Pension, Savings and Other Postretirement Benefit Plans

6 Months Ended

Jun. 30, 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.						U.S.
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions)	2013			2012			2013			2012
Service cost — benefits earned during the period	$	12		$	10		$	23		$	20
Interest cost on projected benefit obligation	60			65			121			131
Expected return on plan assets	(84		)	(75		)	(168		)	(150		)
Amortization of: — prior service cost	5			6			9			12
— net losses	50			43			103			89
Total defined benefit pension cost	$	43		$	49		$	88		$	102

	Non-U.S.						Non-U.S.
	Three Months Ended						Six Months Ended
	June 30,						June 30,
(In millions)	2013			2012			2013			2012
Service cost — benefits earned during the period	$	10		$	7		$	20		$	15
Interest cost on projected benefit obligation	32			35			65			70
Expected return on plan assets	(28		)	(29		)	(56		)	(59		)
Amortization of: — prior service cost	1			1			1			1
— net losses	14			11			30			23
Net periodic pension cost	29			25			60			50
Curtailments/settlements/termination benefits	2			—			2			—
Total defined benefit pension cost	$	31		$	25		$	62		$	50

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 first quarter 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 and six months ended June 30, 2013, we contributed $26 million and $56 million, respectively, to our non-U.S. plans and for the three and six months ended June 30, 2013, we contributed $50 million and $918 million, respectively, to our U.S. plans.

The expense recognized for our contributions to defined contribution savings plans for both the three months ended June 30, 2013 and 2012 was $23 million, and was $49 million and $50 million for the six months ended June 30, 2013 and 2012, 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 June 30, 2013 and 2012 was $(2) million and $0 million, respectively, and $(4) million and $3 million for the six months ended June 30, 2013 and 2012, 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.