Lockheed Martin 2011 Annual Report Download - page 79

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postemployment plans and foreign benefit plans. The aggregate liability for the other postemployment plans was
$107 million and $93 million as of December 31, 2011 and 2010. The expense for the other postemployment plans, as well as
the liability and expense associated with the foreign benefit plans, was not material to our results of operations, financial
position, or cash flows.
The amounts recognized in other comprehensive loss related to our postretirement benefit plans, net of tax, for the years
ended December 31, 2011, 2010, and 2009 are shown in the following table, which also shows the amounts related to our
postretirement benefit plans included in accumulated other comprehensive loss at the end of 2011 and expected to be
recognized in net periodic benefit cost, net of tax, during 2012.
Incurred but Not Yet
Recognized in Net
Periodic Benefit Cost
Recognition of Previously
Deferred Amounts
Expected to be
Recognized in
Net Periodic
Benefit Cost
in 2012(In millions) 2011 2010 2009 2011 2010 2009
Gains (losses) (Gains) losses (Gains) losses
Actuarial gains and losses
Qualified defined benefit pension plans $(2,793) $(763) $ 298 $568 $464 $195 $721
Retiree medical and life insurance plans 1(95) 77 22 17 27 21
Other plans (56) (63) (110) 34 20 22 31
(2,848) (921) 265 624 501 244 773
Credit (cost) (Credit) cost (Credit) cost
Prior service credit and cost
Qualified defined benefit pension plans (3) (61) (45) 53 62 52 47
Retiree medical and life insurance plans (7) — (6) (11) (10) (15) (8)
Other plans —(1) — ——— —
(10) (62) (51) 42 52 37 39
$(2,858) $(983) $ 214 $666 $553 $281 $812
Actuarial Assumptions
The actuarial assumptions used to determine the benefit obligations at December 31 of each year, and to determine the
net periodic benefit cost for each subsequent year, were as follows:
Qualified Defined Benefit
Pension Plans
Retiree Medical and
Life Insurance Plans
2011 2010 2009 2011 2010 2009
Discount rate 4.750% 5.500% 5.875% 4.500% 5.500% 5.875%
Expected long-term rate of return on assets 8.000% 8.500% 8.500% 8.000% 8.500% 8.500%
Rate of increase in future compensation levels 4.300% 4.400% 4.500%
Health care trend rate assumed for next year 9.500% 10.000%
Ultimate trend rate 5.000% 5.000%
Year that the ultimate trend rate is reached 2021 2021
The decrease in the discount rate from December 31, 2010 to December 31, 2011 resulted in an increase in the projected
benefit obligations of our qualified defined benefit pension plans of approximately $3.8 billion at December 31, 2011. The
decrease in the discount rate from December 31, 2009 to December 31, 2010 resulted in an increase in the projected benefit
obligations of our qualified defined benefit pension plans of approximately $1.7 billion at December 31, 2010.
The assumed health care cost trend rates have a significant effect on the amounts reported for the retiree medical plans.
A one-percentage-point increase or decrease in assumed health care cost trend rates would result in a change in the
postretirement benefit obligation of 4.4% and (3.8)% at December 31, 2011, and a change in the 2011 total service and
interest cost of 4.8% and (3.7)%.
The long-term rate of return assumption represents the expected average rate of earnings on the funds invested or to be
invested to provide for the benefits included in the benefit obligations. That assumption is based on several factors including
historical market index returns, the anticipated long-term asset allocation of plan assets, the historical return data, plan
expenses, and the potential to outperform market index returns.
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