Hertz 2008 Annual Report Download - page 173

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The expected return on plan assets for each funded plan is based on expected future investment returns
considering the target investment mix of plan assets.
Pension Benefits
U.S. Non-U.S.
Years ended Years ended
December 31, December 31,
2008 2007 2006 2008 2007 2006
Components of Net Periodic Benefit Cost:
Service cost .............................$23.1 $27.6 $ 28.0 $ 8.1 $ 10.9 $ 9.5
Interest cost ............................. 27.4 26.4 22.2 10.2 10.3 8.4
Expected return on plan assets ............... (23.5) (25.7) (24.0) (11.4) (10.9) (8.5)
Amortization:
Losses and other ........................ 0.4 1.0 — (0.7) — —
Curtailment (gain) loss ...................... — (5.1) — (0.7) (0.1) —
Settlement loss (gain) ...................... 3.7 3.5 — 0.1 (0.3) —
Special termination cost ..................... 2.1 4.5 — — — —
Net pension expense .......................$33.2 $32.2 $ 26.2 $ 5.6 $ 9.9 $ 9.4
Weighted-average discount rate for expense
(January 1) .............................. 6.30% 5.70% 5.50% 5.51% 4.81% 4.65%
Weighted-average assumed long-term rate of return
on assets (January 1) ...................... 8.50% 8.75% 8.75% 7.22% 7.22% 6.88%
Postretirement Benefits
(U.S.)
Years ended
December 31,
2008 2007 2006
Components of Net Periodic Benefit Cost:
Service cost ............................................. $0.1 $0.3 $ 0.4
Interest cost ............................................. 0.7 0.8 0.8
Amortization:
Losses and other ........................................ (2.9) (0.6) (0.1)
Special termination benefit cost .............................. — 0.2 —
Net postretirement expense .................................. $(2.1) $ 0.7 $ 1.1
Weighted-average discount rate for expense ...................... 6.3% 5.7% 5.5%
Initial health care cost trend rate ............................... 9.5% 9.5% 10.0%
Ultimate health care cost trend rate ............................. 5.0% 5.0% 5.0%
Number of years to ultimate trend rate .......................... 8 7 8
Changing the assumed health care cost trend rates by one percentage point is estimated to have the
following effects (in millions of dollars):
One Percentage Point
Increase Decrease
Effect on total of service and interest cost components ................ $0.0 $0.0
Effect on postretirement benefit obligation ......................... $0.3 $(0.3)
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