Mattel 2007 Annual Report Download - page 94

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The accumulated benefit obligation differs from the projected benefit obligation in that it assumes future
compensation levels will remain unchanged. Mattel’s accumulated benefit obligation for its defined benefit
pension plans as of December 31, 2007 and 2006 totaled $415.8 million and $435.9 million, respectively. With
the exception of the Fisher-Price Pension Plan, which has plan assets of $265.8 million, an accumulated benefit
obligation of $256.4 million, and a projected benefit obligation of $269.6 million, Mattel does not have any other
defined benefit pension plans for which the plan assets exceed the accumulated benefit obligation.
The assumptions used in determining the projected and accumulated benefit obligations of Mattel’s
domestic defined benefit pension and postretirement benefit plans are as follows:
December 31,
2007 2006
Defined benefit pension plans:
Discount rate .................................................................... 6.2% 5.7%
Weighted average rate of future compensation increases .................................. 3.8% 4.0%
Postretirement benefit plans:
Discount rate .................................................................... 6.2% 5.7%
Annual increase in Medicare Part B premium .......................................... 6.0% 6.0%
Health care cost trend rate:
Pre-65 ..................................................................... 8.0% 9.0%
Post-65 ..................................................................... 10.0% 11.0%
Ultimate cost trend rate (pre- and post-65) ............................................. 5.0% 5.0%
Year that the rate reaches the ultimate cost trend rate:
Pre-65 ..................................................................... 2011 2011
Post-65 ..................................................................... 2013 2013
The estimated future benefit payments for Mattel’s defined benefit pension and postretirement benefit plans
are as follows:
Defined Benefit
Pension Plans
Postretirement
Benefit Plans
Before Subsidy
Benefit of
Medicare Part D
Subsidy
(In thousands)
2008 ................................................ $ 23,313 $ 4,500 $ (400)
2009 ................................................ 22,765 4,200 (300)
2010 ................................................ 22,099 4,400 (400)
2011 ................................................ 22,578 4,500 (400)
2012 ................................................ 23,955 4,500 (400)
2013 - 2017 ........................................... 134,142 20,900 (1,700)
Mattel expects to make cash contributions totaling approximately $14 million to its defined benefit pension
and postretirement benefit plans in 2008, including approximately $7 million for benefit payments for its
unfunded plans.
Mattel’s domestic defined benefit pension plan assets are comprised of the following:
December 31,
2007 2006
Equity securities .................................................................. 71% 75%
Debt securities ................................................................... 28 23
Cash ........................................................................... 1 2
100% 100%
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