Walgreens 2009 Annual Report Download - page 38

Page 36 2009 Walgreens Annual Report
Notes to Consolidated Financial Statements (continued)
Change in benefit obligation (In millions):
2009 2008
Benefit obligation at September 1 $ 371 $ 370
Service cost 12 14
Interest cost 26 24
Amendments (106) —
Special termination benefits 4—
Actuarial (gain)/loss 31 (29)
Benefit payments (13) (11)
Participants contributions 33
Benefit obligation at August 31 $ 328 $ 371
Change in plan assets (In millions):
2009 2008
Plan assets at fair value at September 1 $— $—
Plan participants contributions 33
Employer contributions 10 8
Benefits paid (13) (11)
Plan assets at fair value at August 31 $— $—
Funded status (In millions):
2009 2008
Funded status $(328) $(371)
Unrecognized actuarial gain ——
Unrecognized prior service cost ——
Accrued benefit cost at August 31 $(328) $(371)
Amounts recognized in the Consolidated Balance Sheets (In millions):
2009 2008
Current liabilities (present value of expected
2010 net benefit payments) $ (11) $ (8)
Non-current liabilities (317) (363)
Net liability recognized at August 31 $(328) $(371)
Amounts recognized in accumulated other comprehensive loss (In millions):
2009 2008
Prior service credit $(141) $ (57)
Net actuarial loss 104 77
Amounts expected to be recognized as components of net periodic costs
for fiscal year 2010 (In millions):
2010
Prior service credit $ (10)
Net actuarial loss 7
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 6.15% for 2009 and 7.30% for 2008. The discount rate assump-
tion used to determine net periodic benefit cost was 7.50%, 6.50% and 6.25% for
fiscal years ending 2009, 2008 and 2007, respectively.
Future benefit costs were estimated assuming medical costs would increase at an
8.00% 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 $ (2) $ 1
Effect on postretirement obligation (14) 10
Estimated future benefit payments and federal subsidy (In millions):
Estimated Estimated
Future Benefit Federal
Payments Subsidy
2010 $ 11 $ 1
2011 12 1
2012 13 1
2013 14 2
2014 16 2
2015–2019 112 15
The expected benefit to be paid during fiscal year 2010 is $10 million.
15. Supplementary Financial Information
Non-cash transactions in fiscal 2009 include $25 million in dividends declared and
$20 million in accrued liabilities related to the purchase of property and equipment.
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.
Included in the Consolidated Balance Sheets captions are the following assets
and liabilities (In millions):
2009 2008
Accounts receivable –
Accounts receivable $2,606 $2,623
Allowance for doubtful accounts (110) (96)
$2,496 $2,527
Accrued expenses and other liabilities –
Accrued salaries $ 687 $ 664
Taxes other than income taxes 408 406
Profit sharing 192 211
Insurance 164 128
Other 955 863
$2,406 $2,272
Other non-current liabilities –
Insurance $ 330 $ 337
Accrued rent 319 281
Postretirement health care benefits 317 363
Other 430 429
$1,396 $1,410