Motorola 2007 Annual Report Download - page 108

The status of the Company’s plans is as follows:
Regular
Officers’
and
MSPP Non U.S. Regular
Officers’
and
MSPP Non U.S.
2007 2006
Change in benefit obligation:
Benefit obligation at January 1 $5,481 $137 $1,798 $ 5,175 $160 $1,520
Service cost 133 4 55 150 5 40
Interest cost 311 7 111 309 8 67
Plan amendments (268) (3) 1 —— —
Settlement/curtailment — — (16) —— —
Actuarial (gain) loss (561) (7) (287) 76 (13) (10)
Foreign exchange valuation adjustment —— 49 — — 195
Employee contributions —— 14 —— 12
Tax payments — (1) — — (3) —
Benefit payments (217) (19) (36) (229) (20) (26)
Benefit obligation at December 31 4,879 118 1,689 5,481 137 1,798
Change in plan assets:
Fair value at January 1 4,285 78 1,178 3,736 92 896
Return on plan assets 336 4 98 508 3 55
Company contributions 270 4 135 270 6 122
Employee contributions —— 14 —— 12
Foreign exchange valuation adjustment —— 14 — — 119
Tax payments from plan assets — (1) — — (3) —
Benefit payments from plan assets (217) (19) (36) (229) (20) (26)
Fair value at December 31 4,674 66 1,403 4,285 78 1,178
Funded status of the plan (205) (52) (286) (1,196) (59) (620)
Unrecognized net loss 954 43 168 1,612 53 469
Unrecognized prior service cost (263) (5) 4 (25) (2) 4
Prepaid (accrued) pension cost $ 486 $ (14) $ (114) $ 391 $ (8) $ (147)
Components of prepaid (accrued) pension cost:
Prepaid benefit cost $— $— $19$— $— $13
Current benefit liability —— ——(3) (3)
Non-current benefit liability (205) (52) (305) (1,196) (56) (630)
Deferred income taxes 255 14 4 587 19 2
Non-owner changes to equity 436 24 168 1,000 32 471
Prepaid (accrued) pension cost $ 486 $ (14) $ (114) $ 391 $ (8) $ (147)
The funded status of the Company’s Non-U.S. pension plans reflects the change in measurement date from
October to December 31 in connection with the adoption of SFAS 158 in 2007. This change required the
Company to obtain a cost projection of fifteen months, which covered the period of October 1, 2006 to
December 31, 2006 as well as the fiscal year 2007. The costs pertaining to the period October 1, 2006 to
December 31, 2006 were treated as a direct charge to opening retained earnings. The statement of stockholders’
equity reflects a decrease in retained earnings of $17 million, net of taxes of $2 million, as of January 1, 2007.
It is estimated that the net periodic cost for 2008 will include amortization of the unrecognized net loss and
prior service costs for the Regular Plan, Officers’ and MSPP Plans, and Non-U.S. Plans, currently included in
Non-owner changes to equity, of $23 million, $3 million, and $2 million, respectively.
The Company uses a five-year, market-related asset value method of amortizing asset-related gains and losses.
Prior service costs are being amortized over periods ranging from 11 to 12 years. Benefits under all pension plans
are valued based upon the projected unit credit cost method.
Certain actuarial assumptions such as the discount rate and the long-term rate of return on plan assets have a
significant effect on the amounts reported for net periodic cost and benefit obligation. The assumed discount rates
reflect the prevailing market rates of a large universe of high-quality, non-callable, corporate bonds currently
available that, if the obligation were settled at the measurement date, would provide the necessary future cash
100