Mondelez 2012 Annual Report Download - page 88

Table of Contents
We used the following weighted-average assumptions to determine our postretirement benefit obligations 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. 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 31, 2012:
Components of Net Postretirement Health Care Costs:
Net postretirement health care costs consisted of the following for the years ended December 31, 2012, 2011 and 2010:
As of December 31, 2012, we expected to amortize from accumulated other comprehensive earnings / (losses) into pre-tax net
postretirement health care costs during 2013:
85
U.S. Plans
Non
-
U.S. Plans
2012
2011
2012
2011
Discount rate
4.20%
4.70%
4.08%
4.29%
Health care cost trend rate
assumed for next year
7.50%
7.00%
7.68%
7.42%
Ultimate trend rate
5.00%
5.00%
5.58%
5.53%
Year that the rate reaches
the ultimate trend rate
2018
2016
2018
2016
One
-
Percentage
-
Point
Increase
Decrease
Effect on total of service and interest cost
13.8%
(11.2%
)
Effect on postretirement benefit obligation
16.8%
(13.4%
)
2012
2011
2010
(in millions)
Service cost
$
35
$
36
$
39
Interest cost
121
165
172
Amortization:
Net loss from experience differences
65
60
55
Prior service credit
(31
)
(32
)
(32
)
Other
29
–
–
Net postretirement health care costs
related to discontinued operations
(135
)
(163
)
(168
)
Net postretirement health care costs
included within continuing operations
$
84
$
66
$
66
(1)
In 2012, we recorded a $23 million unfunded U.S. postretirement plan obligation related to long
-
term disability benefits.
• an estimated $12 million of net loss from experience differences; and
• an estimated $11 million of prior service credit.
(1)