Kraft 2008 Annual Report Download - page 70

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SFAS No. 158 also requires us to measure plan assets and benefit obligations as of the balance sheet date beginning in 2008. We currently measure our non-U.S.
pension plans (other than Canadian pension plans) at September 30 of each year. We expect to adopt the measurement date provision of SFAS No. 158 and
measure these plans as of our operating subsidiaries year-end close date, beginning in 2008. We do not expect the adoption of this statement to have a material
impact on our financial statements.
We sponsor noncontributory defined benefit pension plans covering most U.S. employees. As appropriate, we provide pension coverage for employees of our
non-U.S. subsidiaries through separate plans. Local statutory requirements govern many of these plans. In addition, our U.S. and Canadian subsidiaries provide
health care and other benefits to most retired employees. Local government plans generally cover health care benefits for retirees outside the U.S. and Canada.
The plan assets and benefit obligations of our U.S. and Canadian pension plans are measured at December 31 of each year and all other non-U.S. pension plans
are currently measured at September 30 of each year. The benefit obligations of our postretirement plans are measured at December 31 of each year.
Pension Plans
Obligations and Funded Status:
The projected benefit obligations, plan assets and funded status of our pension plans at December 31, 2007 and 2006 were:
U.S. Plans Non-U.S. Plans
2007 2006 2007 2006
(in millions)
Benefit obligation at January 1 $ 6,286 $ 6,305 $ 4,079 $ 3,762
Service cost 159 170 101 95
Interest cost 365 354 194 169
Benefits paid (585) (469) (219) (221)
Settlements 89 45 (3) (26)
Actuarial gains (376) (132) (323) (40)
Currency - - 423 256
Other 14 13 23 84
Benefit obligation at December 31 5,952 6,286 4,275 4,079
Fair value of plan assets at January 1 7,027 6,326 3,466 2,764
Actual return on plan assets 545 1,002 166 288
Contributions 19 143 269 457
Benefits paid (585) (469) (219) (221)
Currency - - 357 185
Actuarial gains / (losses) - 25 2 (7)
Fair value of plan assets at December 31 7,006 7,027 4,041 3,466
Net pension asset / (liability) recognized
at December 31 $ 1,054 $ 741 $ (234) $ (613)
The combined U.S. and non-U.S. pension plans resulted in a net prepaid pension asset of $820 million at December 31, 2007 and $128 million at December 31,
2006. We recognized these amounts in our consolidated balance sheets at December 31, 2007 and 2006 as follows:
2007 2006
(in millions)
Prepaid pension assets $ 1,648 $ 1,168
Other accrued liabilities (18) (18)
Accrued pension costs (810) (1,022)
$ 820 $ 128
The accumulated benefit obligation, which represents benefits earned to date, was $5,349 million at December 31, 2007 and $5,584 million at December 31,
2006 for the U.S. pension plans. The accumulated benefit obligation for the non-U.S. pension plans was $3,979 million at December 31, 2007 and $3,784 million
at December 31, 2006.
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Source: KRAFT FOODS INC, 10-K, February 25, 2008 Powered by Morningstar® Document Research℠