Walgreens 2007 Annual Report Download - page 35

Change in plan assets (In Millions):
2007 2006
Plan assets at fair value at September 1 $— $—
Plan participants contributions 2.8 1.0
Employer contributions 7.7 7.8
Benefits paid (10.5) (8.8)
Plan assets at fair value at August 31 $— $—
Funded status (In Millions):
2007 2006
Funded status $(370.0) $(356.0)
Unrecognized actuarial gain —130.7
Unrecognized prior service cost —(66.1)
Accrued benefit cost at August 31 $(370.0) $(291.4)
Amounts recognized in the Consolidated Balance Sheets (In Millions):
2007 2006
Current liabilities (present value of expected
2008 net benefit payments) $ (8.4) $ (7.6)
Non-current liabilities (361.6) (283.8)
Net liability recognized at August 31 $(370.0) $(291.4)
Amounts recognized in accumulated other comprehensive loss (In Millions):
2007 2006
Prior service cost (credit) $ (61.8) $—
Net actuarial loss 111.2 —
Amounts expected to be recognized as components of net periodic costs
for fiscal year 2008 (In Millions):
2008
Prior service cost (credit) $(4.4)
Net actuarial loss 5.6
The measurement date used to determine postretirement benefits is August 31.
The discount rate assumption used to compute the postretirement benefit obligation
at year-end was 6.50% for 2007 and 6.25% for 2006. The discount rate assumption
used to determine net periodic benefit cost was 6.25% for 2007 and 5.50% for
2006 and 2005.
Future benefit costs were estimated assuming medical costs would increase at a
8.50% annual rate gradually decreasing to 5.25% over the next five years and
then remaining at a 5.25% annual growth rate thereafter. A one percentage point
change in the assumed medical cost trend rate would have the following effects
(In Millions):
1% Increase 1% Decrease
Effect on service and interest cost $ .3 $ (.3)
Effect on postretirement obligation 14.5 (14.6)
Estimated future benefit payments and federal subsidy (In Millions):
Estimated Estimated
Future Benefit Federal
Payments Subsidy
2008 $ 9.3 $ .9
2009 10.7 1.1
2010 12.1 1.2
2011 13.6 1.4
2012 14.9 1.6
2013–2017 101.4 12.5
The expected contribution to be paid during fiscal year 2008 is $8.4 million.
12. Supplementary Financial Information
Non-cash transactions in fiscal 2007 included the identification of $85.5 million of
deferred taxes associated with amortizable intangible assets related to acquisitions;
$49.4 million in postretirement benefit liabilities related to the adoption of
SFAS No. 158; $83.1 million in accrued liabilities related to the purchase of property
and equipment; $5.2 million of incurred direct acquisition costs; $4.4 million
related to a leasehold interest and $16.0 million in dividends declared.
Included in the Consolidated Balance Sheets captions are the following assets
and liabilities (In Millions):
2007 2006
Accounts receivable –
Accounts receivable $2,306.2 $2,120.0
Allowance for doubtful accounts (69.7) (57.3)
$2,236.5 $2,062.7
Accrued expenses and other liabilities –
Accrued salaries $ 651.7 $ 598.2
Taxes other than income taxes 358.8 279.3
Profit sharing 184.8 164.8
Insurance 144.2 145.1
Other 764.9 525.9
$2,104.4 $1,713.3
Other non-current liabilities –
Postretirement healthcare benefits $ 361.6 $ 283.8
Insurance 338.8 304.8
Other 606.4 530.3
$1,306.8 $1,118.9
2007 Walgreens Annual Report Page 33