Mondelez 2012 Annual Report Download - page 82

Table of Contents
We used the following weighted-average assumptions to determine our benefit obligations under the pension plans at
December 31:
Year-end discount rates for our U.S. and Canadian 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. Year-end discount rates for our non-
U.S. plans (other than Canadian plans) were developed from local bond indices that match local benefit obligations as closely as
possible. Changes in our discount rates were primarily the result of changes in bond yields year-over-year. We determine our
expected rate of return on plan assets from the plan assets’ historical long-term investment performance, current asset allocation
and estimates of future long-term returns by asset class.
Components of Net Pension Cost:
Net pension cost consisted of the following for the years ended December 31, 2012, 2011, and 2010:
The following costs are included within other expenses above. Employees who elected lump-sum payments in connection with our
2012-2014 Restructuring Program and cost saving initiatives and retired employees who elected lump-sum payments resulted in
settlement losses for our U.S. plans of $113 million in 2012, $105 million in 2011 and $118 million in 2010. Non-U.S. plant closures
and early retirement benefits resulted in curtailment and settlement losses of $9 million in 2012, $8 million in 2011 and $11 million
in 2010. In addition, in 2012 we incurred $13 million in special termination benefit costs in the non-U.S. plans and in 2011 we
incurred $6 million in special termination benefit costs in the non-U.S. plans related to the Cadbury integration.
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U.S. Plans
Non
-
U.S. Plans
2012
2011
2012
2011
Discount rate
4.20%
4.85%
3.81%
4.62%
Expected rate of return on plan assets
7.75%
8.00%
6.08%
6.47%
Rate of compensation increase
4.00%
4.00%
3.47%
3.58%
U.S. Plans
Non
-
U.S. Plans
2012
2011
2010
2012
2011
2010
(in millions)
Service cost
$
142
$
146
$
145
$
172
$
170
$
162
Interest cost
275
364
368
425
458
419
Expected return on plan
assets
(358
)
(496
)
(490
)
(494
)
(536
)
(467
)
Amortization:
Net loss from
experience
differences
253
225
170
121
101
77
Prior service cost
6
7
6
3
2
7
Other expenses
113
105
123
22
14
11
Net pension costs related
to
discontinued operations
(263
)
(233
)
(230
)
(29
)
(29
)
(21
)
Net pension cost included
in
continuing operations
$
168
$
118
$
92
$
220
$
180
$
188