> note F > note E Long-term Debt and Other Borrowing Arrangements Pension and Other Postretirement  Health Care Benefits Certain groups of employees are eligible for postretirement  health or welfare benefits. Eligible employees who retired prior to January 1, 1987, receive the company-sponsored medical and  life insurance benefits that were in effect when they retired. The medical plan for eligible employees who retired after January 1, 1987, is automatically modified to incorporate plan benefit and plan provision changes whenever they are made to the active employee plan. Contribution requirements for this group of retired employees are governed by the Retiree Health Care Payment Program and may change each year as the cost to provide cover- age is determined. Eligible employees hired after January 1,1990, may receive postretirement medical coverage but must pay the  full cost of the coverage. During fiscal 2004, the company incurred a one-time charge of $0.9 million for health care benefits offered as a result of the sales reorganization discussed above. The  company also implemented a disease management program and increased the plan deductibles paid by post-1987 union retirees which reduced the benefit obligation by $4.4 million. During fiscal 2003, the company made certain changes to the Retiree Health Care Program for eligible bargaining employees that provided  participants (retirees and current employees) two options for determining the amount the participants would be required to contribute for their coverage. Participants could continue under the existing program that contains a cap on the amount subsidized by the company. Continued coverage under this program would The company has several noncontributory defined benefit plans and defined contribution plans covering most employees. Total costs associated with the company’s defined contribution benefit plans in fiscal 2004, 2003, and 2002 were $18.7 million, $17.0 million, and $15.8 million, respectively. Benefits for defined benefit pension plans covering hourly employees are provided based on stated amounts for each year of service, while plan benefits cov- ering salaried employees are based on final average compensa- tion. As part of the company’s sales reorganization that took place in fiscal 2004, the company offered early retirement packages to  certain employees. The acceptance of these offers resulted in  an increase to the benefit obligation and recognition of a one-time charge of $1.9 million. The pension rates paid for years of service were increased as a result of labor negotiations in fiscal 2003, resulting in an increase in the company’s benefit obligation of  $3.5 million. The company’s funding policy is to make annual  contributions of not less than the minimum required by applicable regulations. Actuarial gains and losses and any adjustments result- ing from plan amendments are deferred and amortized to expense over periods ranging from 10-14 years. Total interest paid during fiscal 2004, 2003, and 2002 was $27.1 million, $32.5 million, and $31.6 million, respectively. Based on borrowing rates currently available to the company for long-term financing with similar terms and average maturities, the fair value  of long-term debt, including current maturities, utilizing discounted cash flows, is $423.6 million. Aggregate annual maturities of long-term debt for the five fiscal years after October 30, 2004, are as follows : The company is required, by certain covenants in its debt agree- ments, to maintain specified levels of financial ratios and balance sheet position. At the end of the current fiscal year, the company was in compliance with all of these covenants. As of October 30, 2004, the company has unused lines of credit of $150.0 million which bear interest at variable rates below prime. A fixed fee is paid for the availability of these credit lines. At October 30, 2004, the current interest rate on outstanding  variable rate debt was 1.9%. Long-term debt consists of: October 30, October 25, (In Thousands) 2004 2003 Senior unsecured notes, with interest at 6.625%,  interest due semi-annually through 2011 $350,000 $350,000 Medium-term unsecured notes, with interest  at 7.35%, principal and interest due annually  through 2006 21,429 32,143 Industrial revenue bonds with variable interest rates,  due 2005 4,700 4,700 Variable rate – revolving credit agreements;  paid in 2004 0 18,000 Medium-term secured notes with variable rates,  principal and interest due semi-annually through 2004, secured by various equipment;  paid in 2004 0 3,239 Other 1,141 1,486 377,270 409,568 Less current maturities 15,760 14,295 Total $361,510 $395,273 (In Thousands) 2005 $15,760 2006 11,085 2007 365 2008 55 2009 4 40 Hormel Foods Corporation