Proctor and Gamble 2005 Annual Report Download - page 59

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Management’s฀Discussion฀and฀Analysis The฀Procter฀&฀Gamble฀Company฀and฀Subsidiaries 55
The฀underfunding฀of฀pension฀benefits฀is฀primarily฀a฀function฀of฀the฀฀
different฀funding฀incentives฀that฀exist฀outside฀of฀the฀U.S.฀In฀certain฀
countries฀where฀we฀ have฀major฀ operations,฀there฀ are฀no฀ legal฀฀
requirements฀or฀financial฀incentives฀provided฀to฀companies฀to฀pre-fund฀฀
pension฀obligations.฀In฀these฀instances,฀benefit฀payments฀are฀typically฀
paid฀directly฀from฀the฀Company’s฀cash฀as฀they฀become฀due.฀
Notes฀to฀Consolidated฀Financial฀Statements The฀Procter฀&฀Gamble฀Company฀and฀Subsidiaries
฀ Millions฀of฀dollars฀except฀per฀share฀amounts฀or฀otherwise฀specified.
฀ Years฀ended฀June฀30
฀ Pension฀Benefits฀ Other฀Retiree฀Benefits
฀ ฀  2004฀  2004

Funded฀status฀at฀฀ ฀
฀end฀of฀year฀ ฀ $(2,353)฀ ฀ 443
Unrecognized฀net฀฀
actuarial฀loss฀(gain)฀ ฀ 902฀ ฀ (344)
Unrecognized฀transition฀฀
amount฀ ฀ 12฀ ฀ –
Unrecognized฀prior฀฀
service฀cost฀ ฀ 38฀ ฀ (259)

฀฀ (1,401)฀฀  (160)
฀
Prepaid฀benefit฀cost฀ ฀ $253฀ ฀ $1
Accrued฀benefit฀cost฀ ฀ (1,872)฀ ฀ (161)
Intangible฀asset฀ ฀ 75฀ ฀–
Accumulated฀other฀฀
comprehensive฀income฀ ฀ 143฀ ฀ ฀–

฀
(1,401)
฀ (160)
฀ Years฀ended฀June฀30
฀ Pension฀Benefits
2
฀ Other฀Retiree฀Benefits
3
฀ ฀  2004฀  2004

Benefit฀obligation฀at฀
beginning฀of฀year
1฀฀ ฀$3,543฀ ฀ $2,914
Service฀cost฀ ฀ 157฀ ฀ 89
Interest฀cost฀ ฀ 204฀ ฀ 172
Participants’
contributions฀ ฀ 14฀ ฀ 31
Amendments฀ ฀ 50฀ ฀ (258)
Actuarial฀loss฀(gain)฀฀ ฀ 5฀ ฀ (460)
Acquisitions฀(divestitures)฀ ฀ 590฀ ฀ 7
Curtailments
and฀settlements฀ ฀ (39)฀ ฀ (8)
Special฀termination
benefits฀฀ ฀ 12฀ ฀ 41
Currency฀translation฀ ฀ 288฀ ฀ 5
Benefit฀payments฀ ฀ (208)฀  (133)

1฀฀ 4,616฀฀  2,400
฀฀
Fair฀value฀of฀plan
฀ assets฀at
฀ beginning฀of฀year฀฀ ฀ $1,558฀ ฀ ฀$2,277
Actual฀return฀on฀
฀ plan฀assets฀ ฀ ฀194฀ ฀ 651
Acquisitions฀(divestitures)฀ ฀ 185฀ ฀–
Employer
contributions฀ ฀ 412฀ ฀ 18
Participants’
contributions฀ ฀ 14฀ ฀ 31
Settlements฀ ฀ (21)฀ ฀–
Currency฀translation฀ ฀ 129฀ ฀(1)
Benefit฀payments฀ ฀ (208)฀ ฀ ฀(133)

 
 
2,263
฀

฀ ฀
2,843
฀ (2,353)฀  443
1฀ For฀the฀pension฀benefit฀plans,฀the฀benefit฀obligation฀is฀the฀projected฀benefit฀obligation.฀For฀
other฀retiree฀benefit฀plans,฀the฀benefit฀obligation฀is฀the฀accumulated฀postretirement฀benefit฀
obligation.
2฀ Predominantly฀non-U.S.-based฀defined฀benefit฀retirement฀plans.
3฀ Predominantly฀U.S.-based฀other฀post-retirement฀benefit฀plans.฀