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Long-Term Employee Benefit Liabilities

12 Months Ended

Dec. 31, 2011

Long-Term Employee Benefit Liabilities [Abstract]

16. LONG-TERM EMPLOYEE BENEFIT LIABILITIES

Long-term employee benefit liabilities consist of:

		0000000		0000000		0000000
	2011		2010		2009


Defined benefit pension plans and other [a]	$	143	$	97	$	110
Termination and long service arrangements [b]		229		212		184
Retirement medical benefits plans [c]		37		34		34
Other long-term employee benefits		10		13		11

Long-term employee benefit obligations	$	419	$	356	$	339

[a]

Defined benefit pension plans

The Company sponsors a number of defined benefit pension plans and similar arrangements for its employees. All pension plans are funded to at least the minimum legal funding requirements, while European defined benefit pension plans are unfunded.

The weighted average significant actuarial assumptions adopted in measuring the Company’s obligations and costs are as follows:

		00000000			00000000			00000000
	2011			2010			2009


Projected benefit obligation
Discount rate		4.7	%		5.5	%		5.8%
Rate of compensation increase		2.8	%		2.6	%		3.6%

Net periodic benefit cost
Discount rate		5.2	%		5.9	%		6.3%
Rate of compensation increase		2.7	%		3.5	%		3.6%
Expected return on plan assets		7.1	%		7.7	%		7.4%

Information about the Company’s defined benefit pension plans is as follows:

		00000000			00000000			00000000
	2011			2010			2009


Projected benefit obligation
Beginning of year	$	352		$	330		$	274
Current service cost		11			11			9
Interest cost		19			18			16
Actuarial losses (gains) and changes in actuarial assumptions		42			(5	)		32
Benefits paid		(14	)		(17	)		(14)
Special termination benefit		1			8			—
Acquisition		—			5			—
Divestitures		(3	)		—			—
Currency translation		(5	)		2			13

End of year		403			352			330


Plan assets at fair value
Beginning of year		253			218			176
Return on plan assets		—			25			37
Employer contributions		24			21			13
Benefits paid		(14	)		(15	)		(13)
Settlement		—			—			(5)
Currency translation		(4	)		4			10

End of year		259			253			218


Ending funded status	$	144		$	99		$	112


Amounts recorded in the consolidated balance sheet
Non-current asset	$	(1	)	$	—		$	—
Current liability		2			2			2
Non-current liability		143			97			110

Net amount	$	144		$	99		$	112


Amounts recorded in accumulated other comprehensive income Unrecognized actuarial losses	$	(101	)	$	(42	)	$	(57)

		000000			000000			000000
	2011			2010			2009


Net periodic benefit cost
Current service cost	$	11		$	11		$	9
Interest cost		19			18			16
Return on plan assets		(19	)		(17	)		(14)
Actuarial losses		1			2			2
Special termination benefit		1			8			—

Net periodic benefit cost	$	13		$	22		$	13

[b]

Termination and long service arrangements

Pursuant to labour laws and national labour agreements in certain European countries and Mexico, the Company is obligated to provide lump sum termination payments to employees on retirement or involuntary termination, and long service payments contingent upon persons reaching a predefined number of years of service. All lump sum termination and long service payment arrangements are unfunded.

The weighted average significant actuarial assumptions adopted in measuring the Company’s projected termination and long service benefit obligations and net periodic benefit cost are as follows:

		000000			000000			000000
	2011			2010			2009


Discount rate		5.4	%		4.9	%		6.2%
Rate of compensation increase		4.0	%		3.9	%		4.1%

Information about the Company’s termination and long service arrangements is as follows:

		000000			000000			000000
	2011			2010			2009


Projected benefit obligation
Beginning of year	$	220		$	190		$	188
Current service cost		14			13			13
Interest cost		10			11			12
Actuarial losses (gains) and changes in actuarial assumptions		14			33			(4)
Benefits paid		(11	)		(12	)		(25)
Divestitures		—			(3	)		—
Currency translation		(10	)		(12	)		6

Ending funded status	$	237		$	220		$	190


Amounts recorded in the consolidated balance sheet
Current liability	$	8		$	8		$	6
Non-current liability		229			212			184

Net amount	$	237		$	220		$	190


Amounts recorded in accumulated other comprehensive income
Unrecognized actuarial losses	$	(45	)	$	(41	)	$	(16)

		0000000		0000000		0000000
	2011		2010		2009


Net periodic benefit cost
Current service cost	$	14	$	13	$	13
Interest cost		10		11		12
Actuarial losses		6		5		4

Net periodic benefit cost	$	30	$	29	$	29

[c]

Retirement medical benefits plans

Historically, the Company sponsored a retirement medical benefits plan that covered eligible employees and retirees. Retirees age 60 or older with 10 or more years of service were eligible for benefits, and existing retirees as at August 1, 2000 that met the above criteria were also eligible for benefits. Benefits were capped based on years of service. During 2009, the Company amended these plans such that substantially all employees retiring on or after August 1, 2009 would no longer participate in the plan and a curtailment gain was recorded during 2009.

In addition, the Company sponsors a number of retirement medical plans which were assumed on certain acquisitions in prior years. These plans are frozen to new employees and incur no current service costs.

The weighted average discount rates used in measuring the Company’s projected retirement medical benefit obligations and net periodic benefit cost are as follows:

		00000000			00000000			00000000
	2011			2010			2009


Retirement medical benefit obligations		4.2	%		5.4	%		5.7%
Net periodic benefit cost		5.4	%		5.7	%		6.0%
Health care cost inflation		9.2	%		9.2	%		9.3%

Information about the Company’s retirement medical benefits plans are as follows:

		0000000			0000000			0000000
	2011			2010			2009


Projected benefit obligation
Beginning of year	$	36		$	36		$	66
Current service cost		—			—			1
Interest cost		2			2			3
Actuarial losses and changes in actuarial assumptions		4			1			3
Benefits paid		(3	)		(3	)		(3)
Curtailment		—			—			(36)
Currency translation		—			—			2

Ending funded status	$	39		$	36		$	36


Amounts recorded in the consolidated balance sheet
Current liability	$	2		$	2		$	2
Non-current liability		37			34			34

Net amount	$	39		$	36		$	36


Amounts recorded in accumulated other comprehensive income
Unrecognized past service costs	$	3		$	4		$	3
Unrecognized actuarial gains		12			18			20

Total accumulated other comprehensive income	$	15		$	22		$	23

	000000011	000000011	000000011	000000011
		2011	2010	2009


Net periodic benefit cost
Current service cost		$ —	$ —	$ 1
Interest cost		2	2	3
Actuarial (gains) losses		(1)	(1)	2
Past service cost amortization		(1)	—	—
Curtailment gain [note 4]		—	—	(26)

Net periodic benefit cost		$ —	$ 1	$ (20)

The effect of a one-percentage point increase or decrease in health care trend rates would not have a significant impact on the Company’s income.

[d]

Future benefit payments

		00000000		00000000		00000000		00000000
	Defined benefit pension plans		Termination and long service arrangements		Retirement medical benefits plans		Total


Expected employer contributions - 2012	$	17	$	8	$	2	$	27


Expected benefit payments:
2012	$	16	$	8	$	2	$	26
2013		14		8		2		24
2014		14		10		3		27
2015		14		11		3		28
2016		14		12		3		29
Thereafter		81		88		12		181

	$	153	$	137	$	25	$	315

[e]

Plan assets

The asset allocation of the Company’s defined benefit pension plans at December 31, 2011 and 2010, and the target allocation for 2012 is as follows:


	2012	2011	2010


Equity securities	55-75%	60%	50%
Fixed income securities	25-45%	39%	21%
Cash and cash equivalents	0-15%	1%	29%

	100%	100%	100%

The expected rate of return on plan assets was determined by considering the Company’s current investment mix, the historic performance of these investment categories and expected future performance of these investment categories.