Mondelez 2014 Annual Report Download - page 87

Table of Contents
Certain of our U.S. and non-U.S. plans are underfunded and have accumulated benefit obligations in excess of plan assets. For
these plans, the projected benefit obligations, accumulated benefit obligations and the fair value of plan assets were:
We used the following weighted-average assumptions to determine our benefit obligations under the pension plans:
Year-end discount rates for our U.S., Canadian, Eurozone and U.K. 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 remaining non-U.S. 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:
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
net settlement losses for our U.S. plans of $28 million in 2014, $1 million in 2013, and $113 million in 2012 (2012 includes amounts
related to the discontinued operation of Kraft Foods Group). Curtailment and settlement losses for our non-U.S. plans in 2014
included $12 million related to employees affected by our 2014-2018 Restructuring Program and retired employees who elected
lump-sum payments. Non-U.S. plant closures and early retirement benefits resulted in curtailment and settlement losses of $2
million in 2013 and $9 million in 2012. In addition, we incurred special termination benefit costs of $2 million in 2014 and $1 million
in 2013 in the non-U.S. plans related to the 2012-2014 Restructuring Program. We incurred special termination benefit costs of $13
million in 2012 in the non-U.S. plans related to the Cadbury integration.
84
U.S. Plans
Non
-
U.S. Plans
As of December 31,
As of December 31,
2014
2013
2014
2013
(in millions)
Projected benefit obligation
$
1,606
$
86
$
10,108
$
8,379
Accumulated benefit obligation
1,474
73
9,763
8,197
Fair value of plan assets
1,216
2
7,576
6,571
U.S. Plans
Non
-
U.S. Plans
As of December 31,
As of December 31,
2014
2013
2014
2013
Discount rate
4.20%
5.10%
2.99%
4.00%
Expected rate of return on plan assets
7.25%
7.75%
5.96%
6.18%
Rate of compensation increase
4.00%
4.00%
3.26%
3.61%
U.S. Plans
Non
-
U.S. Plans
For the Years Ended December 31,
For the Years Ended December 31,
2014
2013
2012
2014
2013
2012
(in millions)
Service cost
$
57
$
71
$
142
$
184
$
172
$
172
Interest cost
67
60
275
388
358
425
Expected return on plan assets
(81
)
(67
)
(358
)
(485
)
(435
)
(494
)
Amortization:
Net loss from experience
differences
29
55
253
106
136
121
Prior service cost
2
2
6
–
1
3
Other expenses
28
1
113
14
3
22
Net pension costs related to
discontinued operations
–
–
(
263
)
–
–
(
29
)
Net pension cost included in
continuing operations
$
102
$
122
$
168
$
207
$
235
$
220