Raytheon 2004 Annual Report Download - page 106

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88
Notes to Consolidated Financial Statements (Continued)
Funded Status – amounts recognized on the Balance Sheet Pension Benefits Other Benefits
(In millions) December 31: 2004 2003 2004 2003
Prepaid benefit cost $ 664 $ 669 $50 $34
Accrued benefit liability (2,317) (2,378) (680) (682)
Intangible asset 186 199 ––
Accumulated other comprehensive income 3,114 3,435 ––
Prepaid (accrued) benefit cost $ 1,647 $ 1,925 $(630) $(648)
Weighted-Average Year-End Benefit Obligation Assumptions Pension Benefits Other Benefits
December 31: 2004 2003 2004 2003
Discount rate 5.74% 6.22% 5.75% 6.25%
Rate of compensation increase 4.49% 4.49% 4.50% 4.50%
Health care trend rate in the next year 12.50% 13.50%
Gradually declining to an ultimate trend rate of 5.00% 5.75%
Year that the rate reaches the ultimate trend rate 2015 2014
The Company’s foreign Pension Benefits plan assumptions have been included in the table above.
The tables below outline the components of net periodic benefit cost and related actuarial assumptions of the
Company’s domestic and foreign Pension Benefits and Other Benefits plans.
Components of Net Periodic Benefit Cost Pension Benefits
(In millions) 2004 2003 2002
Service cost $ 341 $ 271 $ 279
Interest cost 815 799 792
Expected return on plan assets (862) (970) (1,194)
Amortization of transition asset –– (4)
Amortization of prior service cost 19 19 20
Recognized net actuarial loss 425 196 20
Loss due to curtailments/settlements ––9
Net periodic benefit cost (income) $ 738 $ 315 $ (78)
Net periodic benefit cost (income) also includes expense from foreign Pension Benefits plans of $32 million in
2004, $20 million in 2003, and $11 million in 2002. Net periodic benefit costs (income) includes expense from
discontinued operations, including curtailments, of $9 million in 2002.
Components of Net Periodic Benefit Cost Other Benefits
(In millions) 2004 2003 2002
Service cost $16 $15 $21
Interest cost 93 106 105
Expected return on plan assets (30) (26) (30)
Amortization of transition obligation 18 25 25
Amortization of prior service cost (51) (45) –
Recognized net actuarial loss 48 41 9
Gain due to curtailments/settlements –– (47)
Net periodic benefit cost $94 $116 $ 83