AT&T Wireless 2007 Annual Report Download - page 77

2007 AT&T Annual Report
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The plans’ weighted-average asset target and actual allocations as a percentage of plan assets, including the notional exposure of
future contracts by asset categories at December 31 are as follows:
Pension Assets Postretirement (VEBA) Assets
Target 2007 2006 Target 2007 2006
Equity securities
Domestic 35% – 45% 39% 38% 38% – 58% 49% 51%
International 13% – 23% 18 19 7% – 27% 24 22
Debt securities 22% – 32% 27 26 13% – 23% 17 18
Real estate 5% – 11% 9 8 0% – 10% 2 2
Other 4% – 10% 7 9 7% – 17% 8 7
Total 100% 100% 100% 100%
The following table provides information for our supple-
mental retirement plans with accumulated benefit obligations
in excess of plan assets:
2007 2006
Projected benefit obligation $(2,301) $(2,470)
Accumulated benefit obligation (2,155) (2,353)
Fair value of plan assets — —
The following tables present the components of net periodic
benefit cost and other changes in plan assets and benefit
obligations recognized in other comprehensive income:
Net Periodic Benefit Cost 2007 2006
Service cost – benefits earned
during the period $ 16 $ 15
Interest cost on projected
benefit obligation 147 108
Amortization of prior service cost 6 4
Recognized actuarial loss 27 29
Net supplemental retirement pension cost $196 $156
Other Changes Recognized in
Other Comprehensive Income1 2007 2006
Net loss (gain) $ (60) $233
Prior service cost (credit) 11 7
Amortization of net loss (gain) 15 —
Amortization of prior service cost 3 —
Total recognized in net supplemental
pension cost and other
comprehensive income $ (31) $240
1 FAS 158 required prospective application for fiscal years ending after December 15, 2006.
In addition to the net supplemental retirement pension cost
in the table above, we recorded charges of $32 due to
accelerated benefit expenses and settlement charges related
to retirements during 2007.
The estimated net loss and prior service cost for our
supplemental retirement plan benefits that will be amortized
from accumulated other comprehensive income into net
periodic benefit cost over the next fiscal year are $18 and
$6, respectively.
At December 31, 2007, AT&T securities represented less than
0.5% of assets held by our pension plans and VEBA trusts.
Estimated Future Benefit Payments
Expected benefit payments are estimated using the same
assumptions used in determining our benefit obligation at
December 31, 2007. Because benefit payments will depend
on future employment and compensation levels, average
years employed and average life spans, among other factors,
changes in any of these factors could significantly affect these
expected amounts. The following table provides expected
benefit payments under our pension and postretirement plans:
Medicare
Pension Postretirement Subsidy
Benefits Benefits Receipts
2008 $ 4,964 $ 2,520 $ (120)
2009 4,841 2,636 (130)
2010 4,864 2,733 (140)
2011 4,857 2,815 (150)
2012 4,853 2,843 (164)
Years 2013 – 2017 23,393 14,389 (1,047)
Supplemental Retirement Plans
We also provide senior- and middle-management employees
with nonqualified, unfunded supplemental retirement and
savings plans. While these plans are unfunded, we have assets
in a designated nonbankruptcy remote trust that are used to
provide for these benefits. These plans include supplemental
pension benefits as well as compensation deferral plans, some
of which include a corresponding match by us based on a
percentage of the compensation deferral.
We use the same significant assumptions for the discount
rate and composite rate of compensation increase used in
determining the projected benefit obligation and the net
pension and postemployment benefit cost. The following
tables provide the plans’ benefit obligations and fair value
of assets at December 31 and the components of the
supplemental retirement pension benefit cost. The net
amounts recorded as “Other noncurrent liabilities” on our
consolidated balance sheets at December 31, 2007 and
2006 were $2,301 and $2,470, respectively.