Mattel 2011 Annual Report Download - page 82

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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
2011 2010 2009 2011 2010 2009
(In thousands)
Net periodic benefit cost:
Service cost ............................. $13,610 $ 12,441 $ 11,153 $ 73 $ 76 $ 82
Interest cost ............................. 28,433 27,934 26,606 1,576 1,820 2,263
Expected return on plan assets .............. (25,714) (24,581) (24,330) — — —
Amortization of prior service cost ............ 1,776 2,453 1,815———
Recognized actuarial loss (gain) ............. 19,492 13,499 12,502 (48) 52 237
Net periodic benefit cost ................... $37,597 $ 31,746 $ 27,746 $ 1,601 $ 1,948 $ 2,582
Other changes in plan assets and benefit
obligations recognized in other
comprehensive income:
Net loss (gain) ........................... $62,687 $ 482 $(26,705) $(1,249) $(9,502) $(3,609)
Prior service cost (credit) .................. 2 (675) 347———
Amortization of prior service cost ............ (1,776) (2,453) (1,815) — — —
Total recognized in other comprehensive
income (a) ............................ $60,913 $ (2,646) $(28,173) $(1,249) $(9,502) $(3,609)
Total recognized in net periodic benefit cost and
other comprehensive income .............. $98,510 $ 29,100 $ (427) $ 352 $(7,554) $(1,027)
(a) Amounts exclude related tax (benefit) expense of $(21.6) million, $4.4 million, and $13.1 million, during
2011, 2010, and 2009, respectively, which are also included in other comprehensive income.
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
2011 2010 2009
Defined benefit pension plans:
Discount rate ............................................................. 5.2% 5.6% 5.4%
Weighted average rate of future compensation increases ........................... 3.8% 3.8% 3.8%
Long-term rate of return on plan assets ......................................... 8.0% 8.0% 8.0%
Postretirement benefit plans:
Discount rate ............................................................. 5.2% 5.6% 5.4%
Annual increase in Medicare Part B premium .................................... 6.0% 6.0% 6.0%
Health care cost trend rate:
Pre-65 ............................................................... 8.0% 6.0% 7.0%
Post-65 .............................................................. 8.0% 8.0% 9.0%
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 ............................................................... 2017 2011 2011
Post-65 .............................................................. 2017 2013 2013
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 from which the non-US
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