Pension and Postretirement Benefit Plans

9 Months Ended

Oct. 02, 2011

Pension and Postretirement Benefit Plans

Note 12. Pension and Postretirement Benefit Plans

The components of net periodic benefit costs of the U.S. and international pension plans and the postretirement plans, which provide medical and life insurance benefits to retirees and their eligible dependents, follow:

	Pension Plans
	U.S. Qualified(a)						U.S. Supplemental (Non-Qualified)(b)						International(c)						Postretirement Plans(d)
(millions of dollars)	Oct. 2, 2011			Oct. 3, 2010			Oct. 2, 2011			Oct. 3, 2010			Oct. 2, 2011			Oct. 3, 2010			Oct. 2, 2011			Oct. 3, 2010
Three Months Ended:
Service cost	$	87		$	83		$	9		$	7		$	63		$	55		$	17		$	18
Interest cost		181			183			17			19			115			103			49			52
Expected return on plan assets		(216	)		(193	)		––			––			(115	)		(105	)		(9	)		(7	)
Amortization of:
Actuarial losses		33			38			9			7			23			17			4			7
Prior service (credits)/costs		(2	)		––			(1	)		(1	)		(2	)		(1	)		(13	)		(15	)
Curtailments and settlements––net		20			(3	)		3			8			3			––			(14	)		(4	)
Special termination benefits		7			7			5			3			1			1			1			1
Net periodic benefit costs	$	110		$	115		$	42		$	43		$	88		$	70		$	35		$	52
Nine Months Ended:
Service cost	$	266		$	266		$	28		$	22		$	190		$	172		$	52		$	61
Interest cost		550			562			54			59			340			319			146			160
Expected return on plan assets		(657	)		(595	)		––			––			(336	)		(324	)		(26	)		(23	)
Amortization of:
Actuarial losses		103			114			27			22			66			50			12			7
Prior service (credits)/costs		(6	)		1			(2	)		(2	)		(4	)		(3	)		(40	)		(24	)
Curtailments and settlements––net		71			(72	)		21			(1	)		7			(5	)		(40	)		(6	)
Special termination benefits		17			57			18			155			4			4			2			13
Net periodic benefit costs	$	344		$	333		$	146		$	255		$	267		$	213		$	106		$	188

(a) The increase in net periodic benefit costs in the first nine months of 2011, compared to the first nine months of 2010, for our U.S. qualified plans was primarily driven by higher settlement charges and lower curtailment gains associated with restructuring initiatives partially offset by higher expected return on plan assets and special termination benefits recognized in the prior-year period for certain executives as part of restructuring initiatives.

(b) The decrease in net periodic benefit costs in the first nine months of 2011, compared to the first nine months of 2010, for our U.S. supplemental (non-qualified) pension plans was primarily driven by special termination benefits recognized in the prior-year period for certain executives as part of restructuring initiatives.

(c) The increase in net periodic benefit costs in the first nine months of 2011, compared to the first nine months of 2010, for our international pension plans was primarily driven by the decrease in the discount rate partially offset by higher expected return on plan assets.

(d) The decrease in net periodic benefit costs in the first nine months of 2011, compared to the first nine months of 2010, for our postretirement plans was primarily driven by the harmonization of the postretirement plans and by higher curtailment gains and lower settlement charges associated with restructuring initiatives.

For the first nine months of 2011, we contributed from our general assets $487 million to our U.S. qualified pension plans, $314 million to our international pension plans, $183 million to our postretirement plans and $162 million to our U.S. supplemental (non-qualified) pension plans.

During 2011, we expect to contribute from our general assets a total of $487 million to our U.S. qualified pension plans, $483 million to our international pension plans, $249 million to our postretirement plans and $188 million to our U.S. supplemental (non-qualified) pension plans. Contributions expected to be made for 2011 are inclusive of amounts contributed during the first nine months of 2011. The international pension plan, postretirement plan and U.S. supplemental (non-qualified) pension plan contributions from our general assets include direct employer benefit payments.