OfficeMax 2008 Annual Report Download - page 82

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Components of Net Periodic Benefit Cost (Income)
The components of net periodic benefit cost (income) are as follows:
Pension Benefits Other Benefits
2008 2007 2006 2008 2007 2006
(thousands)
Service cost ................. $ 2,132 $ 1,676 $ 1,600 $ 237 $ 341 $ 870
Interest cost ................. 78,041 77,084 74,679 1,164 1,353 1,583
Expected return on plan assets . . . (90,078) (89,018) (87,353) — — —
Recognized actuarial loss ....... 11,775 20,220 23,159 269 512 692
Plan settlement/curtailment/closures
expense .................. 2,331 — 1,580 — — —
Amortization of prior service costs
and other .................———(3,997) (4,009) (3,571)
Net periodic benefit cost (income) . $ 4,201 $ 9,962 $ 13,665 $(2,327) $(1,803) $ (426)
The estimated net actuarial loss for the defined benefit pension plans that will be amortized
from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year
is $21.9 million.
Assumptions
The assumptions used in accounting for the Company’s plans are estimates of factors
including, among other things, the amount and timing of future benefit payments. The following
table presents the key assumptions used in the measurement of the Company’s benefit obligations:
Pension Benefits Other Benefits
United States Canada
2008 2007 2006 2008 2007 2006 2008 2007 2006
Weighted average
assumptions as of
year-end:
Discount rate ............ 6.20% 6.30% 5.80% 6.10% 5.90% 5.60% 7.30% 5.50% 5.00%
The following table presents the assumptions used in the measurement of net periodic benefit
cost:
Pension Benefits Other Benefits
United States Canada
2008 2007 2006 2008 2007 2006 2008 2007 2006
Weighted average
assumptions:
Discount rate ............ 6.30% 5.80% 5.60% 5.90% 5.60% 5.20% 5.50% 5.00% 5.10%
Expected long-term return on
plan assets ........... 8.00% 8.00% 8.00% ——————
The Company bases its discount rate assumption on the rates of return available on
high-quality bonds with maturities approximating the expected period over which the pension
benefits will be paid.
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