Kraft 2007 Annual Report Download - page 86

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Postretirement Benefit Plans
Net postretirement health care costs consisted of the following for the years ended December 31, 2007, 2006 and 2005:
2007 2006 2005
(in millions)
Service cost $ 46 $ 50 $ 48
Interest cost 177 174 170
Amortization:
Net loss from experience
differences 58 78 61
Prior service cost (26) (28) (26)
Other expense 5 (3) -
Net postretirement health care costs $ 260 $ 271 $ 253
The estimated net loss for the postretirement benefit plans that is expected to be amortized from accumulated other
comprehensive losses into net postretirement health care costs during 2008 is $48 million. The estimated prior service cost for
the postretirement benefit plans that is expected to be amortized from accumulated other comprehensive losses into net
postretirement health care costs during 2008 is a net credit of $23 million.
The following weighted-average assumptions were used to determine our net postretirement cost for the years ended
December 31:
U.S. Plans Canadian Plans
2007 2006 2005 2007 2006 2005
Discount rate 5.90% 5.60% 5.75% 5.00% 5.00% 5.75%
Health care cost trend rate 8.00% 8.00% 8.00% 8.50% 9.00% 9.50%
In 2008, the discount rate used to determine our net postretirement cost will be 6.10% for our U.S. plans and 5.80% for our
Canadian plans, and the health care cost trend rate will be 7.50% for our U.S. plans and 9.00% for our Canadian plans.
Our postretirement health care plans are not funded. The changes in the accumulated benefit obligation and net amount accrued
at December 31, 2007 and 2006 were:
2007 2006
(in millions)
Accumulated postretirement benefit
obligation at January 1 $ 3,230 $ 3,263
Service cost 46 50
Interest cost 177 174
Benefits paid (203) (203)
Plan amendments (45) (16)
Currency 21 3
Assumption changes 14 13
Actuarial gains (179) (50)
Curtailments / other 2 (4)
Accrued postretirement health care costs
at December 31 $ 3,063 $ 3,230
The current portion of our accrued postretirement health care costs of $217 million at December 31, 2007 and $216 million at
December 31, 2006, is included in other accrued liabilities on the consolidated balance sheets.
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