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Benefit Plans (Tables)
12 Months Ended
Dec. 31, 2015
Postretirement Benefit Plans  
Weighted Average Assumptions

We used the following weighted-average assumptions to determine our net periodic pension cost:

 

     U.S. Plans      Non-U.S. Plans  
     For the Years Ended December 31,      For the Years Ended December 31,  
     2015      2014      2013      2015      2014      2013  
Discount rate      4.20%         5.10%         4.20%         2.99%         4.03%         3.81%   

Expected rate of return on
plan assets

     7.25%         7.75%         7.75%         5.96%         6.17%         6.08%   
Rate of compensation increase      4.00%         4.00%         4.00%         3.26%         3.63%         3.47%   
Components of Net Costs

Components of Net Periodic Postretirement Health Care Costs:

Net periodic postretirement health care costs consisted of the following:

 

                                                        
     For the Years Ended December 31,  
     2015      2014      2013  
            (in millions)         

Service cost

   $ 15       $ 13       $ 15   

Interest cost

     22         22         20   

Amortization:

        

Net loss from experience differences

     13         5         12   

Prior service credit

     (7      (10      (12
  

 

 

    

 

 

    

 

 

 

Net periodic postretirement health care costs

   $ 43       $ 30       $ 35   
  

 

 

    

 

 

    

 

 

 
Estimated Future Benefit Payments

Our estimated future benefit payments for our postretirement health care plans at December 31, 2015 were (in millions):

 

                                                                                                                 

Year ending:

   2016    2017    2018    2019    2020    2021-2025

U.S. Plans

   $8    $9    $10    $12    $13    $85

Non-U.S. Plans

   $5    $5    $5    $6    $6    $33
Changes in Accumulated Postemployment Benefit Obligations

Our postretirement health care plans are not funded. The changes in and the amount of the accrued benefit obligation were:

 

                                     
     As of December 31,  
     2015      2014  
     (in millions)  

Accrued benefit obligation at January 1

   $ 538       $ 422   

Service cost

     15         13   

Interest cost

     22         22   

Benefits paid

     (10      (9

Currency

     (22      (11

Assumption changes

     (30      75   

Actuarial (gains) / losses

     (2      14   

Other

             12   
  

 

 

    

 

 

 

Accrued benefit obligation at December 31

   $ 511       $ 538   
  

 

 

    

 

 

 
Weighted-Average Assumptions to Determine Benefit Obligations

We used the following weighted-average assumptions to determine our postretirement benefit obligations:

 

                                                                           
     U.S. Plans      Non-U.S. Plans  
     As of December 31,      As of December 31,  
     2015      2014      2015      2014  

Discount rate

     4.60%         4.20%         4.77%         4.52%   

Health care cost trend rate
assumed for next year

     6.50%         6.50%         5.37%         5.18%   

Ultimate trend rate

     5.00%         5.00%         5.55%         5.53%   

Year that the rate reaches the
ultimate trend rate

     2020         2018         2018         2018   
Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

one-percentage-point change in assumed health care cost trend rates would have the following effects:

 

         As of December 31, 2015  
         One-Percentage-Point  
         Increase      Decrease  
         (in millions)  

Effect on postretirement benefit obligation

     $ 88       $ (69

Effect on annual service and interest cost

       7         (6
Pension Plans  
Projected Benefit Obligations, Plan Assets and Funded Status of Pension Plans

The projected benefit obligations, plan assets and funded status of our pension plans were:

 

                                                                           
     U.S. Plans      Non-U.S. Plans  
     2015      2014      2015      2014  
            (in millions)         

Benefit obligation at January 1

   $ 1,606       $ 1,266       $ 10,854       $ 9,920   

Service cost

     64         57         188         184   

Interest cost

     67         67         307         388   

Benefits paid

     (35      (20      (435      (446

Settlements paid

     (88      (52      1           

Actuarial (gains) / losses

     (49      266         (262      1,604   

Deconsolidation of coffee business

                     (261        

Currency

                     (766      (949

Other

     1         22         (79      153   
  

 

 

    

 

 

    

 

 

    

 

 

 

Benefit obligation at December 31

     1,566         1,606         9,547         10,854   
  

 

 

    

 

 

    

 

 

    

 

 

 

Fair value of plan assets at January 1

     1,216         1,118         8,362         8,122   

Actual return on plan assets

     (71      159         192         971   

Contributions

     225         11         318         353   

Benefits paid

     (35      (20      (435      (446

Settlements paid

     (88      (52                

Deconsolidation of coffee business

                     (130        

Currency

                     (579      (681

Other

                     (7      43   
  

 

 

    

 

 

    

 

 

    

 

 

 

Fair value of plan assets at December 31

     1,247         1,216         7,721         8,362   
  

 

 

    

 

 

    

 

 

    

 

 

 

Net pension liability at December 31

   $ (319    $ (390    $ (1,826    $ (2,492
  

 

 

    

 

 

    

 

 

    

 

 

 
Pension Plans Resulted in Net Pension Liability

The combined U.S. and non-U.S. pension plans resulted in a net pension liability of $2,145 million at December 31, 2015 and $2,882 million at December 31, 2014. We recognized these amounts in our consolidated balance sheets as follows:

 

                                     
     As of December 31,  
     2015      2014  
     (in millions)  

Prepaid pension assets

   $ 69       $ 53   

Other accrued liabilities

     (31      (23

Accrued pension costs

     (2,183      (2,912
  

 

 

    

 

 

 
   $ (2,145    $ (2,882
  

 

 

    

 

 

 
Projected Benefit Obligations, Accumulated Benefit Obligations and Fair Value of Plan Assets

For these plans, the projected benefit obligations, accumulated benefit obligations and the fair value of plan assets were:

 

                                                                           
     U.S. Plans      Non-U.S. Plans  
     As of December 31,      As of December 31,  
     2015      2014      2015      2014  
     (in millions)  

Projected benefit obligation

   $ 1,566       $ 1,606       $ 8,139       $ 10,108   

Accumulated benefit obligation

     1,463         1,474         7,920         9,763   

Fair value of plan assets

     1,247         1,216         6,252         7,576   
Components of Net Costs

Net periodic pension cost consisted of the following:

 

     U.S. Plans     Non-U.S. Plans  
     For the Years Ended December 31,     For the Years Ended December 31,  
     2015     2014     2013     2015     2014     2013  
     (in millions)     (in millions)  

Service cost

   $ 64      $ 57      $ 71      $ 188      $ 184      $ 172   

Interest cost

     67        67        60        307        388        358   

Expected return on plan assets

     (93     (81     (67     (478     (485     (435

Amortization:

            

Net loss from experience
differences

     43        29        55        141        106        136   

Prior service cost (1)

     2        2        2        15               1   

Settlement losses and
other expenses (2)

     19        28        1        2        14        3   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic pension cost

   $ 102      $ 102      $ 122      $ 175      $ 207      $ 235   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

  (1) For the year ended December 31, 2015, amortization of prior service cost includes $17 million of pension curtailment losses related to employees who transitioned to JDE upon the contribution of our global coffee business. Refer to Note 2, Divestitures and Acquisitions – Coffee Business Transactions, for more information.
  (2) Settlement losses include $9 million for year ended December 31, 2015 and $12 million for the year ended December 31, 2014 of pension settlement losses for employees who elected lump-sum payments in connection with our 2014-2018 Restructuring Program. Retired employees who elected lump-sum payments resulted in net settlement losses in 2015 of $10 million for our U.S. plans and $2 million for our non-U.S. plans. 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 and $1 million in 2013. Non-U.S. plant closures and early retirement benefits resulted in curtailment and settlement losses of $2 million in 2013. 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. See Note 6, Restructuring Programs, for more information. We recorded an additional $90 million of pension settlement losses related to the coffee business transactions within the gain on the coffee business transactions. Refer to Note 2, Divestitures and Acquisitions – Coffee Business Transactions, for more information.
Fair Values of Pension Plan Assets

The fair value of pension plan assets was determined using the following fair value measurements:

 

                                                                           
     As of December 31, 2015  
            Quoted Prices      Significant         

Asset Category

   Total Fair
Value
     in Active Markets
for Identical
Assets
(Level 1)
     Other
Observable
Inputs

(Level 2)
     Significant
Unobservable
Inputs

(Level 3)
 
     (in millions)  

U.S. equity securities

   $ 2       $ 2       $       $   

Non-U.S. equity securities

     413         413                   

Pooled funds - equity securities

     2,411         569         1,842           
  

 

 

    

 

 

    

 

 

    

 

 

 

Total equity securities

     2,826         984         1,842           

Government bonds

     1,788         53         1,735           

Pooled funds - fixed-income securities

     1,182         311         759         112   

Corporate bonds and other fixed-income securities

     1,691         325         701         665   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total fixed-income securities

     4,661         689         3,195         777   

Real estate

     477         115         7         355   

Hedge funds

     499                         499   

Private equity

     204                         204   

Cash

     140         137         3           

Other

     95         55         36         4   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 8,902       $ 1,980       $ 5,083       $ 1,839   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

                                                                           
     As of December 31, 2014  
            Quoted Prices      Significant         

Asset Category

   Total Fair
Value
     in Active Markets
for Identical
Assets
(Level 1)
     Other
Observable
Inputs

(Level 2)
     Significant
Unobservable
Inputs

(Level 3)
 
     (in millions)  

U.S. equity securities

   $ 124       $ 124       $       $   

Non-U.S. equity securities

     698         698                   

Pooled funds - equity securities

     2,192         538         1,654           
  

 

 

    

 

 

    

 

 

    

 

 

 

Total equity securities

     3,014         1,360         1,654           

Government bonds

     2,283         234         2,049           

Pooled funds - fixed-income securities

     1,151         311         743         97   

Corporate bonds and other fixed-income securities

     1,174         314         111         749   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total fixed-income securities

     4,608         859         2,903         846   

Real estate

     406         110         4         292   

Hedge funds

     829                         829   

Private equity

     237                         237   

Cash

     253         246         7           

Other

     157         124         30         3   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 9,504       $ 2,699       $ 4,598       $ 2,207   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

The percentage of fair value of pension plan assets was:

 

     U.S. Plans      Non-U.S. Plans  
     As of December 31,      As of December 31,  

Asset Category

   2015      2014      2015      2014  

Equity securities

     32%         45%         32%         30%   

Fixed-income securities

     65%         52%         50%         48%   

Real estate

     3%         3%         6%         4%   

Hedge funds

                     7%         10%   

Private equity

                     3%         3%   

Cash

                     1%         3%   

Other

                     1%         2%   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     100%         100%         100%         100%   
  

 

 

    

 

 

    

 

 

    

 

 

 
Schedule of Changes in Level 3 Plan Assets

Changes in our Level 3 plan assets, which are recorded in other comprehensive earnings / (losses), included:

 

                                                                                                                 

Asset Category

   January 1,
2015

Balance
     Net Realized
and Unrealized
Gains/
(Losses)
     Net Purchases,
Issuances and
Settlements
     Net Transfers
Into/(Out of)
Level 3
     Currency
Impact
     December 31,
2015
Balance
 
     (in millions)  

Pooled funds- fixed-income securities

   $ 97       $ (1    $ 25       $ (3    $ (6    $ 112   

Corporate bond and other
fixed-income securities

     749         4         (50              (38      665   

Real estate

     292         19         61                 (17      355   

Hedge funds

     829         13         (312              (31      499   

Private equity

     240         17         (36      (1      (12      208   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Level 3 investments

   $ 2,207       $ 52       $ (312    $ (4    $ (104    $ 1,839   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Asset Category

   January 1,
2014

Balance
     Net Realized
and Unrealized
Gains/
(Losses)
     Net Purchases,
Issuances and
Settlements
     Net Transfers
Into/(Out of)
Level 3
     Currency
Impact
     December 31,
2014
Balance
 
     (in millions)  

Pooled funds- fixed-income securities

   $ 15       $ (15    $ 15       $ 87       $ (5    $ 97   

Corporate bond and other
fixed-income securities

     780         80         (64              (47      749   

Real estate

     267         37         (2      10         (20      292   

Hedge funds

     820         40         20                 (51      829   

Private equity

     227         45         (19      2         (15      240   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Level 3 investments

   $ 2,109       $ 187       $ (50    $ 99       $ (138    $ 2,207   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
Estimated Future Benefit Payments

The estimated future benefit payments from our pension plans at December 31, 2015 were (in millions):

 

                                                                                                                 

Year ending:

   2016      2017      2018      2019      2020      2021-2025  
U.S. Plans    $ 91       $ 84       $ 95       $ 105       $ 109       $ 562   
Non-U.S. Plans    $ 401       $ 403       $ 410       $ 423       $ 435       $ 2,352   
Schedule of Individually Significant Multiemployer Pension Plan

The following is the only individually significant multiemployer plan we participate in as of December 31, 2015:

 

                        Expiration Date  
          Pension   FIP / RP         of Collective-  
    EIN / Pension     Protection Act   Status Pending /     Surcharge   Bargaining  

Pension Fund

  Plan Number     Zone Status   Implemented     Imposed   Agreements  
Bakery, Confectionery, Tobacco Workers and Grain Miller International Pension Fund                         526118572      Red     Implemented      Yes     2/29/2016   
Defined Benefit Pension Plan Benefit Obligation  
Weighted Average Assumptions

We used the following weighted-average assumptions to determine our benefit obligations under the pension plans:

 

                                                                           
     U.S. Plans      Non-U.S. Plans  
     As of December 31,      As of December 31,  
     2015      2014      2015      2014  

Discount rate

        4.50%             4.20%            3.11%         2.99%   

Expected rate of return on plan assets

     6.75%         7.25%         5.87%         5.96%   

Rate of compensation increase

     4.00%         4.00%         3.18%         3.26%   
Defined Benefit Pension Net Periodic Pension Cost  
Weighted Average Assumptions

We used the following weighted-average assumptions to determine our net periodic postretirement health care cost:

 

                                                                                                                 
     U.S. Plans    Non-U.S. Plans
     For the Years Ended December 31,    For the Years Ended December 31,
     2015    2014    2013    2015    2014    2013

Discount rate

   4.20%    5.10%    4.20%    4.52%    5.17%    4.39%

Health care cost trend rate

   6.50%    7.00%    7.50%    5.18%    5.11%    6.47%
Postemployment Benefit Plans  
Components of Net Costs

Net periodic postemployment costs consisted of the following:

 

                                                        
     For the Years Ended December 31,  
     2015      2014      2013  
            (in millions)         

Service cost

   $ 7       $ 9       $ 8   

Interest cost

     5         6         5   

Amortization of net gains

                     (1

Other

                     (1
  

 

 

    

 

 

    

 

 

 

Net periodic postemployment costs

   $ 12       $ 15       $ 11   
  

 

 

    

 

 

    

 

 

 
Changes in Accumulated Postemployment Benefit Obligations

Our postemployment plans are primarily not funded. The changes in and the amount of the accrued benefit obligation at December 31, 2015 and 2014 were:

 

                                     
     2015      2014  
     (in millions)  

Accrued benefit obligation at January 1

   $ 94       $ 103   

Service cost

     7         9   

Interest cost

     5         6   

Benefits paid

     (7      (17

Assumption changes

     (3      2   

Actuarial losses

     (1      (9
  

 

 

    

 

 

 

Accrued benefit obligation at December 31

   $ 95       $ 94