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YUM! BRANDS, INC.-2013 Form10-K 59
Form 10-K
PART II
ITEM 8Financial Statements andSupplementaryData
Information for pension plans with an accumulated benefit obligation in excess of plan assets:
U.S. Pension Plans International Pension Plans
2013 2012 2013 2012
Projected benefit obligation $ 102 $ 1,290 $ — $ —
Accumulated benefit obligation 94 1,239 — —
Fair value of plan assets — 945 — —
Information for pension plans with a projected benefit obligation in excess of plan assets:
U.S. Pension Plans International Pension Plans
2013 2012 2013 2012
Projected benefit obligation $ 102 $ 1,290 $ — $ —
Accumulated benefit obligation 94 1,239 — —
Fair value of plan assets — 945 — —
Components of net periodic benefit cost:
Net periodic benefit
cost
U.S. Pension Plans International Pension Plans
2013 2012 2011 2013 2012 2011
Service cost $ 21 $ 26 $ 24 $ 1 $ 2 $ 5
Interest cost 54 66 64 8 8 10
Amortization of prior
service cost(a) 2 1 1 — — —
Expected return on
plan assets (59) (71) (71) (12) (11) (12)
Amortization of net loss 48 63 31 1 1 2
NET PERIODIC
BENEFIT COST $ 66 $ 85 $ 49 $ (2
)
$—$ 5
Additional (gain) loss
recognized due to:
Settlements(b) $ 30 $ 89 $ — $ — $ — $ —
Special termination
benefits(c) $ 5 $ 3 $ 5 $ — $ — $ —
Curtailment(d) $ — $ — $ — $ (5) $ — $ —
(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. $10 million and $84 million for 2013 and 2012,
respectively of these settlement losses, were not allocated for performance reporting purposes. See Note 4 for discussion of the settlement payments and settlement losses.
(c) Special termination benefits primarily related to the U.S. business transformation measures taken in 2013, 2012 and 2011.
(d) Gain is a result of terminating future service benefits for all participants in one of our UK plans in 2013. The gain was recorded in YRI’s G&A expenses, as amounts in Accumulated other
comprehensive income (loss) related to this plan were in a net gain position.
Pension (gains) losses in Accumulated other comprehensive income (loss):
U.S. Pension Plans International Pension Plans
2013 2012 2013 2012
Beginning of year $ 428 $ 543 $ 14 $ 30
Net actuarial (gain) loss (221) 43 10 (15)
Curtailments (3) (10) — —
Amortization of net loss (48) (63) (1) (1)
Amortization of prior service cost (2) (1) — —
Prior service cost — 5 — —
Settlement charges (30) (89) — —
Exchange rate changes — — — —
END OF YEAR $ 124 $ 428 $ 23 $ 14
Accumulated pre-tax losses recognized within Accumulated Other Comprehensive Income:
U.S. Pension Plans International Pension Plans
2013 2012 2013 2012
Actuarial net loss $ 119 $ 421 $ 23 $ 14
Prior service cost 5 7 — —
$ 124 $ 428 $ 23 $ 14