Napa Auto Parts 2003 Annual Report Download - page 34

The following table sets forth the funded status of the plans and the amounts recognized in the consolidated balance sheets
at December 31:
Information about the expected cash flows for the U.S. pension plan and other post retirement benefit plans follows:
For the pension benefits, the above table reflects the total benefits expected to be paid from the plan's or the Company’s
assets. For other postretirement benefits, the above table reflects only the Company’s share of the benefit cost. Of the benefits
expected to be paid in 2004, pension benefits of $2,088,000 are expected to be paid from employer assets. Expected contribu-
tions reflect amounts expected to be contributed to funded plans.
Net periodic pension cost (income) included the following components:
The assumptions used in accounting for the net periodic benefit costs are as follows:
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
the Company’s management is to achieve long-term objectives and invest the pension assets in accordance with ERISA and
fiduciary standards. The long-term primary objectives for the pension plan are to provide for a reasonable amount of long-
term growth of capital, without undue exposure to risk, protect the assets from erosion of purchasing power, and provide
investment results that meet or exceed the pension plan's actuarially assumed long term rate of return.
Based on the investment policy for the pension plan, as well as an asset study that was performed based on the Company’s
asset allocations and future expectations, the expected rate of return on plan assets for measuring pension expense or
income was chosen to be 8.75% for the year ending December 31, 2004. The asset study forecasted expected rates of return
for the approximate duration of the Company’s benefit obligations, using capital market data and historical relationships.
Pension Benefits Other Postretirement Benefits
(In Thousands) 2003 2002 2003 2002
Funded status at end of year $(106,905) $(114,633) $(24,408) $(10,018)
Unrecognized net actuarial loss 319,407 318,699 20,788 3,249
Unrecognized prior service (income) cost (3,202) (6,460) 3,017 5,492
Net amount recognized at end of year $209,300 $197,606 $(603) $(1,277)
Pension Benefits Other Postretirement Benefits
(In Thousands) 2003 2002 2001 2003 2002 2001
Service cost $ 31,031 $ 25,622 $ 19,935 $ 90 $ 235 $ 177
Interest cost 53,338 49,810 44,525 482 877 816
Expected return on plan assets (72,432) (72,887) (72,167) ———
Amortization of unrecognized transition obligation —— 260 ———
Amortization of prior service (cost) income (3,258) (2,968) (2,871) 371 487 588
Amortization of actuarial loss 8,526 954 531 150 268 74
Net periodic pension cost (income) $ 17,205 $531 $ (9,787) $ 1,093 $1,867 $ 1,655
Pension Benefits Other Postretirement Benefits
(In Thousands) 2003 2002 2001 2003 2002 2001
Weighted average discount rate 6.75% 7.35% 7.63% 6.75% 7.35% 7.63%
Rate of increase in future compensation levels 4.15% 4.15% 4.15% ———
Expected long-term rate of return on assets 8.95% 9.45% 9.85% ———
Health care cost trend covered charges ——— 10.00% 6.50% 7.00%
(In Thousands) Pension Benefits Other Postretirement Benefits
EMPLOYER CONTRIBUTION
2004 (expected) $ 29,736 $ —
EXPECTED BENEFIT PAYMENTS
2004 26,414 2,936
2005 28,252 2,953
2006 30,419 3,025
2007 33,303 3,153
2008 36,091 3,189
2009 through 2013 242,617 13,845