Pepsi 2007 Annual Report Download - page 75

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Components of benefit expense are as follows:
Pension Retiree Medical
2007 2006 2005 2007 2006 2005 2007 2006 2005
U.S. International
Components of benefit expense
Service cost $ 244 $ 245 $ 213 $ 59 $ 52 $ 32 $ 48 $ 46 $ 40
Interest cost 338 319 296 81 68 55 77 72 78
Expected return on plan assets
(399) (391) (344) (97) (81) (69) – – –
Amortization of prior service cost/(credit) 5 3 3 3 2 1 (13) (13) (11)
Amortization of net loss 136 164 106 30 29 15 18 21 26
324 340 274 76 70 34 130 126 133
Settlement/curtailment loss – 3 – – – – – – –
Special termination benefits 5 4 21 – – – – 1 2
Total $ 329 $ 347 $ 295 $ 76 $ 70 $ 34 $ 130 $ 127 $ 135
The estimated amounts to be amortized from accumulated other comprehensive loss into benefi t expense in 2008 for our
pension and retiree medical plans are as follows:
Pension Retiree Medical
U.S. International
Net loss $56 $20 $ 7
Prior service cost/(credit) 20 3 (12)
Total $76 $23 $ (5)
The following table provides the weighted-average assumptions used to determine projected benefi t liability and benefi t expense
for our pension and retiree medical plans:
Pension Retiree Medical
2007 2006 2005 2007 2006 2005 2007 2006 2005
U.S. International
Weighted-average assumptions
Liability discount rate 6.2 % 5.8% 5.7% 5.8% 5.2% 5.1% 6.1% 5.8% 5.7%
Expense discount rate 5.8 % 5.7% 6.1% 5.2% 5.1% 6.1% 5.8% 5.7% 6.1%
Expected return on plan assets 7. 8 % 7.8% 7.8% 7.3% 7.3% 8.0%
Rate of salary increases
4.7% 4.5% 4.4% 3.9% 3.9% 4.1%
The following table provides selected information about plans with liability for service to date and total benefi t liability in excess
of plan assets:
Pension Retiree Medical
2007 2006 2007 2006 2007 2006
U.S. International
Selected information for plans with liability
for service to date in excess of plan assets
Liability for service to date $(364) $(387) $(72) $(286)
Fair value of plan assets $– $1 $13 $237
Selected information for plans with
benefit liability in excess of plan assets
Benefit liability $(707) $(754) $(384) $(1,387) $(1,354) $(1,370)
Fair value of plan assets $– $1 $278 $1,200
Of the total projected pension benefi t liability at year-end 2007, $658 million relates to plans that we do not fund because the
funding of such plans does not receive favorable tax treatment.
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