Time Magazine 2013 Annual Report Download - page 117

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TIME WARNER INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Components of Net Periodic Benefit Costs from Continuing Operations (millions)
December 31,
2013 2012 2011
Service cost ................................................... $ 3 $ 3 $ 9
Interest cost ................................................... 170 178 188
Expected return on plan assets ..................................... (197) (189) (196)
Amortization of prior service cost ..................................111
Amortization of net loss ......................................... 35 27 20
Net periodic benefit costs ........................................ $ 12 $ 20 $ 22
Assumptions
Weighted-average assumptions used to determine benefit obligations and net periodic benefit costs for the
years ended December 31:
Benefit Obligations Net Periodic Benefit Costs
2013 2012 2011 2013 2012 2011
Discount rate ................................ 4.82% 4.12% 4.91% 4.12% 4.91% 5.55%
Rate of compensation increase ................... 4.59% 4.40% 4.47% 3.85% 4.47% 4.76%
Expected long-term return on plan assets .......... n/a n/a n/a 6.10% 6.29% 6.44%
The discount rates were determined by matching the plan’s liability cash flows to rates derived from high-
quality corporate bonds available at the measurement date.
In developing the expected long-term rate of return on plan assets, the Company considered long-term
historical rates of return, the Company’s plan asset allocations as well as the opinions and outlooks of investment
professionals and consulting firms.
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