Analyst research re: the positive impact to valuations stemming from funding pension deficits.

1. OCTOBER 27, 2010
A Morgan Stanley
Publication For Pension
Pensions in Practice Plan Sponsors
How Corporate Pension Plans Impact Pension Solutions Group
Stock Prices Caitlin Long
212.761.4995
Caitlin.Long@morganstanley.com
• The Fed’s “quantitative easing” program, which has caused a plunge in Ethan Bronsnick
212.761.5343
yields, has widened pension funding gaps by boosting the present value Ethan.Bronsnick@morganstanley.com
of pension liabilities, as Morgan Stanley’s chief U.S. economist, Dick Hannah Zwiebel
Berner, points out. This creates dilemmas for CFOs. 212.761.3070
Hannah.Zwiebel@morganstanley.com
• Low interest rates expose four key risks embedded in pension plans:
1. Pension risk adds volatility to companies’ stock prices
Pension, Endowment and
Foundation Coverage Group
2. Pension risk increases a firm’s beta
Sandra Haas
3. Pension risk increases a firm’s cost of capital 212.761.1320
Sandra.Haas@morganstanley.com
4. Investors view pension liabilities as riskier than debt Chris Crevier
212.761.0039
Christoper.Crevier@morganstanley.com
• Our study found both empirical and statistical evidence that pensions
Ryan Vetter
weigh on the stock prices of pension-heavy companies. The pension- 212.761.8124
Ryan.Vetter@morganstanley.com
heavy threshold is a pension liability in excess of 25% of market cap.
Michael Jordan
212.761.1077
• Since the credit crisis began, plan size and funded status are the two Michael.Jordan@morganstanley.com
pension factors that impact stock price performance most. Asset
allocation matters less—though in different times it has mattered more.
• Surprising corporate finance implications stem from our analysis. The Transition Management
benefit from reducing a company’s WACC may outweigh the cost of
actions such as funding the pension deficit by issuing company stock, or Jim Kelly
212.761.8935
terminating the pension despite locking in historically low interest rates. James.F.Kelly@morganstanley.com
Similarly, funding pension deficits with debt would likely create
shareholder value by reducing enterprise volatility and lowering WACC.
Morgan Stanley does not provide tax, legal or accounting advice. This is not a research report and was not prepared by Morgan Stanley research department. This material
has been prepared for information purposes to support the promotion or marketing of the transaction or matters discussed herein. It is not a solicitation of any offer to buy or
sell any security, commodity or other financial instrument or to participate in any trading strategy. This material is not (and should not be construed to be) individualized
“investment advice” (as defined under ERISA) from Morgan Stanley with respect to any employee benefit plan or to any person acting as a fiduciary for an employee benefit
plan, or as a primary basis for any particular plan investment decision . This material was not intended or written to be used, and it cannot be used by any taxpayer, for the
purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Each taxpayer should seek advice based on the taxpayer’s particular
circumstances from an independent tax advisor. Please see additional important information and qualifications at the end of this material.

2. pension plans empirically mattered more to stock prices than
Pension Plans’ Impact on Stock during either the 2001-2002 stock market correction and
2003-2007 rebound. Potential reasons why ‘it’s different
Prices this time’ include historically low interest rates (which
We conducted both empirical and statistical studies to causes pensioners’ claim on firm value to be substantial),
confirm our thesis that pension plans indeed impact the higher volatility in markets, and sector rotation away from
stock prices of the companies sponsoring them. technology (which masked correlation between stock price
and pension exposure in 2001-2002).
I. Empirical Findings
We also compared the average historical and predicted betas
a. Pension-heavy stocks have been more correlated for S&P 500 companies between 2003 and September 30,
with equity markets than companies without material 2010, and found the following trend:
pension exposure. Pension-heavy stocks—those whose
pension liabilities exceed 25% of market cap— b. Pension-heavy stocks have consistently exhibited
underperformed during the credit crisis, between October higher betas than those of non-pension heavy stocks, and
2007 and March 2009 (see Exhibit 1). Subsequently, during the difference grew after the financial crisis began (see
the rebound, pension-heavy stocks outperformed from Exhibit 3). We found that the trend also holds true whether
March 2009 to April 2010 (see Exhibit 2). During both including or excluding technology stocks.
periods, the trends became more pronounced as pension
exposure increased. Exhibit 3: Average Annual Betas: 2003–09/30/2010
S&P 500 companies, excluding financial services and technology
Exhibit 1: Pension-Heavy Stocks Underperformed Beta
During Credit Crisis, 10/17/2007–3/6/2009 1.4
S&P Total Return: -44.38% 1.3
Number of Companies Ratio of Outperformers/Underperformers
180 1.0 x Ratio below 1x
1.2
0.9 indicates there
150 0.8 x were more
underperformers
1.1
120 85 0.7 (red) than
0.5 0.6 x outperformers
1.0
90 0.5 0.5 (green)
67 0.4 0.4 x
60 0.2 0.9
52 0.2
30 75 37 28 0.2 x
45 22 17 0.8
24 17 15 13
0 8 4 3 0.0 x
10% 20% 30% 40% 50% 60% 70% 80% 0.7
Pension Liabilities as a Percent of Market Capitalization 12/31/03 12/31/04 12/31/05 12/31/06 12/31/07 12/31/08 12/31/09 09/30/10
# of Underperformzers Outperformers/Underperformers ratio pension-heavy all other
# of Outperfozzzrmers
Sources: FactSet, Morgan Stanley Sources: FactSet, Morgan Stanley
Exhibit 2: Pension-Heavy Stocks Outperformed
During Recovery, 3/6/2009–4/23/2010
S&P Total Return: +66.57%
Number of Companies
200
Ratio of Outperformers/Underperformers
7.3 8x Ratio above 1x
II. Statistical Findings
indicates multiple
of outperformers
150 6.3 6x (green) relative to Our statistical analysis tested whether pension metrics
76 underperformers
100 47 3.2 4x
(red)
helped explain stock price beyond simply using earnings per
30 2.2 2.5 2.8
19
share forecasts. We tested four pension metrics: (a) pension
50 104 1.4 76 12 11 2x
1.6 4 3
65 47 38 31
plan size (pension liabilities relative to market
25 22
0 0x
capitalization); (b) equity allocation of pension assets; (c)
10% 20% 30% 40% 50% 60% 70% 80%
Pension Liabilities as a Percent of Market Capitalization funding status (pension assets less pension liabilities); and
# of Underperformers Outperformers/Underperformers ratio
# of Outperformers (d) contributions as a percentage of pension assets. We
Sources: FactSet, Morgan Stanley performed this analysis between 2002-2009 as well as sub-
periods, 2002-2004, 2005-2007, and 2007-2009. We
summarize our key findings below, and provide supporting
Pension exposure did not matter to stock price during data in Exhibits 4 and 5a, 5b and 5c.
the prior pension funding crisis of 2001-02. Indeed, it is
different this time. Since the beginning of the credit crisis,
This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the
Morgan Stanley Research Department, and you should not regard it as a research report. Please refer to important information and qualifications at the end of this material.
2

3. Pension size, funded status, understandable in the context of extremely low interest
and equity allocation are all rates, since pension liabilities begin to behave like
statistically significant, as
indicated by a t-score >1.96 perpetuities as interest rates approach zero and pensioners’
claim on a firm’s value grows. Pension size impacted stock
price during each sub-periods and the entire 2002-09 period.
Exhibit 4: Multiple Regression of Stock Price
versus Independent Variables, 2002-09 c. Stocks of companies with better-funded pension
S&P RETURN: -4.9% plans are more highly valued by the stock market than
Independent Variables Coefficient T-statistic P-value R-squared
stocks of companies with large underfunded pensions.
Intercept -2.226 -1.176 0.240 0.682
Projected EPS 9.965 67.813 (1)
0.000 0.682 However, funding status was not relevant during the stock
Pension Liability as % of Market Cap -3.252 -6.205 (1) 0.000 0.682 market rally of 2005-07.
Funded Status (pension assets/pension
liabilities) 9.893 6.202 (1) 0.000 0.682
Equity Allocation Percentage 11.025 5.264 (1) 0.000 0.682 d. Equity allocation impacts stock price over time,
Source: Morgan Stanley although it is inconsistent in sub time periods and matters
substantially less today than it did earlier in the 2000s.
Exhibit 5a: Multiple Regression, 2002-04
S&P RETURN: +3.3% e. Contributions to the pension plan have no clear
Independent Variables Coefficient T-statistic P-value R-squared impact on stock performance. Contributions have become
Intercept -0.124 -0.043 0.966 0.680
Projected EPS 11.510 39.141 (1) 0.000 0.680 more relevant in recent sub-periods, during which they have
(1)
Pension Liability as % of Market Cap -2.533 -3.974 0.000 0.680 exhibited a positive impact on stock price. During the 2005-
Funded Status (pension assets/pension
liabilities) 4.329 1.969 (1)
0.049 0.680 07 boom, higher pension contributions had a negative
Equity Allocation Percentage 10.291 2.906 (1) 0.004 0.680
impact on stock price, while during the financial crisis
Contributions/Pension Assets 1.618 0.289 0.773 0.680
Source: Morgan Stanley
contributions helped stock price—indicating that in times of
stress investors value lower pension deficits.
Exhibit 5b: Multiple Regression, 2005-2007 f. Investors view pension deficits as riskier than
S&P RETURN: +22%
Independent Variables Coefficient T-statistic P-value R-squared
corporate debt. While fixed income investors and rating
Intercept 13.977 3.909 0.000 0.665 agencies have tended to view pension deficits somewhat
Projected EPS 9.815 43.015 (1) 0.000 0.665
Pension Liability as % of Market Cap -3.649 -3.395 (1) 0.001 0.665
qualitatively as ‘soft debt’ that could be extinguished by
Funded Status (pension assets/pension asset returns over time, our analysis suggests the stock
liabilities) 2.731 1.000 0.318 0.665
Equity Allocation Percentage 0.446 0.113 0.910 0.665 market views a dollar of pension deficit as worse than a
Contributions/Pension Assets -22.078 -2.573 (1) 0.010 0.665 dollar of debt, as Exhibits 6a and 6b show. Since pension
Source: Morgan Stanley deficits are inherently more volatile than corporate debt, this
finding makes sense.
Exhibit 5c: Multiple Regression, 2008-09
S&P RETURN: -24.6%
Independent Variables Coefficient T-statistic P-value R-squared
Intercept -8.113 -2.001 0.046 0.697
Projected EPS 9.608 33.888 (1) 0.000 0.697
Pension Liability as % of Market Cap -2.608 -2.540 (1) 0.011 0.697
Funded Status (pension assets/pension
liabilities) 14.856 3.790 (1) 0.000 0.697
Equity Allocation Percentage 7.102 1.801 0.072 0.697
Contributions/Pension Assets 32.333 3.570 (1) 0.000 0.697
Source: Morgan Stanley
a. Pension exposure impacts stock prices. Pension
plans’ size relative to market capitalization, funded status,
and allocation to equities each showed a statistically
significant relationship with stock prices.
b. Pension plan size is negatively correlated with
stock price—meaning the larger the plan size relative to
market cap, the lower the stock price. This relationship is
(1) Statistically significant if t-score > 1.96
This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the
Morgan Stanley Research Department, and you should not regard it as a research report. Please refer to important information and qualifications at the end of this material.
3

4. Exhibit 6a: Pension Deficit vs. Stock Price, 2002- III. Further Statistical Analysis: Pension
09
Stock Price Impact on Cost of Capital
$100
a. Pension risk has a statistically significant
relationship with equity beta. The bigger the pension,
$80 and/or the riskier its asset allocation, the higher the
company’s equity beta.
Steeper slope For this section we updated analysis originally published in
$60
indicates greater the Journal of Financial Economics, “Do a Firm’s Equity
impact
Returns Reflect the Risk of its Pension Plan?” by Li Jin,
Robert C. Merton, and Zvi Bodie, 2006. We found the
$40
relationship between pension risk and beta was weaker from
2002-2009 than that found by Merton, et. al., during their
study period of 1993-1998. Variations in data sources and
$20
methodologies (such as ERISA vs. GAAP data, domestic vs.
global exposures) may explain some of the difference.
$0 Our analysis measured the extent to which the pension beta
0% 20% 40% 60% 80% 100% 120%
Pension Deficit as % of Market Cap impacts the equity beta of each S&P 500 company that has
Stock Price
pension assets greater than 3% of its market capitalization.
Sources: FactSet, Morgan Stanley
b. Our results suggest pensions add 73bps to the
weighted average cost of capital for the S&P 500, at the
Exhibit 6b: Debt vs. Stock Price, 2002-09
Stock Price median. We found that for a 1.0 increase in pension beta,
$100 the firm beta increases by 0.38. In other words, slight
increases in the equity weighting of a pension portfolio
measurably increase the stock beta of the plan sponsor. Our
$80 results showed a weaker relationship than that found by
Merton, et. al., in their work, which found that a 1.0 increase
in pension beta causes approximately a 1.5 increase in firm
$60
beta. Data and methodology variations likely account for
the difference. We found an r-squared of 28.8% and the
overall results were statistically significant.
$40
$20
IV. Conclusion: What Companies Can Do
Our analysis implies companies can reduce the detrimental
$0
0% 20% 40% 60% 80% 100% 120% 140%
impact of pensions on their stock prices by taking some or
Debt as a % of Market Cap all of the following steps, some of which may be
Stock Price
counterintuitive:
Sources: FactSet, Morgan Stanley
Notes: 2370 observations from 2002-2009; 101 outliers were excluded. In a 1. Fund the pension, which should help stock prices
multiple regression with projected EPS, pension deficit as a % of market more than paying down corporate debt. The funding
capitalization, and debt as a % of market capitalization, all variables were could take any form, but our analysis implies even that
statistically significant at the 99% confidence level. The coefficient for pension funding the pension with corporate debt is a net positive for
deficit was 1.5 as large as the coefficient for debt, indicating that pension
the stock price—because it replaces a more volatile form of
deficits have a 50% greater impact on stock price.
debt (i.e., a pension deficit) with a less volatile form (i.e.,
This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the
Morgan Stanley Research Department, and you should not regard it as a research report. Please refer to important information and qualifications at the end of this material.
4

5. corporate bond or loan). More funding is probably better, as The authors would like to thank Chief U.S. Economist Dick
more risk would be reduced. Berner and his U.S. Economics Team for their contributions
to this analysis.
For pension-heavy companies, funding with common stock
could be positive for the stock price despite the dilution—
which, at first blush, is a highly counterintuitive result. For
example, JC Penney’s contribution of common stock to its
pension in May 2009 diluted its shareholders by 7.8%, but
its stock was up 1.4% on the date of announcement (vs. S&P
500 decline of 0.2% that day). Within a year, JC Penney’s
beta declined to 1.26 from 1.37, and S&P upgraded its credit
rating despite a challenging retail environment. The
transaction created value for JC Penney’s shareholders.
2. Reduce the pension liability, by changing the plan’s
benefit structure, closing, freezing or terminating the plan,
or accelerating lump sum payouts.
In 2012, when the IRS’s mandatory subsidy of lump sum
distributions fully expires, companies will be able to settle
their pension obligations by paying lump sum distributions
with little or no incremental cost. Consequently, companies
with substantial pension liabilities may begin in 2012 to
make enhanced efforts to settle their pension obligations to
eligible participants, which is the equivalent of paying down
debt. Eligible participants include retiring employees;
vested participants who no longer work for the company; or,
in the case of a terminating pension plan, potentially all
participants.
More companies are exploring potential plan terminations.
Again, at first blush, this may seem counterintuitive in light
of the historically low level of interest rates. However, the
tail risks of pension plans are greater in low interest rate
environments—because the present value exposure of
extreme, long-term events is higher. The higher cost of tail
exposures is partly why stocks are more sensitive to
pensions today than during the prior funding crisis of a
decade ago. Consequently, while plan terminations are
more expensive amid low interest rates, the positive stock
price impact of a plan termination is theoretically greater.
Companies should consider the potential for such strategic
transactions in their long-term liquidity planning, since lump
sums and plan terminations often require substantial
liquidity.
3. De-risk the pension, though at present the impact of
either funding the pension or reducing the pension liability
is greater than de-risking the pension.
This material is not a solicitation of any offer to buy or sell any security or other financial instrument or to participate in any trading strategy. This material was not prepared by the
Morgan Stanley Research Department, and you should not regard it as a research report. Please refer to important information and qualifications at the end of this material.
5

6. Exhibit 7: Average US GAAP Funded Status of S&P 500 vs. Pension Liability Discount Rate, 1986-present
US GAAP Funded Status (%) Discount Rate (%)
140% 10.0
129%
130%
121% 9.0
119%
120%
116% 117% 116% 116%
112%
111%
109%
110%
106% 8.0
105% 105%
103% 103%
100% 101%
100% 98%
91%
89% 7.0
90% 88%
82% 82%
80%
80% 77%
74% 6.0
70%
60% 5.0
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 8/31/10E 9/30/10E
S&P 12/31 filers' funded status Citigroup 20-year discount rate (year-end)
Sources: FactSet, Society of Actuaries website, Morgan Stanley.
Note: To estimate mid-year results, we use the S&P 500 Total Return Index (SPTR) as a proxy for equity returns, the BarCap US Aggregate Index (LBUSTRUU) as a proxy for fixed
income returns, and a weighted average of both for “other” asset returns. Company disclosures are not sufficient to estimate such factors as returns on alternative asset classes
or hedging gains.
6

7. Basic Materials: Companies with Defined Benefit Plans
$ in Millions; Ranked by 12/31/09 Pension Liability as % of 10/15/10 Market Capitalization
2009 2009 2010E* 12/31/09
Pension Pension Expected Return Employer Pension Employer Pension Pension Pension Pension Deficit as % of Pension Liability as % of
Company Plan Assets Plan Liabilities % Equities % Bonds % Other Discount Rate % on Assets % 10-K Date Contribution Contribution (Deficit)/Surplus Funded Status Mkt Cap at 10/15/2010 Mkt Cap at 10/15/2010
Basic Materials
AK Steel Holding Corp. $2,370.1 $3,494.8 59.0% 39.0% 2.0% 5.75% 8.50% 12/2009 $217.1 $105.0 ($1,124.7) 67.8% 72.5% 225.4%
Innospec Inc. 671.8 796.0 26.0% 74.0% 0.0% 6.50% 5.75% 12/2008 7.1 20.0 (124.20) 84.4% 30.9% 197.8%
United States Steel Corp. 8,280.0 9,988.0 62.0% 28.0% 10.0% 5.50% 8.00% 12/2008 219.0 23.0 (1708.00) 82.9% 27.1% 158.5%
Weyerhaeuser Co. 4,159.0 4,759.0 37.2% 4.6% 58.2% 5.90% 9.50% 12/2009 62.0 130.0 (600.00) 87.4% 18.0% 143.1%
USEC Inc. 661.7 840.0 54.0% 46.0% 0.0% 6.00% 7.75% 12/2008 22.1 16.2 (178.30) 78.8% 29.2% 137.4%
Olin Corp. 1,722.0 1,777.5 14.0% 52.0% 34.0% 5.75% 8.50% 12/2009 9.8 4.0 (55.50) 96.9% 3.3% 105.1%
Huntsman Corp. 2,341.0 2,857.0 45.0% 42.0% 13.0% 5.90% 8.25% 12/2008 138.0 112.0 (516.00) 81.9% 17.9% 98.9%
Neenah Paper Inc. 168.2 234.7 59.0% 37.0% 4.0% 6.17% 7.92% 12/2008 10.2 14.0 (66.50) 71.7% 27.8% 98.2%
Pactiv Corp. 3,447.0 4,084.0 72.0% 28.0% 0.0% 5.75% 9.00% 12/2009 556.0 9.0 (637.00) 84.4% 14.5% 92.7%
International Paper Co. 6,784.0 9,544.0 49.0% 32.0% 19.0% 5.80% 8.25% 12/2009 35.0 41.0 (2760.00) 71.1% 26.7% 92.2%
Armstrong World Industries Inc. 2,040.6 2,165.9 60.0% 31.0% 9.0% 5.60% 8.00% 12/2009 21.0 20.9 (125.30) 94.2% 5.2% 90.0%
USG Corp. 881.0 1,075.0 60.0% 20.0% 20.0% 5.95% 7.00% 12/2009 49.0 45.0 (194.00) 82.0% 15.8% 87.5%
Alcoa Inc. 8,529.0 11,638.0 33.0% 53.0% 14.0% 6.15% 8.75% 12/2009 136.0 100.0 (3109.00) 73.3% 23.2% 86.7%
Ashland Inc. 2,745.0 3,593.0 11.0% 75.0% 14.0% 5.82% 7.97% 09/2009 47.0 141.0 (848.00) 76.4% 20.4% 86.6%
Crown Holdings Inc. 3,607.0 4,155.0 55.0% 17.0% 28.0% 5.70% 8.75% 12/2009 74.0 67.0 (548.00) 86.8% 11.3% 85.8%
Owens-Illinois Inc. 3,283.9 3,801.6 59.7% 38.2% 2.1% 5.76% 7.61% 12/2009 123.1 15.0 (517.70) 86.4% 11.4% 83.5%
Arch Chemicals Inc. 497.8 689.8 66.0% 34.0% 0.0% 6.00% 8.50% 12/2009 58.4 25.0 (192.00) 72.2% 21.2% 76.0%
Graphic Packaging Holding Co. 622.2 858.9 53.4% 40.2% 6.4% 6.10% 7.91% 12/2008 43.6 70.0 (236.70) 72.4% 19.7% 71.4%
Glatfelter 485.7 406.1 65.0% 30.0% 5.0% 6.10% 8.50% 12/2008 2.1 1.3 79.60 119.6% -14.0% 71.2%
W.R. Grace & CO. 919.1 1,531.1 8.0% 62.0% 30.0% 5.75% 8.00% 12/2008 61.4 13.0 (612.00) 60.0% 28.2% 70.6%
Temple-Inland Inc. 1,176.0 1,467.0 13.0% 84.0% 3.0% 5.79% 6.88% 12/2009 36.0 0.0 (291.00) 80.2% 13.4% 67.6%
Celanese Corp. (Series A) 2,329.0 3,342.0 46.0% 54.0% 0.0% 5.83% 7.94% 12/2009 44.0 46.0 (1013.00) 69.7% 19.0% 62.8%
Dow Chemical Co. 14,589.0 19,914.0 45.0% 35.0% 20.0% 5.97% 8.46% 12/2009 355.0 304.0 (5325.00) 73.3% 15.5% 57.8%
E.I. DuPont de Nemours & Co. 17,143.0 22,770.0 52.0% 31.0% 17.0% 5.80% 8.75% 12/2009 306.0 270.0 (5627.00) 75.3% 13.2% 53.6%
Carpenter Technology Corp. 586.6 829.9 58.4% 37.9% 3.7% 6.25% 8.00% 06/2010 3.5 3.9 (243.30) 70.7% 14.7% 50.1%
Solutia Inc. 681.0 1,044.0 58.0% 32.0% 10.0% 5.25% 8.50% 12/2009 77.0 39.0 (363.00) 65.2% 16.7% 48.2%
Allegheny Technologies Inc. 2,163.5 2,220.7 33.0% 64.0% 3.0% 6.20% 8.75% 12/2009 357.5 7.0 (57.20) 97.4% 1.2% 46.8%
Ferro Corp. 380.7 540.2 51.0% 48.0% 1.0% 6.74% 8.50% 12/2008 16.6 18.1 (159.53) 70.5% 13.6% 46.2%
H.B. Fuller Co. 406.9 451.6 51.0% 49.0% 0.0% 5.69% 8.75% 11/2009 141.4 9.4 (44.66) 90.1% 4.4% 44.6%
Owens Corning Inc 1,078.0 1,451.0 48.0% 48.0% 4.0% 5.80% 8.00% 12/2009 43.0 38.0 (373.00) 74.3% 10.8% 42.1%
PolyOne Corp. 320.6 498.7 65.0% 30.0% 5.0% 6.17% 8.50% 12/2009 23.5 20.8 (178.10) 64.3% 14.5% 40.6%
Sonoco Products Co. 986.9 1,286.2 64.6% 27.0% 8.4% 5.74% 8.50% 12/2008 113.2 22.0 (299.33) 76.7% 8.5% 36.7%
PPG Industries Inc. 3,594.0 4,545.0 44.9% 52.7% 2.4% 5.70% 7.90% 12/2009 452.0 240.0 (951.00) 79.1% 7.5% 35.7%
Cytec Industries Inc. 635.6 869.9 53.5% 37.5% 9.0% 5.70% 6.90% 12/2009 53.0 63.5 (234.30) 73.1% 8.0% 29.7%
Ball Corp. 984.4 1,587.8 40.0% 47.0% 13.0% 6.00% 8.25% 12/2009 120.5 55.0 (603.40) 62.0% 10.6% 27.9%
Louisiana-Pacific Corp. 232.7 290.9 53.7% 21.7% 24.6% 5.86% 7.28% 12/2008 1.4 12.0 (58.20) 80.0% 5.6% 27.8%
Eastman Chemical Co. 1,087.0 1,508.0 58.0% 7.0% 35.0% 5.73% 8.47% 12/2009 200.0 0.0 (421.00) 72.1% 7.4% 26.6%
Rockwood Holdings Inc. 261.3 689.9 47.0% 45.5% 7.5% 5.89% 8.28% 12/2008 7.2 6.6 (428.60) 37.9% 16.4% 26.4%
International Flavors & Fragrances Inc. 965.1 1,028.2 39.5% 50.9% 9.6% 6.10% 8.25% 12/2009 51.9 19.5 (63.09) 93.9% 1.6% 25.8%
Note: The above data for asset allocation may not match those disclosed in company filings, as new 10-K disclosure requirements meant asset classification was inconsistent from company to company.
Sources: FactSet, 10-K reports, Bloomberg, Capital IQ. * as disclosed in most recent 10-K
7

8. Basic Materials: Companies with Defined Benefit Plans (cont’d)
$ in Millions; Ranked by 12/31/09 Pension Liability as % of 10/15/10 Market Capitalization
2009 2009 2010E * 12/ 31/ 09
Pension P ension Expected Ret urn E mploy er Pension Em pl oyer P ension P ension Pension P ension Defi cit as % of P ension Liability as % of
Company P lan As sets Plan Li abi lities % E qui ties % Bonds % Other Discount Rate % on A ssets % 10-K Date Contribut ion Cont ribut ion (Deficit)/ Surplus Funded St atus Mkt Cap at 10/ 15/2010 M kt Cap at 10/15/2010
Masco Corp. 4 74.0 958.0 7 1.0% 26.0% 3.0% 5.80% 8 .00% 12/2 009 2 7.0 25.0 (484.00) 4 9.5% 12 .1% 24.0 %
Nalco Holdi ng Co. 4 15.3 834.0 5 0.0% 36.0% 14.0% 5.50% 8 .25% 12/2 009 7 2.9 67.7 (418.70) 4 9.8% 11 .4% 22.7 %
Rock-Ten n Co . (Cl A) 2 77.3 438.9 5 5.0% 35.0% 10.0% 5.53% 8 .65% 09/2 009 4 0.9 26.0 (161.60) 6 3.2% 7 .9% 21.4 %
FMC C orp. 7 66.7 1,098.6 7 1.0% 25.0% 4.0% 5.90% 8 .50% 12/2 009 8 8.8 80.0 (331.90) 6 9.8% 6 .5% 21.4 %
Greif Inc. (Cl A) 4 63.8 541.8 6 0.0% 32.0% 8.0% 5.72% 7 .69% 10/2 009 2 0.4 17.1 (77.94) 8 5.6% 2 .8% 19.3 %
Ai r Products & Chemicals Inc. 2,2 51.0 3,386.0 6 4.0% 31.0% 5.0% 5.70% 8 .80% 09/2 009 18 4.8 360.0 (1135.00) 6 6.5% 6 .5% 19.2 %
Si lgan Hold ings Inc. 3 62.8 491.6 5 8.0% 42.0% 0.0% 5.90% 8 .50% 12/2 009 4 4.2 0.0 (128.85) 7 3.8% 5 .0% 19.0 %
Bemi s Co. Inc. 4 84.6 621.3 6 6.0% 30.0% 4.0% 5.75% 8 .25% 12/2 009 3 4.4 22.6 (136.70) 7 8.0% 3 .7% 16.8 %
Cabot Co rp. 2 97.0 365.0 5 0.0% 46.0% 4.0% 5.30% 7 .80% 09/2 009 1 9.0 0.0 (68.00) 8 1.4% 3 .1% 16.5 %
Vul can Materia ls Co . 4 93.6 709.8 4 7.0% 33.0% 20.0% 5.45% 8 .25% 12/2 009 2 7.6 72.5 (216.14) 6 9.5% 4 .6% 15.1 %
Ecol ab Inc. 1,1 98.2 1,656.1 6 2.0% 19.0% 19.0% 5.84% 8 .50% 12/2 009 25 6.3 28.0 (457.90) 7 2.4% 3 .7% 13.5 %
Al bemarle Corp. 4 17.1 570.9 5 2.0% 15.0% 33.0% 5.77% 8 .69% 12/2 009 3 6.4 6.0 (153.75) 7 3.1% 3 .5% 12.9 %
Lennox In terna tio nal Inc. 2 31.1 299.4 5 9.0% 36.8% 4.2% 6.07% 8 .25% 12/2 009 4 2.2 0.0 (68.30) 7 7.2% 2 .9% 12.7 %
RPM In terna tio nal Inc. 2 11.0 299.0 5 6.0% 35.0% 9.0% 6.90% 8 .75% 05/2 010 4 2.3 19.0 (88.04) 7 0.6% 3 .3% 11.2 %
Lubrizol Corp. 4 71.4 781.3 6 1.0% 35.0% 4.0% 5.76% 7 .61% 12/2 008 5 3.2 61.0 (309.90) 6 0.3% 4 .1% 10.2 %
Sea led Air Co rp. 2 41.9 344.8 2 8.0% 36.0% 36.0% 5.50% 8 .00% 12/2 009 1 6.5 12.0 (102.90) 7 0.2% 2 .7% 9.1 %
Titaniu m Metals Corp. 1 94.1 314.9 8 4.0% 15.0% 1.0% 5.80% 10 .00% 12/2 009 8.8 11.7 (120.80) 6 1.6% 3 .3% 8.6 %
Massey En ergy Co. 2 37.2 303.4 2 9.2% 59.3% 11.5% 6.00% 8 .00% 12/2 009 1 5.1 20.3 (66.22) 7 8.2% 1 .8% 8.3 %
Scotts Miracle-Gro C o. 1 87.1 283.9 5 3.5% 45.5% 1.0% 5.23% 8 .00% 09/2 009 1 0.8 11.9 (96.80) 6 5.9% 2 .8% 8.2 %
Clevelan d-Cliffs Inc. 4 83.4 750.8 4 4.1% 38.0% 17.9% 5.66% 8 .50% 12/2 009 1 8.5 45.4 (267.40) 6 4.4% 2 .9% 8.2 %
Consol Energy Inc. 4 62.0 654.0 6 0.0% 40.0% 0.0% 5.79% 8 .00% 12/2 009 6 7.7 63.6 (192.02) 7 0.6% 2 .1% 7.2 %
Mon sa nto Co. 1,5 16.0 2,051.0 5 5.4% 33.2% 11.5% 5.30% 8 .00% 08/2 009 18 7.0 132.0 (535.00) 7 3.9% 1 .8% 7.0 %
Praxai r Inc. 1,4 23.0 1,945.0 5 7.0% 40.0% 3.0% 5.90% 8 .25% 12/2 009 12 8.0 75.0 (522.00) 7 3.2% 1 .9% 7.0 %
Arch Coal Inc. 2 11.9 280.7 5 8.0% 37.0% 5.0% 5.97% 8 .50% 12/2 008 1 8.8 16.6 (68.79) 7 5.5% 1 .6% 6.4 %
Pea body Ene rg y Corp. 6 29.6 844.9 5 8.9% 28.5% 12.6% 6.19% 8 .75% 12/2 009 3 8.7 3.4 (215.30) 7 4.5% 1 .5% 6.0 %
Si gma-Al drich Corp. 3 03.0 353.8 5 5.0% 38.5% 6.5% 5.65% 8 .25% 12/2 009 2 4.9 5.2 (50.80) 8 5.6% 0 .7% 4.8 %
Freepo rt-McMo Ran Copper & Gold Inc. 1,1 66.0 1,631.0 5 3.5% 39.4% 7.1% 7.69% 9 .25% 12/2 009 3 5.0 21.0 (465.00) 7 1.5% 1 .0% 3.5 %
CF Ind ustrie s Hol dings In c. 2 33.5 276.0 5 2.0% 47.0% 1.0% 5.80% 7 .00% 12/2 009 2 2.3 9.6 (42.50) 8 4.6% 0 .5% 3.3 %
Newmont Mini ng Corp. 3 72.0 580.0 6 5.0% 30.0% 5.0% 6.10% 8 .00% 12/2 009 5 5.0 60.0 (208.00) 6 4.1% 0 .7% 1.9 %
Potash Corpora tio n 6 49.1 792.4 5 9.0% 41.0% 0.0% 5.85% 7 .50% 12/2 009 13 3.4 83.8 (143.30) 8 1.9% 0 .3% 1.8 %
Mosai c Co . 4 68.5 524.7 1 9.5% 75.0% 5.5% 7.16% 6 .93% 05/2 010 5.5 24.4 (56.20) 8 9.3% 0 .2% 1.8 %
Mea dWe stvaco Corp. 3,4 62.0 2,656.0 4 7.0% 48.0% 5.0% 5.74% 7 .98% 12/2 009 2 0.0 3.0 806.00 13 0.3% -18 .7%
Tota ls for All Bas ic Ma terial Companie s $12 4,87 2.7 $ 162,263.4 51 .1% 38.8% 10.1% 5.89% 8.18% $6 ,09 1.0 $3,530.9 77 .0%
Tota ls for 12 /31/09 Basic Ma te ria ls Reporting Companies $11 5,46 2.4 $ 149,498.6 51 .6% 37.6% 10.7% 5.90% 8.19% $5 ,38 8.3 $2,786.2 77 .2%
Tota ls for All S&P 5 00 C ompanies $1 ,17 6,20 8.1 $1,438,659.0 53 .7% 35.9% 10.6% 5.89% 7.85% $69 ,07 3.3 $ 32,425.4 81 .8%
Tota ls for 12 /31/09 S&P 50 0 Re porting Companie s $1 ,06 3,24 6.7 $1,293,598.2 54 .5% 36.0% 9.9% 5.82% 7.94% $60 ,02 9.7 $ 26,600.8 82 .2%
Note: The above data for asset allocation may not match those disclosed in company filings, as new 10-K disclosure requirements meant asset classification was inconsistent from company to company.
Sources: FactSet, 10-K reports, Bloomberg, Capital IQ. * as disclosed in most recent 10-K
8

9. Consumer Products: Companies with Defined Benefit Plans
$ in Millions; Ranked by 12/31/09 Pension Liability as % of 10/15/10 Market Capitalization
2009 2009 2010E * 12/31/09
Pension P ension Expected Ret urn E mploy er Pension Em pl oyer P ension P ension Pension P ension Defi cit as % of P ension Liability as % of
Company P lan As sets Plan Li abi lities % E qui ties % Bonds % Other Discount Rate % on A ssets % 10-K Date Contribut ion Cont ribut ion (Deficit)/ Surplus Funded St atus Mkt Cap at 10/ 15/2010 M kt Cap at 10/15/2010
Consum er Product s
Revlon In c. (Cl A) $4 05.6 $614.5 4 1.5% 36.1% 22.4% 5.68% 8 .25% 12/2 009 $2 3.3 $24.0 ($208 .9) 6 6.0% 29 .6% 87.0 %
Brun sw ick Corp . 6 82.2 1,143.8 6 2.0% 25.0% 13.0% 5.85% 8 .00% 12/2 009 2 1.6 25.0 (461 .6) 5 9.6% 32 .0% 79.3 %
Whi rlpool Corp . 2,4 52.0 4,020.0 5 1.5% 40.9% 7.6% 5.75% 7 .75% 12/2 009 17 6.0 41.0 (1,568 .0) 6 1.0% 24 .5% 62.7 %
Sara Lee Co rp . 3,7 52.0 4,218.0 2 4.0% 63.0% 13.0% 6.50% 6 .90% 06/2 010 33 2.0 110.0 (466 .0) 8 9.0% 4 .7% 42.8 %
Mol son C oors Brewi ng C o. (Cl B) 2,7 82.7 3,408.8 3 3.3% 60.0% 6.7% 4.75% 6 .50% 12/2 009 5 9.8 40.0 (626 .1) 8 1.6% 6 .9% 37.4 %
Sna p-On Inc. 7 16.2 968.7 5 5.0% 15.0% 30.0% 5.90% 7 .80% 12/2 009 9.8 10.5 (252 .5) 7 3.9% 9 .0% 34.5 %
Smithfield Foods Inc. 5 86.2 926.4 5 5.0% 41.0% 4.0% 8.25% 8 .25% 04/2 010 7 4.1 90.4 (340 .2) 6 3.3% 12 .4% 33.6 %
Coca-Cola Enterprises Inc. 2,9 64.0 3,723.0 5 8.0% 19.0% 23.0% 5.80% 7 .80% 12/2 008 47 4.0 155.0 (759 .0) 7 9.6% 6 .3% 30.8 %
Reyn olds Ame ri can Inc. 4,0 54.0 5,270.0 5 2.0% 43.0% 5.0% 6.30% 8 .24% 12/2 009 29 5.0 309.0 (1,216 .0) 7 6.9% 6 .8% 29.5 %
Newell Rub bermaid In c. 9 87.5 1,410.6 4 5.0% 40.0% 15.0% 5.75% 8 .50% 12/2 009 10 3.7 32.7 (423 .1) 7 0.0% 8 .3% 27.8 %
Ja ck in the Box Inc. 2 31.6 339.9 6 1.0% 30.0% 9.0% 6.16% 7 .75% 12/2 008 2 5.8 24.8 (108 .3) 6 8.1% 8 .5% 26.7 %
ConAgra Food s Inc. 1,9 03.2 2,220.4 4 6.0% 40.0% 14.0% 6.90% 7 .75% 05/2 010 12 2.6 116.0 (317 .2) 8 5.7% 3 .2% 22.3 %
Ki mb erly-Clark Corp. 4,2 44.0 5,491.0 6 3.0% 37.0% 0.0% 5.85% 8 .17% 12/2 009 84 5.0 240.0 (1,247 .0) 7 7.3% 4 .6% 20.1 %
Kraft Foods Inc. 8,8 93.0 10,596.0 6 1.0% 34.0% 5.0% 5.93% 8 .00% 12/2 009 63 6.0 240.0 (1,703 .0) 8 3.9% 3 .1% 19.1 %
Kel logg Co. 3,3 34.0 3,616.0 7 0.5% 28.5% 1.0% 5.70% 8 .90% 12/2 009 8 7.0 35.0 (282 .0) 9 2.2% 1 .5% 19.0 %
Campbell Soup Co. 1,7 67.0 2,275.0 4 9.0% 34.0% 17.0% 5.46% 8 .13% 07/2 010 28 4.0 143.0 (508 .0) 7 7.7% 4 .1% 18.4 %
Ene rgizer H oldin gs Inc. 6 99.4 936.3 6 2.0% 35.0% 3.0% 5.60% 8 .00% 12/2 008 1 6.0 19.0 (236 .9) 7 4.7% 4 .5% 17.8 %
Genera l Mil ls Inc. 3,5 29.8 4,030.0 4 9.7% 22.4% 27.9% 5.85% 9 .55% 05/2 010 1 7.1 0.0 (500 .2) 8 7.6% 2 .1% 16.8 %
Dean Foo ds Co . 2 23.4 294.6 5 8.8% 34.8% 6.4% 6.00% 7 .70% 12/2 009 2 4.5 12.0 (71 .2) 7 5.8% 3 .8% 15.5 %
H.J. He inz Co . 1,8 74.7 2,230.1 5 8.0% 37.0% 5.0% 6.50% 8 .20% 04/2 010 53 9.9 50.0 (355 .4) 8 4.1% 2 .3% 14.2 %
Flowe rs Foods Inc. 2 66.2 320.0 5 1.8% 13.0% 35.2% 5.98% 8 .00% 12/2 009 0.5 0.8 (53 .9) 8 3.2% 2 .4% 14.0 %
Hormel Food s Corp. 6 89.8 785.6 6 6.4% 33.5% 0.1% 6.28% 8 .25% 10/2 009 11 4.0 29.0 (95 .8) 8 7.8% 1 .6% 13.1 %
Fortune Brands Inc. 8 21.7 1,111.5 5 6.6% 35.5% 8.0% 5.90% 8 .30% 12/2 009 2 6.4 67.9 (289 .8) 7 3.9% 3 .4% 12.9 %
Del Mo nte Foods Co. 2 68.2 359.4 4 4.0% 46.0% 10.0% 7.90% 8 .00% 12/2 008 9 6.7 40.0 (91 .2) 7 4.6% 3 .2% 12.5 %
McCormi ck & Co . In c. 5 13.6 681.8 6 4.9% 24.3% 10.8% 6.15% 8 .30% 11/2 009 7 2.3 45.0 (168 .2) 7 5.3% 3 .0% 12.0 %
Ja rden Corp. 2 24.5 351.5 2 9.7% 36.3% 34.0% 5.73% 7 .94% 12/2 008 9.2 31.0 (127 .0) 6 3.9% 4 .2% 11.7 %
Al tria Gro up Inc. 4,8 70.0 6,075.0 7 4.0% 19.0% 7.0% 5.90% 8 .00% 12/2 009 3 7.0 50.0 (1,205 .0) 8 0.2% 2 .3% 11.7 %
Note: The above data for asset allocation may not match those disclosed in company filings, as new 10-K disclosure requirements meant asset classification was inconsistent from company to company.
Sources: FactSet, 10-K reports, Bloomberg, Capital IQ. * as disclosed in most recent 10-K
9

10. Consumer Products: Companies with Defined Benefit Plans (cont’d)
$ in Millions; Ranked by 12/31/09 Pension Liability as % of 10/15/10 Market Capitalization
2009 2009 2010E * 12/31/09
Pension P ension Expected Ret urn E mploy er Pension Em pl oyer P ension P ension Pension P ension Defi cit as % of P ension Liability as % of
Company P lan As sets Plan Li abi lities % E qui ties % Bonds % Other Discount Rate % on A ssets % 10-K Date Contribut ion Cont ribut ion (Deficit)/ Surplus Funded St atus Mkt Cap at 10/ 15/2010 M kt Cap at 10/15/2010
Bun ge Ltd. 7 91.0 873.0 5 1.0% 46.0% 3.0% 6.20% 8 .00% 12/2 009 5 5.0 16.0 (82 .0) 9 0.6% 0 .9% 10.0 %
Avon Products Inc. 9 93.4 1,446.5 6 1.0% 35.0% 4.0% 5.35% 8 .00% 12/2 009 6 4.2 60.0 (453 .1) 6 8.7% 3 .0% 9.6 %
Archer Dani els Mi dland Co. 1,4 27.0 2,012.0 4 8.0% 46.0% 6.0% 6.10% 7 .20% 06/2 010 24 9.0 38.0 (585 .0) 7 0.9% 2 .7% 9.5 %
Hershey Co . 9 42.4 957.5 6 5.6% 30.4% 4.0% 5.70% 8 .50% 12/2 009 5 4.5 0.0 (15 .1) 9 8.4% 0 .1% 8.2 %
Pep siCo Inc. 6,9 81.0 8,315.0 5 2.0% 40.0% 8.0% 6.10% 7 .80% 12/2 009 1 ,20 8.0 700.0 (1,334 .0) 8 4.0% 1 .3% 7.8 %
Lorilla rd Inc. 9 21.0 962.0 2 7.7% 30.7% 41.6% 6.00% 7 .50% 12/2 009 2 3.0 15.0 (41 .0) 9 5.7% 0 .3% 7.6 %
Conste llation Brands Inc. (C l A) 2 40.1 288.8 2 8.9% 24.0% 47.1% 6.82% 7 .31% 02/2 010 7.5 7.3 (48 .7) 8 3.1% 1 .2% 7.1 %
Leggett & Pla tt Inc. 1 97.4 234.5 4 6.0% 46.0% 8.0% 5.90% 6 .90% 12/2 009 2.9 2.0 (37 .1) 8 4.2% 1 .1% 6.7 %
Colgate-Palmol ive Co . 1,7 01.0 2,409.0 5 8.0% 37.0% 5.0% 5.75% 8 .00% 12/2 009 13 0.0 85.0 (708 .0) 7 0.6% 1 .9% 6.5 %
Mattel Inc. 2 96.8 513.3 7 4.0% 22.0% 4.0% 5.60% 8 .00% 12/2 009 3 0.4 18.0 (216 .5) 5 7.8% 2 .7% 6.4 %
Estee Laude r Cos. (Cl A) 6 85.5 848.9 2 6.0% 54.0% 20.0% 6.50% 7 .75% 06/2 010 11 4.9 21.4 (163 .4) 8 0.8% 1 .2% 6.4 %
Procter & Ga mb le Co. 6,3 10.0 10,016.0 4 2.0% 51.0% 7.0% 6.00% 7 .40% 06/2 010 43 9.0 321.0 (3,706 .0) 6 3.0% 2 .1% 5.6 %
Yum! Bran ds Inc. 9 76.0 1,180.0 5 7.0% 38.0% 5.0% 6.30% 8 .00% 12/2 009 28 0.0 0.0 (204 .0) 8 2.7% 0 .9% 5.2 %
Clorox Co. 2 75.0 468.0 7 1.0% 24.0% 5.0% 6.81% 8 .11% 06/2 010 5 3.0 0.0 (193 .0) 5 8.8% 2 .0% 4.9 %
Hasbro Inc. 2 50.4 306.2 4 4.0% 37.0% 19.0% 5.73% 8 .50% 12/2 009 1 4.9 5.1 (55 .8) 8 1.8% 0 .9% 4.8 %
J.M. Smucker Co . 3 00.5 362.7 3 9.0% 40.0% 21.0% 7.40% 7 .75% 04/2 010 4.4 15.0 (62 .2) 8 2.8% 0 .8% 4.8 %
Brown -Forman Corp. (C l B) 2 84.0 415.0 5 2.0% 28.0% 20.0% 7.94% 8 .75% 04/2 010 1 3.0 38.0 (131 .0) 6 8.4% 1 .4% 4.5 %
Phi lip Morris Internationa l Inc. 4,4 37.0 4,877.0 6 0.0% 35.0% 5.0% 5.90% 7 .20% 12/2 009 55 8.0 230.0 (440 .0) 9 1.0% 0 .4% 4.5 %
Stanle y Black & Decker Inc. 3 19.5 432.7 6 1.0% 33.0% 6.0% 5.75% 7 .50% 12/2 009 1 4.6 0.0 (113 .2) 7 3.8% 1 .1% 4.1 %
Dr Peppe r Snapp le Group Inc. 2 23.0 253.0 5 0.0% 50.0% 0.0% 5.90% 7 .30% 12/2 009 4 3.0 12.0 (30 .0) 8 8.1% 0 .4% 3.0 %
Coca-Cola Co. 3,0 32.0 3,996.0 4 6.0% 20.0% 34.0% 5.75% 8 .00% 12/2 009 26 9.0 73.0 (964 .0) 7 5.9% 0 .7% 2.9 %
Darden Restaurants Inc. 1 39.9 169.7 6 1.0% 26.0% 13.0% 7.00% 9 .00% 05/2 010 0.4 4.5 (29 .8) 8 2.4% 0 .5% 2.7 %
Tota ls for All Consumer Companie s $8 5,46 0.3 $ 108,754.8 52 .3% 35.0% 12.6% 6.14% 7.95% $8 ,15 2.0 $3,642.4 78 .6%
Tota ls for 12 /31/09 Consumer Reporting C ompanies $6 1,18 2.1 $76,806.4 54 .1% 34.2% 11.8% 5.89% 7.90% $5 ,71 4.8 $2,613.8 79 .7%
Tota ls for All S&P 5 00 C ompanies $1 ,17 6,20 8.1 $1,438,659.0 53 .7% 35.9% 10.6% 5.89% 7.85% $69 ,07 3.3 $ 32,425.4 81 .8%
Tota ls for 12 /31/09 S&P 50 0 Re porting Companie s $1 ,06 3,24 6.7 $1,293,598.2 54 .5% 36.0% 9.9% 5.82% 7.94% $60 ,02 9.7 $ 26,600.8 82 .2%
Note: The above data for asset allocation may not match those disclosed in company filings, as new 10-K disclosure requirements meant asset classification was inconsistent from company to company.
Sources: FactSet, 10-K reports, Bloomberg, Capital IQ. * as disclosed in most recent 10-K
10

11. Energy: Companies with Defined Benefit Plans
$ in Millions; Ranked by 12/31/09 Pension Liability as % of 10/15/10 Market Capitalization
2009 2009 2010E * 12/ 31/ 09
Pension P ens ion Expected Ret urn E mployer Pensi on Employ er Pension P ension Pens ion Pension Defic it as % of P ension Li abi lity as % of
Company P lan Assets Plan Li abil ities % E quit ies % Bonds % Other Discount Rate % on A ssets % 10-K Date Contributi on Cont ri but ion (Deficit)/ Surpl us Funded St atus Mkt Cap at 10/ 15/ 2010 Mkt Cap at 10/ 15/2010
Ener gy
McDermott International Inc. $ 2,02 7.8 $2,806.7 5 3.5% 34.5% 12.0% 6.00% 7.83% 1 2/2 009 $52 .1 $1 68.9 ($778.9) 72 .2% 14 .1% 5 0.7%
ONEOK Inc. 74 8.7 997.0 6 7.0% 10.0% 23.0% 6.00% 8.50% 1 2/2 009 77 .1 43.3 (248.3) 75 .1% 10 .8% 4 3.5%
Sun oco Inc. 80 4.0 1,223.0 6 2.0% 38.0% 0.0% 5.50% 8.25% 1 2/2 009 47 .0 0.0 (419.0) 65 .7% 8 .8% 2 5.6%
Tesoro Corp. 26 2.0 511.0 5 5.0% 37.0% 8.0% 5.80% 8.50% 1 2/2 009 37 .0 0.0 (249.0) 51 .3% 12 .5% 2 5.6%
Bristow Group Inc. 26 1.8 343.1 5 5.4% 40.1% 4.5% 7.00% 7.50% 0 3/2 010 19 .8 4.1 (81.4) 76 .3% 5 .9% 2 4.9%
El Paso Corp. 1,97 9.0 2,133.0 5 0.0% 50.0% 0.0% 5.61% 8.00% 1 2/2 009 4 .0 5.0 (154.0) 92 .8% 1 .7% 2 2.9%
Dresser-Rand Group Inc. 27 5.9 371.5 5 2.0% 29.0% 19.0% 5.80% 8.50% 1 2/2 009 37 .4 6.0 (95.6) 74 .3% 5 .4% 2 1.0%
Rowan Cos. Inc. 33 7.3 532.3 6 4.0% 33.0% 3.0% 5.97% 8.00% 1 2/2 009 36 .2 57.3 (195.0) 63 .4% 5 .3% 1 4.5%
Val ero En ergy Corp. 1,25 1.0 1,454.0 5 1.0% 46.0% 3.0% 5.80% 7.72% 1 2/2 008 92 .0 50.0 (203.0) 86 .0% 2 .0% 1 4.2%
Mara thon Oil Corp. 1,97 1.0 3,384.0 1 1.0% 81.0% 8.0% 5.50% 8.50% 1 2/2 009 345 .0 17.0 (1,413.0) 58 .2% 5 .6% 1 3.4%
Exxon Mobil Corp . 2 5,67 8.0 37,325.0 6 0.0% 38.0% 2.0% 6.25% 8.00% 1 2/2 009 4 ,526 .0 1,0 90.0 (11,647.0) 68 .8% 3 .5% 1 1.3%
ConocoPhil lips 5,42 5.0 8,143.0 5 6.0% 35.0% 9.0% 5.35% 7.00% 1 2/2 009 861 .0 7 60.0 (2,718.0) 66 .6% 3 .0% 9.1%
Wil liams Cos. 86 0.0 1,118.0 7 8.0% 17.0% 5.0% 5.78% 7.75% 1 2/2 009 61 .0 61.0 (258.0) 76 .9% 2 .1% 9.1%
Spe ctra Energy Co rp . 1,01 0.0 1,366.0 6 3.0% 37.0% 0.0% 5.28% 7.25% 1 2/2 009 65 .0 7.0 (356.0) 73 .9% 2 .3% 9.0%
FMC Techno logie s Inc. 61 9.8 753.9 6 5.0% 4.0% 31.0% 5.76% 8.35% 1 2/2 009 63 .9 14.5 (134.1) 82 .2% 1 .6% 8.7%
Chevron Corp. 1 0,53 9.0 14,379.0 5 6.2% 27.7% 16.1% 5.30% 7.80% 1 2/2 009 1 ,739 .0 9 00.0 (3,840.0) 73 .3% 2 .3% 8.6%
Schl umberger Ltd. 5,23 0.0 5,957.0 5 8.8% 30.3% 11.0% 6.00% 8.50% 1 2/2 009 1 ,102 .0 6 00.0 (727.0) 87 .8% 0 .9% 7.8%
Hess Corp . 1,07 2.0 1,547.0 5 6.9% 26.9% 16.2% 5.80% 7.50% 1 2/2 009 220 .0 1 45.0 (475.0) 69 .3% 2 .3% 7.5%
Transocea n L td. 87 5.0 1,335.0 6 8.0% 23.0% 9.0% 5.84% 8.50% 1 2/2 009 70 .0 76.0 (460.0) 65 .5% 2 .4% 7.1%
Ana darko Pe trole um Co rp . 97 9.0 1,630.0 6 0.0% 34.0% 6.0% 5.25% 7.50% 1 2/2 009 163 .0 1 33.0 (651.0) 60 .1% 2 .3% 5.8%
Murp hy Oi l C orp. 37 5.9 521.5 6 0.5% 38.7% 0.8% 5.97% 6.60% 1 2/2 009 50 .8 20.8 (145.5) 72 .1% 1 .2% 4.2%
Bake r Hug hes Inc. 59 4.0 702.0 5 3.0% 44.0% 3.0% 5.90% 8.50% 1 2/2 009 15 .0 45.0 (108.0) 84 .6% 0 .6% 3.6%
Devon En ergy Corp. 53 2.0 980.0 4 9.0% 39.0% 12.0% 6.00% 7.18% 1 2/2 009 55 .0 34.0 (448.0) 54 .3% 1 .5% 3.3%
Wea therford In terna tio nal Ltd. 9 7.7 274.1 6 0.0% 38.0% 2.0% 5.25% 7.00% 1 2/2 008 8 .7 0.0 (176.4) 35 .7% 2 .1% 3.3%
Halli burto n Co . 72 2.0 943.0 5 9.0% 41.0% 0.0% 5.45% 8.00% 1 2/2 009 99 .0 38.0 (221.0) 76 .6% 0 .7% 3.0%
Cameron Internation al Corp. 24 2.2 274.5 5 6.0% 44.0% 0.0% 5.03% 5.25% 1 2/2 009 25 .4 9.4 (32.3) 88 .2% 0 .3% 2.7%
Cabot Oil & Gas Co rp. 5 3.2 75.1 6 0.0% 37.0% 3.0% 5.75% 8.00% 1 2/2 009 10 .1 0.5 (21.9) 70 .8% 0 .7% 2.4%
Noble Corp. 24 2.2 227.5 3 4.0% 63.0% 3.0% 5.65% 7.80% 1 2/2 009 17 .6 4.0 14.7 106 .5% -0 .1% 2.2%
Noble Energy Inc. 17 2.0 228.0 7 3.0% 27.0% 0.0% 6.00% 8.00% 1 2/2 009 20 .0 2.0 (56.0) 75 .4% 0 .4% 1.7%
Nati onal Oi lwell Varco Inc. 19 3.0 262.0 3 6.0% 46.0% 18.0% 5.26% 7.75% 1 2/2 009 12 .0 0.0 (69.0) 73 .7% 0 .3% 1.3%
Occiden tal Petroleum Corp. 48 2.0 583.0 6 0.0% 40.0% 0.0% 5.12% 6.50% 1 2/2 009 31 .0 11.0 (101.0) 82 .7% 0 .1% 0.8%
Sou thwe stern Energy C o. 4 6.7 56.7 6 2.0% 38.0% 0.0% 5.75% 7.50% 1 2/2 009 9 .0 9.6 (10.0) 82 .3% 0 .1% 0.5%
Apa che C orp. 11 8.2 135.3 4 7.0% 49.0% 4.0% 5.70% 6.05% 1 2/2 009 16 .0 6.0 (17.2) 87 .3% 0 .0% 0.4%
Nabors Indu stries Ltd. 1 4.1 18.9 5 5.0% 42.0% 3.0% 6.00% 6.50% 1 2/2 009 0 .6 0.5 (4.8) 74 .5% 0 .1% 0.3%
Tota ls for All Ene rgy Companie s $6 6,09 1.4 $92,591.1 56 .1% 37.0% 6.9 % 5.72% 7.6 5% $9 ,988 .9 $ 4,3 18.9 71.4%
Tota ls for 12 /31/09 Ener gy Reporting C ompanies $6 5,82 9.6 $92,248.0 56 .1% 36.9% 7.0 % 5.68% 7.6 5% $9 ,969 .1 $ 4,3 14.8 71.4%
Tota ls for All S&P 5 00 C ompanies $1 ,17 6,20 8.1 $1,438,659.0 53 .7% 35.9% 10.6 % 5.89% 7.8 5% $69 ,073 .3 $3 2,4 25.4 81.8%
Tota ls for 12 /31/09 S&P 50 0 Re porting Companie s $1 ,06 3,24 6.7 $1,293,598.2 54 .5% 36.0% 9.9 % 5.82% 7.9 4% $60 ,029 .7 $2 6,6 00.8 82.2%
Note: The above data for asset allocation may not match those disclosed in company filings, as new 10-K disclosure requirements meant asset classification was inconsistent from company to company.
Sources: FactSet, 10-K reports, Bloomberg, Capital IQ. * as disclosed in most recent 10-K
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