Postretirement Benefits

12 Months Ended

Dec. 31, 2011

Postretirement Benefits [Abstract]

Postretirement Benefits

15. Postretirement Benefits

The Company sponsors a postretirement medical and life insurance plan covering substantially all Burger King administrative and restaurant management personnel who retire or terminate after qualifying for such benefits.

The following was the plan status and accumulated postretirement benefit obligation (APBO) at December 31, 2011 and 2010:

	2011			2010
Change in benefit obligation:
Benefit obligation at beginning of year	$	1,845		$	1,914
Service cost		7			23
Interest cost		87			103
Plan participants' contributions		67			49
Actuarial loss (gain)		350			(39	)
Benefits paid		(318	)		(219	)
Medicare part D prescription drug subsidy		17			14
Benefit obligation at end of year	$	2,055		$	1,845
Change in plan assets:
Fair value of plan assets at beginning of year	$	—		$	—
Employer contributions		234			156
Plan participants' contributions		67			49
Benefits paid		(318	)		(219	)
Medicare part D prescription drug subsidy		17			14
Fair value of plan assets at end of year		—			—
Funded status	$	(2,055	)	$	(1,845	)
Weighted average assumptions:
Discount rate used to determine benefit obligations		4.40	%		5.54	%
Discount rate used to determine net periodic benefit cost		5.54	%		6.00	%

The discount rate is determined based on high-quality fixed income investments that match the duration of expected retiree medical and life insurance benefits. The Company has typically used the corporate AA/Aa bond rate for this assumption.

Components of net periodic postretirement benefit income recognized in the consolidated statements of operations were:

	Year ended December 31,
	2011			2010			2009
Service cost	$	7		$	23		$	28
Interest cost		87			103			114
Amortization of net gains and losses		84			95			94
Amortization of prior service credit		(359	)		(360	)		(359	)
Net periodic postretirement benefit income	$	(181	)	$	(139	)	$	(123	)

Amounts recognized in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit income, consisted of:

	2011			2010
Prior service cost	$	3,753		$	4,112
Net gain		(1,864	)		(1,598	)
Deferred income taxes		(736	)		(979	)
Accumulated other comprehensive income	$	1,153		$	1,535

The estimated net gain and prior service credit for the postretirement benefit plan that will be amortized from accumulated other comprehensive income into net periodic benefit income over the next fiscal year are $114 and $360, respectively.

The following table reflects the changes in accumulated other comprehensive income for the years ended December 31, 2011 and 2010:

	2011			2010
Net loss (gain)	$	350		$	(39	)
Amortization of net loss		(84	)		(95	)
Amortization of prior service credit		359			360
Deferred income taxes		(243	)		(98	)
Total recognized in accumulated other comprehensive income	$	382		$	128

Assumed health care cost trend rates at December 31 were as follows:

	2011			2010			2009
Medical benefits cost trend rate assumed for the following year		8.00	%		9.00	%		9.00	%
Prescription drug benefit cost trend rate assumed for the following year		7.50	%		8.00	%		9.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)		5.00	%		5.00	%		5.00	%
Year that the rate reaches the ultimate trend rate		2017			2017			2016

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in the health care cost trend rates would have the following effects:

	1% Increase		1% Decrease
Effect on total of service and interest cost components	$	8	$	(7	)
Effect on postretirement benefit obligation		168		(146	)

During 2012, the Company expects to contribute approximately $127 to its postretirement benefit plan. The benefits, net of Medicare Part D subsidy receipts, expected to be paid in each year from 2012 through 2016 are $127, $139, $138, $139 and $131 respectively, and for the years 2017-2021 the aggregate amount is $915.