Mattel 2007 Annual Report Download - page 92

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A summary of the components of Mattel’s net periodic benefit cost and other changes in plan assets and
benefit obligations recognized in other comprehensive income for the years ended December 31 are as follows:
Defined Benefit Pension Plans Postretirement Benefit Plans
2007 2006 2005 2007 2006 2005
(In thousands)
Net periodic benefit cost
Service cost ..................................$12,305 $ 12,110 $ 10,016 $ 99 $ 106 $ 119
Interest cost .................................. 25,327 24,234 23,117 2,832 2,690 3,245
Expected return on plan assets ................... (25,539) (25,804) (23,889) — — —
Amortization of prior service cost ................ 1,919 1,933 1,920 — — —
Recognized actuarial loss ....................... 8,139 9,205 10,993 846 918 1,507
Net periodic benefit cost ........................$22,151 $ 21,678 $ 22,157 $ 3,777 $3,714 $4,871
Other changes in plan assets and benefit
obligations recognized in other comprehensive
income
Net gain .....................................$(40,274) N/A N/A $(2,704) N/A N/A
Prior service cost (credit) ....................... (124) N/A N/A — N/A N/A
Amortization of prior service cost ................ (1,919) N/A N/A — N/A N/A
Total recognized in other comprehensive income (a) . .
$(42,317) N/A N/A $(2,704) N/A N/A
Total recognized in net periodic benefit cost and other
comprehensive income .......................$(20,166) N/A N/A $ 1,073 N/A N/A
(a) Amounts exclude related tax benefits of $16.7 million during 2007, which is also included in other
comprehensive income.
N/A Not applicable for 2006 or 2005 due to the adoption of SFAS No. 158 at December 31, 2006.
Net periodic benefit cost for Mattel’s domestic defined benefit pension and postretirement benefit plans was
calculated on January 1 of each year using the following assumptions:
For the Year
2007 2006 2005
Defined benefit pension plans:
Discount rate .............................................................. 5.7% 5.4% 5.7%
Weighted average rate of future compensation increases ............................ 4.0% 4.4% 4.4%
Long-term rate of return on plan assets .......................................... 8.0% 8.0% 8.0%
Postretirement benefit plans:
Discount rate .............................................................. 5.7% 5.4% 5.7%
Annual increase in Medicare Part B premium .................................... 6.0% 6.0% 6.0%
Health care cost trend rate:
Pre-65 ............................................................... 9.0% 9.0% 10.0%
Post-65 ............................................................... 11.0% 10.0% 11.0%
Ultimate cost trend rate (pre- and post-65) ....................................... 5.0% 5.0% 5.0%
Year that the rate reaches the ultimate cost trend rate:
Pre-65 ............................................................... 2011 2010 2010
Post-65 ............................................................... 2013 2011 2011
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