PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

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



	PENSION
	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2014			JUNE 2013			JUNE 2014			JUNE 2013
Service cost⁽¹⁾	$	13		$	16		$	27		$	32
Interest cost	69			62			138			122
Expected return on plan assets	(116		)	(111		)	(232		)	(220		)
Amortization of actuarial loss	30			56			61			111
Amortization of prior service cost	2			1			3			3
Total net periodic benefit cost (credit)	$	(2	)	$	24		$	(3	)	$	48


(1)	Service cost includes $1 million and $2 million for quarter and year-to-date ended 2014 and $2 million and $3 million for quarter and year-to-date ended 2013 for employees that were part of the Real Estate Divestiture. These charges are included in our results of discontinued operations.



	OTHER POSTRETIREMENT BENEFITS
	QUARTER ENDED						YEAR-TO-DATE ENDED
DOLLAR AMOUNTS IN MILLIONS	JUNE 2014			JUNE 2013			JUNE 2014			JUNE 2013
Service cost	$	—		$	1		$	—		$	1
Interest cost	$	2		$	3		5			6
Amortization of actuarial loss	3			4			6			7
Amortization of prior service credit	(47		)	(6		)	(95		)	(12		)
Other	—			2			(4		)	2
Total net periodic benefit cost (credit)	$	(42	)	$	4		$	(88	)	$	4

During fourth quarter 2013, we decided to eliminate post-Medicare health funding for certain salaried retirees after 2014. As a result, we will ratably amortize a total pretax gain of $177 million throughout 2014. We recognized a pretax gain of $45 million in second quarter 2014 and $90 million in first half 2014 from this plan amendment. This gain is included in "Other operating income, net" in our Consolidated Statement of Operations and reflected in the amortization of prior service credit in the table above.

VALUATION OF PENSION PLAN ASSETS AND OBLIGATION

We estimate the fair value of pension plan assets based upon the information available during the year-end reporting process. In some cases, primarily private equity funds, the information available consists of net asset values as of an interim date, cash flows between the interim date and the end of the year and market events. We revised the year-end estimated fair value of pension plan assets to incorporate year-end net asset values reflected in audited financial statements received after we have filed our Annual Report on Form 10-K. During second quarter 2014, we recorded an increase in the fair value of the pension assets of $53 million. We also revised our census data that is used to estimate our projected benefit obligation. During second quarter 2014, we recorded an increase to the projected benefit obligation of $19 million. The net effect was a $34 million increase in the funded status.

EXPECTED CONTRIBUTIONS AND BENEFIT PAYMENTS

As disclosed in our Annual Report on Form 10-K for the year ended December 31, 2013, in 2014 we expect to:


•	make approximately $53 million of required contributions to our Canadian registered pension plan;


•	make $3 million of required contributions or benefit payments to our Canadian nonregistered pension plans;


•	make benefit payments of $20 million for our U.S. nonqualified pension plans; and


•	make benefit payments of $35 million for our U.S. and Canadian other postretirement plans.

We do not anticipate making a contribution to our U.S. qualified pension plan for 2014.