Walgreens 2008 Annual Report Download - page 36

Page 34 2008 Walgreens Annual Report
Amounts recognized in accumulated other comprehensive loss (In millions):
2008 2007
Prior service cost (credit) $(57) $ (62)
Net actuarial loss 77 111
Amounts expected to be recognized as components of net periodic costs
for fiscal year 2009 (In millions):
2009
Prior service cost (credit) $(4)
Net actuarial loss 4
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 7.30% for 2008 and 6.5% for 2007. The discount rate assumption
used to determine net periodic benefit cost was 6.50%, 6.25%, and 5.50% for fiscal
years ending 2008, 2007, and 2006, respectively.
Future benefit costs were estimated assuming medical costs would increase at a
8.50% annual rate, gradually decreasing to 5.25% over the next six 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 $ — $ —
Effect on postretirement obligation 14 (14)
Estimated future benefit payments and federal subsidy (In millions):
Estimated Estimated
Future Benefit Federal
Payments Subsidy
2009 $ 9 $ 1
2010 11 1
2011 12 1
2012 14 1
2013 16 2
2014–2018 119 15
The expected contribution to be paid during fiscal year 2009 is $8 million.
11. Supplementary Financial Information
Non-cash transactions in fiscal 2008 included the identification of $74 million in
accrued liabilities related to the purchase of property and equipment; $24 million of
deferred taxes associated with amortizable intangible assets related to acquisitions;
and $17 million in dividends declared.
Non-cash transactions in fiscal 2007 included the identification of $86 million of
deferred taxes associated with amortizable intangible assets related to acquisitions;
$49 million in postretirement benefit liabilities related to the adoption of SFAS No. 158;
$83 million in accrued liabilities related to the purchase of property and equipment;
$5 million of incurred direct acquisition costs; $4 million related to a leasehold
interest and $16 million in dividends declared.
Included in the Consolidated Balance Sheets captions are the following assets
and liabilities (In millions):
2008 2007
Accounts receivable –
Accounts receivable $2,623 $2,306
Allowance for doubtful accounts (96) (69)
$2,527 $2,237
Accrued expenses and other liabilities –
Accrued salaries $ 664 $ 652
Taxes other than income taxes 406 359
Profit sharing 211 185
Insurance 128 144
Other 863 759
$2,272 $2,099
Other non-current liabilities –
Postretirement health care benefits $363 $ 362
Insurance 337 339
Other 710 584
$1,410 $1,285
Notes to Consolidated Financial Statements (continued)