EXHIBIT 14-16 Components of Expense (Income)
|
|
Yew Ended 31 December |
||
|
|
2008 |
2007 |
2006 |
|
Components of expense/(income) |
|
|
|
|
Service cost |
$908 |
$910 |
$831 |
|
Interest cost |
2,497 |
2,457 |
2,378 |
|
Expected return on plan assets |
(3,455) |
(3,515) |
(3,378) |
|
Amortization of prior service costs |
188 |
185 |
180 |
|
Recognized net actuarial loss/(gain) |
912 |
1,266 |
440 |
|
Net periodic benefit coat |
$1,050 |
$I,303 |
$451 |
EXHIBIT 14-17 Funded Status of Plan
|
At 31 December ($ millions) |
2008 |
2007 |
|
Change in benefit obligation |
|
|
|
Beginning balance |
$45,183 |
$42,781 |
|
Service cost |
908 |
910 |
|
Interest cost |
2,497 |
2,457 |
|
Plan participants” contributions |
9 |
12 |
|
Amendments |
156 |
270 |
|
Actuarial (gain)/losses |
(925) |
2,778 |
|
Settlement/curtailment/acquisitions/dispositions, net |
85 |
(1,774) |
|
Benefit paid |
(2,331) |
(2,251) |
|
Ending balance |
$45,582 |
$45,183 |
|
Change in plan assets |
|
|
|
Beginning at fair value |
$43,484 |
$38,977 |
|
Actual return on plan assets |
4,239 |
5,460 |
|
Company contribution |
526 |
2,604 |
|
Plan participants” contributions |
9 |
12 |
|
Settlement/curtailment/acquisitions/dispositions, net |
216 |
(1,393) |
|
Benefit paid |
(2,286) |
(2,208) |
|
Exchange rate adjustment.( |
15 |
32 |
|
Ending balance at fair value |
$46,203 |
$43,484 |
EXHIBIT 14-18 Volatility Assumptions Used to Value Stock Option Grants
|
Grant year |
Weighted average expected volatility |
|
2008 valuation |
|
|
2004-2008 |
21.50% |
|
2008 valuation |
|
|
2003-2007 |
23.00% |
Passaic Industries is based in the United States and offers its employees both a defined-benefit pension plan and stock options. Several of the disclosures related to these plans are presented in Exhibits 14-16, 14-17, and 14-18.
The pension expense reported on the Passaic Industries income statement for the year ending 31 December 2008 is closest to
a. $908 million.
b. $1,050 million.
c. $2,331 million.