Raytheon Co. expects to contribute a combined $4.2 billion to its pension plans over the next three years, while Lockheed Martin Corp. foresees a $1.1 billion contribution to its pension trust, according to fourth-quarter earnings statements from both firms.
Waltham, Mass.-based Raytheon is projecting contributions of $1.2 billion this year, $1.4 billion in 2013 and $1.6 billion in 2014, according to a presentation accompanying its quarterly earnings call.
Raytheon made $1.8 billion in contributions to its pension plans in 2011.
The company had $13.9 billion of U.S. defined benefit plan assets as of Sept. 30, according to Pensions & Investments data.
Lockheed Martin, Bethesda, Md., made $1.1 billion of accelerated contributions to its pension plans during the fourth quarter, for a total contribution of $2.3 billion for the year. The company's U.S. defined benefit plan assets totaled $26.6 billion as of Sept. 30, according to P&I data.
Lockheed returned 4.9% on plan assets in 2011, below its expected long-term rate of return of 8%.
Also Thursday, AT&T Inc., Dallas, said it made a $1 billion contribution to its pension plan during the fourth quarter, and that no additional funding is required in 2012, according to its fourth-quarter earnings release. According to P&I data, the company had $43.9 billion of U.S. defined benefit plan assets as of Sept. 30.
On Wednesday, AK Steel Holding Corp., West Chester, Ohio, announced that it expects to make $170 million in pension contributions in 2012, according to a transcript of the firm's fourth-quarter earnings call.
The firm already has contributed $29 million to its defined benefit plan this month and plans to contribute an additional $141 million later this year.
According to its latest 10-K filing, the defined benefit plan had $2.473 billion in plan assets and $3.529 billion in projected benefit obligations as of Dec. 31, 2010, for a funding ratio of 70%.The plan's target allocation is 60% equity, 38% fixed income and 2% cash, according to the 10-K. The firm contributed $170 million in 2011.
Separately, the company announced it will reduce its expected annual rate of return for its defined benefit plan to 8% from 8.5% for 2012. Company spokesman Alan McCoy declined to comment.
Also Wednesday, Xerox Corp. CFO Luca Maestri said the Norwalk, Conn., company expects to make “a similar level of pension contributions in 2012” as its $426 million contribution in 2011.
Mr. Maestri cited a significant drop in the discount rate used to calculate pension liabilities, despite “truly outstanding returns that we achieved in 2011 on our plan assets.”
Mr. Maestri said that 2012 contributions to the pension plan will be skewed toward the first half of the year, rather than the latter half, as was the case in 2011. Xerox plans to issue equity to fund its contributions, but has not determined the timing or the amount. When asked about cash-flow projections, Mr. Maestri indicated cash pension contributions would account for about $200 million in 2012.
Xerox had $3.4 billion of U.S. defined benefit assets as of Sept. 30, according to P&I data
