Pepsi 2006 Annual Report Download - page 71

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69
Components of benefit expense are as follows:
Pension Retiree Medical
2006 2005 2004 2006 2005 2004 2006 2005 2004
U.S. International
Components of benefit expense
Service cost $ 245 $ 213 $ 193 $52 $32 $27 $46 $40 $38
Interest cost 319 296 271 68 55 47 72 78 72
Expected return on plan assets (391) (344) (325) (81) (69) (65) –––
Amortization of prior service cost/(credit) 336 211 (13) (11) (8)
Amortization of net loss 164 106 81 29 15 9 21 26 19
340 274 226 70 34 19 126 133 121
Settlement/curtailment loss 3–4 ––1 –––
Special termination benefits 421 19 ––1 124
Total $ 347 $ 295 $ 249 $70 $34 $21 $127 $135 $125
The estimated amounts to be amortized from accumulated other comprehensive loss into benefit expense in 2007 for our
pension and retiree medical plans are as follows:
Pension Retiree Medical
U.S. International
Net loss $136 $29 $ 18
Prior service cost/(credit) 5 3 (13)
Total $141 $32 $ 5
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
2006 2005 2004 2006 2005 2004 2006 2005 2004
U.S. International
Weighted average assumptions
Liability discount rate 5.8% 5.7% 6.1% 5.2% 5.1% 6.1% 5.8% 5.7% 6.1%
Expense discount rate 5.7% 6.1% 6.1% 5.1% 6.1% 6.1% 5.7% 6.1% 6.1%
Expected return on plan assets 7.8% 7.8% 7.8% 7.3% 8.0% 8.0% –––
Rate of salary increases 4.5% 4.4% 4.5% 3.9% 4.1% 3.9% –––
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
2006 2005 2006 2005 2006 2005
U.S. International
Selected information for plans with liability
for service to date in excess of plan assets
Liability for service to date $(387) $(374) $(286) $(65)
Fair value of plan assets $1 $8 $237 $33
Selected information for plans with
benefit liability in excess of plan assets
Benefit liability $(754) $(2,690) $(1,387) $(1,158) $(1,370) $(1,312)
Fair value of plan assets $1 $1,758 $1,200 $985 ––
Of the total projected pension benefit liability at year-end 2006, $701 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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