Kraft 2012 Annual Report Download - page 71

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Postretirement Benefit Plans
Obligations:
Our postretirement health care plans are not funded. The changes in and the amount of the accrued benefit obligation at
December 29, 2012 and December 31, 2011 were:
2012 2011
(in millions)
Accrued benefit obligation at beginning of year $-$-
Service cost 8-
Interest cost 32 -
Benefits paid (49) -
Plan amendments --
Currency (2) -
Actuarial losses 187 -
Transfer from Mondele¯ z International 3,562 -
Accrued benefit obligation at end of year $ 3,738 $ -
The current portion of our accrued postretirement benefit obligation of $236 million at December 29, 2012 was included in
accrued postretirement health care costs.
We used the following weighted-average assumptions to determine our postretirement benefit obligations at December 29,
2012 and December 31, 2011:
2012 2011
Discount rate 3.89% N/A
Health care cost trend rate assumed for next year 7.53% N/A
Ultimate trend rate 5.03% N/A
Year that the rate reaches the ultimate trend rate 2023 N/A
Year-end discount rates for our U.S. and non-U.S. plans were developed from a model portfolio of high quality,
fixed-income debt instruments with durations that match the expected future cash flows of the benefit obligations. Our
expected health care cost trend rate is based on historical costs.
Assumed health care cost trend rates have a significant impact on the amounts reported for the health care plans. A one-
percentage-point change in assumed health care cost trend rates would have the following effects as of December 29,
2012:
One-Percentage-Point
Increase Decrease
(in millions)
Effect on annual service and interest cost $ 6 $ (5)
Effect on postretirement benefit obligation 453 (374)
Components of Net Postretirement Health Care Costs:
Net postretirement health care costs consisted of the following for the years ended December 29, 2012, December 31,
2011, and December 31, 2010:
2012 2011 2010
(in millions)
Service cost $8$ -$-
Interest cost 32 - -
Amortization of prior service credit (7) - -
Market-based changes 250 - -
Actuarial (gains) (62) - -
Net postretirement health care costs $ 221 $ - $ -
69