Ford 2007 Annual Report Download - page 111

Notes to the Financial Statements
109Ford Motor Company | 2007 Annual Report
NOTE 24. RETIREMENT BENEFITS (Continued)
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A one percentage point increase/(decrease) in the assumed health care cost trend rates would increase/(decrease)
the postretirement health care benefit obligation for year-end 2007 by approximately $3.5 billion/$(2.8) billion and the
service and interest component of health care expense for 2007 by $340 million/$(270) million.
As a result of plans to close North American manufacturing facilities and providing various separation programs (both
discussed in Note 18), we have recognized curtailments due to the significant reduction in the expected aggregate years of
future service of the employees in the U.S. and Canadian pension and OPEB plans. The financial impact of the curtailments
is reflected in the tables above and are recorded in Automotive cost of sales and Selling, administrative and other expenses.
On December 31, 2006, we adopted certain recognition and disclosure provisions of SFAS No. 158, Employers'
Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88,
106 and 132R ("SFAS No. 158"). This standard requires employers that sponsor defined benefit plans to recognize the
over-funded or under-funded status of a defined benefit postretirement plan as an asset or liability in its balance sheet, and
to recognize changes in that funded status in the year in which the changes occur. Unrecognized prior service credits/costs
and net actuarial gains/losses are recognized as a component of Accumulated other comprehensive income/(loss).
The amounts in Accumulated other comprehensive income/(loss) that are expected to be recognized as components
of net expense/(income) during the next year are as follows (in millions):
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Plan Contributions and Drawdowns
Pension. Our policy for funded pension plans is to contribute annually, at a minimum, amounts required by applicable
laws, regulations, and union agreements. We do from time to time make contributions beyond those legally required. In
2007, we made $1.6 billion of cash contributions to our funded pension plans. During 2008, we expect to contribute to our
worldwide pension plans (including Jaguar and Land Rover plans) $2.3 billion from available Automotive cash and cash
equivalents. This amount includes about $400 million of benefit payments paid directly by us for unfunded plans. Based
on current assumptions and regulations, we do not expect to have a legal requirement to fund our major U.S. pension
plans in 2008.