McKesson 2009 Annual Report Download - page 104

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
98
The projected unit credit method is utilized for measuring net periodic pension expense over the employees’
service life for the U.S. pension plans. Unrecognized actuarial losses exceeding 10% of the greater of the projected
benefit obligation and the market value of assets are amortized straight-line over the average remaining future
service periods.
Information regarding the changes in benefit obligations and plan assets for our pension plans is as follows:
(In millions)
15 Month
Period Ending
March
31, 2009
12 Month
Period Ending
December
31, 2007
Change in benefit obligations
Benefit obligation at beginning of period $ 543 $ 552
SFAS No. 158 measurement date adjustment (3) -
Service cost 6 7
Interest cost 33 31
Actuarial gains (65) (8)
Benefit payments (32) (47)
Foreign exchange impact and other (26) 8
Benefit obligation at end of period $ 456 $ 543
Change in plan assets
Fair value of plan assets at beginning of period $ 501 $ 484
SFAS No. 158 measurement date adjustment (9) -
Actual return on plan assets (138) 29
Employer and participant contributions 15 33
Benefits paid (32) (47)
Foreign exchange impact and other (28) 2
Fair value of plan assets at end of period $ 309 $ 501
Funded status at end of period (1) $ (147) $ (39)
Amounts recognized on the balance sheet
Noncurrent assets $ 5 $ 78
Current liabilities (10) (9)
Noncurrent liabilities (142) (108)
Total $ (147) $ (39)
(1) Includes $3 million of employer contributions subsequent to our December 31, 2007 measurement date for 2008.
The unfavorable change in the funded status of our plans from March 31, 2008 to March 31, 2009 was primarily
due to the decrease in the fair value of our plan assets as a result of the volatility in the financial markets.
The accumulated benefit obligations for our pension plans were $441 million at March 31, 2009 and $522
million at March 31, 2008. The components of the amount recognized in accumulated other comprehensive income
at March 31, 2009 and 2008 are as follows: net actuarial loss, $215 million and $111 million; net prior service cost,
$8 million and $10 million; and net transitional obligations, $1 million and $2 million.