Kraft 2001 Annual Report Download - page 58

Kraft Foods Inc.
52
The changes in benefit obligations and plan assets, as well as the
funded status of the Company’s pension plans at December 31,
2001 and 2000, were as follows:
(in millions) U.S. Plans Non-U.S. Plans
2001 2000 2001 2000
Benefit obligation at
January 1 $4,327 $2,766 $1,915 $1,740
Service cost 107 69 45 37
Interest cost 339 213 112 98
Benefits paid (403) (258) (108) (94)
Acquisitions 71 1,463 (22) 236
Settlements 14 11
Actuarial losses 500 51 22 91
Currency 18 (205)
Other 912 39 12
Benefit obligation at
December 31 4,964 4,327 2,021 1,915
Fair value of plan assets at
January 1 7,039 6,282 1,589 1,314
Actual return on plan assets (386) (215) (227) 103
Contributions 37 33 63 32
Benefits paid (394) (278) (76) (64)
Acquisitions (45) 1,226 (41) 265
Currency 18 (121)
Actuarial gains (losses) 108 (9) 360
Fair value of plan assets at
December 31 6,359 7,039 1,329 1,589
Excess (deficit) of plan assets
versus benefit obligations at
December 31 1,395 2,712 (692) (326)
Unrecognized actuarial
losses (gains) 756 (691) 226 (42)
Unrecognized prior
service cost 56 54 49 27
Unrecognized net transition
obligation (1) 7 7
Net prepaid pension
asset (liability) $2,206 $2,075 $ (410) $ (334)
The combined U.S. and non-U.S. pension plans resulted in a net
prepaid asset of $1,796 million and $1,741 million at December 31,
2001 and 2000, respectively. These amounts were recognized in
the Company’s consolidated balance sheets at December 31, 2001
and 2000 as prepaid pension assets of $2,675 million and $2,623
million, respectively, for those plans in which plan assets exceeded
their accumulated benefit obligations and as other liabilities of
$879 million and $882 million at December 31, 2001 and 2000,
respectively, for plans in which the accumulated benefit obligations
exceeded their plan assets.
At December 31, 2001 and 2000, certain of the Company’s U.S.
plans were unfunded, with projected benefit and accumulated
benefit obligations of $213 million and $164 million, respectively, in
2001 and $156 million and $97 million, respectively, in 2000. For
certain non-U.S. plans, which have accumulated benefit obligations
in excess of plan assets, the projected benefit obligation,
accumulated benefit obligation and fair value of plan assets were
$1,165 million, $1,073 million and $416 million, respectively, as of
December 31, 2001 and $639 million, $596 million and $49 million,
respectively, as of December 31, 2000.
The following weighted-average assumptions were used to
determine the Company’s obligations under the plans:
U.S. Plans Non-U.S. Plans
2001 2000 2001 2000
Discount rate 7.00% 7.75% 5.80% 5.88%
Expected rate of return on
plan assets 9.00 9.00 8.49 8.51
Rate of compensation increase 4.50 4.50 3.36 3.55
The Company and certain of its subsidiaries sponsor employee
savings plans, to which the Company contributes. These plans
cover certain salaried, non-union and union employees. The
Company’s contributions and costs are determined by the
matching of employee contributions, as defined by the plans.
Amounts charged to expense for defined contribution plans totaled
$63 million, $43 million and $41 million in 2001, 2000 and 1999,
respectively.
Postretirement Benefit Plans: Net postretirement health care
costs consisted of the following for the years ended December 31,
2001, 2000 and 1999:
(in millions)
2001 2000 1999
Service cost $34 $23 $27
Interest cost 168 109 101
Amortization:
Unrecognized net loss from
experience differences 523
Unrecognized prior service cost (8) (8) (7)
Other expense 21
Net postretirement health
care costs $199 $126 $145
During 1999, the Company instituted early retirement and workforce
reduction programs that resulted in curtailment losses of $21 million.