Question
Analyzing and Interpreting Pension Disclosures Assume E.I. Du Pont De Nemours and Co.'s 10-K report has the following disclosures related to its retirement plans ($
Analyzing and Interpreting Pension Disclosures
Assume E.I. Du Pont De Nemours and Co.'s 10-K report has the following disclosures related to its retirement plans ($ millions).
Pension Benefits
($ millions) 2010 2009
Change in benefit obligation
Benefit obligation at beginning of year $ 22,849 $ 22,935
Service cost 383 388
Interest cost 1,228 1,192
Plan participants' contributions 13 9
Acturarial loss (gain) (728) (244)
Benefits paid (1,544) (1,506)
Amendments -- (1)
Net effects of acquisitions/divestitures 5 76
Benefit obligation at end of year $ 22,206 $ 22,849
Change in plan assets
Fair value of plan assets at beginning of year $ 21,649 $ 19,532
Actual gain on plan assets 1,909 3,306
Employer contributions 277 280
Plan participants' contributions 13 9
Benefits paid (1,544) (1,506)
Net effects of acquisitions/divestitures -- 28
Fair value of plan assets at end of year $ 22,304 $ 21,649
Funded status
U.S. plans with plan assets $ 1,747 $ 892
Non-U.S. plans with plan assets (90) (317)
All other plans (1,559) (1,515)
Total $ 98 $ (940)
Pension Benefits
(in millions)
Components of net periodic benefit cost (credit) and amounts recognized in other comprehensive income 2010 2009 2008
Net periodic benefit
Service cost $ 383 $ 388 $ 349
Interest cost 1,228 1,192 1,160
Expected return on plan assets (1,804) (1,648) (1,416)
Amortization of loss 117 227 303
Amortization of prior service cost 18 29 37
Curtailment/settlement (gain) loss -- 3 (1)
Net periodic benefit cost $ (58) $ 191 $ 432
Changes in plan assets and benefit obligations recognized in other comprehensive income
Net gain (893) -- --
Amortization of loss (117) -- --
Amortization of prior service cost (18) -- --
Total recognized in other comprehensive income $ (1,028) $ -- $ --
Total recognized in net periodic benefit cost and other comprehensive income $ (1,086) $ 191 $ 432
Weighted-avg. assumptions used for net periodic benefit cost for years ended Dec. 31
2010
2009
Dicsount Rate 5.56% 5.43%
Expected return on plan assets 8.33% 8.33%
Rate of compensation increase 4.32% 4.31%
The following benefit payments, which reflect future service, as appropriate, are expected to be paid:
($ millions) Pension Benefits
2008 $ 1,525
2009 1,507
2010 1,493
2011 1,500
2012 1,500
Years 2013-2017 7,690
HINT: Do not use negative signs with your answers.
(a) How much pension expense (revenue) does DuPont report in its 2010 income statement?
DuPont reports pension Answer of $Answer
0
million.
(b) DuPont reports a $1,804 million expected return on pension plan assets as an offset to 2010 pension expense. Approximately, how is this amount computed (estimate from the numbers reported)? (Round your dollar answers to the nearest whole number.)
$Answer
0
million x Answer
0
% = $Answer
0
million
What is DuPont's actual gain or loss realized on its 2010 pension plan assets?
Answer
0
($ million) Answer
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