Advance Auto Parts 2006 Annual Report Download - page 94

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ADVANCE AUTO PARTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
December 30, 2006, December 31, 2005 and January 1, 2005
(in thousands, except per share data)
2006 2005
Change in benefit obligation:
Benefit obligation at beginning of the year 13,711$ 14,625$
Interest cost 726 802
Benefits paid (794) (1,513)
Actuarial gain (3,126) (203)
Benefit obligation at end of the year 10,517 13,711
Change in plan assets:
Fair value of plan assets at beginning of the year - -
Employer contributions 794 1,513
Participant contributions 1,088 2,336
Benefits paid (1,882) (3,849)
Fair value of plan assets at end of year - -
Funded Status 10,517 13,711
Reconciliation of funded status:
Funded status (10,517) (13,711)
Unrecognized prior service cost - (6,531)
Unrecognized actuarial loss - 3,929
Accrued postretirement benefit cost (10,517)$ (16,313)$
Net periodic postretirement benefit cost is as follows:
2006 2005 2004
Service cos
t
-$-$ 2$
Interest cos
t
726 802 1,004
A
mort
i
zat
i
on o
f
t
h
e pr
i
or serv
i
ce cos
t
(
5
81)
(
5
81)
(436)
Amortization of recognized net losses 210 239 250
355$ 460$ 820$
The health care cost trend rate was assumed to be 11.5% for 2007, 10.0% for 2008, 9.5% for 2009, 8.5% for
2010, 8.0% for 2011, 7.0% for 2012 and 5.0% to 6.0% for 2013 and thereafter. If the health care cost were increased
1% for all future years the accumulated postretirement benefit obligation would have increased by $285 as of
December 30, 2006. The effect of this change on the combined service and interest cost would have been an increase
of $26 for 2006. If the health care cost were decreased 1% for all future years the accumulated postretirement
benefit obligation would have decreased by $258 as of December 30, 2006. The effect of this change on the
combined service and interest cost would have been a decrease of $25 for 2006.
The postretirement benefit obligation and net periodic postretirement benefit cost was computed using the
following weighted average discount rates as determined by the Company’s actuaries for each applicable year:
2006 2005
Postretirement benefit obligation 5.50% 5.50%
Net periodic postretirement benefit cost 5.50% 5.75%
F-31