Mattel 2008 Annual Report Download - page 79

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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
2008 2007 2006 2008 2007 2006
(In thousands)
Net periodic benefit cost
Service cost ................................... $ 11,989 $ 12,305 $ 12,110 $ 100 $ 99 $ 106
Interest cost ................................... 26,299 25,327 24,234 2,797 2,832 2,690
Expected return on plan assets ..................... (26,396) (25,539) (25,804) — — —
Amortization of prior service cost .................. 1,865 1,919 1,933 — — —
Recognized actuarial loss ........................ 5,828 8,139 9,205 513 846 918
Net periodic benefit cost ......................... $ 19,585 $ 22,151 $ 21,678 $3,410 $ 3,777 $3,714
Other changes in plan assets and benefit obligations
recognized in other comprehensive income
Net loss (gain) ................................. $139,637 $(40,274) N/A $2,531 $(2,704) N/A
Prior service credit .............................. (39) (124) N/A — — N/A
Amortization of prior service cost .................. (1,865) (1,919) N/A — — N/A
Total recognized in other comprehensive income (a) . . . $137,733 $(42,317) N/A $2,531 $(2,704) N/A
Total recognized in net periodic benefit cost and other
comprehensive income ........................ $157,318 $(20,166) N/A $5,941 $ 1,073 N/A
(a) Amounts exclude related tax benefits of $52.6 million and $16.7 million during 2008 and 2007, respectively,
which are also included in other comprehensive income.
N/A Not applicable for 2006 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
2008 2007 2006
Defined benefit pension plans:
Discount rate .......................................................... 6.2% 5.7% 5.4%
Weighted average rate of future compensation increases ........................ 3.8% 4.0% 4.4%
Long-term rate of return on plan assets ...................................... 8.0% 8.0% 8.0%
Postretirement benefit plans:
Discount rate .......................................................... 6.2% 5.7% 5.4%
Annual increase in Medicare Part B premium ................................. 6.0% 6.0% 6.0%
Health care cost trend rate:
Pre-65 ............................................................ 8.0% 9.0% 9.0%
Post-65 ........................................................... 10.0% 11.0% 10.0%
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 2011 2010
Post-65 ........................................................... 2013 2013 2011
Discount rates, weighted average rates of future compensation increases, and long-term rates of return on
plan assets for Mattel’s foreign defined benefit pension plans differ from the assumptions used for Mattel’s
domestic defined benefit pension plans due to differences in local economic conditions in which the non-US
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