Avis 2007 Annual Report Download - page 109

Table of Contents
The Company also recorded pretax stock-based compensation expense of $134 million and $54 million ($83 million and $33 million, after
tax) during 2006 and 2005, respectively, within discontinued operations. The expense recorded in 2006 includes a pretax charge of $104
million, primarily related to the accelerated vesting of previously outstanding RSUs and equitable adjustments related to previously
outstanding stock options as a result of the Cendant Separation.
Defined Contribution Savings Plans
The Company sponsors several defined contribution savings plans that provide certain eligible employees of the Company an opportunity
to accumulate funds for retirement. The Company matches the contributions of participating employees on the basis specified by the plans.
The Company’s contributions to these plans was $14 million, $23 million and $20 million during 2007, 2006 and 2005, respectively.
Defined Benefit Pension Plans
The Company sponsors domestic non-contributory defined benefit pension plans covering certain eligible employees and contributory
defined benefit pension plans in certain foreign subsidiaries with participation in the plans at the employees’ option. Under both the
domestic and foreign plans, benefits are based on an employee’s years of credited service and a percentage of final average compensation.
However, the majority of such plans are frozen and no longer accruing benefits.
The Company adopted SFAS No. 158 as of December 31, 2006. SFAS 158 requires the recognition of the funded status of our defined
benefit pension plan on the Consolidated Balance Sheets and the recognition as a component of accumulated other comprehensive loss, net
of tax, the gains or losses and prior service costs or credits and that arise during the period but are not recognized as components of net
periodic benefit cost. Additional minimum pension liabilities and related intangible assets are also derecognized upon adoption of the new
standard. As a result of the adoption of the provisions of SFAS No. 158, the Company recorded a pretax charge in 2006 of $6 million ($4
million, after tax) within stockholders’ equity and a $6 million reduction in pension assets.
The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars:
F
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21. Employee Benefit Plans
For the Year Ended December 31,
2007
2006
2005
Service cost
$
2
$
2
$
2
Interest cost
11
13
9
Expected return on plan assets
(12
)
(14
)
(11
)
Amortization of unrecognized amounts
3
5
4
Net periodic benefit cost
$
4
$
6
$
4