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This excerpt taken from the HBI 10-Q filed May 14, 2007. (9) Postretirement
Healthcare and Life Insurance Plans
Prior to the spin off from Sara Lee on September 5, 2006,
employees who met certain eligibility requirements participated
in post-retirement healthcare and life insurance sponsored by
Sara Lee. The annual cost of the Sara Lee defined benefit plans
was allocated from Sara Lee to all of the participating
businesses based upon a specific actuarial computation which was
followed consistently. In connection with the spin off on
September 5, 2006, the Company assumed Sara Lee’s
obligations under the Sara Lee postretirement plans. The
obligations and costs related to all of these plans are included
in the Company’s Condensed Consolidated Financial
Statements as of March 31, 2007.
In December 2006, the Company changed the postretirement plan
benefits to (a) pass along a higher share of retiree
medical costs to all retirees effective February 1, 2007,
(b) eliminate company contributions toward premiums for
retiree medical coverage effective December 1, 2007,
(c) eliminate retiree medical coverage options for all
current and future retirees age 65 and older and
(d) eliminate future postretirement life benefits. Gains
associated with these amendments are currently being amortized
and the Company expects to record a final gain on curtailment of
plan benefits of approximately $36,000 in December 2007.
The postretirement plan expense (income) incurred by the Company
for these postretirement plans is as follows:
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HANESBRANDS
Notes to Condensed Consolidated Financial Statements — (Continued) (dollars and shares in thousands, except per share data) (unaudited)
For the first quarter ended March 31, 2007, the components
of the Company’s postretirement plans net periodic benefit
income were as follows:
This excerpt taken from the HBI 10-Q filed Nov 13, 2006. (9) Postretirement
Healthcare and Life Insurance Plans
Prior to the spin off from Sara Lee on September 5, 2006,
employees who met certain eligibility requirements participated
in post-retirement healthcare and life insurance sponsored by
Sara Lee. These plans included employees from a number of
domestic Sara Lee business units. All obligations pursuant to
these plans have historically been obligations of Sara Lee and
as such, were not included on the Company’s historical
Condensed Combined and Consolidated Balance Sheets, prior to
September 5, 2006. The annual cost
Table of Contents
HANESBRANDS
Notes to
Condensed Combined and Consolidated Financial
Statements — (Continued)
(unaudited)
(dollars and shares in thousands, except per share data)
of the Sara Lee defined benefit plans was allocated to all of
the participating businesses based upon a specific actuarial
computation which was followed consistently.
In connection with the spin off on September 5, 2006, the
Company assumed Sara Lee’s obligations under the Sara Lee
postretirement plans. The obligations and costs related to all
of these plans are included in the Company’s Condensed
Combined and Consolidated Financial Statements as of
September 30, 2006.
The postretirement plan expense incurred by the Company for
these postretirement plans is as follows:
At September 30, 2006 the Company reported a liability of
$74,111 in the “Other noncurrent liabilities” line of
the Condensed Combined and Consolidated Balance Sheet.
Measurement
Date and Assumptions
Historically, a March 31 measurement date was used to value
plan assets and obligations for the Company’s defined
benefit pension plans. In connection with the spin off on
September 5, 2006, a measurement date of September 5,
2006 was used to value plan assets and obligations reported for
the postretirement healthcare and life insurance plans. The
weighted average actuarial assumptions used in measuring the net
periodic benefit cost and plan obligations for these plans at
the measurement date were as follows: discount rate of 5.82% for
plan obligations and net periodic benefit cost; and long term
rate of return on plan assets of 3.70%.
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