Macy's 2012 Annual Report Download - page 81
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
F-34
Net postretirement benefit costs and other amounts recognized in other comprehensive loss included the following
actuarially determined components:
2012 2011 2010
(millions)
Net Periodic Postretirement Benefit Cost
Service cost.............................................................................................. $ — $ — $ —
Interest cost.............................................................................................. 12 14 15
Amortization of net actuarial gain ........................................................... (4)(5)(5)
Amortization of prior service cost ........................................................... — — —
8 9 10
Other Changes in Plan Assets and Projected Benefit Obligation
Recognized in Other Comprehensive Loss
Net actuarial (gain) loss ........................................................................... (4)(3) 8
Amortization of net actuarial gain ........................................................... 4 5 5
Amortization of prior service cost ........................................................... — — —
— 2 13
Total recognized in net periodic postretirement benefit cost and other
comprehensive loss ...................................................................................... $ 8 $ 11 $ 23
The estimated net actuarial gain of the postretirement obligations that will be amortized from accumulated other
comprehensive loss into net postretirement benefit cost during 2013 is $3 million.
The following weighted average assumptions were used to determine the accumulated postretirement benefit obligations
at February 2, 2013 and January 28, 2012:
2012 2011
Discount rate.................................................................................................................... 4.15% 4.65%
The following weighted average assumptions were used to determine the net postretirement benefit costs for the
postretirement obligations:
2012 2011 2010
Discount rate........................................................................................ 4.65% 5.40% 5.65%
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.
The future medical benefits provided by the Company for certain employees are based on a fixed amount per year of
service, and the accumulated postretirement benefit obligation is not affected by increases in health care costs. However, the
future medical benefits provided by the Company for certain other employees are affected by increases in health care costs.