Analyzing and Interpreting Pension Disclosures Johnson & Johnson provide s the following footnote…
Analyzing and Interpreting Pension Disclosures
Johnson & Johnson provide s the following footnote disclosures in its 10-K report relating to its defined benefit pension plans and its other post-retirement benefits.
a. How much pension expense does Johnson & Johnson report in its 2012 income statement?
b. The company reports a $1,236 million expected return on pension plan assets as an offset to 2012 pension expense. Approximately, how is this amount computed? What is the actual gain or loss realized on its 20 12 pension plan assets? What is the purpose of using this expected return instead of the actual gain or loss?
c. What factors affected the company's pension liability during 2012? What factors affected the pension plan assets during 2012?
d. What does the term funded status mean? What is the funded status of the 20 12 pension plans and postretirement benefit plans?
e. The company decreased its discount rate from 5.13% to 4.25% in 2012. What effect(s) does this decrease have on its balance sheet and its income statement?
f How did Johnson & Johnson's pension plan affect the company's cash flow in 20 12?