Locate the information relating to pensions and other postretirement benefits found in The Walt Disney Company’s annual report (which can be found on the Internet at www.disney.com) and answer the following questions.

1. What is Disney’s PBO at the end of fiscal 2007 (September 29, 2007)?

2. Look at the computation of pension expense. Determine whether Disney’s actual return was greater than or less than its expected return in 2007.

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. At the end of 2007, Disney’s pension plans appear to be slightly underfunded. What can you say about the status of its postretirement medical benefits plans?