Honeywell 2012 Annual Report Download - page 116

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Other Changes in Plan Assets and Benefits Obligations
Recognized in Other Comprehensive (Income) Loss 2012 2011 2010
Years Ended December 31,
Actuarial losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34 $ 6 $ 160
Prior service (credit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (21) (176)
Prior service credit recognized during year . . . . . . . . . . . . . . . . . . . . . . . . . . 14 34 44
Actuarial losses recognized during year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34) (38) (34)
Settlements and curtailments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 167 47
Total recognized in other comprehensive loss (income). . . . . . . . . . $ 19 $148 $ 41
Total recognized in net periodic benefit cost and other
comprehensive loss (income) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 87 $ 55 $ 67
The estimated net loss and prior service (credit) for other postretirement benefits that will be
amortized from accumulated other comprehensive (income) loss into net periodic benefit cost in 2013
are expected to be $41 and $(13) million, respectively.
Major actuarial assumptions used in determining the benefit obligations and net periodic benefit
cost for our significant benefit plans are presented in the following table.
2012 2011 2010 2012 2011 2010
U.S. Plans Non-U.S. Plans
Pension Benefits
Actuarial assumptions used to determine benefit
obligations as of December 31:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.06% 4.89% 5.25% 4.29% 4.84% 5.40%
Expected annual rate of compensation
increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.50% 4.50% 4.50% 3.55% 3.67% 3.79%
Actuarial assumptions used to determine net
periodic benefit cost for years ended
December 31:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.89% 5.25% 5.75% 4.84% 5.40% 5.71%
Expected rate of return on plan assets. . . . . . . . 8.00% 8.00% 9.00% 7.03% 7.06% 7.51%
Expected annual rate of compensation
increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.50% 4.50% 4.50% 3.67% 3.79% 3.87%
2012 2011 2010
Other
Postretirement
Benefits
Actuarial assumptions used to determine benefit obligations as of
December 31:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.40% 4.00% 4.70%
Actuarial assumptions used to determine net periodic benefit cost for
years ended December 31:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.00% 4.70% 5.25%
The discount rate for our U.S. pension and other postretirement benefits plans reflects the current
rate at which the associated liabilities could be settled at the measurement date of December 31. To
determine discount rates for our U.S. pension and other postretirement benefit plans, we use a
modeling process that involves matching the expected cash outflows of our benefit plans to a yield
curve constructed from a portfolio of high quality, fixed-income debt instruments. We use the average
yield of this hypothetical portfolio as a discount rate benchmark. The discount rate used to determine
the other postretirement benefit obligation is lower principally due to a shorter expected duration of
other postretirement plan obligations as compared to pension plan obligations.
107
HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)