Boeing 2011 Annual Report Download - page 98

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The estimated amount that will be amortized from Accumulated other comprehensive loss into net
periodic benefit cost during the year ended December 31, 2012 is as follows:
Pensions
Other
Postretirement
Benefits
Recognized net actuarial loss $1,935 $ 123
Amortization of prior service costs/(credits) 226 (197)
Total $2,161 $ (74)
The ABO for all pension plans was $61,902 and $53,513 at December 31, 2011 and 2010. Key
information for our plans with ABO in excess of plan assets as of December 31 is as follows:
2011 2010
Projected benefit obligation $67,418 $58,772
Accumulated benefit obligation 61,675 53,202
Fair value of plan assets 50,820 48,926
The Patient Protection and Affordable Care Act, as modified by the Health Care and Education
Reconciliation Act of 2010 increased our APBO by $300 at December 31, 2010. This includes the
impact of the excise tax on high cost health plans scheduled to become payable beginning in 2018.
This increase is recognized as an actuarial loss and is amortized over the expected future service of
current employees.
Assumptions
The following assumptions, which are the weighted average for all plans, are used to calculate the
benefit obligation at December 31 of each year and the net periodic benefit cost for the subsequent
year.
December 31, 2011 2010 2009
Discount rate:
Pension 4.40% 5.30% 5.80%
Other postretirement benefits 4.00% 4.90% 5.40%
Expected return on plan assets 7.75% 7.75% 8.00%
Rate of compensation increase 3.90% 5.20% 5.50%
The discount rate for each plan is determined based on the plans’ expected future benefit payments
using a yield curve developed from high quality bonds that are rated as Aa or better by Moody’s as of
the measurement date. The yield curve is fitted to yields developed from bonds at various maturity
points. Bonds with the ten percent highest and the ten percent lowest yields are omitted. A portfolio of
about 400 bonds is used to construct the yield curve. Since corporate bond yields are generally not
available at maturities beyond 30 years, it is assumed that spot rates will remain level beyond that
30-year point. The present value of each plan’s benefits is calculated by applying the spot/discount
rates to projected benefit cash flows. All bonds are U.S. issues, with a minimum outstanding of $50.
The pension fund’s expected return on plan assets assumption is derived from a review of actual
historical returns achieved by the pension trust and anticipated future long-term performance of
individual asset classes. While consideration is given to recent trust performance and historical returns,
86