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71Xerox 2009 Annual Report
Notes to the Consolidated
Financial Statements
Dollars in millions, except per-share data and unless otherwise indicated.
Pension Benefits Retiree Health
2009 2008 2009 2008
Change in Benefit Obligation:
Benefit obligation, January 1 $ 8,495 $ 10,458 $ 1,002 $ 1,501
Service cost 173 209 7 14
Interest cost 508 (5) 60 84
Plan participants’ contributions 9 13 36 31
Plan amendments 4 1 1 (219)
Actuarial loss (gain) 209 (550) 124 (251)
Acquisitions 1 20 — —
Currency exchange rate changes 373 (1,090) 15 (23)
Curtailments — 3 — —
Benefits paid/settlements (578) (657) (143) (135)
Other(1) — 93 — —
Benefit obligation, December 31 $ 9,194 $ 8,495 $ 1,102 $ 1,002
Change in Plan Assets:
Fair value of plan assets, January 1 $ 6,923 $ 9,805 $ — $ —
Actual return on plan assets 720 (1,527) — —
Employer contribution 122 299 107 105
Plan participants’ contributions 9 13 36 30
Acquisitions — 20 — —
Currency exchange rate changes 349 (1,049) — —
Benefits paid/settlements (578) (657) (143) (135)
Other(1)(3) 16 19 — —
Fair value of plan assets, December 31 $ 7,561 $ 6,923 $ — $ —
Net Funded Status at December 31(2) $ (1,633) $ (1,572) $ (1,102) $ (1,002)
Amounts Recognized in the Consolidated Balance Sheets:
Other long-term assets $ 155 $ 61 $ — $ —
Accrued compensation and benefit costs (47) (48) (103) (106)
Pension and other benefit liabilities (1,741) (1,585) — —
Post-retirement medical benefits — — (999) (896)
Net Amounts Recognized $ (1,633) $ (1,572) $ (1,102) $ (1,002)
(1) 2008 Other reflects adjustments associated with the change in measurement dates for several European countries as required by ASC Topic 715-30-35.
(2) Includes under-funded and non-funded plans.
(3) 2009 activity represents opening balance adjustment of $16.
Note 14 – Employee Benefit Plans
We sponsor numerous pension and other post-retirement benefit plans,
primarily retiree health, in our domestic and international operations.
December 31 is the measurement date for all of our other post-
retirement benefit plans. Refer to Note 1 – “New Accounting Standards
and Accounting Changes” section for additional information regarding
recent accounting changes affecting our benefit plans.
The fair value amounts for Cash and cash equivalents and Accounts
receivable, net approximate carrying amounts due to the short
maturities of these instruments. The fair value of Short- and Long-
term debt, as well as our Liability to subsidiary trust issuing preferred
securities, was estimated based on quoted market prices for publicly
traded securities or on the current rates offered to us for debt of similar
maturities. The difference between the fair value and the carrying value
represents the theoretical net premium or discount we would pay or
receive to retire all debt at such date.