Pension And Other Postretirement Benefit Plans

6 Months Ended

Dec. 31, 2011

Pension And Other Postretirement Benefit Plans [Abstract]

Pension And Other Postretirement Benefit Plans

10. Pension and Other Postretirement Benefit Plans

The components of the net periodic pension cost and the postretirement medical cost (benefit) for the second quarter and first six months of 2012 and 2011 are as follows:

	Pension - U.S Plans						Pension - International Plans
(In millions)	Second Quarter 2012			Second Quarter 2011			Second Quarter 2012			Second Quarter 2011
Service cost	$	2		$	2		$	6		$	8
Interest cost		18			18			41			40
Expected return on plan assets		(21	)		(20	)		(54	)		(49	)
Amortization of:
Prior service cost (benefit)		—			—			1			2
Net actuarial loss		1			3			2			7
Net periodic benefit cost (benefit)	$	—		$	3		$	(4	)	$	8

	Pension - U.S Plans						Pension - International Plans
(In millions)	First Six Months 2012			First Six Months 2011			First Six Months 2012			First Six Months 2011
Service cost	$	4		$	4		$	13		$	16
Interest cost		37			36			83			79
Expected return on plan assets		(41	)		(40	)		(110	)		(96	)
Amortization of:
Prior service cost (benefit)		—			—			2			3
Net actuarial loss		2			7			4			13
Net periodic benefit cost (benefit)	$	2		$	7		$	(8	)	$	15

	Postretirement Medical  and Life Insurance
(In millions)	Second Quarter 2012			Second Quarter 2011			Six Months 2012			Six Months 2011
Service cost	$	1		$	—		$	1		$	1
Interest cost		1			2			2			3
Amortization of:
Prior service cost (benefit)		(3	)		(3	)		(6	)		(6	)
Net periodic benefit cost (benefit)	$	(1	)	$	(1	)	$	(3	)	$	(2	)

The net periodic benefit costs of the defined benefit pension plans were lower in the first six months of 2012 than in 2011 due to the increase in the expected return on plan assets, which results from the higher level of plan assets as of the beginning of this fiscal year due to improved asset returns during 2011; and a reduction in the amortization of net actuarial losses due to actuarial gains recognized during 2011, which reduced the amount of unrecognized actuarial losses to be amortized as of the end of 2011.

Beginning in the second quarter of 2011, the corporation has classified the North American fresh bakery business as discontinued operations and per the sale agreement, the purchaser assumed the pension and postretirement medical obligations related to those discontinued operations. As such, the total net periodic benefit costs associated with the participants in those plans has been included in discontinued operations as these costs were not retained after these businesses were sold. In addition, the related pension and postretirement benefit plan net liabilities and/or assets have been included in assets and/or liabilities held for sale for periods prior to the date the sale closed.

The disposition of the North American fresh bakery business resulted in the recognition of the following plan settlements and curtailments: a $34 million net settlement loss related to the defined benefit pension plans; and a $71 million settlement gain and a $44 million curtailment gain related to the postretirement health-care and life insurance benefit plans. These amounts are being reported as part of the gain on disposition of businesses in discontinued operations. See Note 6 – "Discontinued Operations" for additional information.

As of the date of disposition, the projected benefit obligations and plan assets for the benefit plans impacted by the disposition were remeasured. In total, including both continuing and discontinued operations, the remeasurement resulted in a $68 million increase in pension liability and a $13 million increase in the postretirement health-care and life insurance liability with a corresponding offset to Accumulated Other Comprehensive Income in the common stockholders' equity section of the Condensed Consolidated Balance Sheet.

During the first six months of 2012 and 2011, the company contributed $121 million and $34 million, respectively, to its defined benefit pension plans. The $121 million contribution includes a €60 million contribution to the company's Dutch pension plan related to an agreement with the Dutch unions to restructure this plan. At the present time, the company expects to contribute approximately $220 million of cash to its defined benefit pension plans in 2012, of which approximately $214 million will be contributed to the international pension plans. The exact amount of cash contributions made to pension plans in any year is dependent upon a number of factors including minimum funding requirements in the jurisdictions in which the corporation operates and arrangements made with trustees of certain foreign plans. As a result, the actual funding in 2012 may differ from the current estimate.