Proctor and Gamble 2011 Annual Report Download - page 67

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Notes to Consolidated Financial StatementsThe Procter & Gamble Company 65
Amounts in millions of dollars except per share amounts or as otherwise specified.
Obligation and Funded Status. The following provides a reconciliation
of benefit obligations, plan assets and funded status of these defined
benefit plans:
Pension Benefits ()OtherRetiree Benefits ()
Years ended June30  2010  2010
CHANGE IN BENEFIT
OBLIGATION
Benefit obligation at
beginning of year(3)$11,245 $10,016 $4,778$3,928
Service cost 270 218 146 103
Interest cost 588 579 270 253
Participants’ contributions 21 19 67 58
Amendments 93 66 7—
Actuarial loss/(gain) (633)1,738 (235)633
Acquisitions/(divestitures) —(13)——
Curtailments and
settlements —4——
Special termination benefits ——314
Currency translation
andother 1,137 (798)89 30
Benefit payments (492)(584)(239)(241)
BENEFIT OBLIGATION
ATEND OF YEAR(3)12,229 11,245 4,886 4,778
CHANGE IN PLAN ASSETS
Fair value of plan assets
atbeginning of year6,562 6,310 2,843 2,394
Actual return on plan assets 685 839 253 596
Acquisitions/(divestitures) —(6)——
Employer contributions 555 439 29 22
Participants’ contributions 21 19 67 58
Currency translation
andother 631 (455)2—
ESOP debt impacts(4)——20 14
Benefit payments (492)(584)(239)(241)
FAIR VALUE OF PLAN
ASSETS AT END OF YEAR 7,962 6,562 2,975 2,843
FUNDED STATUS (4,267) (4,683)(1,911) (1,935)
(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.
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 prior to their
due date. In these instances, benefit payments are typically paid
directly from the Company’s cash as they become due.
Pension BenefitsOtherRetireeBenefits
Years ended June30  2010  2010
CLASSIFICATION OF NET
AMOUNT RECOGNIZED
Noncurrent assets $168 $56 $—$—
Current liability (47) (38)(24) (20)
Noncurrent liability (4,388) (4,701)(1,887) (1,915)
NET AMOUNT RECOGNIZED (4,267) (4,683)(1,911) (1,935)
AMOUNTS RECOGNIZED IN
ACCUMULATED OTHER
COMPREHENSIVE INCOME
(AOCI)
Net actuarial loss 2,315 3,038 2,181 2,319
Prior service cost/(credit) 354 275 (92) (119)
NET AMOUNTS
RECOGNIZED IN AOCI2,669 3,313 2,089 2,200
CHANGE IN PLAN ASSETS
AND BENEFIT
OBLIGATIONS
RECOGNIZED IN
ACCUMULATED OTHER
COMPREHENSIVE INCOME
(AOCI)
Net actuarial loss/(gain)—
current year (827)1,343 (60) 491
Prior service cost—
current year 93 66 7—
Amortization of net
actuarial loss (154)(91)(96) (20)
Amortization of prior service
(cost) /credit (18) (15)18 21
Settlement/ curtailment cost —(3)——
Currency translation and
other 262 (190)20 —
TOTAL CHANGE IN AOCI(644)1,110 (111)492
NET AMOUNTS
RECOGNIZED IN PERIODIC
BENEFIT COST AND AOCI(106)1,579 (124)349