Coca Cola 2005 Annual Report Download - page 106

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THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15: PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Continued)
Components of Net Periodic Benefit Cost
Net periodic benefit cost for our pension and other postretirement benefit plans consisted of the following
(in millions):
Pension Benefits Other Benefits
Year Ended December 31, 2005 2004 2003 2005 2004 2003
Service cost $91 $85 $76 $28 $27 $25
Interest cost 156 147 140 43 44 44
Expected return on plan assets (167) (153) (130) (1) ——
Amortization of prior service cost (benefit) 787—(1) —
Recognized net actuarial loss 43 35 27 136
Net periodic benefit cost1$ 130 $ 122 $ 120 $71 $73 $75
1During 2004, net periodic benefit cost for our other postretirement benefit plans was reduced by
$12 million due to our adoption of FSP 106-2. Refer to Note 1.
In 2003, the Company recorded a charge of $23 million for special retirement benefits and curtailment costs
as part of the streamlining costs. Refer to Note 18.
Assumptions
Certain weighted-average assumptions used in computing the benefit obligations are as follows:
Pension Benefits Other Benefits
December 31, 2005 2004 2005 2004
Discount rate 51⁄4%51⁄2%53⁄4%6%
Rate of increase in compensation levels 4% 4% 41⁄2%41⁄2%
Certain weighted-average assumptions used in computing net periodic benefit cost are as follows:
Pension Benefits Other Benefits
Year Ended December 31, 2005 2004 2003 2005 2004 2003
Discount rate151⁄2%6% 6% 6% 61⁄4%6
1⁄2%
Rate of increase in compensation levels 4% 41⁄4%4
1⁄4%41⁄2%41⁄2%4
1⁄2%
Expected long-term rate of return on plan assets 73⁄4%73⁄4%7
3⁄4%81⁄2%81⁄2%—%
1On March 27, 2003, the primary qualified and nonqualified U.S. pension plans, as well as the U.S.
postretirement health care plan, were remeasured to reflect the effect of the curtailment resulting
from the Company’s streamlining initiatives. Refer to Note 18. The discount rate assumption used to
determine 2003 net periodic benefit cost for these U.S. plans was 63⁄4 percent prior to the
remeasurement and 61⁄2 percent subsequent to the remeasurement. This change in the discount rate is
reflected in the 2003 weighted-average discount rate of 6 percent for all pension benefit plans and 61⁄2
percent for other benefit plans.
104