Albertsons 2006 Annual Report Download - page 80

Download and view the complete annual report

Please find page 80 of the 2006 Albertsons annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 85

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85

SUPERVALU INC. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The accumulated benefit obligation for the defined benefit pension plan was $718,761 and $627,602 at
February 25, 2006 and February 26, 2005, respectively.
Pension Benefits Post Retirement Benefits
2006 2005 2004 2006 2005 2004
(In thousands)
NET BENEFIT COSTS FOR THE FISCAL
YEAR
Service cost $ 20,748 $ 19,370 $ 18,243 $ 1,818 $ 1,443 $ 1,350
Interest cost 40,503 37,957 35,003 8,649 6,899 7,457
Expected return on plan assets (40,774) (41,843) (40,970) — — —
Amortization of:
Unrecognized net loss 23,173 18,895 7,898 6,652 3,722 3,305
Unrecognized prior service cost 1,294 1,261 1,106 (1,905) (1,949) (1,200)
Net benefit costs for the fiscal year $ 44,944 $ 35,640 $ 21,280 $15,214 $10,115 $10,912
The company utilized the following assumptions in the calculations for pension and post retirement benefit
plans:
2006 2005 2004
Weighted-average assumptions used to determine benefit
obligations:
Discount rate 5.75% 6.00% 6.25%
Rate of compensation increase 3.00% 3.00% 3.00%
Weighted-average assumptions used to determine net periodic
benefit cost:
Discount rate 6.00% 6.25% 7.00%
Rate of compensation increase 3.00% 3.00% 3.25%
Expected return on plan assets 8.00% 8.75% 9.00%
The assumed health care cost trend rate used in measuring the accumulated post retirement benefit
obligation was 11.0 percent in fiscal 2006. The assumed health care cost trend rate will decrease by one percent
each year for the next six years until it reaches the ultimate trend rate of 5.0 percent. The health care cost trend
rate assumption has a significant impact on the amounts reported. For example, a one percent change in the trend
rate would impact the accumulated post retirement benefit obligation by approximately $10 million and the
service and interest cost by approximately $0.6 million in fiscal 2007.
The company also maintains non-contributory unfunded pension plans to provide certain employees with
pension benefits in excess of limits imposed by federal tax law. The projected benefit obligation of the unfunded
plans was $21.5 million and $18.1 million at February 25, 2006 and February 26, 2005, respectively. The
accumulated benefit obligation of these plans totaled $17.8 million and $14.2 million at February 25, 2006 and
February 26, 2005, respectively. Net periodic pension cost was $2.9 million, $3.6 million and $3.6 million for
fiscal 2006, 2005 and 2004, respectively.
F-35