Mondelez 2013 Annual Report Download - page 54

Table of Contents
The 2013 net expense for employee benefit plans of $519 million decreased by $88 million and was primarily related to certain
benefit plan obligations transferred to Kraft Foods Group in the Spin-Off and other 2012 one-
time costs, partially offset by increased
benefit plan expenses in 2013 due to lower discount rates. The 2012 net expense for employee benefit plans of $607 million
increased by $89 million and was primarily related to higher amortization of the net loss from experience differences related to the
U.S. and non-U.S. pension plans.
We expect our 2014 net expense for employee benefit plans to decrease by approximately $95 million, primarily due to higher
discount rates and favorable asset performance.
In 2013, other comprehensive losses included $713 million of net actuarial pre-tax gains primarily related to the increase in the
discount rate utilized to determine our pension plan benefit obligations at December 31, 2013 (90 basis point increase for U.S.
plans and 19 basis point increase for non-
U.S. plans) and favorable differences between our expected and actual return on pension
plan assets, as well as the increase in the discount rate utilized to determine our postretirement benefit obligations at December 31,
2013 (90 basis point increase for U.S. plans and 73 basis point increase for our non-U.S. plans). In 2012, other comprehensive
losses included $2,266 million of net actuarial pre-tax losses primarily related to the decrease in the discount rate utilized to
determine our pension plan benefit obligations at December 31, 2012 (65 basis point decrease for U.S. plans and 81 basis point
decrease for non-U.S. plans) and the decrease in the discount rate utilized to determine our postretirement benefit obligations at
December 31, 2012 (50 basis point decrease for U.S. plans and 21 basis point decrease for non-U.S. plans). In 2011, other
comprehensive losses included $2,333 million of net actuarial pre-tax losses primarily related to the decrease in the discount rate
utilized to determine our pension plan benefit obligations at December 31, 2011 (68 basis point decrease for U.S. plans and 49
basis point decrease for non-U.S. plans), unfavorable differences between our expected and actual return on pension plan assets
and the decrease in the discount rate utilized to determine our postretirement benefit obligations at December 31, 2011 (60 basis
point decrease for U.S. plans and 73 basis point decrease for non-U.S. plans).
In 2013, we contributed $178 million to our U.S. pension plans and $330 million to our non-U.S. pension plans. In addition,
employees contributed $20 million to our non-U.S. plans. Of our 2013 pension contributions, $163 million was voluntary. We make
contributions to our U.S. and non-U.S. pension plans primarily to the extent that they are tax deductible and do not generate an
excise tax liability.
In 2014, we estimate that our pension contributions will be $10 million to our U.S. plans and $309 million to our non-U.S. plans
based on current tax laws. Of the total 2014 pension contributions, none is expected to be voluntary. Our actual contributions may
be different due to many factors, including changes in tax and other benefit laws, significant differences between expected and
actual pension asset performance or interest rates, or other factors.
For salaried and non-union hourly employees hired in the U.S. after January 1, 2009, we discontinued benefits under our U.S.
pension plans, and we replaced them with an enhanced company contribution to our employee savings plan. Additionally, we will
be freezing the U.S. pension plans for current salaried and non-union hourly employees effective December 31, 2019.
For our postretirement plans, our 2014 health care cost trend rate assumption decreased to 7.00% from 7.50% for our U.S.
postretirement plans and decreased to 4.76% from 6.47% for our non-U.S. postretirement plans. We established these rates based
upon our most recent experience as well as our expectation for health care trend rates going forward. We anticipate that our health
care cost trend rate assumption will be 5.0% for U.S. plans by 2018 and 5.54% for non-U.S. plans by 2019. Assumed health care
cost trend rates have a significant effect 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 on our costs and obligation as of December 31, 2013:
47
One
-
Percentage
-
Point
Increase
Decrease
(in millions)
Effect on postretirement benefit obligation
$
66
$
(53
)
Effect on annual service and interest cost
$
6
$
(5
)