Tyson Foods 2004 Annual Report Download - page 54

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52
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Amounts recognized in the Consolidated Balance Sheets consist of:
Other Postretirement
Pension Benefits Benefits
in millions 2004 2003 2004 2003
Accrued benefit liability $(10) $(17) $(75) $(76)
Accumulated other
comprehensive loss 68––
Net amount recognized $(4) $(9) $(75) $(76)
The increase (decrease) in the pretax minimum liability related to the
Company’s pension plans that is included in other comprehensive
income was $(2) million, $(6) million and $14 million in fiscal years
2004, 2003 and 2002, respectively.
At October 2, 2004, and September 27, 2003, all pension plans had an
accumulated benefit obligation in excess of plan assets. Information
related to these plans is as follows:
Pension Benefits
in millions 2004 2003
Projected benefit obligation $77 $67
Accumulated benefit obligation 76 67
Fair value of plan assets 59 50
Components of net periodic benefit cost for these plans that was recognized in the Consolidated Statements of Income were as follows:
Pension Benefits Other Postretirement Benefits
in millions 2004 2003 2002 2004 2003 2002
Service cost $3 $1 $1 $1 $1 $1
Interest cost 545466
Expected return on plan assets (5) (4) (6) –––
Amortization of prior service cost 1––(1) ––
Recognized actuarial (gain)/loss –––5(13) –
Net periodic benefit cost $4 $1 $– $9 $(6) $7
Weighted average assumptions used are as follows:
Pension Benefits Other Postretirement Benefits
in millions 2004 2003 2002 2004 2003 2002
Discount rate to determine net periodic benefit cost 6.75% 6.75% 7.25% 6.75% 6.75% 7.25%
Discount rate to determine benefit obligations 6.75% 6.75% 6.75% 6.75% 6.75% 6.75%
Rate of compensation increase 4.00% N/A N/A N/A N/A N/A
Expected return on plan assets 8.50% 8.50% 8.50% N/A N/A N/A
To determine the rate-of-return on assets assumption, the Company
first examined actual historical rates of return for the various asset
classes. The Company then determined a long-term projected rate-
of-return based on expected returns over the next five to 10 years.
Prior to fiscal year 2004, the Company only had defined benefit
plans which provided a retirement benefit based on the number
of years of service multiplied by a benefit rate. During 2004, a plan
was added with a 4% compensation increase inherent in its benefit
obligation calculation.