Pension and Postretirement Benefits

6 Months Ended

Jun. 30, 2012

Pension and Postretirement Benefits

b. Pension and Postretirement Benefits. Net periodic pension expense for the three and six months ended June 30, 2012 and 2011 is presented below (in millions of dollars):

	Three Months Ended June 30, 2012									Three Months Ended June 30, 2011
	Total			U.S. Plans			Int’l. Plans			Total			U.S. Plans			Int’l. Plans
Service cost	$	2.2		$	—		$	2.2		$	2.4		$	—		$	2.4
Interest cost		91.4			62.7			28.7			98.1			65.5			32.6
Expected return on plan assets		(105.3	)		(71.3	)		(34.0	)		(118.3	)		(83.5	)		(34.8	)
Amortization of prior service cost		—			.2			(.2	)		—			.2			(.2	)
Recognized net actuarial loss		38.5			30.1			8.4			26.5			19.8			6.7
Curtailment gain		(5.7	)		—			(5.7	)		—			—			—
Net periodic pension expense	$	21.1		$	21.7		$	(.6	)	$	8.7		$	2.0		$	6.7

	Six Months Ended June 30, 2012									Six Months Ended June 30, 2011
	Total			U.S. Plans			Int’l. Plans			Total			U.S. Plans			Int’l. Plans
Service cost	$	4.2		$	—		$	4.2		$	6.1		$	—		$	6.1
Interest cost		181.4			124.4			57.0			196.0			132.0			64.0
Expected return on plan assets		(210.6	)		(142.9	)		(67.7	)		(237.1	)		(168.7	)		(68.4	)
Amortization of prior service cost		.3			.4			(.1	)		.2			.4			(.2	)
Recognized net actuarial loss		77.2			59.9			17.3			52.5			39.2			13.3
Curtailment gain		(5.7	)		—			(5.7	)		—			—			—
Net periodic pension expense	$	46.8		$	41.8		$	5.0		$	17.7		$	2.9		$	14.8

On July 6, 2012, legislation was signed into law in the U.S., which among other things, provides defined benefit plan sponsors with funding relief. The legislation includes provisions regarding interest rate stabilization for pension plans as well as amendments regarding an increase in future Pension Benefit Guarantee Corporation premiums. Final funding requirements cannot be determined until the Internal Revenue Service publishes the rates to be utilized. The company estimates that the new guidelines will reduce cash funding requirements in 2012 for the company’s U.S. qualified defined benefit pension plan from the previous estimate of $143 million to approximately $110 million.

In 2012, the company estimates that it will make cash contributions of approximately $200 million to its worldwide defined benefit pension plans, which is comprised of $110 million for the company’s U.S. qualified defined benefit pension plan and $90 million primarily for non-U.S. defined benefit pension plans. In 2011, the company made cash contributions of $82.7 million to its worldwide defined benefit pension plans. For the six months ended June 30, 2012 and 2011, $118.8 million and $42.8 million, respectively, of cash contributions have been made.

Net periodic postretirement benefit expense for the three and six months ended June 30, 2012 and 2011 is presented below (in millions of dollars):

	Three Months Ended June 30						Six Months Ended June 30
	2012			2011			2012			2011
Service cost	$	.1		$	.1		$	.2		$	.2
Interest cost		2.3			2.5			4.5			4.9
Expected return on assets		(.2	)		(.2	)		(.3	)		(.3	)
Amortization of prior service cost		.4			.5			.9			.9
Recognized net actuarial loss		1.1			1.0			2.2			2.0
Net periodic postretirement benefit expense	$	3.7		$	3.9		$	7.5		$	7.7

The company expects to make cash contributions of approximately $23 million to its postretirement benefit plan in 2012 compared with $21.9 million in 2011. For the six months ended June 30, 2012 and 2011, $8.2 million and $8.8 million, respectively, of cash contributions have been made.