Lockheed Martin 2007 Annual Report Download - page 93

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The following postretirement benefit plan amounts were included in Other comprehensive income, net of tax, during the
year ended December 31, 2007, in accordance with FAS 158.
(In millions)
Incurred but
Not Recognized
Reclassification
Adjustment for Prior
Period Amounts
Recognized
Actuarial gains (losses)
Defined benefit pension plans $ 1,304 $ 108
Retiree medical and life insurance plans 211 14
Nonqualified defined benefit pension plans 12 15
Foreign benefit and other plans 5—
1,532 137
Prior service (cost) credit
Defined benefit pension plans (12) 57
Retiree medical and life insurance plans 7 (15)
(5) 42
$ 1,527 $ 179
The prior service cost (credit) included in Accumulated other comprehensive loss at the end of 2007 and expected to be
recognized in net pension cost during 2008 is $80 million ($52 million net of tax) for our defined benefit pension plans and
$(25) million ($(16) million net of tax benefit) for our retiree medical and life insurance plans. The amounts of prior service
cost for the nonqualified, foreign and other plans is not expected to be material. In addition, the amount of unrecognized
actuarial losses expected to be recognized in net pension cost in 2008 is not expected to be material for any of the plans. No
plan assets are expected to be returned to us during the year ended December 31, 2008.
The net pension cost as determined by FAS 87, Employers’ Accounting for Pensions, and the net postretirement benefit
cost as determined by FAS 106, Employers’ Accounting for Postretirement Benefits Other Than Pensions, related to our
plans include the following components:
(In millions) 2007 2006 2005
Defined benefit pension plans
Service cost $ 862 $ 896 $ 852
Interest cost 1,631 1,557 1,535
Expected return on plan assets (2,063) (1,930) (1,740)
Recognized net actuarial losses 168 335 392
Amortization of prior service cost 89 80 85
Total net pension expense $ 687 $ 938 $ 1,124
Retiree medical and life insurance plans
Service cost $51 $57 $59
Interest cost 189 191 208
Expected return on plan assets (144) (121) (112)
Recognized net actuarial losses 21 46 49
Amortization of prior service (credit) cost (24) (23) 14
Total net postretirement expense $93 $ 150 $ 218
The actuarial assumptions used to determine the benefit obligations at December 31, 2007 and 2006 related to our
defined benefit pension and postretirement benefit plans, as appropriate, are as follows:
Benefit Obligation
Assumptions
2007 2006
Discount rates 6.375% 5.875%
Rates of increase in future compensation levels 5.000 5.000
85