United Technologies 2011 Annual Report Download - page 74

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Pension Plans. We sponsor both funded and unfunded
domestic and foreign defined benefit pension plans that
cover the majority of our employees. Our plans use a
December 31 measurement date consistent with our fiscal
year.
(Dollars in millions) 2011 2010
CHANGE IN BENEFIT OBLIGATION:
Beginning balance $24,445 $ 22,271
Service cost 444 396
Interest cost 1,298 1,287
Actuarial loss 2,185 1,625
Total benefits paid (1,233) (1,216)
Net settlement and curtailment loss (gain) 1(37)
Plan amendments 21 121
Other 6(2)
Ending balance $27,167 $24,445
CHANGE IN PLAN ASSETS:
Beginning balance $22,384 $19,377
Actual return on plan assets 1,320 2,635
Employer contributions 1,060 1,621
Benefits paid from plan assets (1,233) (1,216)
Other 11 (33)
Ending balance $ 23,542 $ 22,384
FUNDED STATUS:
Fair value of plan assets $ 23,542 $ 22,384
Benefit obligations (27,167) (24,445)
Funded status of plan $(3,625) $(2,061)
AMOUNTS RECOGNIZED IN THE CONSOLIDATED
BALANCE SHEET CONSIST OF:
Noncurrent assets $ 552 $637
Current liability (64) (58)
Noncurrent liability (4,113) (2,640)
Net amount recognized $(3,625) $(2,061)
AMOUNTS RECOGNIZED IN ACCUMULATED
OTHER COMPREHENSIVE LOSS CONSIST OF:
Net actuarial loss $9,436 $7,223
Prior service credit (152) (184)
Transition obligation 66
Net amount recognized $9,290 $7,045
The amounts included in “Other” in the preceding table
reflect the impact of foreign exchange translation, primarily
for plans in the U.K. and Canada.
Qualified domestic pension plan benefits comprise
approximately 76% of the projected benefit obligation.
Benefits for union employees are generally based on a stated
amount for each year of service. For non-union employees,
benefits are generally based on an employee’s years of
service and compensation near retirement. Effective
January 1, 2015, this formula will change to the existing cash
balance formula that was adopted in 2003 for newly hired
non-union employees and for other non-union employees
who made a one-time voluntary election to have future
benefit accruals determined under this formula. This plan
change resulted in a $623 million reduction in the projected
benefit obligation as of December 31, 2009. Certain foreign
plans, which comprise approximately 23% of the projected
benefit obligation, are considered defined benefit plans for
accounting purposes. Nonqualified domestic pension plans
provide supplementary retirement benefits to certain
employees and are not a material component of the
projected benefit obligation.
We made $156 million of cash contributions and contributed
$450 million in UTC common stock to our domestic defined
benefit pension plans and made $395 million of cash
contributions to our foreign defined benefit pension plans in
2011. In 2010, we made $1,001 million of cash contributions
and contributed $250 million in UTC common stock to our
domestic defined benefit pension plans and made $298
million of cash contributions to our foreign defined benefit
pension plans.
Information for pension plans with accumulated benefit
obligation in excess of plan assets:
(Dollars in millions) 2011 2010
Projected benefit obligation $24,091 $ 21,556
Accumulated benefit obligation 23,198 20,562
Fair value of plan assets 19,949 18,885
The accumulated benefit obligation for all defined benefit
pension plans was $26.0 billion and $23.2 billion at
December 31, 2011 and 2010, respectively.
The components of the net periodic pension cost are as
follows:
(Dollars in millions) 2011 2010 2009
Pension Benefits:
Service cost $444 $ 396 $ 429
Interest cost 1,298 1,287 1,285
Expected return on plan assets (1,834) (1,735) (1,634)
Amortization of prior service
(credits) costs (12) (18) 56
Amortization of unrecognized net
transition obligation 111
Recognized actuarial net loss 462 285 226
Net settlement and curtailment
loss 16 2 102
Net periodic pension cost—employer $375 $ 218 $ 465
Other changes in plan assets and benefit obligations
recognized in other comprehensive loss in 2011 are as follows:
(Dollars in millions)
Current year actuarial loss $2,700
Amortization of actuarial loss (462)
Current year prior service cost 21
Amortization of prior service credit 12
Amortization of transition obligation (1)
Other (1)
Total recognized in other comprehensive loss $ 2,269
Net recognized in net periodic pension cost and other
comprehensive loss $2,644
72 UNITED TECHNOLOGIES CORPORATION