Postretirement benefits

6 Months Ended

Apr. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Postretirement benefits

Postretirement Benefits

Defined Benefit Plans

We provide postretirement benefits to a substantial portion of our employees. Costs associated with postretirement benefits include pension and postretirement health care expenses for employees, retirees, and surviving spouses and dependents. Generally, the pension plans are non-contributory. Our policy is to fund the pension plans in accordance with applicable U.S. and Canadian government regulations and to make additional contributions from time to time. For the three and six months ended April 30, 2012, we contributed $53 million and $82 million, respectively, and for the three and six months ended April 30, 2011, we contributed $31 million and $52 million, respectively, to our pension plans to meet regulatory funding requirements. We currently anticipate additional contributions of $108 million to our pension plans during the remainder of 2012.

We primarily fund other post-employment benefit (“OPEB”) obligations, such as retiree medical, in accordance with a 1993 Settlement Agreement (the "1993 Settlement Agreement"), which requires us to fund a portion of the plans' annual service cost to a retiree benefit trust (the "Base Trust"). That 1993 Settlement Agreement resolved a class action lawsuit originally filed in 1992 regarding the restructuring of the Company's then applicable retiree health care and life insurance benefits. Contributions for each of the six months ended April 30, 2012 and 2011 were $1 million, and we anticipate contributions for the remainder of 2012 to be $18 million.

The Early Retiree Reinsurance Program ("ERRP") was created under the Patient Protection and Affordable Care Act ("PPACA") of 2010 to provide temporary financial assistance to health plan sponsors who provide retirement health coverage to pre-Medicare retirees. Under the terms of ERRP, for the six months ended April 30, 2012 and 2011, $3 million and $5 million, respectively, was collected and deposited into the Base Trust. In the three months ended April 30, 2012 and 2011, no amounts were collected or deposited into the Base Trust.

During the three months ended January 31, 2011, the Company incurred a charge of $5 million due to a plan curtailment and contractual termination benefits related to restructuring activities at the Fort Wayne facility. For more information regarding restructuring activities at the Fort Wayne facility, see Note 2, Restructurings and Impairments.

Components of Net Periodic Benefit Expense (Income)

Net postretirement benefits expense (income) included in our Consolidated Statements of Operations is comprised of the following:

	Three Months Ended April 30,												Six Months Ended April 30,
	Pension Benefits						Health and Life Insurance Benefits						Pension Benefits						Health and Life Insurance Benefits
	2012			2011			2012			2011			2012			2011			2012			2011
(in millions)
Service cost for benefits earned during the period	$	4		$	5		$	2		$	2		$	8		$	9		$	4		$	4
Interest on obligation	43			47			21			14			86			94			42			27
Amortization of cumulative loss	27			25			11			—			55			50			20			—
Amortization of prior service benefit	—			—			(1		)	(7		)	—			—			(2		)	(15		)
Settlements and curtailments	—			—			—			—			—			2			—			—
Contractual termination benefits	—			—			—			—			—			3			(3		)	—
Premiums on pension insurance	1			1			—			—			1			1			—			—
Expected return on assets	(48		)	(53		)	(9		)	(11		)	(96		)	(105		)	(18		)	(21		)
Net postretirement benefits expense (income)	$	27		$	25		$	24		$	(2	)	$	54		$	54		$	43		$	(5	)

Defined Contribution Plans and Other Contractual Arrangements

Our defined contribution plans cover a substantial portion of domestic salaried employees and certain domestic represented employees. The defined contribution plans contain a 401(k) feature and provide most participants with a matching contribution from the Company. Many participants covered by the plan receive annual Company contributions to their retirement accounts based on an age-weighted percentage of the participant's eligible compensation for the calendar year. Defined contribution expense pursuant to these plans was $14 million and $24 million for the three and six months ended April 30, 2012 respectively, and $8 million and $18 million for the three and six months ended April 30, 2011, respectively.

In accordance with the 1993 Settlement Agreement, an independent Retiree Supplemental Benefit Trust (the "Supplemental Trust") was established. The Supplemental Trust, and the benefits it provides to certain retirees, is not part of the Company's consolidated financial statements. The assets of the Supplemental Trust arise from three sources: (i) the Company's 1993 contribution to the Supplemental Trust of 25.5 million shares of our Class B common stock, which was subsequently sold by the Supplemental Trust prior to 2000, (ii) contingent profit-sharing contributions made by the Company, and (iii) net investment gains on the Supplemental Trust's assets, if any.

The Company's contingent profit sharing obligations will continue until certain funding targets defined by the 1993 Settlement Agreement are met ("Profit Sharing Cessation"). Upon Profit Sharing Cessation, the Company would assume responsibility for (i) establishing the investment policy for the Supplemental Trust, (ii) approving or disapproving of certain additional supplemental benefits to the extent such benefits would result in higher expenditures than those contemplated upon the Profit Sharing Cessation, and (iii) making additional contributions to the Supplemental Trust as necessary to make up for investment and / or actuarial losses. We have recorded no profit sharing accruals based on our estimate of 2012 results.