Lockheed Martin 2007 Annual Report Download - page 92

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The following provides a reconciliation of benefit obligations, plan assets and funded status related to our qualified
defined benefit pension plans and retiree medical and life insurance plans:
Defined Benefit
Pension Plans
Retiree Medical and
Life Insurance Plans
(In millions) 2007 2006 2007 2006
Change in benefit obligations
Benefit obligations at beginning of year $28,525 $28,421 $3,344 $ 3,516
Service cost 862 896 51 57
Interest cost 1,631 1,557 189 191
Benefits paid (1,418) (1,372) (385) (371)
Actuarial gains (1,482) (1,034) (370) (166)
Amendments 18 127 (11) 8
Divestitures 2(70) —(4)
Participants’ contributions ——127 113
Benefit obligations at end of year $28,138 $28,525 $2,945 $ 3,344
Change in plan assets
Fair value of plan assets at beginning of year $25,735 $23,432 $1,848 $ 1,521
Actual return on plan assets 2,607 3,043 102 226
Benefits paid (1,418) (1,372) (385) (371)
Our contributions 335 693 323 364
Participants’ contributions ——127 113
Divestitures and other —(61) 2(5)
Fair value of plan assets at end of year $27,259 $25,735 $2,017 $ 1,848
Unfunded status of the plans $ (879) $ (2,790) $ (928) $(1,496)
Amounts recognized in the balance sheet
Prepaid pension asset $ 313 $ 235 $— $—
Accrued postretirement benefit liabilities (1,192) (3,025) (928) (1,496)
Accumulated other comprehensive loss (pre-tax) related to:
Unrecognized net actuarial losses 1,934 4,129 224 572
Unrecognized prior service cost (credit) 458 529 (120) (133)
We also sponsor nonqualified defined benefit plans to provide benefits in excess of qualified plan limits. The aggregate
liabilities for these plans at December 31, 2007 and 2006 were $610 million and $641 million. The unrecognized net
actuarial losses at those respective dates were $287 million and $330 million, and the unrecognized prior service costs were
not material. The expense associated with these plans totaled $73 million in 2007, $59 million in 2006 and $58 million in
2005. We sponsor a small number of foreign benefit plans for which the liabilities and expenses are not material to our
results of operations, financial position or cash flows.
The unrecognized amounts recorded in Accumulated other comprehensive loss will be subsequently recognized as
expense consistent with our historical accounting policy for amortizing those amounts. Actuarial gains and losses incurred in
future periods and not recognized as expense in those periods will be recognized as increases or decreases in Other
comprehensive income (loss), net of tax. As they are subsequently recognized as a component of expense, the amounts
recorded in other comprehensive loss in prior periods are adjusted.
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