Danaher 2011 Annual Report Download - page 89

Table of Contents

 
   
Service cost $ 15.0 $ 2.2 $17.4 $12.3
Interest cost 91.1 71.1 39.2 30.4
Expected return on plan assets (115.2) (83.0) (27.4) (19.0)
Amortization of prior service credit — — (0.3) (0.3)
Amortization of net loss 28.9 19.7 3.3 1.2
Curtailment and settlement (gains) losses recognized (3.3) — 1.2 —
Net periodic pension cost $16.5 $10.0 $33.4 $ 24.6

 
   
Discount rate 5.20% 5.75% 4.70% 5.10%
Expected long-term return on plan assets 8.00% 8.00% 4.90% 5.25%
Rate of compensation increase 4.00% 4.00% 3.00% 3.05%
The discount rate reflects the market rate on December 31 for high-quality fixed-income investments with maturities corresponding to the Company’s benefit
obligations and is subject to change each year. For non-U.S. plans, rates appropriate for each plan are determined based on investment grade instruments with
maturities approximately equal to the average expected benefit payout under the plan. Included in accumulated other comprehensive income at December 31,
2011 are the following amounts that have not yet been recognized in net periodic pension cost: unrecognized prior service credits of $2 million ($2 million, net
of tax) and unrecognized actuarial losses of $757 million ($494 million, net of tax). The unrecognized losses and prior service credits, net, is calculated as the
difference between the actuarially determined projected benefit obligation and the value of the plan assets less accrued pension costs as of December 31,
2011. The prior service credits and actuarial loss included in accumulated comprehensive income and expected to be recognized in net periodic pension costs
during the year ending December 31, 2012 is $0.2 million ($0.1 million, net of tax) and $43 million ($28 million, net of tax), respectively. No plan assets are
expected to be returned to the Company during the year ending December 31, 2012.

For the years ended December 31, 2011, 2010 and 2009, the Company used an expected long-term rate of return assumption of 8.0% for its U.S. defined
benefit pension plan. The Company intends to use an expected long-term rate of return assumption of 7.5% for 2012 for its U.S. plan. This expected rate of
return reflects the asset allocation of the plan, and is based primarily on broad, publicly traded equity and fixed-income indices and forward-looking estimates
of active portfolio and investment management. Long-term rate of return on asset assumptions for the non-U.S. plans were determined on a plan-by-plan basis
based on the composition of assets and ranged from 1.25% to 7.90% and 1.25% to 7.20% in 2011 and 2010, respectively, with a weighted average rate of
return assumption of 4.90% and 5.25% in 2011 and 2010, respectively.

The U.S. plan’s goal is to maintain between 60% and 70% of its assets in equity portfolios, which are invested in individual equity securities or funds that are
expected to mirror broad market returns for equity securities or in assets with characteristics similar to equity investments, such as venture capital funds and
partnerships. Asset holdings are periodically rebalanced when equity holdings are outside this range. The balance of the U.S. plan asset portfolio is invested in
corporate bonds, bond index funds or U.S. Treasury securities. Non-U.S. plan assets are invested in various insurance contracts, equity and debt securities
as determined by the administrator of each plan. The value of the plan assets directly affects the funded status of the Company’s pension plans recorded in the
financial statements.
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Source: DANAHER CORP /DE/, 10-K, February 24, 2012 Powered by Morningstar® Document Research℠
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