Kraft 2014 Annual Report Download - page 64

most of the retired North American MondelƝz International employees. We assumed net benefit plan liabilities of $5.5 billion from
MondelƝz International, which was in addition to the $0.1 billion of net benefit plan liabilities we had previously reported in our
historical financial statements, for a total liability of $5.6 billion on October 1, 2012.
Total MondelƝz International benefit plan costs allocated to us were $491 million in the first nine months of 2012 prior to the Spin-
Off. The expense allocations for these benefits were determined based on a review of personnel by business unit and based on
allocations of corporate or other shared functional personnel. These allocated costs are reflected in our cost of sales and selling,
general and administrative expenses. These costs were funded through intercompany transactions with MondelƝz International and
were reflected within the parent company investment equity balance. Our allocated expenses in connection with the pension plans
were $283 million in 2012. Our allocated expenses in connection with the postretirement plans were $142 million in 2012.
Note 10. Financial Instruments
Fair Value of Derivative Instruments :
The fair values and the levels within the fair value hierarchy of derivative instruments recorded on the consolidated balance sheets
at December 27, 2014 and December 28, 2013 were:
The fair values of our asset derivatives are recorded within other current assets and other assets. The fair values of our liability
derivatives are recorded within other current liabilities.
Level 1 financial assets and liabilities consist of commodity futures and options contracts and are valued using quoted prices in
active markets for identical assets and liabilities.
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December 27, 2014
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total Fair Value
Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
Derivatives designated as
hedging instruments:
Commodity contracts $ 2 $5 $ — $ — $ — $ — $ 2 $5
Foreign exchange contracts — — 80 — — — 80 —
Derivatives not designated
as hedging instruments:
Commodity contracts 46 99 — 4 — — 46 103
Total fair value $ 48 $104 $80 $ 4 $ — $ — $128 $108
December 28, 2013
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant
Other Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Total Fair Value
Assets Liabilities Assets Liabilities Assets Liabilities Assets Liabilities
Derivatives designated as
hedging instruments:
Commodity contracts $ 5 $4 $ — $ — $ — $ — $ 5 $4
Foreign exchange contracts — — 48 — — — 48 —
Derivatives not designated
as hedging instruments:
Commodity contracts 39 20 1 1 — — 40 21
Total fair value $ 44 $24 $49 $ 1 $ — $ — $93 $25