HP 2010 Annual Report Download - page 140

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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 16: Retirement and Post-Retirement Benefit Plans (Continued)
Pension and Post-Retirement Benefit Expense
HP’s net pension and post-retirement benefit cost (gain) recognized in the Consolidated
Statements of Earnings 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
2010 2009 2008 2010 2009 2008 2010 2009 2008
In millions
Service cost ...................... $ 1 $ 27 $ 63 $319 $312 $281 $12 $14 $29
Interest cost ...................... 578 592 296 657 619 475 47 70 78
Expected return on plan assets ........ (662) (533) (318) (756) (669) (713) (32) (32) (40)
Amortization and deferrals:
Actuarial loss (gain) .............. 27 (72) (36) 214 71 1 14 6 19
Prior service benefit ..............———(11)(9)(8)(87)(78)(55)
Net periodic benefit cost ............. (56) 14 5 423 324 36 (46) (20) 31
Curtailment (gain) loss ............——— (6)5—(13)(2)—
Settlement loss (gain) ............. 7 (1) (1) 7 12 (2) — — —
Special termination benefits .........———2955 4———
Net benefit (gain) cost .............. $ (49)$ 13 $ 4 $453 $396 $ 38 $(59) $(22) $ 31
In fiscal 2010, HP recognized aggregate pension curtailment gains and settlement losses totaling
$6 million and $7 million, respectively, resulting from workforce rebalancing initiatives in several
non-U.S. countries. In the United Kingdom, workforce rebalancing initiatives triggered pension
termination benefits totaling $29 million. In the United States, a settlement loss of $7 million was
recognized for payout activity related to non-qualified plans and a curtailment gain of $13 million was
recognized for the elimination of life insurance benefits.
The weighted-average assumptions used to calculate net benefit cost were 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
2010 2009 2008 2010 2009 2008 2010 2009 2008
Discount rate ........................... 5.9% 8.0% 6.4% 5.0% 6.0% 5.2% 5.4% 8.2% 6.2%
Average increase in compensation levels ....... 2.0% 2.0% 3.7% 2.5% 2.6% 3.3% — — —
Expected long-term return on assets .......... 8.0% 7.5% 6.7% 7.0% 6.9% 6.8% 9.5% 9.3% 8.7%
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