Deciphering Financial Statements (The Walt Disney Company)
Locate the information relating to pensions and other postretirement benefits found in
The Walt Disney Company’s annual report and answer the following questions.
1. What is Disney’s PBO in 2004?
2. By examining the change in Disney’s “Unrecognized net loss,” can you determine if
Disney’s actual return was greater than or less than its expected return?
3. Because of the high costs associated with medical benefits, Disney has elected to follow a strategy adopted by a number of firms. That strategy has been to not offer those benefits to new employees. In its 1994 annual report, Disney stated that “employees hired after January 1, 1994, are not eligible for postretirement medical benefits.” How might the financial accounting rules have caused Disney to make this change in policy in 1994?
4. Disney’s pension plan appears to be underfunded. Can you say the same about the status of its other postretirement benefits?