Note 14 — Retirement Benefits
RAI sponsors a number of non-contributory defined benefit pension plans covering most of the employees of RAI and certain of its subsidiaries, and also provides certain health and life insurance benefits for most of the retired employees of RAI and certain of its subsidiaries and their dependents. These benefits are generally no longer provided to employees hired on or after January 1, 2004.
The changes in benefit obligations and plan assets, as well as the funded status of these plans at December 31 were as follows:
| Pension Benefits | Postretirement Benefits |
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| 2013 | 2012 | 2013 | 2012 | |||||||||||||
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Change in benefit obligations: |
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Obligations at beginning of year |
$ | 6,293 | $ | 5,766 | $ | 1,280 | $ | 1,434 | ||||||||
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Service cost |
23 | 23 | 3 | 3 | ||||||||||||
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Interest cost |
247 | 280 | 50 | 56 | ||||||||||||
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Actuarial (gain) loss |
(540 | ) | 612 | (95 | ) | 27 | ||||||||||
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Plan amendments |
— | — | — | (157 | ) | |||||||||||
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Benefits paid |
(405 | ) | (424 | ) | (69 | ) | (83 | ) | ||||||||
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Special termination benefits |
— | 34 | — | — | ||||||||||||
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One-time cost |
— | 2 | — | — | ||||||||||||
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Obligations at end of year |
$ | 5,618 | $ | 6,293 | $ | 1,169 | $ | 1,280 | ||||||||
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Change in plan assets: |
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Fair value of plan assets at beginning of year |
$ | 5,423 | $ | 5,110 | $ | 258 | $ | 255 | ||||||||
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Actual return on plan assets |
142 | 627 | 31 | 29 | ||||||||||||
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Employer contributions |
60 | 110 | 48 | 57 | ||||||||||||
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Benefits paid |
(405 | ) | (424 | ) | (69 | ) | (83 | ) | ||||||||
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Fair value of plan assets at end of year |
$ | 5,220 | $ | 5,423 | $ | 268 | $ | 258 | ||||||||
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Funded status |
$ | (398 | ) | $ | (870 | ) | $ | (901 | ) | $ | (1,022 | ) | ||||
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For the pension benefit plans, the benefit obligation is the projected benefit obligation. For the postretirement benefit plans, the benefit obligation is the accumulated postretirement benefit obligation. The decrease in the unfunded status for the pension plans is primarily a result of lower obligations due to a higher discount rate, actual returns on plan assets and employer contributions. The decrease in the unfunded status for the postretirement plans is primarily a result of a higher discount rate.
| Pension Benefits | Postretirement Benefits |
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| 2013 | 2012 | 2013 | 2012 | |||||||||||||
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Amounts recognized in the consolidated balance sheets consist of: |
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Noncurrent assets — other assets and deferred charges |
$ | 1 | $ | 3 | $ | — | $ | — | ||||||||
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Accrued benefit — other current liability |
(9 | ) | (9 | ) | (70 | ) | (65 | ) | ||||||||
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Accrued benefit — long-term retirement benefits |
(390 | ) | (864 | ) | (831 | ) | (957 | ) | ||||||||
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Net amount recognized |
(398 | ) | (870 | ) | (901 | ) | (1,022 | ) | ||||||||
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Accumulated other comprehensive loss |
311 | 645 | (231 | ) | (157 | ) | ||||||||||
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Net amounts recognized in the consolidated balance sheets |
$ | (87 | ) | $ | (225 | ) | $ | (1,132 | ) | $ | (1,179 | ) | ||||
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Amounts included in accumulated other comprehensive loss were as follows as of December 31:
| 2013 | 2012 | |||||||||||||||||||||||
| Pension Benefits |
Postretirement Benefits |
Total | Pension Benefits |
Postretirement Benefits |
Total | |||||||||||||||||||
|
Prior service cost (credit) |
$ | 17 | $ | (220 | ) | $ | (203 | ) | $ | 20 | $ | (262 | ) | $ | (242 | ) | ||||||||
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Net actuarial (gain) loss |
294 | (11 | ) | 283 | 625 | 105 | 730 | |||||||||||||||||
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Deferred income taxes |
(134 | ) | 71 | (63 | ) | (265 | ) | 42 | (223 | ) | ||||||||||||||
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Accumulated other comprehensive loss |
$ | 177 | $ | (160 | ) | $ | 17 | $ | 380 | $ | (115 | ) | $ | 265 | ||||||||||
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Changes in accumulated other comprehensive loss were as follows:
| 2013 | 2012 | |||||||||||||||||||||||
| Pension Benefits |
Postretirement Benefits |
Total | Pension Benefits |
Postretirement Benefits |
Total | |||||||||||||||||||
|
Prior service credit |
$ | — | $ | — | $ | — | $ | — | $ | (157 | ) | $ | (157 | ) | ||||||||||
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Net actuarial (gain) loss |
(331 | ) | (116 | ) | (447 | ) | 344 | 8 | 352 | |||||||||||||||
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Amortization of prior service cost (credit) |
(3 | ) | 42 | 39 | (4 | ) | 30 | 26 | ||||||||||||||||
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One-time cost |
— | — | — | (2 | ) | — | (2 | ) | ||||||||||||||||
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MTM adjustment |
— | — | — | (289 | ) | (40 | ) | (329 | ) | |||||||||||||||
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Deferred income tax expense |
131 | 29 | 160 | (20 | ) | 65 | 45 | |||||||||||||||||
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Change in accumulated other comprehensive loss |
$ | (203 | ) | $ | (45 | ) | $ | (248 | ) | $ | 29 | $ | (94 | ) | $ | (65 | ) | |||||||
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The prior service credit in postretirement benefits in 2012 reflects the adoption of plan amendments resulting from plan design changes primarily impacting the Medicare eligible retirees. These plan changes reduced the postretirement obligation by $157 million.
In March 2010, the Patient Protection Affordable Care Act, referred to as the PPACA, as amended by the Health Care and Reconciliation Act of 2010, was signed into law. The PPACA mandates health-care reforms with staggered effective dates from 2010 to 2018. The additional postretirement liability resulting from the material impacts of the PPACA have been included in the accumulated postretirement benefit obligation at December 31, 2013 and 2012. Given the complexity of the PPACA and the extended time period in which implementation is expected to occur, further adjustments to the accumulated postretirement benefit obligation may be necessary in the future.
| Pension Benefits | Postretirement Benefits |
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| 2013 | 2012 | 2013 | 2012 | |||||||||||||
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Weighted-average assumptions used to determine benefit obligations at December 31: |
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Discount rate |
4.92 | % | 4.07 | % | 4.87 | % | 3.99 | % | ||||||||
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Rate of compensation increase |
4.00 | % | 4.00 | % | — | — | ||||||||||
The measurement date used for all plans was December 31.
The accumulated benefit obligation, which represents benefits earned to date, for all pension plans was $5,557 million and $6,216 million for the years ended December 31, 2013 and 2012, respectively.
Pension plans experiencing accumulated benefit obligations, which represent benefits earned to date, in excess of plan assets are summarized below:
| December 31, | ||||||||
| 2013 | 2012 | |||||||
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Projected benefit obligation |
$ | 5,589 | $ | 6,261 | ||||
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Accumulated benefit obligation |
5,529 | 6,185 | ||||||
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Plan assets |
5,190 | 5,388 | ||||||
The components of the total benefit cost and assumptions are set forth below:
| Pension Benefits | Postretirement Benefits | |||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||
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Components of total benefit cost: |
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Service cost |
$ | 23 | $ | 23 | $ | 26 | $ | 3 | $ | 3 | $ | 3 | ||||||||||||
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Interest cost |
247 | 280 | 300 | 50 | 56 | 75 | ||||||||||||||||||
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Expected return on plan assets |
(350 | ) | (359 | ) | (373 | ) | (11 | ) | (10 | ) | (18 | ) | ||||||||||||
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Amortization of prior service cost (credit) |
3 | 4 | 4 | (42 | ) | (30 | ) | (29 | ) | |||||||||||||||
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MTM adjustment |
— | 289 | 110 | — | 40 | 35 | ||||||||||||||||||
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Curtailment |
— | 4 | — | — | — | — | ||||||||||||||||||
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Special termination benefits |
— | 34 | — | — | — | — | ||||||||||||||||||
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Total benefit (income) cost |
$ | (77 | ) | $ | 275 | $ | 67 | $ | — | $ | 59 | $ | 66 | |||||||||||
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A workforce reduction in 2012, due to changes in the organizational structure of RJR Tobacco, RAI and RAISC, met RAI’s curtailment threshold as a major event for pension plans. As a result, curtailment charges and special termination benefits were recognized as restructuring expense. The workforce reduction did not exceed the minimum threshold for the postretirement plans, and no special postretirement termination benefits were offered. See note 4 for additional information regarding the restructuring.
The estimated prior service cost for the pension plans that is expected to be amortized from accumulated other comprehensive loss into net periodic benefit cost during 2014 is $3 million. The estimated prior service credit for the postretirement plans that is expected to be amortized from accumulated other comprehensive loss into net postretirement health-care costs during 2014 is $42 million.
| Pension Benefits | Postretirement Benefits | |||||||||||||||||||||||
| 2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||
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Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31: |
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Discount rate |
4.07 | % | 5.00 | % | 5.66 | % | 3.99 | % | 4.84 | % | 5.52 | % | ||||||||||||
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Expected long-term return on plan assets |
6.67 | % | 6.97 | % | 7.73 | % | 4.35 | % | 4.35 | % | 7.00 | % | ||||||||||||
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Rate of compensation increase |
4.00 | % | 5.00 | % | 5.00 | % | — | — | 5.00 | % | ||||||||||||||
RAI generally uses a hypothetical bond matching analysis to determine the discount rate. The discount rate modeling process involves selecting a portfolio of high quality corporate bonds whose cash flows, via coupons and maturities, match the projected cash flows of the obligations.
The overall expected long-term rate of return on asset assumptions for pension and postretirement assets are based on: (1) the target asset allocation for plan assets, (2) long-term capital markets forecasts for asset classes employed, and (3) excess return expectations of active management to the extent asset classes are actively managed.
Plan assets are invested using active investment strategies and multiple investment management firms. Managers within each asset class cover a range of investment styles and approaches and are combined in a way that controls for capitalization, style biases, and interest rate exposures, while focusing primarily on security selection as a means to add value. Risk is controlled through diversification among asset classes, managers, styles and securities. Risk is further controlled both at the manager and asset class level by assigning excess return and tracking error targets against related benchmark indices. Investment manager performance is evaluated against these targets.
RAI’s risk mitigating strategy seeks to balance pension plan returns with a reasonable level of funded status volatility. Based on this framework, the asset allocation has two primary components. The first component is the “hedging portfolio,” which uses extended duration fixed income holdings and derivatives to match a portion of the interest rate risk associated with the benefit obligations, thereby reducing expected funded status volatility. The second component is the “return seeking portfolio,” which is designed to enhance portfolio returns. The return seeking portfolio is broadly diversified across asset classes.
Allowable investment types include domestic equity, international equity, global equity, emerging market equity, fixed income, high yield fixed income, real estate, private equity, absolute return, global tactical asset allocation and commodities. The range of allowable investment types utilized for pension assets provides enhanced returns and more widely diversifies the plan. Domestic equities are composed of common stocks of large, medium and small companies. International equities include equity securities issued by companies domiciled outside the United States and in depository receipts, which represent ownership of securities of non-U.S. companies. Global equities include a combination of both domestic and international equities. Emerging market equities are comprised of stocks that are domiciled in less developed, fast growing countries. Fixed income includes corporate debt obligations, fixed income securities issued or guaranteed by the U.S. government, and to a lesser extent by non-U.S. governments, mortgage backed securities, and dollar-denominated obligations issued in the United States by non-U.S. banks and corporations. High yield fixed income is composed of debt securities that are below investment grade. Real estate consists of publicly traded real estate investment trust securities and private real estate investments. Private equity consists of the unregistered securities of private and public companies. Absolute return investments are diversified portfolios utilizing multiple strategies that invest primarily in public securities, including equities and fixed income. Global tactical asset allocation strategies evaluate relative value within and across asset categories and overweight the attractive markets/assets while simultaneously underweighting less attractive markets/assets. Commodities utilize futures contracts to invest in a variety of energy, metal and agricultural goods.
For pension assets, futures and forward contracts are used for portfolio rebalancing and to approach fully invested portfolio positions. Otherwise, a small number of investment managers employ limited use of derivatives, including futures contracts, options on futures, forward contracts and interest rate swaps in place of direct investment in securities to gain efficient exposure to markets.
RAI’s pension and postretirement plans asset allocations at December 31, 2013 and 2012, by asset category were as follows:
| Pension Plans | ||||||||||||||||
| 2013 Target(1) | 2013 | 2012 Target (1) | 2012 | |||||||||||||
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Asset Category: |
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Domestic equities |
10 | % | 10 | % | 7.5 | % | 8 | % | ||||||||
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International equities |
8 | % | 9 | % | 7.5 | % | 8 | % | ||||||||
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Global equities |
9 | % | 11 | % | 9 | % | 9 | % | ||||||||
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Emerging market equities |
3 | % | 3 | % | 3 | % | 3 | % | ||||||||
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Fixed income |
53 | % | 55 | % | 55 | % | 56 | % | ||||||||
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High yield fixed income |
— | — | 3 | % | 3 | % | ||||||||||
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Absolute return |
6 | % | 3 | % | 4 | % | 3 | % | ||||||||
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Private equity |
2 | % | 1 | % | 1 | % | 1 | % | ||||||||
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Real estate |
5 | % | 4 | % | 4 | % | 4 | % | ||||||||
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Global tactical asset allocation |
— | — | 2 | % | 1 | % | ||||||||||
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Commodities |
4 | % | 4 | % | 4 | % | 4 | % | ||||||||
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Total |
100 | % | 100 | % | 100 | % | 100 | % | ||||||||
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| (1) |
Allows for a rebalancing range of up to 5 percentage points around target asset allocations. |
| Postretirement Plans | ||||||||||||||||
| 2013 Target(1) | 2013 | 2012 Target(1) | 2012 | |||||||||||||
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Asset Category: |
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Domestic equities |
21 | % | 22 | % | 21 | % | 20 | % | ||||||||
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International equities |
21 | % | 22 | % | 21 | % | 22 | % | ||||||||
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Fixed income |
55 | % | 51 | % | 55 | % | 52 | % | ||||||||
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Cash and other |
3 | % | 5 | % | 3 | % | 6 | % | ||||||||
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Total |
100 | % | 100 | % | 100 | % | 100 | % | ||||||||
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| (1) |
Allows for a rebalancing range of up to 5 percentage points around target asset allocations. |
RAI’s pension and postretirement plan assets, excluding uninvested cash and unsettled trades, carried at fair value on a recurring basis as of December 31, 2013, were as follows(1):
|
Pension Plans |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
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Asset Category: |
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Domestic equities |
$ | 523 | $ | — | $ | — | $ | 523 | ||||||||
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International equities |
135 | 404 | — | 539 | ||||||||||||
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Global equities |
535 | — | — | 535 | ||||||||||||
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High yield fixed income |
— | 18 | — | 18 | ||||||||||||
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Absolute return |
— | — | 176 | 176 | ||||||||||||
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Private equity |
— | — | 53 | 53 | ||||||||||||
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Real estate |
22 | — | 190 | 212 | ||||||||||||
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Commodities |
— | 185 | — | 185 | ||||||||||||
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Agency bonds |
— | 17 | — | 17 | ||||||||||||
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Asset backed securities |
— | 89 | 3 | 92 | ||||||||||||
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Corporate bonds |
— | 1,568 | 2 | 1,570 | ||||||||||||
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Government bonds |
— | 152 | — | 152 | ||||||||||||
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Mortgage backed securities |
— | 74 | 21 | 95 | ||||||||||||
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Municipal bonds |
— | 212 | — | 212 | ||||||||||||
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Treasuries |
— | 398 | — | 398 | ||||||||||||
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Other |
30 | 72 | 2 | 104 | ||||||||||||
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Total |
$ | 1,245 | $ | 3,189 | $ | 447 | $ | 4,881 | ||||||||
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Postretirement Plans |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
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Asset Category: |
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Domestic equities |
$ | — | $ | 60 | $ | — | $ | 60 | ||||||||
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International equities |
— | 59 | — | 59 | ||||||||||||
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Short-term bonds |
9 | — | — | 9 | ||||||||||||
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Intermediate bonds |
— | 127 | — | 127 | ||||||||||||
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Other |
— | 7 | — | 7 | ||||||||||||
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Total |
$ | 9 | $ | 253 | $ | — | $ | 262 | ||||||||
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| (1) |
See note 1 for additional information on the fair value hierarchy. |
RAI’s pension and postretirement plan assets, excluding uninvested cash and unsettled trades, carried at fair value on a recurring basis as of December 31, 2012, were as follows(1):
|
Pension Plans |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
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Asset Category: |
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Domestic equities |
$ | 465 | $ | — | $ | — | $ | 465 | ||||||||
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International equities |
111 | 324 | — | 435 | ||||||||||||
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Emerging market equities |
— | 71 | — | 71 | ||||||||||||
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Global equities |
455 | — | — | 455 | ||||||||||||
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High yield fixed income |
— | 187 | — | 187 | ||||||||||||
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Absolute return |
— | — | 189 | 189 | ||||||||||||
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Private equity |
— | — | 47 | 47 | ||||||||||||
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Real estate |
25 | — | 178 | 203 | ||||||||||||
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Global tactical asset allocation |
— | 55 | — | 55 | ||||||||||||
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Commodities |
— | 201 | — | 201 | ||||||||||||
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Agency bonds |
— | 18 | — | 18 | ||||||||||||
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Asset backed securities |
— | 85 | 5 | 90 | ||||||||||||
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Corporate bonds |
— | 1,721 | 2 | 1,723 | ||||||||||||
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Government bonds |
— | 159 | — | 159 | ||||||||||||
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Mortgage backed securities |
— | 79 | 21 | 100 | ||||||||||||
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Municipal bonds |
— | 222 | — | 222 | ||||||||||||
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Treasuries |
— | 415 | — | 415 | ||||||||||||
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Other |
37 | 113 | 2 | 152 | ||||||||||||
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Total |
$ | 1,093 | $ | 3,650 | $ | 444 | $ | 5,187 | ||||||||
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Postretirement Plans |
Level 1 | Level 2 | Level 3 | Total | ||||||||||||
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Asset Category: |
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Domestic equities |
$ | — | $ | 52 | $ | — | $ | 52 | ||||||||
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International equities |
— | 56 | — | 56 | ||||||||||||
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Short-term bonds |
6 | — | — | 6 | ||||||||||||
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Intermediate bonds |
— | 130 | — | 130 | ||||||||||||
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Other |
— | 6 | — | 6 | ||||||||||||
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Total |
$ | 6 | $ | 244 | $ | — | $ | 250 | ||||||||
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| (1) |
See note 1 for additional information on the fair value hierarchy. |
Transfers of pension and postretirement plan assets in and out of Level 3 during 2013, by asset category were as follows:
| Balance as of January 1, 2013 |
Purchases, Sales, Issuances and Settlements (net) |
Realized Gains |
Unrealized Gains (Losses) |
Transferred From Other Levels |
Balance as of December 31, 2013 |
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Absolute return |
$ | 189 | $ | (32 | ) | $ | 31 | $ | (12 | ) | $ | — | $ | 176 | ||||||||||
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Private equity |
47 | (1 | ) | 4 | 3 | — | 53 | |||||||||||||||||
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Real estate |
178 | (9 | ) | 4 | 17 | — | 190 | |||||||||||||||||
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Asset backed securities |
5 | (2 | ) | — | — | — | 3 | |||||||||||||||||
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Corporate bonds |
2 | — | — | — | — | 2 | ||||||||||||||||||
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Mortgage backed securities |
21 | — | — | — | — | 21 | ||||||||||||||||||
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Other |
2 | — | — | — | — | 2 | ||||||||||||||||||
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Total |
$ | 444 | $ | (44 | ) | $ | 39 | $ | 8 | $ | — | $ | 447 | |||||||||||
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Transfers of pension and postretirement plan assets in and out of Level 3 during 2012, by asset category were as follows:
| Balance as of January 1, 2012 |
Purchases, Sales, Issuances and Settlements (net) |
Realized Gains |
Unrealized Gains (Losses) |
Transferred From Other Levels(1) |
Balance as of December 31, 2012 |
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Absolute return |
$ | 249 | $ | (71 | ) | $ | 39 | $ | (28 | ) | $ | — | $ | 189 | ||||||||||
|
Private equity |
46 | (3 | ) | 4 | — | — | 47 | |||||||||||||||||
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Real estate |
161 | 2 | 2 | 13 | — | 178 | ||||||||||||||||||
|
Asset backed securities |
2 | 1 | — | — | 2 | 5 | ||||||||||||||||||
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Corporate bonds |
15 | (14 | ) | 6 | (6 | ) | 1 | 2 | ||||||||||||||||
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Mortgage backed securities |
19 | — | — | 2 | — | 21 | ||||||||||||||||||
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Other |
2 | — | — | — | — | 2 | ||||||||||||||||||
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Total |
$ | 494 | $ | (85 | ) | $ | 51 | $ | (19 | ) | $ | 3 | $ | 444 | ||||||||||
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| (1) |
Transfers in and out of Level 3 occur using the fair value at the beginning of the period. |
For the years ended December 31, 2013 and 2012, there were no changes among the fair value hierarchy levels between Level 1 and Level 2. For the year ended December 31, 2012, there were changes among the fair value hierarchy levels from Level 2 to Level 3 because of a lack of observable market data due to a decrease in market activity for those securities.
At December 31, 2013 and 2012, the fair value of pension and postretirement assets classified as Level 2 or Level 3 was determined using a combination of third party pricing services and net asset value. In instances where the plans have invested in commingled pools, the net asset value was used as the practical expedient and no adjustments were made to the provided fair value.
The fair value of commingled pools classified as commodities, emerging market equities, municipal bonds, high yield fixed income, mortgage backed securities, global tactical asset allocation, domestic equities, international equities, intermediate bonds, other and certain of those classified as real estate, asset backed securities and absolute return, classified as Level 2 and Level 3, was determined primarily using an income approach. This approach utilized the net asset value of the underlying investment fund adjusted by the investment manager for restrictions or illiquidity of the disposition of the interest, if any, valuations provided by the fund’s cash flows, and the rights and obligations of the ownership interest of the fund.
The fair value of assets classified as private equity and certain of those classified as real estate and absolute return, classified as Level 3, was determined primarily using an income approach. The fair value was determined by qualified appraisers utilizing observable and unobservable data, including comparable transactions, the fair value of the underlying assets, discount rates, restrictions on disposing interests in the investment’s cash flows and other entity specific risk factors.
The fair value of assets classified as corporate bonds, other and certain of those classified as asset backed securities, classified as Level 3, was determined primarily using an income approach that utilized cash flow models and benchmarking strategies. This approach utilized observable inputs, including market-based interest rate curves, corporate credit spreads and corporate ratings. Additionally, unobservable factors incorporated into these models included default probability assumptions, potential recovery and discount rates.
Additional information relating to RAI’s significant postretirement plans is as follows:
| 2013 | 2012 | |||||||
|
Weighted-average health-care cost trend rate assumed for the following year |
7.50 | % | 8.00 | % | ||||
|
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) |
5.00 | % | 5.00 | % | ||||
|
Year that the rate reaches the ultimate trend rate |
2020 | 2018 | ||||||
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 had the following effects at December 31, 2013:
| 1-Percentage Point Increase |
1-Percentage Point Decrease |
|||||||
|
Effect on total of service and interest cost components |
$ | 2 | $ | (2 | ) | |||
|
Effect on benefit obligation |
52 | (44 | ) | |||||
During 2014, RAI expects to contribute $109 million to its pension plans and expects payments related to its postretirement plans to be approximately $70 million.
Estimated future benefit payments:
| Postretirement Benefits | ||||||||||||||||
|
Year |
Pension Benefits |
Gross Projected Benefit Payments Before Medicare Part D Subsidies |
Expected Medicare Part D Subsidies |
Net Projected Benefit Payments After Medicare Part D Subsidies |
||||||||||||
|
2014 |
$ | 417 | $ | 103 | $ | (2 | ) | $ | 101 | |||||||
|
2015 |
432 | 95 | (2 | ) | 93 | |||||||||||
|
2016 |
398 | 96 | (2 | ) | 94 | |||||||||||
|
2017 |
398 | 93 | (2 | ) | 91 | |||||||||||
|
2018 |
394 | 91 | (3 | ) | 88 | |||||||||||
|
2019-2023 |
1,909 | 418 | (17 | ) | 401 | |||||||||||
RAI sponsors qualified defined contribution plans. The expense related to these plans was $34 million in 2013 and 2012, and $37 million in 2011. Included in the plans is a non-leveraged employee stock ownership plan, which holds shares of the Reynolds Stock Fund. Participants can elect to contribute to the fund. Dividends paid on shares are reflected as a reduction of equity. All shares are considered outstanding for earnings per share computations.