Emerson 2004 Annual Report Download - page 45

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43
The reconciliations of the actuarial present value of the projected benefit obligations and of the fair value of plan assets for defined benefit
pension plans follow:
U.S. Plans Non-U.S. Plans
2003 2004 2003 2004
Benefit obligation, beginning $1,871 2,264 342 526
Service cost 41 49 11 15
Interest cost 136 136 22 27
Actuarial loss (gain) 309 (82) 76 2
Benefits paid (103) (108) (15) (16)
Acquisitions/divestitures, net 9 67 1 6
Foreign currency and other 1 4 89 47
Benefit obligation, ending $2,264 2,330 526 607
Fair value of plan assets, beginning $1,703 1,962 279 326
Actual return on plan assets 74 318 (14) 30
Employer contributions 288 67 8 60
Benefits paid (103) (108) (15) (16)
Acquisitions/divestitures, net – 51 – 4
Foreign currency and other – 2 68 29
Fair value of plan assets, ending $1,962 2,292 326 433
Plan assets in excess of (less than) benefit
obligation as of June 30 $ (302) (38) (200) (174)
Unrecognized net loss 1,137 872 187 176
Unrecognized prior service costs (benefit) 12 10 (3) (3)
Adjustment for fourth quarter contributions 1 51 11 1
Net amount recognized in the balance sheet $ 848 895 (5) –
Accumulated benefit obligation $2,057 2,151 475 540
U.S. Plans Non-U.S. Plans
2002 2003 2004 2002 2003 2004
Weighted average assumptions used to
determine net pension expense:
Discount rate 7.75% 7.25% 6.00% 6.4% 5.8% 5.2%
Expected return on plan assets 9.00% 9.00% 8.50% 8.5% 8.3% 7.2%
Rate of compensation increase 4.25% 3.75% 3.25% 3.9% 3.4% 3.3%
Weighted average assumptions used to
determine benefit obligations as of June 30:
Discount rate 6.00% 6.25% 5.2% 5.4%
Rate of compensation increase 3.25% 3.25% 3.3% 3.1%
At September 30, 2004 and 2003, the pension assets recognized in the balance sheet were $883 and $843, and the pension liabilities
recognized in the balance sheet were $242 and $310, respectively; in addition, $254 and $310 were included in accumulated other
comprehensive income at September 30, 2004 and 2003, respectively. As of the plans’ June 30 measurement date, the projected benefit
obligation, accumulated benefit obligation, and fair value of plan assets for the retirement plans with accumulated benefit obligations in
excess of plan assets were $1,009, $934 and $694, respectively, for 2004, and $905, $844 and $522, respectively, for 2003. As of the
June 30, 2004, measurement date, the fair value of plan assets exceeded the accumulated benefit obligation for the primary defined benefit
pension plan by approximately $250 and an additional $50 was contributed to the plan in the fourth quarter of 2004. If the performance of
the equity and bond markets in 2005 eliminates the $300 excess, the Company could be required to record an after-tax charge to equity of
approximately $550.