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YUM! BRANDS, INC.-2012 Form10-K 58
Form 10-K
PART II
ITEM 8Financial Statements andSupplementaryData
Information for pension plans with an accumulated benefi t obligation in excess of plan assets:
U.S. Pension Plans International Pension Plans
2012 2011 2012 2011
Projected benefi t obligation $ 1,290 $ 1,381 $ — $ —
Accumulated benefi t obligation 1,239 1,327 — —
Fair value of plan assets 945 998 — —
Information for pension plans with a projected benefi t obligation in excess of plan assets:
U.S. Pension Plans International Pension Plans
2012 2011 2012 2011
Projected benefi t obligation $ 1,290 $ 1,381 $ — $ 99
Accumulated benefi t obligation 1,239 1,327 — 87
Fair value of plan assets 945 998 — 87
Our funding policy with respect to the U.S. Plan is to contribute amounts
necessary to satisfy minimum pension funding requirements, including
requirements of the Pension Protection Act of 2006, plus such additional
amounts from time to time as are determined to be appropriate to improve
the U.S. Plan’s funded status.We currently do not plan to make any
contributions to the U.S. plan in 2013.
The funding rules for our pension plans outside of the U.S. vary from
country to country and depend on many factors including discount rates,
performance of plan assets, local laws and regulations.We do not plan
to make any signifi cant contributions to any pension plan outside of the
U.S. in 2013.
We do not anticipate any plan assets being returned to the Company
during 2013 for any plans.
Components of net periodic benefi t cost:
Net periodic benefi t
cost
U.S. Pension Plans International Pension Plans
2012 2011 2010 2012 2011 2010
Service cost $ 26 $ 24 $ 25 $ 2 $ 5 $ 6
Interest cost 66 64 62 8 10 9
Amortization of prior
service cost(a) 1 1 1 — — —
Expected return on
plan assets (71) (71) (70) (11) (12) (9)
Amortization of net loss 63 31 23 1 2 2
NET PERIODIC
BENEFIT COST $ 85 $ 49 $ 41 $ — $ 5 $ 8
Additional loss
recognized due to:
Settlements(b) $ 89$ —$ 3$ —$ —$ —
Special termination
benefi ts(c) $3 $5 $1 $— $— $—
(a) Prior service costs are amortized on a straight-line basis over the average remaining service period of employees expected to receive benefits.
(b) Settlement losses result from benefit payments exceeding the sum of the service cost and interest cost for each plan during the year. See Note4 for discussion of the settlement payments
and settlement loss related to the U.S. Plan’s deferred vested benefit project.
(c) Special termination benefits primarily related to the U.S. business transformation measures taken in 2012, 2011 and 2010.
Pension (gains) losses in Accumulated other comprehensive income (loss):
U.S. Pension Plans International Pension Plans
2012 2011 2012 2011
Beginning of year $ 543 $ 363 $ 30 $ 46
Net actuarial (gain) loss 117 219 (15) (5)
Curtailments (10) (7) — (10)
Amortization of net loss (63) (31) (1) (2)
Amortization of prior service cost (1) (1) — —
Prior service cost 5 — — —
PBO reduction in excess of settlement payment (74) — — —
Settlement charges (89) — — —
Exchange rate changes — — — 1
END OF YEAR $ 428 $ 543 $ 14 $ 30