HP 2006 Annual Report Download - page 127

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 15: Retirement and Post-Retirement Benefit Plans (Continued)
The weighted average assumptions used to calculate the benefit obligation as of the September 30
measurement date were as follows:
U.S. Defined Non-U.S. Defined Post-Retirement
Benefit Plans Benefit Plans Benefit Plans
2006 2005 2006 2005 2006 2005
Discount rate ......................... 5.8% 5.6% 4.4% 4.2% 5.8% 5.7%
Average increase in compensation levels ..... 4.0% 4.0% 3.3% 3.7% — —
Current medical cost trend rate ........... — — — — 8.5% 9.5%
Ultimate medical cost trend rate ........... — — — — 5.5% 5.5%
Year the rate reaches ultimate trend rate ..... — — — — 2010 2010
A 1.0 percentage point increase in the medical cost trend rate would have increased the total
post-retirement benefit obligation reported at October 31, 2006 by $30 million, while a 1.0 percentage
point decrease would have resulted in a decrease of $36 million.
The net amount recognized for HP’s defined benefit and post-retirement benefit plans was as
follows for the following fiscal years ended October 31:
U.S. Defined Non-U.S. Defined Post-Retirement
Benefit Plans Benefit Plans Benefit Plans
2006 2005 2006 2005 2006 2005
In millions
Prepaid benefit costs .................... $ — $395 $1,527 $1,494 $ — $ —
Pension, post-retirement and post-employment
liabilities ........................... (502) (915) (297) (284) (1,053) (1,110)
Intangible asset ........................ — — 4 — — —
Accumulated other comprehensive loss ....... — — 30 20 — —
Contribution after measurement date ........ — — 25 19 4 4
Net amount recognized .................. $(502) $(520) $1,289 $1,249 $(1,049) $(1,106)
Defined benefit plans with projected benefit obligations exceeding the fair value of plan assets
were as follows:
U.S. Defined Non-U.S. Defined
Benefit Plans Benefit Plans
2006 2005 2006 2005
In millions
Aggregate fair value of plan assets ........................ $4,325 $1,929 $1,984 $5,211
Aggregate projected benefit obligation ..................... $4,688 $2,677 $2,411 $5,824
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