Kimberly-Clark 2007 Annual Report Download - page 79

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KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Postretirement Benefit Plans
Substantially all U.S. retirees and employees are covered by unfunded health care and life insurance benefit
plans. Certain benefits are based on years of service and/or age at retirement. The plans are principally
noncontributory for employees who were eligible to retire before 1993 and contributory for most employees who
retire after 1992, except that the Corporation provides no subsidized benefits to most employees hired after 2003.
In the U.S., health care benefit costs are capped and indexed by 3 percent annually for certain employees
retiring on or before April 1, 2004. The Corporation’s future cost for retiree health care benefits is limited to a
defined fixed cost based on the years of service for certain employees retiring after April 1, 2004. The annual
increase in the consolidated weighted-average health care cost trend rate is expected to be 8.44 percent in 2008,
7.46 percent in 2009 and to gradually decline to 5.21 percent in 2020 and thereafter.
Summarized financial information about postretirement plans, excluding defined contribution retirement
plans, is presented below:
Pension Benefits Other Benefits
Year Ended December 31
2007 2006 2007 2006
(Millions of dollars)
Change in Benefit Obligation
Benefit obligation at beginning of year ..................... $5,688.3 $ 5,509.2 $ 866.7 $ 861.7
Service cost .......................................... 81.4 86.9 14.7 16.3
Interest cost .......................................... 315.1 298.3 50.1 48.1
Actuarial (gain) loss ................................... (338.7) (66.7) (16.3) 6.0
Currency and other .................................... 64.1 197.5 19.6 10.3
Benefit payments from plans ............................ (336.6) (324.1) —(47.4)
Direct benefit payments ................................ (14.8) (12.8) (76.6) (28.3)
Benefit obligation at end of year .......................... 5,458.8 5,688.3 858.2 866.7
Change in Plan Assets
Fair value of plan assets at beginning of year ................ 4,605.3 4,126.2 ——
Actual gain on plan assets ............................... 294.3 544.9 ——
Employer contributions ................................. 98.0 132.1 —40.9
Currency and other .................................... 44.5 126.2 —6.5
Benefit payments ...................................... (336.6) (324.1) —(47.4)
Fair value of plan assets at end of year ..................... 4,705.5 4,605.3 ——
Funded Status ........................................... $ (753.3) $(1,083.0) $(858.2) $(866.7)
Amounts Recognized in the Balance Sheet
Noncurrent asset—Prepaid benefit cost .................... $ 20.1 $ 7.6 $— $—
Current liability—Accrued benefit cost .................... (8.6) (8.5) (76.0) (69.7)
Noncurrent liability—Accrued benefit cost ................. (764.8) (1,082.1) (782.2) (797.0)
Net amount recognized ................................. $ (753.3) $(1,083.0) $(858.2) $(866.7)
The Corporation uses December 31 as the measurement date for all of its postretirement plans.
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