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PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables)
 12 Months Ended
Dec. 31, 2014
Changes in Projected Benefit Obligations of Our Pension and Other Postretirement Benefit Plans
Changes in Projected Benefit Obligations of Our Pension and Other Postretirement Benefit Plans
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER
POSTRETIREMENT
BENEFITS
  
2014

2013

2014

2013

Reconciliation of projected benefit obligation:
 
 
 
 
Projected benefit obligation beginning of year
$
5,834

$
6,575

$
321

$
433

Service cost
53

64

1

1

Interest cost
271

244

10

12

Plan participants’ contributions
—

—

13

16

Actuarial (gains) losses
1,006

(666
)
4

(23
)
Foreign currency exchange rate changes
(87
)
(66
)
(7
)
(5
)
Benefits paid (includes lump sum settlements)
(391
)
(317
)
(44
)
(50
)
Plan amendments and other
1

—

2

(66
)
Special/contractual termination benefits
7

—

—

—

Plan transfer/Acquisitions
4

—

3

3

Projected benefit obligation at end of year
$
6,698

$
5,834

$
303

$
321
Changes in Fair Value of Plan Assets
Changes in Fair Value of Plan Assets
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER
POSTRETIREMENT
BENEFITS
  
2014

2013

2014

2013

Fair value of plan assets at beginning of year (estimated)
$
5,614

$
5,022

$
—

$
—

Adjustment for final fair value of plan assets
53

55

—

—

Actual return on plan assets
368

808

—

—

Foreign currency exchange rate changes
(75
)
(57
)
—

—

Employer contributions and benefit payments
70

103

31

34

Plan participants’ contributions
—

—

13

16

Plan transfer/Acquisitions
4

—

—

—

Benefits paid (includes lump sum settlements)
(391
)
(317
)
(44
)
(50
)
Fair value of plan assets at end of year (estimated)
$
5,643

$
5,614

$
—

$
—
Funded Status of Our Pension and Other Postretirement Benefit Plans
Funded Status of Our Pension and Other Postretirement Benefit Plans
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER
POSTRETIREMENT
BENEFITS
  
2014

2013

2014

2013

Noncurrent assets
$
8

$
35

$
—

$
—

Current liabilities
(21
)
(22
)
(26
)
(35
)
Noncurrent liabilities
(1,042
)
(233
)
(277
)
(283
)
Funded status
$
(1,055
)
$
(220
)
$
(303
)
$
(318
)
Schedule of Allocation of Plan Assets
The net pension plan assets, when categorized in accordance with this fair value hierarchy, are as follows:
DOLLAR AMOUNTS IN MILLIONS
2014
Level 1

Level 2

Level 3

Total

Pension trust investments:
 
 
 
 
Fixed income instruments
$
646

$
36

$
3

$
685

Hedge funds
103

(22
)
3,333

3,414

Private equity and related funds
—

3

1,422

1,425

Real estate and related funds
—

—

82

82

Common and preferred stock and equity index instruments
25

12

—

37

Total pension trust investments
$
774

$
29

$
4,840

$
5,643

Accrued liabilities, net
 
 
 
(13
)
Pension trust net assets
 
 
 
$
5,630

Canadian nonregistered plan assets:
 
 
 
 
Cash
$
7

$
—

$
—

$
7

Investments
6

—

—

6

Total Canadian nonregistered plan assets
$
13

$
—

$
—

$
13

Total plan assets
 
 
 
$
5,643

DOLLAR AMOUNTS IN MILLIONS
2013
Level 1

Level 2

Level 3

Total

Pension trust investments:
 
 
 
 
Fixed income instruments
$
567

$
68

$
3

$
638

Hedge funds
—

(7
)
3,225

3,218

Private equity and related funds
—

(2
)
1,606

1,604

Real estate and related funds
—

—

101

101

Common and preferred stock and equity index instruments
23

29

—

52

Total pension trust investments
$
590

$
88

$
4,935

$
5,613

Accrued liabilities, net
 
 
 
(13
)
Pension trust net investments
 
 
 
$
5,600

Canadian nonregistered plan assets:
 
 
 
 
Cash
$
8

$
—

$
—

$
8

Investments
6

—

—

6

Total Canadian nonregistered plan assets
$
14

$
—

$
—

$
14

Total plan assets
 
 
 
$
5,614
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets
A reconciliation of the beginning and ending balances of the pension plan assets measured at fair value using significant unobservable inputs (Level 3) is presented below:
DOLLAR AMOUNTS IN MILLIONS
  
INVESTMENTS
  
Hedge funds

Private equity  and
related funds

Real estate and
related funds

Fixed Income

Total

Balance as of December 31, 2012
$
2,767

$
1,577

$
91

$
4

$
4,439

Net realized gains (losses)
164

90

(19
)
—

235

Net change in unrealized appreciation (depreciation)
275

138

23

(1
)
435

Purchases
743

188

29

—

960

Sales
(645
)
(387
)
(23
)
—

(1,055
)
Settlements
(79
)
—

—

—

(79
)
Balance as of December 31, 2013
3,225

1,606

101

3

4,935

Net realized gains (losses)
186

128

8

—

322

Net change in unrealized appreciation (depreciation)
76

(130
)
(4
)
—

(58
)
Purchases
541

177

5

—

723

Sales
(540
)
(359
)
(28
)
—

(927
)
Issuances
52

—

—

—

52

Settlements
(132
)
—

—

—

(132
)
     Transfers, Out(1)
$
(75
)
—

—

—

(75
)
Balance as of December 31, 2014
$
3,333

$
1,422

$
82

$
3

$
4,840

(1) One hedge fund completed an initial public offering during 2014; as such the security was transferred from Level 3 to Level 1 in 2014.
Net Periodic Benefit Cost (Credit)
Net Periodic Benefit Cost (Credit)
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER POSTRETIREMENT
BENEFITS
  
2014

2013

2012

2014

2013

2012

Net periodic benefit cost (credit):
 
 
 
 
 
 
Service cost(1)
$
53

$
64

$
53

$
1

$
1

$
1

Interest cost
271

244

262

10

12

15

Expected return on plan assets
(467
)
(439
)
(422
)
—

—

—

Amortization of actuarial loss
125

221

175

12

14

13

Amortization of prior service cost (credit)(2)(3)
5

7

7

(161
)
(23
)
(127
)
Recognition of curtailments, settlements and special termination benefits due to closures, restructuring or divestitures(1)
9

—

—

—

—

—

Other
—

—

—

(4
)
—

4

Net periodic benefit cost (credit)
$
(4
)
$
97

$
75

$
(142
)
$
4

$
(94
)
(1)  Service cost includes $2 million in 2014, $4 million in 2013 and $3 million in 2012 for employees that were part of the Real Estate Divestiture. These charges are included in our results of discontinued operations. Curtailment and special termination benefits are related to involuntary terminations, due to restructuring activities, as well as the Real Estate Divestiture.
(2) During fourth quarter 2011, we ratified amendments to our postretirement medical and life insurance benefit plans for U.S. salaried employees that reduced or eliminated certain benefits that were available to both past and present employees. The company recognized a gain of $103 million in 2012 due to these benefit changes. This gain is included in other operating income and reflected in the amortization of prior service credit in the table above. The benefit related to the fourth quarter 2011 amendments was fully recognized in first and second quarter 2012.
(3) During fourth quarter 2013, the decision was ratified to eliminate Company funding of the Post-Medicare Health Reimbursement Account (HRA) for certain salaried retirees after 2014. This change was communicated to affected retirees during January 2014. As a result, we recognized a pretax gain of $151 million in 2014 from this plan amendment.
Estimated Amortization from Cumulative Other Comprehensive Loss in 2015
Estimated Amortization from Cumulative Other Comprehensive Loss in 2015
Amortization of the net actuarial loss and prior service cost (credit) of our pension and postretirement benefit plans will affect our other comprehensive income in 2015. The net effect of the estimated amortization will be an increase in net periodic benefit costs or a decrease in net periodic benefit credits in 2015.
DOLLAR AMOUNTS IN MILLIONS
  
PENSION

OTHER POSTRETIREMENT BENEFITS

TOTAL

Net actuarial loss
$
178

$
10

$
188

Prior service cost (credit)
4

(9
)
(5
)
Net effect cost
$
182

$
1

$
183
Estimated Projected Benefit Payments for the Next 10 Years
Estimated Projected Benefit Payments for the Next 10 Years
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER
POSTRETIREMENT
BENEFITS
2015
$
348

$
26

2016
$
354

$
25

2017
$
361

$
24

2018
$
370

$
23

2019
$
379

$
22

2020-2024
$
1,979

$
98
Discount Rates and Rates of Compensation Increase Used in Estimating Our Pension and Other Postretirement Benefit Obligation
Discount Rates and Rates of Compensation Increase Used in Estimating Our Pension and Other Postretirement Benefit Obligation
  
PENSION
OTHER POSTRETIREMENT
BENEFITS
  
DECEMBER 31,
2014

DECEMBER 31,
2013

DECEMBER 31,
2014

DECEMBER 31,
2013

Discount rates:
 
 
 
 
United States
4.10
%
4.90
%
3.60
%
4.00
%
Canada
3.90
%
4.70
%
3.80
%
4.60
%
Lump sum distributions (US salaried and nonqualified plans only)(1)
PPA Table
PPA Table
N/A

N/A

Rate of compensation increase:
 

 

 

 

Salaried:
 

 

 

 

United States
2.50% for 2014, 2015
and 3.50% thereafter
2.50% for 2013, 2014
and 3.50% thereafter
N/A

N/A

Canada
2.50% for 2014, 2015
and 3.50% thereafter
2.50% for 2013, 2014
and 3.50% thereafter
N/A

N/A

Hourly:
 
 
 
 
United States
3.00
%
3.00
%
3.00
%
3.00
%
Canada
3.25
%
3.25
%
N/A

N/A

Election of lump sum or installment distributions (US salaried and nonqualified plans only)
60.00
%
60.00
%
N/A

N/A

(1) The PPA Phased Table: Interest and mortality assumptions as mandated by Pension Protection Act of 2006 including the phase out of the prior interest rate basis in 2013.
Rates Used to Estimate Our Net Periodic Benefit Costs
Rates Used to Estimate Our Net Periodic Benefit Costs
  
PENSION
OTHER
POSTRETIREMENT
BENEFITS
  
2014
2013
2012
2014
2013
2012
Discount rates:
 
 
 
 
 
 
United States
4.90% for the first half of 2014 and 4.40% for the second half of 2014
3.70%
4.50%
4.00%
3.00%
4.10%
Salaried – lump sum distributions (U.S. salaried and nonqualified plan only)(1)
PPA Table
PPA phased
Table
PPA phased
Table
N/A
N/A
N/A
Canada
4.70%
4.10%
4.90%
4.60%
4.00%
4.80%
Expected return on plan assets:
 
 
 
 
 
 
Qualified/registered plans
9.00%
9.00%
9.00%
 
 
 
Nonregistered plans (Canada only)
3.50%
3.50%
3.50%
 
 
 
Rate of compensation increase:
 
 
 
 
 
 
Salaried:
 
 
 
 
 
 
United States
2.50% for 2014
and 3.50% thereafter
2.50% for 2013
and 3.50% thereafter
2.00% for 2012
and 3.50% thereafter
N/A
N/A
N/A
Canada
2.50% for 2014
and 3.50%  thereafter
2.50% for 2013
and 3.50%  thereafter
2.10% for 2012
and 3.50% thereafter
N/A
N/A
N/A
Hourly:
 
 
 
 
 
 
United States
3.00%
3.00%
3.00%
3.00%
3.00%
3.00%
Canada
3.25%
3.25%
3.25%
N/A
N/A
N/A
Election of lump sum distributions (U.S. salaried and nonqualified plans only)
60.00%
56.00%
60.00%
N/A
N/A
N/A
(1) PPA Phased Table: Interest and mortality assumptions as mandated by Pension Protection Act of 2006 including the phase out of the prior interest rate basis in 2013.
Actual Returns on Assets Held by Our Pension Trusts
DOLLAR AMOUNTS IN MILLIONS
  
2014

2013

2012

Direct investments
$
258

$
568

$
324

Derivatives
110

240

166

Total
$
368

$
808

$
490
Assumptions We Use in Estimating Health Care Benefit Costs
Assumptions We Use in Estimating Health Care Benefit Costs
  
2014
2013
  
U.S.

CANADA

U.S.

CANADA

Weighted health care cost trend rate assumed for next year
6.30
%
5.60
%
6.40
%
5.70
%
Rate to which cost trend rate is assumed to decline (ultimate trend rate)
4.50
%
4.30
%
4.50
%
4.30
%
Year that the rate reaches the ultimate trend rate
2029

2028

2029

2028
Effect of a1 Percent Change in Health Care Costs
Effect of a 1 Percent Change in Health Care Costs
AS OF DECEMBER 31, 2014 (DOLLAR AMOUNTS IN MILLIONS)
  
1% INCREASE

1% DECREASE

Effect on total service and interest cost components
less than $1

less than $(1)

Effect on accumulated postretirement benefit obligation
$
14

$
(12
)
Qualified and Registered Pension Plans  
Schedule of Allocation of Plan Assets
Assets within our qualified and registered pension plans in our U.S. and Canadian pension trusts were invested as follows:
 
DECEMBER 31,
2014

DECEMBER 31,
2013

Fixed income
12.2
 %
11.4
 %
Hedge funds
60.6

57.5

Private equity and related funds
25.3

28.6

Real estate and related funds
1.4

1.8

Common and preferred stock and equity index instruments
0.7

0.9

Accrued liabilities
(0.2
)
(0.2
)
Total
100.0
 %
100.0
 %
Non Registered Canadian Pension Plans  
Schedule of Allocation of Plan Assets
Assets within our nonregistered plans that we are allowed to manage were invested as follows:
 
DECEMBER 31,
2014

DECEMBER 31,
2013

Equities
52.8
%
55.5
%
Cash and cash equivalents
47.2

44.5

Total
100.0
%
100.0
%
Derivatives | Qualified and Registered Pension Plans  
Schedule of Allocation of Plan Assets
This table shows the fair value of the derivatives held by our pension trusts — which fund our qualified and registered plans — at the end of the last two years.
DOLLAR AMOUNTS IN MILLIONS
  
DECEMBER 31,
2014

DECEMBER 31,
2013

Equity index instruments
$
13

$
29

Forward contracts
(32
)
(9
)
Swaps
436

405

Total
$
417

$
425
Derivatives, Aggregate Notional Amount | Qualified and Registered Pension Plans  
Schedule of Allocation of Plan Assets
This table shows the aggregate notional amount of the derivatives held by our pension trusts — which fund our qualified and registered plans — at the end of the last two years.
DOLLAR AMOUNTS IN MILLIONS
  
DECEMBER 31,
2014

DECEMBER 31,
2013

Equity index instruments
$
361

$
399

Forward contracts
535

638

Swaps
1,824

1,568

Total
$
2,720

$
2,605