Proctor and Gamble 2007 Annual Report Download - page 65

Millions of dollars except per share amounts or as otherwise specied.
Notes to Consolidated Financial Statements The Procter & Gamble Company 63
Pension Benets Other Retiree Benets
Years ended June 30  2006  2006


Funded status at end of year  $(3,041)  $(195)
Unrecognized net
actuarial loss  672  275
Unrecognized transition
amount  7 
—
Unrecognized prior
service cost  146  (220)
  (2,216)  (140)


Noncurrent assets
—
prepaid benefit cost   386  255
Current liability
—
accrued benefit cost  (216)  (21)
Noncurrent liability
—
accrued benefit cost  (2,550)  (374)
Intangible asset  74 
—
Accumulated other
comprehensive income
—
minimum pension liability  90 
—
  (2,216)  (140)




Net actuarial loss  
—  —
Prior service cost (credit)  —  —
Minimum pension liability  90  —

   90 
—
The underfunding of pension benets is primarily a function of the
different funding incentives that exist outside of the U.S. In certain
countries where we have major operations, there are no legal
requirements or nancial incentives provided to companies to pre-
fund pension obligations. In these instances, benet payments are
typically paid directly from the Company’s cash as they become due.
The accumulated benet obligation for all dened benet retirement
pension plans was $8,611 and $8,013 at June 30, 2007, and June 30,
2006, respectively. Pension plans with accumulated benet obligations
in excess of plan assets and plans with projected benet obligations
in excess of plan assets consist of the following:
Accumulated Benet Projected Benet
Obligation Exceeds the Obligation Exceeds the
Fair Value of Plan Assets
Fair Value of Plan Assets
Years ended June 30  2006  2006
Projected benefit obligation  $5,597  $7,695
Accumulated benefit
obligation  4,912  6,544
Fair value of plan assets  2,684  4,498
Net Periodic Benet Cost. Components of the net periodic benet
cost were as follows:
Pension Benets Other Retiree Benets
Years ended June 30  2006 2005  2006 2005
Service cost  $ 265 $ 162   $ 97 $ 67
Interest cost  383 241  179 146
Expected return
on plan assets  (353) (185)  (372) (333)
Amortization of
deferred amounts  7 6  (22) (22)
Curtailment and
settlement
(gain) loss  (4) 13 
— —
Recognized net
actuarial loss  76 31  6 1

  374 268  (112) (141)
Dividends on ESOP
preferred stock
 — —  (78) (73)


  374 268  (190) (214)
Pursuant to plan revisions adopted during 2007, Gillette’s U.S.
dened benet retirement pension plans will be frozen effective
January 1, 2008, at which time Gillette employees in the U.S. will
move into the P&G dened contribution Prot Sharing Trust and
Employee Stock Ownership Plan. This revision resulted in a $154
curtailment gain for the year ended June 30, 2007.
Amounts expected to be amortized from accumulated other
comprehensive income into net period benet cost during the year
ending June 30, 2008, are as follows:
Other
Pension Retiree
Benets Benets
Net actuarial loss $25 $ 6
Prior service cost (credit) 14 (21)