Halliburton 2011 Annual Report Download - page 79

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64
The weighted-average discount rate utilized in 2011 to determine the projected benefit obligation
at the measurement date for our United Kingdom pension plan, which constituted 74% of our international
plans’ pension obligations, was 4.9%, compared to a discount rate of 5.5% utilized in 2010. The expected
long-term rate of return assumption used for our United Kingdom pension plan expense was 6.7% in 2011
and 2010. The following table illustrates the sensitivity to changes in certain assumptions, holding all other
assumptions constant, for our United Kingdom pension plan.
Effect on
Pretax Pension Pension Benefit Obligation
Millions of dollars
Expense in 2011 at December 31, 2011
25-basis-point decrease in discount rate $ 1 $ 37
25-basis-point increase in discount rate $ (1) $ (35)
25-basis-point decrease in expected long-term rate of return $ 2 NA
25-basis-point increase in expected long-term rate of return $ (2) NA
Our international defined benefit plans reduced pretax income by $27 million in 2011, $28 million
in 2010, and $32 million in 2009. Included in these amounts was income from expected pension returns of
$47 million in 2011, $43 million in 2010, and $38 million in 2009. Actual returns on international plan
assets totaled $13 million in 2011, compared to $72 million in 2010. Our net actuarial loss, net of tax,
related to international pension plans at December 31, 2011 was $184 million. In our international plans
where employees continue to earn additional benefits for continued service, actuarial gains and losses are
being recognized in operating income over a period of 12 to 17 years, which represents the estimated
average remaining service of the participant group expected to receive benefits. In our international plans
where benefits are not accrued for continued service, actuarial gains and losses are being recognized in
operating income over a period of one to 35 years, which represents the estimated average remaining
lifetime of the benefit obligations. The broad range of one to 35 years reflects varying maturity levels
among these plans.
During 2011, we made contributions of $26 million to fund our international defined benefit plans.
We expect to make contributions of approximately $11 million to our international defined benefit plans in
2012.
The actuarial assumptions used in determining our pension benefit obligations may differ
materially from actual results due to changing market and economic conditions, higher or lower withdrawal
rates, and longer or shorter life spans of participants. While we believe that the assumptions used are
appropriate, differences in actual experience or changes in assumptions may materially affect our financial
position or results of operations. See Note 13 to the consolidated financial statements for further
information related to defined benefit and other postretirement benefit plans.