Pension and Other Postretirement Benefit Plans

9 Months Ended

Sep. 30, 2012

General Discussion of Pension and Other Postretirement Benefits [Abstract]

Pension and Other Postretirement Benefit Plans

PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS

The following table summarizes the components of net periodic pension cost and the cost of other postretirement benefits for the periods presented:

	Three Months Ended September 30,
	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
Millions of dollars	2012			2011			2012			2011			2012			2011
Service cost	$	1		$	—		$	2		$	2		$	2		$	2
Interest cost	45			48			6			5			5			7
Expected return on plan assets	(48		)	(48		)	(3		)	(3		)	—			—
Amortization:
Actuarial loss	11			8			1			1			—			—
Prior service credit	(1		)	(1		)	—			—			(11		)	(12		)
Settlement and curtailment (gain) loss	1			—			1			—			(3		)	—
Net periodic benefit cost (credit)	$	9		$	7		$	7		$	5		$	(7	)	$	(3	)

	Nine Months Ended September 30,
	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
Millions of dollars	2012			2011			2012			2011			2012			2011
Service cost	$	2		$	—		$	5		$	6		$	5		$	6
Interest cost	134			144			15			15			16			24
Expected return on plan assets	(145		)	(144		)	(8		)	(9		)	—			—
Amortization:
Actuarial loss	34			24			3			3			—			—
Prior service credit	(3		)	(3		)	—			—			(34		)	(30		)
Settlement and curtailment (gain) loss	5			—			1			—			(52		)	—
Net periodic benefit cost (credit)	$	27		$	21		$	16		$	15		$	(65	)	$	—

During the second quarter 2012, we recognized approximately $49 million in curtailment gains, which were primarily related to the closure of our Fort Smith, Arkansas facility, which was previously announced in October 2011. These curtailment gains are recognized as employees terminate and are included in cost of products sold with an offset in other comprehensive income, net of tax.

We now expect to contribute up to $200 million to our pension plans during 2012, as a result of funding relief provided through the Surface Transportation Extension Act of 2012, which lowered contributions to our United States pension plans by approximately $50 million.