HP 2008 Annual Report Download - page 143
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 15: Retirement and Post-Retirement Benefit Plans (Continued)
The weighted-average assumptions used to calculate net benefit cost were as follows for the
following fiscal years ended October 31:
U.S. Defined Non-U.S. Defined Post-Retirement
Benefit Plans Benefit Plans Benefit Plans
2008 2007 2006 2008 2007 2006 2008 2007 2006
Discount rate ........................... 6.4% 5.9% 5.9% 5.2% 4.4% 4.2% 6.2% 5.8% 5.8%
Average increase in compensation levels ....... 3.7% 4.0% 4.0% 3.3% 3.3% 3.7% — — —
Expected long-term return on assets .......... 6.7% 8.3% 8.3% 6.8% 6.7% 6.7% 8.7% 8.3% 8.3%
The 2008 weighted-average rates outlined in the table above reflect the inclusion of EDS plans
since the acquisition date.
The medical cost and related assumptions used to calculate the net post-retirement benefit cost for
the following fiscal years ended October 31 were as follows:
2008 2007 2006
Current medical cost trend rate .................................... 7.5% 8.5% 9.5%
Ultimate medical cost trend rate ................................... 5.5% 5.5% 5.5%
Year the medical cost rate reaches ultimate trend rate .................... 2010 2010 2010
A 1.0 percentage point increase in the medical cost trend rate would have increased the fiscal 2008
service and interest components of the post-retirement benefit costs by $1.7 million, while a
1.0 percentage point decrease would have resulted in a decrease of $2.0 million in the same period.
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