Proctor and Gamble 2009 Annual Report Download - page 66

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64 The Procter & Gamble Company Notes to Consolidated Financial Statements
Amounts in millions of dollars except per share amounts or as otherwise specified.
Obligation and Funded Status. We use a June30 measurement date
for our defined benefit retirement plans and other retiree benefit
plans. The following provides a reconciliation of benefit obligations,
plan assets and funded status of these plans:
Pension Benefits(1) Other Retiree Benefits(2)
Years ended June 30 2009 2008 2009 2008
CHANGE IN BENEFIT
OBLIGATION
Benefit obligation at
beginning of year(3) $10,095 $9,819 $3,553 $3,558
Service cost 214 263 91 95
Interest cost 551 539 243 226
Participants’ contributions 15 14 55 58
Amendments 47 52
—
(11)
Actuarial (gain) loss 456 (655)186 (232)
Acquisitions (divestitures) (3)(7)(17) 2
Curtailments and
settlements 3(68)
—
(3)
Special termination benefits 3116 2
Currency translation
and other (867)642 27 67
Benefit payments (498)(505)(226)(209)
BENEFIT OBLIGATION
AT END OF YEAR (3) 10,016 10,095 3,928 3,553
CHANGE IN PLAN ASSETS
Fair value of plan assets at
beginning of year7,225 7,350 3,225 3,390
Actual return on plan assets (401)(459)(678)(29)
Acquisitions (divestitures)
————
Employer contributions 657 507 18 21
Participants’ contributions 15 14 55 58
Currency translation
and other (688)318 (4)1
ESOP debt impacts (4)
——
4(7)
Benefit payments (498)(505)(226)(209)
FAIR VALUE OF PLAN
ASSETS AT END OF YEAR 6,310 7,225 2,394 3,225
FUNDED STATUS (3,706) (2,870)(1,534) (328)
(1) Primarily non-U.S.-based defined benefit retirement plans.
(2) Primarily U.S.-based other postretirement benefit plans.
(3) 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.
(4) Represents the net impact of ESOP debt service requirements, which is netted against plan
assets for Other Retiree Benefits.
Pension Benefits Other Retiree Benefits
Years ended June 30 2009 2008 2009 2008
CLASSIFICATION OF NET
AMOUNT RECOGNIZED
Noncurrent assets $133 $321 $
—
$200
Current liability (41) (45)(18) (16)
Noncurrent liability (3,798) (3,146)(1,516) (512)
NET AMOUNT RECOGNIZED (3,706) (2,870)(1,534) (328)
AMOUNTS RECOGNIZED IN
ACCUMULATED OTHER
COMPREHENSIVE INCOME
(AOCI)
Net actuarial loss 1,976 715 1,860 578
Prior service cost (credit) 227 213 (152)(175)
NET AMOUNTS RECOGNIZED
IN AOCI 2,203 928 1,708 403
CHANGE IN PLAN ASSETS
AND BENEFIT OBLIGA-
TIONS RECOGNIZED IN
ACCUMULATED OTHER
COMPREHENSIVE INCOME
(AOCI)
Net actuarial loss
—
current year 1,335 361 1,309 226
Prior service cost (credit)
—
current year 47 52
—
(11)
Amortization of net actuarial
loss (29) (9)(2)(7)
Amortization of prior service
(cost) credit (14) (14)23 21
Settlement/ Curtailment cost
—
(32)
—
(2)
Currency translation
and other (64) 19 (25) 24
TOTAL CHANGE IN AOCI 1,275 377 1,305 251
NET AMOUNTS RECOGNIZED
IN PERIODIC BENEFIT COST
AND AOCI 1,616 609 1,088 33
The underfunding of pension benefits is primarily a function of
the different funding incentives that exist outside of the U.S. In
certain countries, 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.