Kraft 2014 Annual Report Download - page 62

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Components of Net Postretirement Health Care Cost / (Benefit):
Net postretirement health care cost / (benefit) consisted of the following for the years ended December 27, 2014, December 28,
2013, and December 29, 2012:
As a result of the 2014 annual remeasurement of our postretirement health care plans, we recorded an expense from market-based
impacts of $556 million as of December 27, 2014, primarily driven by a 60 basis point weighted average decrease in the discount
rate and a $328 million impact from the adoption of the new Society of Actuaries RP-2014 mortality tables. We recorded $424
million of the expense from market-based impacts in cost of sales and $132 million in selling, general and administrative expenses
in accordance with our policy for allocating employee costs. Market-based impacts are included in actuarial losses / (gains) in the
table above.
As a result of the 2013 annual remeasurement of our postretirement health care plans, we recorded a benefit from market-based
impacts of $292 million as of December 28, 2013, primarily driven by an 80 basis point weighted average increase in the discount
rate. We recorded expense from market-based impacts of $250 million as of December 29, 2012.
In addition, as a result of the 2013 annual remeasurement, we recorded a benefit from market-based impacts of $15 million into
inventory as of December 28, 2013 consistent with our capitalization policy. During 2014, the entire benefit previously capitalized
was recognized in cost of sales. At December 27, 2014, we capitalized an aggregate expense of $36 million from market-based
impacts into inventory.
The special termination benefits were associated with our voluntary early retirement program in 2013.
As of December 27, 2014, we expected to amortize an estimated $33 million of prior service credits from accumulated other
comprehensive earnings / (losses) into net postretirement health care costs during 2015.
We used the following weighted average assumptions to determine our net postretirement health care cost for the years ended
December 27, 2014, December 28, 2013, and December 29, 2012:
Future Benefit Payments:
Our estimated future benefit payments for our postretirement health care plans at December 27, 2014 were:
57
For the Years Ended
December 27,
2014 December 28,
2013 December 29,
2012
(in millions)
Service cost $ 26 $35 $ 8
Interest cost 148 143 32
Actuarial losses / (gains) 370 (376 ) 188
Amortization of prior service credits (28 ) (26) (7 )
Special termination benefits — 5 —
Net postretirement health care cost / (benefit) $ 516
$ (219 ) $221
December 27,
2014 December 28,
2013 December 29,
2012
Discount rate 4.69 % 3.89 % 3.61 %
Health care cost trend rate 7.28 % 7.53 % 7.06 %
(in millions)
2015 $196
2016 196
2017 198
2018 199
2019 201
2020-2024 1,019