Raytheon 2005 Annual Report Download - page 105

Download and view the complete annual report

Please find page 105 of the 2005 Raytheon annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 124

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Funded Status – amounts recognized on the Balance Sheet Pension Benefits Other Benefits
(In millions) December 31: 2005 2004 2005 2004
Prepaid benefit cost $ 648 $ 664 $62 $50
Accrued benefit liability (2,511) (2,317) (635) (680)
Intangible asset 175 186 ——
Accumulated other comprehensive income 3,043 3,114 ——
Prepaid (accrued) benefit cost $ 1,355 $ 1,647 $(573) $(630)
Weighted-Average Year-End Benefit Obligation Assumptions Pension Benefits Other Benefits
December 31: 2005 2004 2005 2004
Discount rate 5.71% 5.74% 5.75% 5.75%
Rate of compensation increase 4.48% 4.49% 4.50% 4.50%
Health care trend rate in the next year 11.30% 12.50%
Gradually declining to an ultimate trend rate of 5.00% 5.00%
Year that the rate reaches the ultimate trend rate 2015 2015
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) 2005 2004 2003
Service cost $ 386 $ 341 $ 271
Interest cost 829 815 799
Expected return on plan assets (912) (862) (970)
Amortization of transition asset ———
Amortization of prior service cost 19 19 19
Recognized net actuarial loss 489 425 196
Loss due to curtailments/settlements 2——
Net periodic benefit cost $ 813 $ 738 $ 315
Net periodic benefit cost also includes expense from foreign Pension Benefits plans of $31 million in 2005, $32 million in
2004, and $20 million in 2003.
Components of Net Periodic Benefit Cost Other Benefits
(In millions) 2005 2004 2003
Service cost $14 $16 $15
Interest cost 74 93 106
Expected return on plan assets (37) (30) (26)
Amortization of transition obligation 818 25
Amortization of prior service cost (52) (51) (45)
Recognized net actuarial loss 33 48 41
Gain due to curtailments/settlements ———
Net periodic benefit cost $40 $ 94 $116
83