PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

3 Months Ended

Mar. 31, 2012

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The components of net periodic benefit costs (credits) are:

	PENSION
	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2012			MARCH 31, 2011
Service cost	$	14		$	12
Interest cost	65			69
Expected return on plan assets	(105		)	(105		)
Amortization of actuarial loss	42			35
Amortization of prior service cost	2			4
Loss due to curtailment and special termination benefits	—			1
Total net periodic benefit cost	$	18		$	16

	OTHER POSTRETIREMENT BENEFITS
	QUARTER ENDED
DOLLAR AMOUNTS IN MILLIONS	MARCH 31, 2012			MARCH 31, 2011
Service cost	$	—		$	1
Interest cost	4			6
Amortization of actuarial loss	4			3
Amortization of prior service credit	(58		)	(6		)
Other	4			4
Total net periodic benefit cost (credit)	$	(46	)	$	8

During fourth quarter 2011, we ratified amendments to our postretirement medical and life insurance benefit plans for U.S. salaried employees that reduced or eliminated certain benefits that were available to both past and present employees. In first quarter 2012, the company recognized a gain of $52 million due to these benefit changes. This gain is included in other operating income and reflected in the amortization of prior service credit in the table above.

FAIR VALUE OF PENSION PLAN ASSETS

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011, the value reported for our pension plan assets at the end of 2011 was estimated. Additional information regarding the year-end values generally becomes available to us during the first half of the following year. We expect to complete the valuation of our pension plan assets during second quarter 2012. The final adjustments could affect net pension periodic benefit cost.

EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011, we expect to:

• make approximately $83 million of required contributions to our Canadian registered and nonregistered pension plans in 2012;

• contribute approximately $60 million to our U.S. qualified pension plan for 2012, which is payable by September 15, 2013 if we do not elect to pay it in 2012;

• contribute approximately $20 million to our U.S. nonqualified pension plans in 2012; and

• make U.S. and Canadian other postretirement benefit payments of approximately $42 million in 2012.