v2.4.0.6
Postretirement benefit plans (Tables)
 12 Months Ended
Dec. 31, 2011
Compensation and Retirement Disclosure [Abstract]  
Schedule of defined benefit plans disclosures
Assumptions and investment policies
 
 
Defined Benefit
 
U.S. Retiree
Health Care
 
 
2011
 
2010
 
2011
 
2010
Weighted average assumptions used to determine benefit obligations:
 
 
 
 
 
 
 
 
U.S. discount rate
 
4.92%
 
5.58%
 
4.89%
 
5.48%
Non-U.S. discount rate
 
2.89%
 
2.79%
 

 

 
 
 
 
 
 
 
 
 
U.S. average long-term pay progression
 
3.50%
 
3.40%
 

 

Non-U.S. average long-term pay progression
 
3.18%
 
3.24%
 

 

 
 
 
 
 
 
 
 
 
Weighted average assumptions used to determine net periodic benefit cost:
 
 
 
 
 
 
 
 
U.S. discount rate
 
5.58%
 
5.61%
 
5.48%
 
5.54%
Non-U.S. discount rate
 
2.79%
 
3.23%
 

 

 
 
 
 
 
 
 
 
 
U.S. long-term rate of return on plan assets
 
6.25%
 
6.50%
 
5.50%
 
6.00%
Non-U.S. long-term rate of return on plan assets
 
4.17%
 
4.23%
 

 

 
 
 
 
 
 
 
 
 
U.S. average long-term pay progression
 
3.40%
 
3.00%
 

 

Non-U.S. average long-term pay progression
 
3.24%
 
3.06%
 

 


Weighted average asset allocations at December 31, are as follows:
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S. Defined
Benefit
Asset category
 
2011
 
2010
 
2011
 
2010
 
2011
 
2010
Equity securities
 
35%
 
35%
 
48%
 
49%
 
32%
 
49%
Fixed income securities
 
63%
 
60%
 
41%
 
41%
 
66%
 
50%
Cash equivalents
 
2%
 
5%
 
11%
 
10%
 
2%
 
1%

None
Changes in the benefit obligations and plan assets for the defined benefit and retiree health care benefit plans were as follows:
 
 
U.S. Defined Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
 
2011
 
2010
 
2011
 
2010
 
2011
 
2010
Change in plan benefit obligation:
 
 
 
 
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
 
$
880

 
$
860

 
$
473

 
$
472

 
$
2,217

 
$
1,945

Service cost
 
22

 
20

 
4

 
4

 
41

 
37

Interest cost
 
46

 
45

 
25

 
26

 
69

 
62

Participant contributions
 
—

 
—

 
18

 
17

 
1

 
3

Benefits paid
 
(52
)
 
(6
)
 
(43
)
 
(45
)
 
(72
)
 
(70
)
Medicare subsidy
 
—

 
—

 
4

 
3

 
—

 
—

Actuarial (gain) loss
 
61

 
92

 
19

 
(4
)
 
91

 
132

Settlements
 
—

 
(131
)
 
—

 
—

 
(1
)
 
—

Curtailments
 
(2
)
 
—

 
4

 
—

 
(3
)
 
—

Assumed with National acquisition
 
—

 
—

 
—

 
—

 
301

 
—

Special termination benefits
 
4

 
—

 
—

 
—

 
—

 
—

Plan amendments
 
—

 
—

 
17

 
—

 
—

 
(1
)
Effects of exchange rate changes
 
—

 
—

 
—

 
—

 
104

 
109

Benefit obligation at end of year (BO)
 
$
959

 
$
880

 
$
521

 
$
473

 
$
2,748

 
$
2,217

 
 
 
 
 
 
 
 
 
 
 
 
 
Change in plan assets:
 
 
 
 

 
 
 
 

 
 
 
 

Fair value of plan assets at beginning of year
 
$
833

 
$
859

 
$
404

 
$
374

 
$
1,835

 
$
1,672

Actual return on plan assets
 
106

 
76

 
6

 
25

 
53

 
95

Employer contributions (funding of qualified plans)
 
25

 
30

 
46

 
33

 
72

 
53

Employer contributions (payments for non-qualified plans)
 
2

 
5

 
—

 
—

 
—

 
—

Participant contributions
 
—

 
—

 
18

 
17

 
1

 
3

Assumed with National acquisition
 
—

 
—

 
—

 
—

 
235

 
—

Benefits paid
 
(52
)
 
(6
)
 
(43
)
 
(45
)
 
(72
)
 
(70
)
Settlements
 
—

 
(131
)
 
—

 
—

 
(1
)
 
—

Effects of exchange rate changes
 
—

 
—

 
—

 
—

 
88

 
82

Fair value of plan assets at end of year (FVPA)
 
$
914

 
$
833

 
$
431

 
$
404

 
$
2,211

 
$
1,835

Funded status (FVPA – BO) at end of year
 
$
(45
)
 
$
(47
)
 
$
(90
)
 
$
(69
)
 
$
(537
)
 
$
(382
)

Expense related to defined benefit and retiree health care benefit plans was as follows:
 
 
U.S. Defined Benefit
 
U.S. Retiree Health Care
 
Non-U.S. Defined Benefit
 
 
2011
 
2010
 
2009
 
2011
 
2010
 
2009
 
2011
 
2010
 
2009
Service cost
 
$
22

 
$
20

 
$
20

 
$
4

 
$
4

 
$
4

 
$
41

 
$
37

 
$
40

Interest cost
 
46

 
45

 
49

 
25

 
26

 
26

 
69

 
62

 
62

Expected return on plan assets
 
(45
)
 
(49
)
 
(49
)
 
(21
)
 
(23
)
 
(28
)
 
(83
)
 
(73
)
 
(69
)
Amortization of prior service cost (credit)
 
1

 
1

 
1

 
2

 
2

 
2

 
(4
)
 
(3
)
 
(3
)
Recognized net actuarial loss
 
23

 
22

 
18

 
13

 
12

 
8

 
40

 
30

 
34

Net periodic benefit cost
 
47

 
39

 
39

 
23

 
21

 
12

 
63

 
53

 
64

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement charges (a)
 
—

 
37

 
13

 
—

 
—

 
—

 
—

 
—

 
15

Curtailment charges (credits)
 
—

 
—

 
—

 
5

 
—

 
2

 
2

 
—

 
(9
)
Special termination benefit charges
 
4

 
—

 
6

 
—

 
—

 
—

 
—

 
—

 
3

Total, including charges
 
$
51

 
$
76

 
$
58

 
$
28

 
$
21

 
$
14

 
$
65

 
$
53

 
$
73

(a) Includes restructuring and non-restructuring related settlement charges.
The following table summarizes the change in the fair values for Level 3 plan assets for the years ending December 31, 2011 and 2010:
 
 
Level 3 Plan Assets
 
 
U.S.
Defined
Benefit
 
Non-U.S.
Defined
Benefit
Balance, December 31, 2009
 
$
34

 
$
49

Redemptions
 
—

 
(4
)
Unrealized gain
 
—

 
6

Balance, December 31, 2010
 
34

 
51

Redemptions
 
—

 
(51
)
Unrealized gain
 
1

 
—

Assumed with National acquisition
 
—

 
18

Balance, December 31, 2011
 
$
35

 
$
18

 
Amounts recognized on the balance sheet as of December 31, 2010, were as follows:
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
Total
Overfunded retirement plans
 
$
1

 
$
—

 
$
30

 
$
31

Accrued expenses and other liabilities
 
(3
)
 
—

 
(7
)
 
(10
)
Underfunded retirement plans
 
(45
)
 
(69
)
 
(405
)
 
(519
)
Funded status (FVPA – BO) at end of year
 
$
(47
)
 
$
(69
)
 
$
(382
)
 
$
(498
)

The tables below set forth the fair value of our plan assets as of December 31, 2011 and 2010, using the same three-level hierarchy of fair-value inputs described in Note 9.
 
 
Fair Value at
December 31, 2011
 
Level 1
 
Level 2
 
Level 3
Assets of U.S. defined benefit plan
 
 
 
 
 
 
 
 
Money market funds
 
$
23

 
$
—

 
$
23

 
$
—

U.S. Government agency and Treasury securities
 
266

 
244

 
22

 
—

U.S. bond funds
 
309

 
—

 
309

 
—

U.S. equity funds and option collars
 
229

 
—

 
229

 
—

International equity funds
 
52

 
—

 
52

 
—

Limited partnerships
 
35

 
—

 
—

 
35

Total
 
$
914

 
$
244

 
$
635

 
$
35

 
 
 
 
 
 
 
 
 
Assets of U.S. retiree health care plan
 
 

 
 
 
 
 
 
Money market funds
 
$
50

 
$
—

 
$
50

 
$
—

U.S. bond funds
 
175

 
175

 
—

 
—

U.S. equity funds and option collars
 
159

 
40

 
119

 
—

International equity funds
 
47

 
—

 
47

 
—

Total
 
$
431

 
$
215

 
$
216

 
$
—

 
 
 
 
 
 
 
 
 
Assets of non-U.S. defined benefit plans
 
 

 
 
 
 
 
 
Money market funds
 
$
50

 
$
41

 
$
9

 
$
—

Local market bond funds
 
1,129

 
209

 
920

 
—

International/global bond funds
 
335

 
3

 
332

 
—

Local market equity funds
 
133

 
13

 
120

 
—

International/global equity funds
 
521

 
136

 
385

 
—

Other investments
 
43

 
—

 
25

 
18

Total
 
$
2,211

 
$
402

 
$
1,791

 
$
18



 
 
Fair Value at
December 31, 2010
 
Level 1
 
Level 2
 
Level 3
Assets of U.S. defined benefit plan
 
 
 
 
 
 
 
 
Money market funds
 
$
43

 
$
—

 
$
43

 
$
—

U.S. Government agency and Treasury securities
 
220

 
196

 
24

 
—

U.S. bond funds
 
281

 
—

 
281

 
—

U.S. equity funds and option collars
 
195

 
—

 
195

 
—

International equity funds
 
60

 
—

 
60

 
—

Limited partnerships
 
34

 
—

 
—

 
34

Total
 
$
833

 
$
196

 
$
603

 
$
34

 
 
 
 
 
 
 
 
 
Assets of U.S. retiree health care plan
 
 

 
 

 
 

 
 

Money market funds
 
$
41

 
$
—

 
$
41

 
$
—

U.S. bond funds
 
165

 
165

 
—

 
—

U.S. equity funds and option collars
 
144

 
41

 
103

 
—

International equity funds
 
54

 
—

 
54

 
—

Total
 
$
404

 
$
206

 
$
198

 
$
—

 
 
 
 
 
 
 
 
 
Assets of non-U.S. defined benefit plans
 
 

 
 

 
 

 
 

Money market funds
 
$
19

 
$
—

 
$
19

 
$
—

Local market bond funds
 
669

 
—

 
669

 
—

International/global bond funds
 
211

 
—

 
211

 
—

Local market equity funds
 
300

 
42

 
258

 
—

International/global equity funds
 
555

 
—

 
555

 
—

Other investments
 
81

 
—

 
30

 
51

Total
 
$
1,835

 
$
42

 
$
1,742

 
$
51


Amounts recognized on the balance sheet as of December 31, 2011, were as follows:
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
Total
Overfunded retirement plans
 
$
11

 
$
—

 
$
29

 
$
40

Accrued expenses and other liabilities
 
(2
)
 
—

 
(9
)
 
(11
)
Underfunded retirement plans
 
(54
)
 
(90
)
 
(557
)
 
(701
)
Funded status (FVPA – BO) at end of year
 
$
(45
)
 
$
(90
)
 
$
(537
)
 
$
(672
)

Assumed health care cost trend rates for the U.S. retiree health care plan at December 31 are as follows:
 
 
2011
 
2010
Assumed health care cost trend rate for next year
 
9.0%
 
9.0%
Ultimate trend rate
 
5.0%
 
5.0%
Year in which ultimate trend rate is reached
 
2017
 
2016

The table below shows target allocation ranges for the plans that hold a substantial majority of the defined benefit assets.
Asset category
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Non-U.S. Defined
Benefit
Equity securities
 
35%
 
50%
 
25% - 60%
Fixed income securities and cash equivalents
 
65%
 
50%
 
40% - 75%

The following table shows the benefits we expect to pay to participants from the plans in the next ten years. Almost all of the payments will be made from plan assets and not from company assets.
 
 
U.S. Defined
Benefit
 
U.S. Retiree
Health Care
 
Medicare
Subsidy
 
Non-U.S.
Defined Benefit
2012
 
$
160

 
$
35

 
$
(4
)
 
$
77

2013
 
92

 
37

 
(4
)
 
80

2014
 
91

 
39

 
(4
)
 
82

2015
 
94

 
41

 
(2
)
 
89

2016
 
95

 
43

 
(2
)
 
92

2017–2021
 
451

 
213

 
(10
)
 
525


The amounts recorded in AOCI for the years ended December 31, 2011 and 2010, are detailed below by plan type:
 
 
U.S. Defined Benefit
 
U.S. Retiree
Health Care
 
Non-U.S.
Defined Benefit
 
Total
 
 
Net
Actuarial
Loss
 
Prior
Service
Cost
 
Net
Actuarial
Loss
 
Prior
Service
Cost
 
Net
Actuarial
Loss
 
Prior
Service
Cost
 
Net
Actuarial
Loss
 
Prior
Service
Cost
AOCI balance, December 31, 2010 (net of tax)
 
$
157

 
$
1

 
$
126

 
$
6

 
$
421

 
$
(23
)
 
$
704

 
$
(16
)
Changes in AOCI by category in 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 

Annual adjustments
 
(3
)
 
—

 
34

 
17

 
158

 
(3
)
 
189

 
14

Reclassification of recognized transactions
 
(23
)
 
(1
)
 
(12
)
 
(4
)
 
(40
)
 
3

 
(75
)
 
(2
)
Less tax expense (benefit)
 
9

 
—

 
(8
)
 
(5
)
 
(39
)
 
—

 
(38
)
 
(5
)
Total change to AOCI in 2011
 
(17
)
 
(1
)
 
14

 
8

 
79

 
—

 
76

 
7

AOCI balance, December 31, 2011 (net of tax)
 
$
140

 
$
—

 
$
140

 
$
14

 
$
500

 
$
(23
)
 
$
780

 
$
(9
)