Northrop Grumman 2012 Annual Report Download - page 77

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NORTHROP GRUMMAN CORPORATION
-67-
The table below summarizes the components of changes in unamortized benefit plan costs for the years ended
December 31, 2012, 2011, and 2010:
Pension Medical and
$ in millions Benefits Life Benefits Total
Changes in unamortized benefit plan costs
Change in net actuarial loss ($ 158)($ 64)($ 222)
Amortization of:
Prior service (cost) credit (48) 60 12
Net loss from previous years (244)(26)(270)
Tax expense related to above items 171 12 183
Change in unamortized benefit plan costs – 2010 ($ 279)($ 18)($ 297)
Change in net actuarial loss $2,687 $138 $2,825
Change in prior service cost (608) 6 (602)
Amortization of:
Prior service (cost) credit (23) 51 28
Net loss from previous years (162)(17)(179)
Tax benefit related to above items (752)(71)(823)
Change in unamortized benefit plan costs – 2011 $1,142 $107 $1,249
Change in net actuarial loss $2,353 $151 $2,504
Change in prior service cost (2) — (2)
Amortization of:
Prior service credit 58 51 109
Net loss from previous years (427)(21)(448)
Tax benefit related to above items (788)(72)(860)
Change in unamortized benefit plan costs – 2012 $1,194 $109 $1,303
Unamortized benefit plan costs consist primarily of accumulated actuarial losses totaling $5.1 billion and $3.9
billion, both after tax, as of December 31, 2012 and 2011, respectively. The change in net actuarial loss from
pension benefits in 2012 was primarily due to the reduction in the discount rate assumption to 4.12 percent at
December 31, 2012, from 5.03 percent at December 31, 2011, partially offset by higher than expected return on plan
assets in 2012.
In December 2011, the company adopted certain changes in its defined benefit pension plans designed to enable the
company to remain competitive within its marketplace and provide the affordability its customers require. These
changes represent modifications to the defined benefits available to employees hired prior to July 1, 2008 who retire
beginning after December 31, 2012. As a result of these changes, the company recognized a reduction of
approximately $640 million in its projected benefit obligations for the affected employee groups as of December 31,
2011. Due to these changes, certain nonqualified benefit plans experienced curtailments, however the net impact of
these curtailment events was not material.
Pension
Benefits Medical and Life
Benefits
$ in millions 2012 2011 2012 2011
Amounts recorded in accumulated other comprehensive loss
Net actuarial loss ($8,057)($6,131)($461)($331)
Prior service credit 481 537 98 149
Income tax benefits related to above items 3,003 2,215 146 74
Unamortized benefit plan costs ($4,573)($3,379)($217)($108)