Kodak 2008 Annual Report Download - page 93

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NOTE 18: OTHER POSTRETIREMENT BENEFITS
The Company provides healthcare, dental and life insurance benefits to U.S. eligible retirees and eligible survivors of retirees.
Generally, to be eligible for the plan, individuals retiring prior to January 1, 1996 were required to be 55 years of age with ten years
of service or their age plus years of service must have equaled or exceeded 75. For those retiring after December 31, 1995, the
individuals must be 55 years of age with ten years of service or have been eligible as of December 31, 1995. Based on the eligibility
requirements, these benefits are provided to U.S. retirees who are covered by the Company's KRIP plan and are funded from the
general assets of the Company as they are incurred. However, those under the Cash Balance Plus portion of the KRIP plan would
be required to pay the full cost of their benefits under the plan.
On August 1, 2008, the Company adopted and announced certain changes to its U.S. postretirement benefit plan affecting its post-
September 1991 retirees beginning January 1, 2009. For affected participants, the terms of the amendment reduce the Company’s
contribution toward retiree medical coverage from its 2008 level by one percentage point per year for a 10-year period, phase-out
Company contributions for dependent medical coverage over the same 10-year period with access only coverage beginning in 2018,
and discontinue retiree dental coverage and Company-paid life insurance.
The changes made to the plan resulted in the remeasurement of the plan’s obligations as of August 1, 2008, the date the changes
were adopted and announced by the Company. This remeasurement reduced the Company’s other postretirement benefit obligation
by $919 million, of which $772 million is attributable to the plan changes. In addition, the Company recognized a curtailment gain of
$79 million as a result of the amendment. The curtailment gain was included in Cost of goods sold, Selling, general and
administrative expenses, and Research and development costs in the Consolidated Statement of Operations for the year ended
December 31, 2008.
The Company’s benefits to U.S. long-term disability recipients were also amended as described above. These changes resulted in a
reduction in Pension and other postretirement liabilities, and a corresponding gain of $15 million was included in the Cost of goods,
Selling general and administrative expenses, and Research and development costs in the Consolidated Statement of Operations for
the year ended December 31, 2008.
The Company's subsidiaries in the United Kingdom and Canada offer similar healthcare benefits.
The measurement date used to determine the net benefit obligation for the Company's other postretirement benefit plans is
December 31.
Changes in the Company’s benefit obligation and funded status for the U.S., United Kingdom and Canada other postretirement
benefit plans were as follows:
(in millions) 2008
2007
Net benefit obligation at beginning of year $ 2,524
$ 3,009
Service cost 4
8
Interest cost 136
165
Plan participants’ contributions 26
25
Plan amendments (825)
(88)
Actuarial gain (141)
(317)
Acquisitions/divestitures 2
(9)
Settlements (2)
(37)
Benefit payments (230)
(243)
Currency adjustments (23)
11
Net benefit obligation at end of year $ 1,471
$ 2,524
Underfunded status at end of year $ (1,471)
$ (2,524)