Time Warner Cable 2007 Annual Report Download - page 118

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Included in the change in benefit obligation table above are the following projected benefit obligations,
accumulated benefit obligations and fair value of plan assets at the end of the year for the unfunded defined benefit
pension plan (in millions):
2007 2006
December 31,
Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 37 $ 33
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 35
Fair value of plan assets, end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
For the funded defined benefit pension plans, plan assets exceeded the accumulated benefit obligations and
projected benefit obligations as of December 31, 2007 and 2006.
The components of net periodic benefit costs from continuing operations are as follows (in millions):
2007 2006 2005
Years Ended December 31,
Servicecost................................................... $ 75 $ 63 $ 49
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 58 51
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90) (73) (64)
Amounts amortized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 29 21
Net periodic benefit costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 64 $ 77 $ 57
The estimated amounts that will be amortized from accumulated other comprehensive loss into net periodic
benefit cost in 2008 include an actuarial loss of $17 million.
In addition, certain employees of TWC participate in multi-employer pension plans, not included in the net
periodic costs above, for which the expense was $28 million in 2007, $24 million in 2006 and $21 million in 2005.
Weighted-average assumptions used to determine benefit obligations at December 31, 2007, 2006 and 2005
are as follows:
2007 2006 2005
December 31,
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.00% 6.00% 5.75%
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.50% 4.50% 4.50%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31,
2007, 2006 and 2005 are as follows:
2007 2006 2005
Years Ended December 31,
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.00%
(a)
5.75% 6.00%
Expected long-term return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.00% 8.00% 8.00%
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.50% 4.50% 4.50%
(a)
Due to the Transactions, the pension plans were remeasured on August 1, 2007 using a discount rate of 6.25%.
The discount rate was determined by comparison against the Moody’s Aa Corporate Index rate, adjusted for
coupon frequency and duration of the obligation. The resulting discount rate is supported by periodic matching of
plan liability cash flows to a pension yield curve constructed of a large population of high-quality corporate bonds.
A decrease in the discount rate of 25 basis points, from 6.00% to 5.75%, while holding all other assumptions
constant, would have resulted in an increase in the TWC’s pension expense of approximately $13 million in 2007.
113
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)