Pension, Savings and Other Postretirement Benefit Plans

3 Months Ended

Mar. 31, 2013

Compensation and Retirement Disclosure [Abstract]

PENSION, SAVINGS AND OTHER POSTRETIREMENT BENEFIT PLANS

PENSION, SAVINGS AND OTHER POSTRETIREMENT BENEFIT PLANS

We provide employees with defined benefit pension or defined contribution savings plans.

Defined benefit pension cost follows:

	U.S.
	Three Months Ended
	March 31,
(In millions)	2013			2012
Service cost — benefits earned during the period	$	11		$	10
Interest cost on projected benefit obligation	61			66
Expected return on plan assets	(84		)	(75		)
Amortization of: — prior service cost	4			6
— net losses	53			46
Total defined benefit pension cost	$	45		$	53

	Non-U.S.
	Three Months Ended
	March 31,
(In millions)	2013			2012
Service cost — benefits earned during the period	$	10		$	8
Interest cost on projected benefit obligation	33			35
Expected return on plan assets	(28		)	(30		)
Amortization of: — prior service cost	—			—
— net losses	16			12
Total defined benefit pension cost	$	31		$	25

During the first quarter of 2013, we made $34 million of required contributions and $834 million of discretionary contributions to fully fund our frozen U.S. pension plans. Following these contributions, the Company changed its target asset allocation for these plans to a portfolio of substantially all fixed income securities designed to offset the future impact of discount rate movements on the plans' funded status. As a result of the asset allocation change, we were required to remeasure the benefit obligations and assets of the affected plans at February 28, 2013, which resulted in a reduction to net actuarial losses included in Accumulated Other Comprehensive Loss of $93 million. The weighted average discount rate used to measure the benefit obligations of the frozen U.S. pension plans at February 28, 2013 was 3.82% as compared to 3.61% at December 31, 2012. As a result of the change in target asset allocation for the frozen U.S. pension plans, the expected long term return on plan assets for these plans is 4.75% as of March 1, 2013. At February 28, 2013, these frozen U.S. pension plans had assets of $2,072 million.

In addition to the $834 million of discretionary contributions to our frozen U.S. pension plans in the first quarter of 2013, we expect to contribute approximately $275 million to $325 million to our funded U.S. and non-U.S. pension plans in 2013. For the three months ended March 31, 2013, we contributed $868 million and $30 million to our U.S. and non-U.S. plans, respectively.

The expense recognized for our contributions to defined contribution savings plans for the three months ended March 31, 2013 and 2012 was $26 million and $27 million, respectively.

We provide certain U.S. employees and employees at certain non-U.S. subsidiaries with health care benefits or life insurance benefits upon retirement. Postretirement benefit (credit) cost for the three months ended March 31, 2013 and 2012 was $(2) million and $3 million, respectively.

During the third quarter of 2012, we announced changes to our U.S. and Canadian salaried other postretirement benefit plans, effective January 1, 2013. The changes consisted primarily of eliminating coverage for participants who are or become at least age 65 and eligible for government subsidized programs and reduced our U.S. other postretirement benefit obligation by $56 million and our Canadian other postretirement benefit obligation by $18 million.