Texas Instruments 2006 Annual Report Download - page 30

TEXAS INSTRUMENTS 2006 ANNUAL REPORT
2828
Effect on the Statements of Income and Balance Sheets
Expense related to defined benefit and retiree health care benefit plans was as follows:
U.S. DEFINED BENEFIT U.S. RETIREE HEALTH CARE NON-U.S. DEFINED BENEFIT
2006 2005 2004 2006 2005 2004 2006 2005 2004
Service cost ............................... $26 $27 $25 $4 $4$2 $44 $44 $50
Interest cost ............................... 45 40 40 25 22 21 46 46 44
Expected return on plan assets .............. (45) (44) (44) (21) (20) (15) (66) (45) (43)
Amortization of prior service cost ............ ——— 23(4)(3) (2) 1
Amortization of transition obligation ......... —————— ——1
Recognized net actuarial loss ................ 21 23 20 6810 13 22 20
Net periodic benefit cost .................... 47 46 41 16 17 14 34 65 73
Settlement, curtailment and special
termination benefit charges ............... 26 12——— ———
Total including charges ..................... $73 $47 $43 $16 $17 $14 $34 $65 $73
The increase in settlement costs in 2006 is primarily due to an increase in lump-sum distributions elected by retirees in 2006 as
compared with previous years.
For the U.S. plans, the expected return on plan assets component of net periodic benefit cost is based upon the market-related
value of assets. In accordance with U.S. GAAP, the market-related value of assets utilizes a smoothing technique whereby
investment gains and losses that differ from plan assumptions are phased into the value over a period of three years.
Changes in the benefit obligations and plan assets for the defined benefit and retiree health care benefit plans were as
follows:
U.S. DEFINED BENEFIT U.S. RETIREE
HEALTH CARE NON-U.S. DEFINED BENEFIT
2006 2005 2006 2005 2006 2005
Obligation and funded status of plans:
Benefit obligation at beginning of year ........... $798 $740 $442 $420 $1,603 $1,571
Service cost .................................. 26 27 4444 44
Interest cost .................................. 45 40 25 22 46 46
Change in measurement date ................... ————22 —
Participant contributions ....................... ——15 16 43
Benefits paid ................................. (5) (50) (45) (44) (55) (43)
Medicare subsidy ............................. ——4———
Plan amendments ............................. ———(4) —(62)
Actuarial (gain)loss ........................... 44 48 (1) 26 31 44
Settlements .................................. (119) (12) ————
Curtailments .................................. (1) 4—2——
Special termination benefits .................... —1————
Benefit obligation at end of year (BO) ........... $788 $798 $ 444 $442 $1,695 $1,603
Change in plan assets:
Fair value of plan assets at beginning of year ..... $724 $736 $303 $315 $1,054 $827
Actual return on plan assets .................... 71 47 37 15 171 177
Change in measurement date ................... ————16 —
Employer contributions ........................ 125 391 1379(a) 108
Participant contributions ....................... ——15 16 43
Benefits paid ................................. (5) (50) (45) (44) (55) (43)
Settlements .................................. (119) (12) ————
Actuarial gain ................................. ————(3) (18)
Fair value of plan assets at end of year (FVPA) . . . $796 $724 $401 $303 $1,566 $1,054
Funded status (FVPA–BO) at end of year .......... $8 $(74) $(43) $(139) $(129) $(549)
(a) Includes $236 million contributed to non-U.S. plans in 2005 after the September 30 measurement date for those plans.