Northrop Grumman 2013 Annual Report Download - page 78

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NORTHROP GRUMMAN CORPORATION
-68-
managed care providers, and coordination of benefits with other plans. The plans also provide for a Medicare carve-
out. Subsequent to January 1, 2005 (or earlier at some segments), newly hired employees are not eligible for post
retirement medical and life benefits.
Summary Plan Results
The cost to the company of its retirement benefit plans in each of the three years ended December 31 is shown in the
following table:
Year Ended December 31
Pension Benefits Medical and
Life Benefits
$ in millions 2013 2012 2011 2013 2012 2011
Components of net periodic benefit cost
Service cost $ 516 $ 522 $ 520 $ 36 $ 34 $ 32
Interest cost 1,117 1,184 1,223 96 109 114
Expected return on plan assets (1,809) (1,708)(1,690)(75)(68)(62)
Amortization of:
Prior service (credit) cost (58) (58) 23 (51)(51)(51)
Net loss from previous years 608 427 162 30 21 17
Other —7———(6)
Net periodic benefit cost $ 374 $ 374 $ 238 $ 36 $ 45 $ 44
The table below summarizes the components of changes in unamortized benefit plan costs for the years ended
December 31, 2013, 2012 and 2011:
Pension Medical and
$ in millions Benefits Life Benefits Total
Changes in unamortized benefit plan costs
Change in net actuarial loss $2,687 $138 $2,825
Change in prior service cost (608) 6 (602)
Amortization of:
Prior service (cost) credit (23) 51 28
Net loss from previous years (162)(17)(179)
Tax benefit related to above items (752)(71)(823)
Change in unamortized benefit plan costs – 2011 $1,142 $107 $1,249
Change in net actuarial loss $2,353 $151 $2,504
Change in prior service cost (2) — (2)
Amortization of:
Prior service credit 58 51 109
Net loss from previous years (427)(21)(448)
Tax benefit related to above items (788)(72)(860)
Change in unamortized benefit plan costs – 2012 $1,194 $109 $1,303
Change in net actuarial loss ($2,158)($280)($2,438)
Amortization of:
Prior service credit 58 51 109
Net loss from previous years (608)(30)(638)
Tax expense related to above items 1,075 102 1,177
Change in unamortized benefit plan costs – 2013 ($1,633)($157)($1,790)
Unamortized benefit plan costs consist primarily of accumulated actuarial losses totaling $3.3 billion and $5.1
billion, both after tax, as of December 31, 2013 and 2012, respectively. The change in net actuarial loss from
pension benefits in 2013 was primarily due to the increase in the discount rate assumption to 4.99 percent at
December 31, 2013, from 4.12 percent at December 31, 2012.