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Analyzing and Interpreting Pension Disclosures-Expenses and Returns YUM! Brands, Inc., discloses the following pension footnote in its 10-K report: (in millions) Pension Benefits 2014 2013

Analyzing and Interpreting Pension Disclosures-Expenses and Returns

YUM! Brands, Inc., discloses the following pension footnote in its 10-K report:

(in millions)

Pension Benefits

2014

2013

Service Cost

$17

$21

Interest Cost

54

54

Amortization or prior service cost

1

2

Expected return on plan assets

(56)

(59)

Amortization of net loss

17

48

Net periodic benefit cost

$33

$66

  1. How much pension expense does yum report in its 2014 income statement?
  2. What affect does its expected return on plan assets have on its reported pension expense? Explain.
  3. Explain use of the word expected as it relates to results of pension plan investments.

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