Pension and Postretirement Benefit Plans



The following table provides the components of net periodic benefit cost:
	Pension Plans
	U.S. Qualified^(a)						U.S. Supplemental (Non-Qualified)						International^(b)						Postretirement Plans^(c)
(MILLIONS OF DOLLARS)	June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
Three Months Ended
Net periodic benefit cost:
Service cost	$	72		$	63		$	6		$	5		$	46		$	52		$	14		$	14
Interest cost	168			175			13			14			76			101			32			42
Expected return on plan assets	(270		)	(262		)	—			—			(103		)	(116		)	(13		)	(15		)
Amortization of:
Actuarial losses	82			15			11			8			31			24			9			2
Prior service credits	(2		)	(1		)	—			(1		)	(2		)	(1		)	(31		)	(15		)
Curtailments	—			—			—			—			—			16			(7		)	(1		)
Settlements	19			12			2			5			1			1			—			—
Special termination benefits	—			—			—			—			—			3			—			—
	$	69		$	2		$	32		$	31		$	50		$	80		$	5		$	27

Six Months Ended
Net periodic benefit cost:
Service cost	$	144		$	127		$	11		$	10		$	94		$	104		$	27		$	28
Interest cost	337			350			27			29			155			201			64			84
Expected return on plan assets	(542		)	(525		)	—			—			(209		)	(230		)	(26		)	(31		)
Amortization of:
Actuarial losses	165			31			23			15			63			49			18			3
Prior service credits	(3		)	(3		)	(1		)	(1		)	(3		)	(3		)	(62		)	(29		)
Curtailments	1			2			—			—			—			15			(17		)	(4		)
Settlements	45			21			17			16			1			2			—			—
Special termination benefits	—			—			—			—			—			5			—			—
	$	147		$	3		$	77		$	69		$	101		$	143		$	6		$	51

^(a)

The increase in net periodic benefit costs for the three and six months ended June 28, 2015, compared to the three and six months ended June 29, 2014, for our U.S. qualified pension plans was primarily driven by (i) the increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation (which increased the amount of deferred actuarial losses) and, to a lesser extent, a 2014 change in mortality assumptions (reflecting a longer life expectancy for plan participants), and (ii) higher settlement activity. The aforementioned increases were partially offset by (i) a greater expected return on plan assets resulting from an increased plan asset base due to a voluntary contribution of $1.0 billion made at the beginning of January 2015, which in turn was partially offset by a decrease in the expected rate of return on plan assets from 8.50% to 8.25%, and (ii) lower interest costs resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.

^(b)

The decrease in net periodic benefit costs for the three and six months ended June 28, 2015, compared to the three and six months ended June 29, 2014, for our international pension plans was primarily driven by (i) the decrease in interest cost resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation, (ii) a decrease in service cost related to changes in actuarial assumptions (lower inflation and lower rate of wage increases) and the U.K. pension plan freeze in 2014, which offset the impact of the decrease, in 2014, in the discount rate used to determine the benefit obligation (the effect of which is an increase in service costs). The aforementioned decreases to net periodic benefit costs were partially offset by (i) a decrease in the expected return on plan assets due to a lower expected rate of return on plan assets and (ii) an increase in the amounts amortized for actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.

^(c)

The decrease in net periodic benefit costs for the three and six months ended June 28, 2015, compared to the three and six months ended June 29, 2014, for our postretirement plans was primarily driven by (i) the increase in the amounts amortized for prior service credits and (ii) an increase in curtailment gain resulting from the implementation of changes to certain retiree medical benefits to adopt programs eligible for the Medicare Part D plan subsidy, as allowed under the employer group waiver plan, which was approved and communicated to plan participants, and will go into effect on January 1, 2016, as well as (iii) a decrease in interest cost resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation. The aforementioned decreases were partially offset by an increase in actuarial losses resulting from the decrease, in 2014, in the discount rate used to determine the benefit obligation.

As of and for the six months ended June 28, 2015, we contributed and expect to contribute from our general assets as follows:



	Pension Plans
(MILLIONS OF DOLLARS)	U.S. Qualified		U.S. Supplemental (Non-Qualified)		International		Postretirement Plans
Contributions from/reimbursements of our general assets for the six months ended June 28, 2015^(a)	$	1,000	$	84	$	117	$	(30	)
Expected contributions from our general assets during 2015^(b)	$	1,000	$	117	$	237	$	81


^(a)	Contributions to the postretirement plans were more than offset by reimbursements of approximately $133 million received for eligible 2014 prescription drug expenses for certain retirees.

^(b)

Contributions expected to be made for 2015 are inclusive of amounts contributed during the six months ended June 28, 2015, including the $1.0 billion voluntary contribution that was made in January 2015 for the U.S. Qualified plan. The U.S. supplemental (non-qualified) pension plan, international pension plan and the postretirement plan contributions from our general assets include direct employer benefit payments.