Macy's 2010 Annual Report Download - page 87

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Net postretirement benefit costs and other amounts recognized in other comprehensive income included the
following actuarially determined components:
2010 2009 2008
(millions)
Net Periodic Postretirement Benefit Cost
Service cost ............................................................. $ – $ – $ –
Interest cost ............................................................. 15 19 19
Amortization of net actuarial gain ........................................... (5) (7) (3)
Amortization of prior service credit .......................................... – – –
10 12 16
Other Changes in Plan Assets and Projected Benefit Obligation
Recognized in Other Comprehensive Income
Net actuarial (gain) loss ................................................... 8 8 (70)
Amortization of net actuarial gain ........................................... 5 7 3
Amortization of prior service credit .......................................... – – –
13 15 (67)
Total recognized in net periodic postretirement benefit cost and other
comprehensive income ...................................................... $23 $27 $(51)
The estimated net actuarial gain of the postretirement obligations that will be amortized from accumulated
other comprehensive (income) loss into net postretirement benefit cost during 2011 is $(3) million.
As permitted under ASC Subtopic 715-60, “Defined Benefit Plans – Other Postretirement,” the amortization
of any prior service cost is determined using a straight-line amortization of the cost over the average remaining
service period of employees expected to receive the benefits under the plans.
The following weighted average assumptions were used to determine the accumulated postretirement
benefit obligations at January 29, 2011 and January 30, 2010:
2010 2009
Discount rate ........................................................... 5.40% 5.65%
The following weighted average assumptions were used to determine the net postretirement benefit costs for
the postretirement obligations:
2010 2009 2008
Discount rate .................................................... 5.65% 7.45% 6.25%
The postretirement benefit obligation assumptions are evaluated annually and updated as necessary.
The discount rate used to determine the present value of the Company’s accumulated postretirement benefit
obligations is based on a yield curve constructed from a portfolio of high quality corporate debt securities with
various maturities. Each year’s expected future benefit payments are discounted to their present value at the
appropriate yield curve rate, thereby generating the overall discount rate for the accumulated postretirement
benefit obligations.
F-39