Pepsi 2012 Annual Report Download - page 92

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The following table provides the weighted-average assumptions used to determine projected benefit liability and benefit
expense for our pension and retiree medical plans:
Pension Retiree Medical
U.S. International
2012 2011 2010 2012 2011 2010 2012 2011 2010
Weighted-average assumptions
Liability discount rate 4.2% 4.6% 5.7% 4.4% 4.8% 5.5% 3.7% 4.4% 5.2%
Expense discount rate 4.6% 5.7% 6.0% 4.8% 5.5% 6.0% 4.4% 5.2% 5.8%
Expected return on plan assets 7.8% 7.8% 7.8% 6.7% 6.7% 7.1% 7.8% 7.8% 7.8%
Liability rate of salary increases 3.7% 3.7% 4.1% 3.9% 4.1% 4.1%
Expense rate of salary increases 3.7% 4.1% 4.4% 4.1% 4.1% 4.1%
The following table provides selected information about plans with liability for service to date and total benefit liability in
excess of plan assets:
Pension Retiree Medical
U.S. International
2012 2011 2012 2011 2012 2011
Selected information for plans with liability for service
to date in excess of plan assets
Liability for service to date $ (11,643) $ (11,205) $ (711) $ (471)
Fair value of plan assets $ 10,817 $ 9,072 $ 552 $ 344
Selected information for plans with projected benefit
liability in excess of plan assets
Benefit liability $ (12,886) $ (11,901) $ (2,542) $ (2,191) $ (1,511) $ (1,563)
Fair value of plan assets $ 10,817 $ 9,072 $ 2,166 $ 1,786 $ 365 $ 190
Of the total projected pension benefit liability at year-end 2012, $761million relates to plans that we do not fund because the
funding of such plans does not receive favorable tax treatment.
Future Benet Payments and Funding
Our estimated future benefit payments are as follows:
2013 2014 2015 2016 2017 2018–22
Pension $560 $570 $600 $650 $705 $ 4,465
Retiree medical(a) $120 $125 $125 $130 $130 $ 655
(a) Expected future benefit payments for our retiree medical plans do not reflect any estimated subsidies expected to be received under the 2003 Medicare Act. Subsidies
are expected to be approximately $13million for each of the years from 2013 through 2017 and approximately $90million in total for 2018 through 2022.
These future benefits to beneficiaries include payments
from both funded and unfunded plans.
In 2013, we expect to make pension and retiree medi-
cal contributions of approximately $240million, with up to
approximately $17million expected to be discretionary. Our
contributions for retiree medical are estimated to be approxi-
mately $70million in 2013.
2012 PEPSICO ANNUAL REPORT90
Notes to Consolidated Financial Statements