DIRECTV 2008 Annual Report Download - page 102

Download and view the complete annual report

Please find page 102 of the 2008 DIRECTV annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 142

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142

THE DIRECTV GROUP, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(continued)
Net periodic pension benefit costs for 2007 includes one month of expense that was recorded as an
adjustment to ‘‘Accumulated deficit’’ in the Consolidated Balance Sheets ($1 million after tax) related
to the adoption of the measurement date provisions of SFAS No. 158 discussed in Note 2.
Assumptions
Weighted-average assumptions used to determine benefit obligations at December 31:
Other
Pension Postretirement
Benefits Benefits
2008 2007 2008 2007
Discount rate—Qualified Plans ............................... 6.06% 6.22% 5.88% 5.76%
Discount rate—Non-Qualified Plans ........................... 6.04% 6.24% — —
Rate of compensation increase ............................... 4.00% 4.00% 4.00% 4.00%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended
December 31:
Other Postretirement
Pension Benefits Benefits
2008 2007 2006 2008 2007 2006
Discount rate—Qualified Plan ........................ 6.22% 5.67% 5.78% 5.76% 5.43% 5.46%
Discount rate—Non-Qualified Plans .................... 6.24% 5.69% 5.74% — — —
Expected long-term return on plan assets ................ 8.75% 8.75% 8.75% — — —
Rate of compensation increase ........................ 4.00% 4.00% 4.00% 4.00% 4.00% 4.00%
We base our expected long-term return on plan assets assumption on a periodic review and
modeling of the plans’ asset allocation and liability structure over a long-term horizon. Expectations of
returns for each asset class are the most important of the assumptions used in the review and modeling
and are based on comprehensive reviews of historical data and economic/financial market theory.
A hypothetical 0.25% decrease in our discount rate would have had the effect of increasing our
2008 pension expense by approximately $1 million and our projected benefit obligation by
approximately $12 million. A hypothetical 0.25% decrease in our expected return on plan assets would
have had the effect of increasing our 2008 pension expense by approximately $1 million.
The following table provides assumed health care costs trend rates:
2008 2007
Health care cost trend rate assumed for next year ............................ 8.00% 8.00%
Rate to which the cost trend rate is assumed to decline (ultimate trend rate) ........ 5.00% 5.00%
Year that trend rate reaches the ultimate trend rate ........................... 2015 2011
A one-percentage-point change in assumed health care cost trend rates would have the following
effects:
1-Percentage 1-Percentage
Point Increase Point Decrease
(Dollars in Millions)
Effect on total of service and interest cost components ............... — —
Effect on postretirement benefit obligation ....................... $2 $(1)
89