AutoZone 2015 Annual Report Download - page 159

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66
Net periodic benefit expense consisted of the following:
Year Ended
(in thousands) August 29,
2015
August 30,
2014
August 31,
2013
Interest cost ......................................................................... $ 12,338 $ 13,070 $ 11,746
Expected return on plan assets ............................................ (16,281) (15,386) (13,617)
Recognized net actuarial losses ........................................... 8,941 6,879 14,721
Net periodic benefit expense ............................................... $ 4,998 $ 4,563 $ 12,850
The actuarial assumptions used in determining the projected benefit obligation include the following:
Year Ended
August 29,
2015
August 30,
2014
August 31,
2013
Weighted average discount rate .......................................... 4.50% 4.28% 5.19%
Expected long-term rate of return on plan assets ................ 7.00% 7.50% 7.50%
As the plan benefits are frozen, increases in future compensation levels no longer impact the calculation and there
is no service cost. The discount rate is determined as of the measurement date and is based on the calculated yield
of a portfolio of high-grade corporate bonds with cash flows that generally match the Company’ s expected benefit
payments in future years. The expected long-term rate of return on plan assets is based on the historical
relationships between the investment classes and the capital markets, updated for current conditions.
The Company makes annual contributions in amounts at least equal to the minimum funding requirements of the
Employee Retirement Income Security Act of 1974. The Company contributed $17.1 million to the plans in fiscal
2015, $16.9 million to the plans in fiscal 2014 and $16.9 million to the plans in fiscal 2013. The Company expects
to contribute approximately $6.3 million to the plans in fiscal 2016; however, a change to the expected cash
funding may be impacted by a change in interest rates or a change in the actual or expected return on plan assets.
Based on current assumptions about future events, benefit payments are expected to be paid as follows for each of
the following fiscal years. Actual benefit payments may vary significantly from the following estimates:
(in thousands) Benefit
Payments
2016 ............................................................................................................................................. $ 11,118
2017 ............................................................................................................................................. 10,992
2018 ............................................................................................................................................. 11,717
2019 ............................................................................................................................................. 12,482
2020 ............................................................................................................................................. 13,107
2021
–
2025 .................................................................................................................................. 73,726
The Company has a 401(k) plan that covers all domestic employees who meet the plan’ s participation
requirements. The plan features include Company matching contributions, immediate 100% vesting of Company
contributions and a savings option up to 25% of qualified earnings. The Company makes matching contributions,
per pay period, up to a specified percentage of employees’ contributions as approved by the Board. The Company
made matching contributions to employee accounts in connection with the 401(k) plan of $17.7 million in fiscal
2015, $15.6 million in fiscal 2014, and $14.1 million in fiscal 2013.
10-K