Coca Cola 2008 Annual Report Download - page 123

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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, 2008 2007 2006 2008 2007 2006
Service cost $ 114 $ 123 $ 108 $20 $40 $31
Interest cost 205 191 168 26 34 46
Expected return on plan assets (249) (231) (191) (20) (20) (5)
Amortization of prior service cost (credit) 10 77(61) (42) —
Amortization of actuarial loss 10 18 46 —13
Net periodic benefit cost (credit) 90 108 138 (35) 13 75
Settlement charge 14 31———
Curtailment charge —2—(6) ——
Special termination benefits 11 —————
Total cost (credit) recognized in the
statements of income $ 115 $ 113 $ 139 $ (41) $13 $75
Assumptions
Certain weighted-average assumptions used in computing the benefit obligations are as follows:
Pension Benefits Other Benefits
December 31, 2008 2007 2008 2007
Discount rate 6% 6% 61⁄4%61⁄4%
Rate of increase in compensation levels 33⁄4%41⁄4%N/A N/A
Certain weighted-average assumptions used in computing net periodic benefit cost are as follows:
Pension Benefits Other Benefits
December 31, 2008 2007 2006 2008 2007 2006
Discount rate 6% 51⁄2%5
1⁄4%61⁄4%6% 53⁄4%
Rate of increase in compensation levels 41⁄4%41⁄4%4%N/A N/A N/A
Expected long-term rate of return on plan assets 8% 73⁄4%7
3⁄4%81⁄2%81⁄2%8
1⁄2%
The assumed health care cost trend rates are as follows:
December 31, 2008 2007
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) 51⁄4%5%
Year that the rate reaches the ultimate trend rate 2012 2012
121