Time Warner Cable 2008 Annual Report Download - page 137

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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 funded and unfunded
defined benefit pension plans (in millions):
2008 2007 2008 2007
December 31, December 31,
Funded Plans Unfunded Plan
Projected benefit obligation ................. $ 1,276 $ 1,183 $ 42 $ 37
Accumulated benefit obligation ............... 1,045 961 45 40
Fair value of plan assets .................... 1,113 1,187 — —
The components of net periodic benefit costs from continuing operations are as follows (in millions):
2008 2007 2006
Year Ended December 31,
Service cost ........................................ $ 96 $ 75 $ 63
Interest cost ........................................ 79 68 58
Expected return on plan assets ........................... (102) (90) (73)
Amounts amortized ................................... 18 11 29
Net periodic benefit costs .............................. $ 91 $ 64 $ 77
The estimated amounts that will be amortized from accumulated other comprehensive income (loss) into net
periodic benefit cost in 2009 include an actuarial loss of $63 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 $31 million in 2008, $28 million in 2007 and $24 million in 2006.
Weighted-average assumptions used to determine benefit obligations at December 31, 2008, 2007 and 2006
are as follows:
2008 2007 2006
Year Ended December 31,
Discount rate........................................ 6.17% 6.00% 6.00%
Rate of compensation increase ........................... 4.00% 4.50% 4.50%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31,
2008, 2007 and 2006 are as follows:
2008 2007 2006
Year Ended December 31,
Discount rate........................................ 6.00% 6.00%
(a)
5.75%
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 Adelphia/Comcast Transactions, the pension plans were remeasured on August 1, 2007 using a discount rate of 6.25%.
The discount rate for the plan years ended December 31, 2007 and 2006 was determined by comparison against
the Moody’s Aa Corporate Index rate, adjusted for coupon frequency and duration of the obligation, consistent with
prior periods. The resulting discount rate was supported by periodic matching of plan liability cash flows to a
pension yield curve constructed of a large population of high-quality corporate bonds. Effective for the plan year
ending on December 31, 2008, the Company refined the discount rate determination process to rely on the matching
of plan liability cash flows to a pension yield curve constructed of a large population of high-quality corporate
bonds, without comparison against the Moody’s Aa Corporate Index rate. A decrease in the discount rate of 25 basis
127
TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)