John Deere 2013 Annual Report Download - page 37

The amounts recognized at October 31 in millions of
dollars consist of the following:
Health Care
and
Pensions Life Insurance
___________ ____________
2013 2012 2013 2012
Amounts recognized in
balance sheet
Noncurrent asset ............................. $ 551 $ 20
Current liability ................................ (58) (53) $ (21) $ (23)
Noncurrent liability ............................ (453) (1,784 ) (4,748 ) ( 5,713)
Total ............................................... $ 40 $ (1,817) $ (4,769) $ (5,736)
Amounts recognized in
accumulated other compre-
hensive income – pretax
Net actuarial loss ............................. $ 3,512 $ 5,260 $ 960 $ 2,266
Prior service cost (credit) .................. 67 105 (41) (47)
Total ............................................... $ 3,579 $ 5,365 $ 919 $ 2,219
The total accumulated benefit obligations for all pension
plans at October 31, 2013 and 2012 was $10,352 million and
$11,181 million, respectively.
The accumulated benefit obligations and fair value of plan
assets for pension plans with accumulated benefit obligations
in excess of plan assets were $680 million and $267 million,
respectively, at October 31, 2013 and $10,987 million and
$9,787 million, respectively, at October 31, 2012. The pro-
jected benefit obligations and fair value of plan assets for
pension plans with projected benefit obligations in excess of
plan assets were $1,340 million and $829 million, respectively,
at October 31, 2013 and $11,627 million and $9,790 million,
respectively, at October 31, 2012.
The amounts in accumulated other comprehensive income
that are expected to be amortized as net expense (income) during
fiscal 2014 in millions of dollars follow:
Health Care
and
Pensions Life Insurance
Net actuarial loss ......................................... $ 174 $ 37
Prior service cost (credit) ............................. 25 (3)
Total ........................................................... $ 199 $ 34
The company expects to contribute approximately
$88 million to its pension plans and approximately $27 million
to its health care and life insurance plans in 2014, which are
primarily direct benefit payments for unfunded plans.
The benefits expected to be paid from the benefit plans,
which reflect expected future years of service, are as follows in
millions of dollars:
Health Care
and
Pensions Life Insurance*
2014 ............................................................... $ 690 $ 321
2015 ............................................................... 673 331
2016 ............................................................... 672 339
2017 ............................................................... 679 357
2018 ............................................................... 682 362
2019 to 2023 .................................................. 3,467 1,831
* Net of prescription drug group benefit subsidy under Medicare Part D.
The annual rates of increase in the per capita cost of
covered health care benefits (the health care cost trend rates)
used to determine accumulated postretirement benefit obliga-
tions were based on the trends for medical and prescription
drug claims for pre- and post-65 age groups due to the effects
of Medicare. At October 31, 2013, the weighted-average
composite trend rates for these obligations were assumed to be
a 6.5 percent increase from 2013 to 2014, gradually decreasing
to 5.0 percent from 2021 to 2022 and all future years.
The obligations at October 31, 2012 and the cost in 2013
assumed a 7.1 percent increase from 2012 to 2013, gradually
decreasing to 5.0 percent from 2018 to 2019 and all future
years. An increase of one percentage point in the assumed
health care cost trend rate would increase the accumulated
postretirement benefit obligations by $717 million and the
aggregate of service and interest cost component of net periodic
postretirement benefits cost for the year by $43 million.
A decrease of one percentage point would decrease the obliga-
tions by $570 million and the cost by $34 million.
The discount rate assumptions used to determine the
postretirement obligations at October 31, 2013 and 2012 were
based on hypothetical AA yield curves represented by a series
of annualized individual discount rates. These discount rates
represent the rates at which the company’s benefit obligations
could effectively be settled at the October 31 measurement dates.
Fair value measurement levels in the following tables are
defined in Note 26.
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