Analyzing and Interpreting Pension and Health Care Footnote

Xerox reports the following pension and retiree health care ("Other") footnote as part of its 10-K report.

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	Pension Benefits		Retiree Health
(in millions)	2010	2009	2010	2009
Change in Benefit Obligation
Benefit obligation, January 1	$ 9,194	$ 8,495	$ 1,102	$ 1,002
Service cost	178	173	8	7
Interest cost	575	508	54	60
Plan participants' contributions	11	9	26	36
Plan amendments	(19)	4	(86)	1
Actuarial loss (gain)	477	209	13	124
Aquistions	140	1	1	--
Currency exchange rate changes	(154)	373	6	15
Curtailments	(1)	--	--	--
Benefits paid/settlements	(670)	(578)	(118)	(143)
Benefit obligation, December 31	$ 9,731	$ 9,194	$ 1,006	$ 1,102
Change in Plan Assets
Fair value of plan assets, January 1	$ 7,561	$ 6,923	$ --	$ --
Actual return on plan assets	846	720	--	--
Employer contribution	237	122	92	107
Plan participants' contributions	11	9	26	36
Aquistions	107	--	--	--
Currency exchange rate changes	(144)	349	--	--
Benefits paid/settlements	(669)	(578)	(118)	(143)
Other	(9)	16	--	--
Fair value of plan assets, December 31	$ 7,940	$ 7,561	$ --	$ --
Net funded status at December 31	$ (1,791)	$ (1,633)	$ (1,006)	$ (1,102)

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	Pension Benefits			Retiree Health
(in millions)	2010	2009	2008	2010	2009	2008
Components of Net Periodic Benefit Cost
Service cost	$ 178	$ 173	$ 209	$ 8	$ 7	$ 14
Interest cost	575	508	(5)	54	60	84
Expected return on plan assets	(570)	(523)	(80)	--	--	--
Recognized net actuarial loss	71	25	36	--	--	--
Amortization of prior service credit	(22)	(21)	(20)	(30)	(41)	(21)
Recognized settlement loss	72	70	34	--	--	--
Defined benefit plans	304	232	174	32	26	77
Defined contribution plans	51	38	80	--	--	--
Total net periodic benefit cost	$ 355	$ 270	$ 254	$ 32	$ 26	$ 77
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Net actuarial loss (gain)	198	8	1,062	13	126	(244)
Prior service cost (credit)	(19)	--	1	(86)	1	(219)
Amortization of net actuarial (loss) gain	(143)	(95)	(70)	--	--	--
Amortization of prior service (cost) credit	22	21	20	30	41	21
Total recognized in other comprehensive income	$ 58	$ (66)	$1,013	(43)	$ 168	$ (442)

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(b) What is the actual return on the pension and the health care ("Other") plan investments in 2010? $Answer

million

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(e) How much cash did Xerox contribute to its pension and health care plans in 2010? Pension = $Answer

million Health care = $Answer

million (f) How much cash did retirees receive in 2010 from the pension plan and the health care plan? Pension = $Answer

million Health care = $Answer

million

How much cash did Xerox pay these retirees in 2010? $Answer

million

(g) Show the computation of the 2010 funded status for the pension and health care plans. Hint: Do not use negative signs with your answers. Pension : $7,940 million - $Answer

million = $Answer

million Answer

Health care : $0 million - $Answer

million = $Answer

million Answer

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