Federal Express 2009 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2009 Federal Express 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 80

  • 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

FEDEX CORPORATION
60
PBO Exceeds the Fair Value
of Plan Assets
2009 2008
Pension Benefi ts
Fair Value of Plan Assets $ 375 $ 218
PBO (923) (783)
Net funded status $ (548) $ (565)
ABO Exceeds the Fair Value
of Plan Assets
2009 2008
Pension Benefi ts
ABO (1) $(778) $ (682)
Fair Value of Plan Assets 325 217
PBO (869) (782)
Net funded status $ (544) $ (565)
(1) ABO not used in determination of funded status.
The APBO exceeds plan assets for each of our postretirement
healthcare plans.
In September 2008, we made $483 million in voluntary contribu-
tions to our U.S. tax-qualifi ed plans. We made additional voluntary
contributions of $600 million during the fourth quarter of 2009 in
order to improve the funded status of our principal pension plans.
During 2008, we made voluntary contributions of $479 million to
our U.S. tax-qualifi ed plans. While our U.S. tax-qualifi ed plans
have ample funds to meet benefi t payments, current market con-
ditions have negatively impacted asset values over the near term.
We anticipate making contributions to the U.S. tax-qualifi ed plans
totaling approximately $850 million in 2010, including $350 million
in required minimum quarterly payments.
Net periodic benefi t cost for the three years ended May 31 were as follows (in millions):
Pension Plans Postretirement Healthcare Plans
2009 2008 2007 2009 2008 2007
Service cost $ 499 $ 518 $ 540 $ 31 $ 35 $ 31
Interest cost 798 720 707 33 31 28
Expected return on plan assets (1,059) (985) (930) – – –
Recognized actuarial (gains) losses and other (61) 70 150 (7) 11 (4)
Net periodic benefit cost $ 177 $ 323 $ 467 $ 57 $ 77 $ 55
The reduction in pension costs from 2008 to 2009 was attributable to the signifi cantly higher discount rate that was used to determine
our 2009 expense. Decreases in pension costs from 2007 to 2008 are primarily the result of the plan changes discussed above and
in Note 1.
Our pension plans included the following components at May 31, 2009 and 2008 (in millions):
Fair Value of Funded Net Amount
ABO PBO Plan Assets Status Other (1) Recognized
2009
Qualifi ed $ 10,113 $ 10,328 $ 10,606 $ 278 $ – $ 278
Nonqualifi ed 317 318 – (318) – (318)
International Plans 315 404 206 (198) – (198)
Total $ 10,745 $ 11,050 $ 10,812 $ (238) $ – $ (238)
2008
Qualifi ed $ 10,530 $ 10,834 $ 11,661 $ 827 $ – $ 827
Nonqualifi ed 333 338 – (338) 7 (331)
International Plans 349 445 218 (227) 8 (219)
Total $ 11,212 $ 11,617 $ 11,879 $ 262 $ 15 $ 277
(1) Amounts in “ Other” represent employer contributions after measurement date.
The table above provides the ABO, PBO, fair value of plan assets and funded status of our plans on an aggregated basis. The following
table, provided under the requirements of SFAS 158, presents our plans on a disaggregated basis to show those plans (as a group)
whose assets did not exceed their liabilities. These plans are primarily comprised of our unfunded nonqualifi ed plans and certain
international plans, but do not include our principal U.S. domestic plan. At May 31, 2009 and 2008, the fair value of plan assets for pen-
sion plans with a PBO or ABO in excess of plan assets were as follows (in millions):