Time Magazine 2015 Annual Report Download - page 115

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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,
2015 2014 2013
Service cost (a) ...................................................... $ 4 $ 3 $ 3
Interest cost ......................................................... 83 91 79
Expected return on plan assets .......................................... (90) (95) (85)
Amortization of prior service cost ........................................ 1 1 1
Amortization of net loss ............................................... 17 14 16
Net periodic benefit costs (b) ........................................... $ 15 $ 14 $ 14
(a) Amounts relate to various international benefit plans.
(b) Excludes net periodic benefit costs/(income) related to discontinued operations of $5 million, $3 million and $(2) million during the years ended
December 31, 2015, 2014 and 2013, respectively.
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
2015 2014 2013 2015 2014 2013
Discount rate ....................... 4.59% 4.10% 4.90% 4.10% 4.89% 4.07%
Rate of compensation increase ......... 5.45% 5.34% 5.60% 5.35% 5.59% 3.98%
Expected long-term return on plan
assets ........................... n/a n/a n/a 5.84% 6.01% 5.95%
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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