XML 75 R40.htm IDEA: XBRL DOCUMENT v3.3.1.900
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables)
 12 Months Ended
Dec. 31, 2015
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
  
2015

2014

2015

2014

Reconciliation of projected benefit obligation:
 
 
 
 
Projected benefit obligation beginning of year
$
6,698

$
5,834

$
303

$
321

Service cost
57

53

—

1

Interest cost
265

271

9

10

Plan participants’ contributions
—

—

9

13

Actuarial (gains) losses
(309
)
1,006

(34
)
4

Foreign currency translation
(159
)
(87
)
(15
)
(7
)
Benefits paid (includes lump sum settlements)
(342
)
(391
)
(32
)
(44
)
Plan amendments and other
(1
)
1

—

2

Special/contractual termination benefits
—

7

—

—

Plan transfer/Acquisitions
2

4

—

3

Projected benefit obligation at end of year
$
6,211

$
6,698

$
240

$
303
Changes in Fair Value of Plan Assets
Changes in Fair Value of Plan Assets
DOLLAR AMOUNTS IN MILLIONS
  
PENSION
OTHER
POSTRETIREMENT
BENEFITS
  
2015

2014

2015

2014

Fair value of plan assets at beginning of year (estimated)
$
5,643

$
5,614

$
—

$
—

Adjustment for final fair value of plan assets
57

53

—

—

Actual return on plan assets
226

368

—

—

Foreign currency translation
(155
)
(75
)
—

—

Employer contributions and benefit payments
60

70

23

31

Plan participants’ contributions
—

—

9

13

Plan transfer/Acquisitions
2

4

—

—

Benefits paid (includes lump sum settlements)
(342
)
(391
)
(32
)
(44
)
Fair value of plan assets at end of year (estimated)
$
5,491

$
5,643

$
—

$
—
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
  
2015

2014

2015

2014

Noncurrent assets
$
70

$
8

$
—

$
—

Current liabilities
(21
)
(21
)
(22
)
(26
)
Noncurrent liabilities
(769
)
(1,042
)
(218
)
(277
)
Funded status
$
(720
)
$
(1,055
)
$
(240
)
$
(303
)
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
2015
Level 1

Level 2

Level 3

Total

Pension trust investments:
 
 
 
 

Fixed income instruments
$
668

$
46

$
—

714

Hedge funds
87

(37
)
3,388

3,438

Private equity and related funds
—

—

1,267

1,267

Real estate and related funds
—

—

67

67

Common and preferred stock and equity index instruments
—

3

—

3

Total pension trust investments
$
755

$
12

$
4,722

$
5,489

Accrued liabilities, net
 
 
 
(8
)
Pension trust net assets
 
 
 
5,481

Canadian nonregistered plan assets:
 
 
 
 
Cash
$
6

$
—

$
—

6

Investments
4

—

—

4

Total Canadian nonregistered plan assets
$
10

$
—

$
—

$
10

Total plan assets
 
 
 
$
5,491

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 investments
 
 
 
5,630

Canadian nonregistered plan assets:
 
 
 
 
Cash
$
7

$
—

$
—

7

Investments
6

—

—

6

Total Canadian nonregistered plan assets
$
13

$
—

$
—

$
13

Total plan assets
 
 
 
$
5,643
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, 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

Net realized gains (losses)
143

100

9

1

253

Net change in unrealized appreciation (depreciation)
47

(117
)
(11
)
—

(81
)
Purchases
441

141

6

—

588

Sales
(539
)
(279
)
(19
)
(4
)
(841
)
Issuances
47

—

—

—

47

Settlements
(84
)
—

—

—

(84
)
     Transfers, Out(1)
—

—

—

—

—

Balance as of December 31, 2015
$
3,388

$
1,267

$
67

$
—

$
4,722

(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
  
2015

2014

2013

2015

2014

2013

Net periodic benefit cost (credit):
 
 
 
 
 
 
Service cost(1)
$
57

$
53

$
64

$
—

$
1

$
1

Interest cost
265

271

244

9

10

12

Expected return on plan assets
(476
)
(467
)
(439
)
—

—

—

Amortization of actuarial loss
182

125

221

10

12

14

Amortization of prior service cost (credit)(2)
4

5

7

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

9

—

—

—

—

Other
—

—

—

—

(4
)
—

Net periodic benefit cost (credit)
$
32

$
(4
)
$
97

$
10

$
(142
)
$
4

(1)  Service cost includes $2 million in 2014 and $4 million in 2013 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 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 2016
Estimated Amortization from Cumulative Other Comprehensive Loss in 2016
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 2016. 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 2016.
DOLLAR AMOUNTS IN MILLIONS
  
PENSION

OTHER POSTRETIREMENT BENEFITS

TOTAL

Net actuarial loss
$
152

$
9

$
161

Prior service cost (credit)
4

(8
)
(4
)
Net effect cost
$
156

$
1

$
157
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

2016
$
334

$
22

2017
$
340

$
21

2018
$
347

$
20

2019
$
354

$
19

2020
$
360

$
19

2021-2025
$
1,858

$
81
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,
2015

DECEMBER 31,
2014

DECEMBER 31,
2015

DECEMBER 31,
2014

Discount rates:
 
 
 
 
United States
4.50
%
4.10
%
4.00
%
3.60
%
Canada
4.00
%
3.90
%
3.90
%
3.80
%
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
Determined by participant age, ranging from 2.00% to 13.00%
2.50% for 2014, 2015
and 3.50% thereafter
N/A

N/A

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

N/A

Hourly:
 
 
 
 
United States
Determined by participant age, ranging from 2.30% to 13.00%
3.00
%
N/A

N/A

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
  
2015
2014
2013
2015
2014
2013
Discount rates:
 
 
 
 
 
 
United States
4.10%
4.90% for the first half of 2014 and 4.40% for the second half of 2014
3.70%
3.60%
4.00%
3.00%
Salaried – lump sum distributions (U.S. salaried and nonqualified plan only)(1)
PPA Table
PPA Table
PPA phased
Table
N/A
N/A
N/A
Canada
3.90%
4.70%
4.10%
3.80%
4.60%
4.00%
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 2015 and 3.50% thereafter
2.50% for 2014
and 3.50% thereafter
2.50% for 2013
and 3.50% thereafter
N/A
N/A
N/A
Canada
2.50% for 2015
and 3.50%  thereafter
2.50% for 2014
and 3.50%  thereafter
2.50% for 2013
and 3.50%  thereafter
N/A
N/A
N/A
Hourly:
 
 
 
 
 
 
United States
3.00%
3.00%
3.00%
N/A
N/A
N/A
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%
60.00%
56.00%
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
  
2015

2014

2013

Direct investments
$
175

$
258

$
568

Derivatives
51

110

240

Total
$
226

$
368

$
808
Assumptions We Use in Estimating Health Care Benefit Costs
Assumptions We Use in Estimating Health Care Benefit Costs
  
2015
2014
  
U.S.

CANADA

U.S.

CANADA

Weighted health care cost trend rate assumed for next year
7.20% for Pre Medicare and 4.50% for HRA

5.00
%
6.30
%
5.60
%
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
2036

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, 2015 (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
$
10

$
(8
)
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, 2015

December 31, 2014

Fixed income
13.1
 %
12.2
 %
Hedge funds
62.7

60.6

Private equity and related funds
23.0

25.3

Real estate and related funds
1.2

1.4

Common and preferred stock and equity index instruments
0.1

0.7

Accrued liabilities
(0.1
)
(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, 2015

December 31, 2014

Cash and cash equivalents
55.9
%
52.8
%
Equities
44.1

47.2

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,
2015

DECEMBER 31,
2014

Equity index instruments
$
13

$
13

Forward contracts
(51
)
(32
)
Swaps
492

436

Total
$
454

$
417
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,
2015

DECEMBER 31,
2014

Equity index instruments
$
500

$
361

Forward contracts
523

535

Swaps
2,058

1,824

Total
$
3,081

$
2,720