McKesson 2006 Annual Report Download - page 77

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
Information regarding the changes in benefit obligations and plan assets for our pension plans is as follows:
The accumulated benefit obligations for our pension plans were $462 million at March 31, 2006 and $452 million at March 31, 2005.
In April 2004, we made several lump sum cash payments totaling $42 million from an unfunded U.S. pension plan. In accordance with
SFAS No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits,”
$12 million in settlement charges associated with these payments was expensed in the first quarter of 2005.
A reconciliation of the pension plans’ funded status to the net asset recognized is as follows:
72
March 31,
(In millions) 2006 2005
Chan
g
e in benefit obli
g
ations
Benefit obligation at beginning of year $468 $465
Service cost 6 6
Interest cost 26 26
Participant contributions 1 1
Amendments 1 11
Immediate recognition of pension cost — 8
Actuarial losses 21 19
Benefit payments (33) (71)
Foreign exchange impact (5) 3
Benefit obligation at end of year $485 $468
Chan
g
e in
p
lan assets
Fair value of plan assets at beginning of year $397 $372
Actual return on plan assets 33 43
Employer and participant contributions 20 53
Expenses paid (2) (2)
Benefits paid (33)(71)
Foreign exchange impact (3) 2
Fair value of plan assets at end of year $412 $397
Years Ended March 31,
(In millions) 2006 2005
Funded status
Funded status at end of year $(73) $(71)
Unrecognized net actuarial loss and transitional obligations 124 111
Unrecognized prior service cost 14 15
Employer contributions 6 3
Prepaid benefit cost $ 71 $ 58
Net amounts recognized in the consolidated balance sheets
Prepaid benefit cos
t
122 106
Accrued benefit cos
t
(99)(91)
Intangible asset 14 15
Accumulated other comprehensive loss, net of tax of $12 and $10 22 18
Net asse
t
$59 $48