Chevron 2007 Annual Report Download - page 79
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77
Net actuarial losses recorded in “Accumulated other com-
prehensive loss” at December 31, 2007, for the company’s U.S.
pension, international pension and other postretirement benefit
plans are being amortized on a straight-line basis over approxi-
mately 10, 13 and 10 years, respectively. These amortization
periods represent the estimated average remaining service of
employees expected to receive benefits under the plans. These
losses are amortized to the extent they exceed 10 percent of the
higher of the projected benefit obligation or market-related
value of plan assets. The amount subject to amortization is
determined on a plan-by-plan basis. During 2008, the company
estimates actuarial losses of $59, $80 and $39 will be amortized
from “Accumulated other comprehensive loss” for U.S. pension,
international pension and other postretirement benefit plans,
respectively. In addition, the company estimates an additional
$78 will be recognized from “Accumulated other comprehen-
sive loss” during 2008 related to lump-sum settlement costs
from U.S. pension plans.
The weighted average amortization period for recognizing
prior service costs (credits) recorded in “Accumulated other
comprehensive loss” at December 31, 2007, was approximately
nine and 11 years for U.S. and international pension plans,
respectively, and six years for other postretirement benefit plans.
During 2008, the company estimates prior service (credits)
costs of $(7), $25 and $(81) will be amortized from “Accumu-
lated other comprehensive loss” for U.S. pension, international
pension and other postretirement benefit plans, respectively.
The components of net periodic benefit cost for 2007, 2006 and 2005 and amounts recognized in other comprehensive income
for 2007 are shown in the table below. For 2007, changes in pension plan assets and benefit obligations were recognized as changes
in other comprehensive income.
Pension Benefits
2007 2006 2005 Other Benefits
U.S. Int’l. U.S. Int’l. U.S. Int’l. 2007 2006 2005
Net Periodic Benefit Cost
Service cost $ 260 $ 125 $ 234 $ 98 $ 208 $ 84 $ 49 $ 35 $ 30
Interest cost 483 255 468 214 395 199 184 181 164
Expected return on plan assets (578) (266) (550) (227) (449) (208) – – –
Amortization of transitional assets – – – 1 – 2 – – –
Amortization of prior-service
costs (credits) 46 17 46 14 45 16 (81) (86) (91)
Recognized actuarial losses 128 82 149 69 177 51 81 97 93
Settlement losses 65 – 70 – 86 – – – –
Curtailment losses – 3 – – – – – – –
Net periodic benefit cost 404 216 417 169 462 144 233 227 196
Changes Recognized in Other
Comprehensive Income
Net actuarial (gain) loss during period (160) 31 – – – – (401) – –
Amortization of actuarial (loss) (193) (82) – – – – (81) – –
Prior service (credit) cost during period (301) 97 – – – – – – –
Amortization of prior-service
(costs) credits (46) (20) – – – – 81 – –
Total changes recognized in
other comprehensive income (700) 26 – – – – (401) – –
Recognized in Net Periodic
Benefit Cost and Other
Comprehensive Income $ (296) $ 242 $ 417 $ 169 $ 462 $ 144 $ (168) $ 227 $ 196