HP 2008 Annual Report Download - page 146

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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 the benefit obligation disclosed as of the 2008
and 2007 fiscal close were as follows:
Non-U.S.
U.S. Defined Defined Post-Retirement
Benefit Plans Benefit Plans Benefit Plans
2008 2007 2008 2007 2008 2007
Discount rate ............................. 8.0% 6.2% 6.0% 5.1% 7.8% 6.2%
Average increase in compensation levels .......... 2.0% 4.0% 2.6% 3.4% — —
Current medical cost trend rate ................ ———— 9.5% 7.5%
Ultimate medical cost trend rate ............... ———— 5.5% 5.5%
Year the rate reaches ultimate trend rate ......... ————2013 2010
A 1.0 percentage point increase in the medical cost trend rate would have increased the total
post-retirement benefit obligation reported at October 31, 2008 by $22 million, while a 1.0 percentage
point decrease would have resulted in a decrease of $26 million.
Defined benefit plans with projected benefit obligations exceeding the fair value of plan assets
were as follows:
Non-U.S.
U.S. Defined Defined
Benefit Plans Benefit Plans
2008 2007 2008 2007
In millions
Aggregate fair value of plan assets ........................... $3,178 $ — $4,076 $422
Aggregate projected benefit obligation ........................ $4,330 $131 $5,782 $776
Defined benefit plans with accumulated benefit obligations exceeding the fair value of plan assets
were as follows:
Non-U.S.
U.S. Defined Defined
Benefit Plans Benefit Plans
2008 2007 2008 2007
In millions
Aggregate fair value of plan assets ........................... $3,178 $ — $3,710 $116
Aggregate accumulated benefit obligation ...................... $4,328 $124 $4,962 $360
Implementation of SFAS 158
SFAS 158 requires that the funded status of defined benefit postretirement plans be recognized on
the company’s balance sheet and changes in the funded status be reflected in comprehensive income,
effective for fiscal years ending after December 15, 2006, which HP adopted effective October 31, 2007.
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