Coca Cola 2006 Annual Report Download - page 112

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THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16: 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
December 31, 2006 2005 2004 2006 2005 2004
Service cost $ 104 $88$82$31$28$27
Interest cost 158 146 136 46 43 44
Expected return on plan assets (179) (154) (141) (5) (1) —
Amortization of prior service cost (credit) 778——(1)
Recognized net actuarial loss 46 42 35 313
Net periodic benefit cost1$ 136 $ 129 $ 120 $75$71$73
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.
Assumptions
Certain weighted-average assumptions used in computing the benefit obligations are as follows:
Pension Benefits Other Benefits
December 31, 2006 2005 2006 2005
Discount rate 53⁄4%51⁄2%6% 53⁄4%
Rate of increase in compensation levels 41⁄4%41⁄4%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, 2006 2005 2004 2006 2005 2004
Discount rate 51⁄2%51⁄2%6%53⁄4%6% 61⁄4%
Rate of increase in compensation levels 41⁄4%4% 41⁄4%41⁄2%41⁄2%4
1⁄2%
Expected long-term rate of return on plan assets 8% 8% 8% 81⁄2%81⁄2%8
1⁄2%
The assumed health care cost trend rates are as follows:
December 31, 2006 2005
Health care cost trend rate assumed for next year 9% 9%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5% 51⁄4%
Year that the rate reaches the ultimate trend rate 2011 2010
110