McKesson 2012 Annual Report Download - page 85

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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
81
The net periodic expense for our pension plans is as follows:
Years Ended March 31,
(In millions) 2012 2011 2010
Service cost—benefits earned during the year $ 7 $ 6 $ 4
Interest cost on projected benefit obligation 31 31 35
Expected return on assets (31) (29) (24)
Amortization of unrecognized actuarial loss, prior
service costs and net transitional obligation 27 28 25
Net periodic pension expense $ 34 $ 36 $ 40
The projected unit credit method is utilized in 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 or 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:
Years Ended March 31,
(In millions) 2012 2011
Change in benefit obligations
Benefit obligation at beginning of period $ 625 $ 593
Service cost 7 6
Interest cost 31 31
Actuarial loss 42 21
Benefit payments (34) (32)
Foreign exchange impact and other (1) 6
Benefit obligation at end of period
(
1
)
$ 670 $ 625
Change in plan assets
Fair value of plan assets at beginning of period $ 416 $ 391
Actual return on plan assets 12 40
Employer and participant contributions 17 11
Benefits paid (34) (32)
Foreign exchange impact and other (1) 6
Fair value of plan assets at end of period $ 410 $ 416
Funded status at end of period $ (260) $ (209)
Amounts recognized on the balance sheet
Long-term assets $ — $ 4
Current liabilities (13) (4)
Long-term liabilities (247) (209)
Total $ (260) $ (209)
(1) The benefit obligation is the projected benefit obligation.