2013 Annual Report - Investor Relations - Darden Restaurants

Notes to Consolidated Financial StatementsDardenNOTE 17RETIREMENT PLANSDefined Benefit Plans and Postretirement Benefit PlanSubstantially all of our employees are eligible to participate in a retirement plan. We sponsor non-contributory defined benefit pension plans, which have been frozen,for a group of salaried employees in the United States, in which benefits are based on various formulas that include years of service and compensation factors; and for agroup of hourly employees in the United States, in which a fixed level of benefits is provided. Pension plan assets are primarily invested in U.S. and International equitiesas well as long-duration bonds and real estate investments. Our policy is to fund, at a minimum, the amount necessary on an actuarial basis to provide for benefitsin accordance with the requirements of the Employee Retirement Income Security Act of 1974, as amended and the Internal Revenue Code (IRC), as amended bythe Pension Protection Act of 2006. We also sponsor a contributory postretirement benefit plan that provides health care benefits to our salaried retirees. Fundingsrelated to the defined benefit pension plans and postretirement benefit plans, which are funded on a pay-as-you-go basis, were as follows:Fiscal Year(in millions) 2013 2012 2011Defined benefit pension plans funding $2.4 $22.2 $12.9Postretirement benefit plan funding 0.8 0.5 0.3We expect to contribute approximately $0.4 million to our defined benefit pension plans and approximately $0.7 million to our postretirement benefit plan duringfiscal 2014.We are required to recognize the over- or under-funded status of the plans as an asset or liability as measured by the difference between the fair value of the planassets and the benefit obligation and any unrecognized prior service costs and actuarial gains and losses as a component of accumulated other comprehensive income(loss), net of tax.The following provides a reconciliation of the changes in the plan benefit obligation, fair value of plan assets and the funded status of the plans as of May 26, 2013and May 27, 2012:Defined Benefit PlansPostretirement Benefit Plan(in millions) 2013 2012 2013 2012Change in Benefit Obligation:Benefit obligation at beginning of period $274.4 $215.8 $ 29.6 $ 27.0Service cost 4.7 5.1 0.8 0.8Interest cost 9.9 9.6 1.3 1.5Participant contributions – – 0.4 0.3Benefits paid (11.2) (9.8) (1.2) (0.8)Actuarial loss (gain) (1.0) 53.7 (1.0) 0.8Benefit obligation at end of period $276.8 $274.4 $ 29.9 $ 29.6Change in Plan Assets:Fair value at beginning of period $203.5 $187.4 $ – $ –Actual return on plan assets 39.4 3.7 – –Employer contributions 2.4 22.2 0.8 0.5Participant contributions – – 0.4 0.3Benefits paid (11.2) (9.8) (1.2) (0.8)Fair value at end of period $234.1 $203.5 $ – $ –Reconciliation of the Plans’ Funded Status:Unfunded status at end of period $ (42.7) $ (70.9) $(29.9) $(29.6)56 Darden Restaurants, Inc. 2013 Annual Report