Analyzing and Interpreting Pension and Health Care Footnote Xerox reports the following pension and retiree...
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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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