We sponsor several unfunded health care benefit plans for certain of our retired employees. Eligibility for these benefits is based upon minimum age and service requirements. The following table illustrates the effect on operations of these plans for the three years ended May 31, 2004:

The changes in the benefit obligations of the plans at May 31, 2004 and 2003 were as follows:

A measurement date of May 31, 2004 was used to determine postretirement benefit measurements outlined above.

A 6.0% general discount rate was used in determining the accumulated postretirement benefit obligation as of May 31, 2004 (6.7% for 2003). A general discount rate of 6.7% was used to determine the net periodic postretirement expense for the year ended May 31, 2004 (7.25% for 2003). Also used in determining the year-end accumulated postretirement benefit obligation was a 10.0% increase in the cost of covered health care benefits for fiscal 2004 (9.0% for 2003). This trend rate in all cases is assumed to decrease to 5.0% after several years and remain at that level thereafter, except for various union plans, which will cap at alternate benefit levels. A health care cost trend rate of 9.0% was used in measuring the net periodic postretirement expense for the year ended May 31, 2004 (8.0% for 2003). Increasing the health care costs trend rate by 1.0% would have increased the accumulated postretirement benefit obligation as of May 31, 2004 by $2.4 million and the net postretirement expense by $0.2 million. Decreasing the health care costs trend rate by 1.0% would have decreased the accumulated postretirement benefit obligation as of May 31, 2004 by $2.0 million and the net postretirement expense by $0.2 million.

The Medicare Prescription Drug, Improvement and ­Modernization Act (the “Act”) was enacted on December 8, 2003. The Act introduces a prescription drug benefit under Medicare Part D, in addition to a federal subsidy to sponsors of postretirement benefit plans that provide a prescription drug benefit that is at least actuarially equivalent to Medicare Part D. In accordance with FASB Staff Position No. FAS 106-1, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” we have elected to defer recognition of the Act. Therefore, the effects of this Act have not been reflected in the accumulated postretirement benefit obligation or net periodic postretirement benefit cost.

Upon clarification of accounting for the Act, we may be required to change previously reported information. Also upon clarification, we may choose to amend our postretirement medical plan to reflect the benefits of the Act.