Dow Chemical 2012 Annual Report Download - page 143

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The Company funds most of the cost of these health care and life insurance benefits as incurred. In 2012, Dow did not
make any contributions to its other postretirement benefit plan trusts. Likewise, Dow does not expect to contribute assets to its
other postretirement benefits plan trusts in 2013.
The weighted-average assumptions used to determine other postretirement benefit obligations and net periodic benefit
costs for the U.S. plans are provided below:
U.S. Plan Assumptions for Other
Postretirement Benefits
Benefit Obligations
at December 31
Net Periodic Costs
for the Year
2012 2011 2010 2012 2011 2010
Discount rate 3.67% 4.66% 5.15% 4.66% 5.15% 5.69%
Expected long-term rate of return on plan assets — — — 1.00% 3.60% 4.35%
Initial health care cost trend rate 7.84% 8.28% 8.70% 8.28% 8.70% 9.13%
Ultimate health care cost trend rate 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
Year ultimate trend rate to be reached 2019 2019 2019 2019 2019 2019
Increasing the assumed medical cost trend rate by one percentage point in each year would decrease the accumulated
postretirement benefit obligation at December 31, 2012 by $16 million and decrease the net periodic postretirement benefit cost
for the year by less than $1 million. Decreasing the assumed medical cost trend rate by one percentage point in each year would
increase the accumulated postretirement benefit obligation at December 31, 2012 by $20 million and the net periodic
postretirement benefit cost for the year by $1 million.
Net Periodic Benefit Cost for All Significant Plans
Defined Benefit Pension Plans Other Postretirement Benefits
In millions 2012 2011 2010 2012 2011 2010
Service cost $ 378 $ 347 $ 309 $ 17 $ 15 $ 15
Interest cost 1,093 1,121 1,098 92 100 111
Expected return on plan assets (1,262) (1,305) (1,212) (1) (6) (10)
Amortization of prior service cost (credit) 26 28 28 (4) (1) —
Amortization of unrecognized loss (gain) 519 374 268 1 1 (1)
Curtailment/settlement/other (1) (2) — (4) 11 9 — 3
Net periodic benefit cost $ 754 $ 561 $ 502 $ 114 $ 109 $ 118
(1) Included $11 million of curtailment and settlement costs recorded in 2010 related to the divestiture of Styron (see Note 5).
(2) Included $9 million of curtailment costs recorded in 2012 related to the 4Q12 Restructuring plan (see Note 3).
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss
for All Significant Plans
Defined Benefit Pension Plans Other Postretirement Benefits
In millions 2012 2011 2010 2012 2011 2010
Net loss $ 3,135 $ 2,009 $ 591 $ 163 $ 20 $ 59
Prior service cost —— 2———
Amortization of prior service (cost) credit (26) (28) (36) 4 1 (3)
Amortization of unrecognized (loss) gain (519) (370) (271) (1) (1) 1
Total recognized in other comprehensive
loss $ 2,590 $ 1,611 $ 286 $ 166 $ 20 $ 57
Total recognized in net periodic benefit
cost and other comprehensive loss $ 3,344 $ 2,172 $ 788 $ 280 $ 129 $ 175