Safeway 2007 Annual Report Download - page 81

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SAFEWAY INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Safeway expects approximately $6.2 million of the net actuarial loss and $21.7 million of the prior service cost to be
recognized as a component of net periodic benefit cost in 2008.
The following table provides the components of 2007, 2006 and 2005 net pension expense for the retirement plans (in
millions):
2007 2006 2005
Estimated return on assets $ 173.6 $ 191.2 $ 167.8
Service cost (93.1) (101.1) (108.0)
Interest cost (124.0) (129.3) (125.5)
Amortization of prior service cost (23.0) (22.4) (16.8)
Amortization of unrecognized losses (5.6) (21.5) (33.1)
Net pension expense $ (72.1) $ (83.1) $ (115.6)
Prior service costs are amortized on a straight-line basis over the average remaining service period of active participants.
Actuarial gains and losses are amortized over the average remaining service life of active participants when the
accumulation of such gains and losses exceeds 10% of the greater of the projected benefit obligation and the fair value
of plan assets. The Company uses its fiscal year-end date as the measurement date for its plans. The accumulated benefit
obligation for all Safeway plans was $2,062.5 million at year-end 2007 and $2,011.4 million at year-end 2006.
The actuarial assumptions used to determine year-end projected benefit obligation were as follows:
2007 2006 2005
Discount rate:
United States plans 6.1% 6.0% 5.7%
Canadian plans 5.3 5.0 5.0
Combined weighted-average rate 5.9 5.7 5.5
Rate of compensation increase:
United States plans 4.0% 4.0% 4.0%
Canadian plans 3.5 3.5 3.5
The actuarial assumptions used to determine net periodic benefit cost were as follows:
2007 2006 2005
Discount rate:
United States plans 6.0% 5.7% 5.8%
Canadian plans 5.0 5.0 5.8
Combined weighted-average rate 5.7 5.5 5.8
Expected return on plan assets:
United States plans 8.5% 8.5% 8.5%
Canadian plans 7.0 7.0 7.0
Rate of compensation increase:
United States plans 4.0% 4.0% 5.0%
Canadian plans 3.5 3.5 3.5
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