Graco 2008 Annual Report Download - page 34

Newell Rubbermaid Inc. 2008 Annual Report
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The following tables summarize the Company’s pension and other postretirement plan assets and obligations included in the Consolidated Balance
Sheet as of December 31, 2008 (in millions):
U.S. International
Pension plan assets and obligations, net:
Prepaid benefit cost $ — $ 45.2
Accrued current benefit cost (7.0) (3.8)
Accrued noncurrent benefit cost (364.3) (70.1)
Net liability recognized in the Consolidated Balance Sheet $(371.3) $(28.7)
U.S.
Other postretirement benefit obligations:
Accrued current benefit cost $ (16.1)
Accrued noncurrent benefit cost (146.4)
Liability recognized in the Consolidated Balance Sheet $(162.5)
The following table summarizes the net pre-tax cost associated with pensions and other postretirement benefit obligations in the Consolidated
Statement of Operations for the year ended December 31, (in millions):
2008 2007 2006
Net pension cost $18.3 $14.4 $15.7
Net postretirement benefit costs 8.8 10.1 10.1
Total $27.1 $24.5 $25.8
The Company used weighted-average discount rates of 6.0% and 6.3% to determine the expenses for 2008 for the pension and post retirement
plans, respectively. The Company used a weighted-average expected return on assets of 7.9% to determine the expense for the pension plans for 2008.
The following table illustrates the sensitivity to a change in certain assumptions for the pension and postretirement expenses, holding all other assumptions
constant (in millions):
Impact on 2008
Pension Expense
25 basis point decrease in discount rate +$1.7
25 basis point increase in discount rate -$1.6
25 basis point decrease in expected return on assets +$2.8
25 basis point increase in expected return on assets -$2.8
The total projected benefit obligations of the Company’s pension and postretirement plans as of December 31, 2008 were $1.26 billion and $162.5
million, respectively. The Company used weighted average discount rates of 6.2% and 6.3% to determine the projected benefit obligations for the pension
and postretirement plans, respectively, as of December 31, 2008. The following table illustrates the sensitivity to a change in certain assumptions for the
projected benefit obligation for the pension and postretirement plans, holding all other assumptions constant (in millions):
December 31,
2008 Impact on PBO
25 basis point decrease in discount rate +$42.9
25 basis point increase in discount rate -$40.8
The Company has $309.1 million (after-tax) of net unrecognized pension and other postretirement losses ($498.4 million pre-tax) included as a
reduction to stockholders’ equity at December 31, 2008. The unrecognized gains and losses primarily result from changes to life expectancies and other
actuarial assumptions as well as actual returns on plan assets being more or less than expected. The unrecognized gain (loss) for each plan is amortized to
expense over the average life of each plan. The net amount amortized to expense totaled $9.6 million (pre-tax) in 2008, and amortization of unrecognized
net losses is expected to continue to result in increases in pension and other postretirement plan expenses for the foreseeable future. Changes in actuarial
assumptions, actual returns on plan assets, and changes in the actuarially determined average life of the plans impact the amount of unrecognized gain
(loss) recognized as expense annually.