U.S. plans reflects the market rate for high-quality, fixed-income securities.
Accumulated Other Comprehensive Loss
The amounts recognized in accumulated other comprehensive loss consist of the following as of December 31:
U.S. Pension Benefits Non-U.S. Pension Benefits Other Postretirement Benefits
2009 2008 2009 2008 2009 2008
Net loss $ 150 $ 173 $ 132 $ 83 $ – $ 6
Net prior service cost 3 4 – – 2 4
Total $ 153 $ 177 $ 132 $ 83 $ 2 $ 10
The estimated net loss and prior service cost for the defined benefit pension plans that will be amortized from accumulated
other comprehensive loss into net periodic benefit cost over the next fiscal year are $14 million and $1 million, respectively. The
estimated prior service cost for the other postretirement benefits that will be amortized from accumulated other comprehensive
loss into net periodic benefit cost over the next fiscal year is $1 million.