Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of Reconciliation of the Changes in the Plans' Projected Benefit Obligations

The following tables provide a reconciliation of the changes in the plans’ projected benefit obligations as of December 31:



	U.S. Qualified Plans						U.S. Non-Qualified Plans						U.K. Plan
(In millions)	2018			2017			2018			2017			2018			2017
Projected benefit obligation at beginning of year	$	1,743		$	1,745		$	78		$	74		$	1,305		$	1,235
Interest cost	57			74			2			3			28			34
Plan amendment	—			—			—			—			19			—
Actuarial (gain) loss	(142		)	128			(5		)	6			(62		)	(23		)
Benefits paid	(69		)	(62		)	(5		)	(5		)	(56		)	(60		)
Settlement	—			(142		)	—			—			—			—
Foreign currency exchange rate changes	—			—			—			—			(70		)	119
Projected benefit obligation at end of year ⁽¹⁾	$	1,589		$	1,743		$	70		$	78		$	1,164		$	1,305


(1)	At the end of each year presented, the accumulated benefit obligations for the plans are equal to the projected benefit obligations.

The following sets forth the changes in the benefit obligation and the determination of the amounts recognized on the Consolidated Balance Sheets for the Postretirement Plan:



	As of December 31,
(In millions)	2018			2017
Projected benefit obligation at beginning of year	$	40		$	51
Interest cost on projected benefit obligation	1			2
Actuarial gain	(5		)	(9		)
Participant contributions	2			2
Benefits paid	(4		)	(6		)
Projected and accumulated benefit obligation at end of year	$	34		$	40
Funded status of the plan	$	(34	)	$	(40	)
Amounts recognized in the balance sheet consist of :
Current liabilities	$	(3	)	$	(3	)
Long-term liabilities	(31		)	(37		)
Net amount recognized	$	(34	)	$	(40	)
Discount rate assumption as of December 31	4.21		%	3.52		%

Schedule of Reconciliation of the Changes in the Plans' Fair Value of Plan Assets

The following tables provide a reconciliation of the changes in the fair value of plan assets as of December 31:



	U.S. Qualified Plans						U.S. Non-Qualified Plans						U.K. Plan
(In millions)	2018			2017			2018			2017			2018			2017
Fair value of plan assets at beginning of year	$	1,764		$	1,700		$	—		$	—		$	1,390		$	1,207
Actual return on plan assets	(113		)	268			—			—			(35		)	109
Employer contributions	—			—			5			5			3			13
Benefits paid	(69		)	(62		)	(5		)	(5		)	(56		)	(60		)
Settlement	—			(142		)	—			—			—			—
Foreign currency exchange rate changes	—			—			—			—			(75		)	121
Fair value of plan assets at end of year	$	1,582		$	1,764		$	—		$	—		$	1,227		$	1,390

Schedule of the Funded Status of the Plans

The following table provides the funded status of the plans as of December 31:



	U.S. Qualified Plans					U.S. Non-Qualified Plans						U.K. Plan
(In millions)	2018			2017		2018			2017			2018		2017
Funded status:
Funded status at end of year	$	(7	)	$	21	$	(70	)	$	(78	)	$	63	$	85
Funded status recognized in balance sheet:
Long-term assets	$	—		$	21	$	—		$	—		$	63	$	85
Current liabilities	—			—		(5		)	(6		)	—		—
Long-term liabilities	(7		)	—		(65		)	(72		)	—		—
Net amount recognized	$	(7	)	$	21	$	(70	)	$	(78	)	$	63	$	85
Plans with projected and accumulated benefit obligation in excess of plan assets:
Projected and accumulated benefit obligation	$	1,589		$	—	$	70		$	78		$	—	$	—
Fair value of plan assets	1,582			—		—			—			—		—

Schedule of Accumulated Other Comprehensive Loss Not Yet Recognized in Net Periodic Benefit Expense

The following table provides amounts included in AOCI that have not yet been recognized in net periodic benefit expense as of December 31:



	U.S. Qualified Plans					U.S. Non-Qualified Plans						U.K. Plan
(In millions)	2018			2017		2018			2017			2018		2017
Actuarial (loss) gain	$	(50	)	$	13	$	(3	)	$	(8	)	$	5	$	44
Prior-service credit	—			—		—			—			19		39
AOCI	$	(50	)	$	13	$	(3	)	$	(8	)	$	24	$	83

The following table provides amounts included in AOCI that have not yet been recognized in net periodic benefit expense as of December 31:



(In millions)	2018		2017
Actuarial gain (loss)	$	12	$	8
AOCI	$	12	$	8

Schedule of Net Periodic Benefit Costs

The following table sets forth the amount of net periodic benefit cost and amounts recognized in Other comprehensive (loss) income for the years ended December 31:



	U.S. Qualified Plans									U.S. Non-Qualified Plans							U.K. Plan
(In millions)	2018			2017			2016			2018			2017		2016		2018			2017			2016
Net periodic benefit (income) expense:
Interest cost	$	57		$	74		$	76		$	2		$	3	$	3	$	28		$	34		$	41
Expected return on plan assets	(92		)	(93		)	(88		)	—			—		—		(67		)	(60		)	(59		)
Amortization of prior-service credit	—			—			—			—			—		—		(2		)	(1		)	(1		)
Recognized AOCI loss due to settlements	—			(1		)	—			—			—		—		—			—			—
Net periodic benefit (income) expense	$	(35	)	$	(20	)	$	(12	)	$	2		$	3	$	3	$	(41	)	$	(27	)	$	(19	)
Amounts recognized in Other comprehensive (loss) income
Actuarial loss (gain)	$	63		$	(47	)	$	11		$	(5	)	$	6	$	3	$	40		$	(72	)	$	29
Prior-service cost	—			—			—			—			—		—		19			—			(42		)
Reclassification of recognized AOCI gain due to settlements	—			1			—			—			—		—		—			—			—
Reclassification of prior-service credit to net periodic benefit (income) expense	—			—			—			—			—		—		2			1			1
Loss (gain) recognized in Other comprehensive (loss) income	$	63		$	(46	)	$	11		$	(5	)	$	6	$	3	$	61		$	(71	)	$	(12	)

Net periodic benefit expense includes the following components:



	Years Ended December 31,
(In millions, except discount rate)	2018			2017			2016
Net periodic benefit expense:
Service cost - benefits earned during the year	$	1		$	—		$	1
Interest cost on projected benefit obligation	1			2			2
Amortization of actuarial gain	(1		)	—			—
Net periodic benefit expense	$	1		$	2		$	3
Discount rate assumption used to calculate interest cost	3.11% - 3.67%			3.90		%	4.20		%

Schedule of Assumptions Used to Determine the Projected Benefit Obligation and Net Periodic Benefit Cost

The following table outlines the weighted-average assumptions used to determine the net periodic benefit costs and benefit obligations for the year ended December 31:



	U.S. Qualified Plans				U.S. Non-Qualified Plans					U.K. Plan
	2018	2017	2016		2018	2017		2016		2018		2017		2016
Discount rate - net periodic benefit costs	3.14% - 3.38%	3.83% - 4.35%	4.65	%	2.84% - 3.21%	4.35	%	4.65	%	2.21	%	2.70	%	3.75	%
Discount rate - benefit obligations	4.18% - 4.39%	3.55% - 3.71%	4.35	%	3.93% - 4.28%	3.21% - 3.60%		4.35	%	2.85	%	2.53	%	2.70	%
Expected long-term rate of return on plan assets	3.00% - 5.40%	2.35% - 5.65%	5.58	%	N/A	N/A		N/A		4.95	%	5.00	%	5.40	%

Schedule of Expected Benefit Payments

Expected benefit payments for the defined benefit pension plans are summarized below. These estimates are based on assumptions about future events. Actual benefit payments may vary from these estimates.



(In millions)	U.S. Qualified Plans		U.S. Non-Qualified Plans		U.K. Plan
Year ending December 31:
2019	$	80	$	5	$	40
2020	83		5		41
2021	87		5		43
2022	89		5		45
2023	92		5		46
2024-2028	492		25		257

Expected benefit payments, which reflect expected future service, as appropriate, are summarized below. These estimates are based on assumptions about future events. Actual benefit payments may vary from these estimates.



(In millions)	Benefit Payments
Year ending December 31:
2019	$	3
2020	3
2021	3
2022	3
2023	3
2024-2028	14

Schedule of Fair Values of Investments Held in Pension Plans by Major Asset Category

The following tables set forth the fair values of investments held in the pension plans by major asset category as of December 31, 2018 and 2017, as well as the percentage that each asset category comprises of total plan assets:



(Dollars in millions)	December 31, 2018
Asset category (U.S. Qualified Plans)	Level 1		Level 2			Not Subject to Leveling⁽¹⁾		Total		Percentage of Plan Assets
Cash and cash equivalents
Short-term investment fund	$	—	$	—		$	37	$	37	2.3	%
Equity:
U.S. large companies	—		—			107		107		6.8	%
U.S. small companies	25		—			—		25		1.6	%
International	59		—			60		119		7.5	%
Fixed income securities:
Global long-term debt instruments	223		1,063			8		1,294		81.8	%
Derivatives	1		(1		)	—		—		—	%
Total U.S. Plan assets	$	308	$	1,062		$	212	$	1,582	100.0	%

Asset category (U.K. Plan)
Cash and cash equivalents	$	57	$	—		$	—	$	57	4.6	%
Fixed income securities	—		615			363		978		79.7	%
Derivatives	—		5			26		31		2.6	%
Hedge funds⁽²⁾	—		—			38		38		3.1	%
Diversified multi-asset funds:
Dynamic asset allocation	—		—			123		123		10.0	%
Total U.K. Plan assets	$	57	$	620		$	550	$	1,227	100.0	%

(1)

In accordance with ASU 2015-07, Fair Value Measurement (Topic 820), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total defined benefit pension plan assets.


(2)	The fair value of the fund is based on the fair value of the underlying assets, substantially all of which is invested in the York Credit Opportunities Master Fund, L.P., an exempted limited partnership formed under the laws of the Cayman Islands. The fund offers very limited liquidity with redemption only allowed on anniversary of investment with 60 days’ prior notice.



(Dollars in millions)	December 31, 2017
Asset category (U.S. Qualified Plans)	Level 1		Level 2		Not Subject to Leveling⁽¹⁾		Total		Percentage of Plan Assets
Cash and cash equivalents
Short-term investment fund	$	—	$	—	$	25	$	25	1.4	%
Equity:
U.S. large companies	189		49		101		339		19.2	%
U.S. small companies	37		—		—		37		2.1	%
International	79		—		82		161		9.1	%
Fixed income securities:
Global long-term debt instruments	171		940		87		1,198		68.0	%
Derivatives	1		3		—		4		0.2	%
Total U.S. Plan assets	$	477	$	992	$	295	$	1,764	100.0	%

Asset category (U.K. Plan)
Cash and cash equivalents	$	65	$	—	$	—	$	65	4.6	%
Fixed income securities	—		371		293		664		47.8	%
Derivatives	—		13		54		67		4.9	%
Hedge funds⁽²⁾	—		—		42		42		3.0	%
Diversified multi-asset funds:
Risk parity	—		—		275		275		19.8	%
Dynamic asset allocation	—		—		277		277		19.9	%
Total U.K. Plan assets	$	65	$	384	$	941	$	1,390	100.0	%

(1)


(2)	The fair value of the fund is based on the fair value of the underlying assets, substantially all of which is invested in the York Credit Opportunities Master Fund, L.P., an exempted limited partnership formed under the laws of the Cayman Islands. The fund offers very limited liquidity with redemption only allowed on anniversary of investment with 60 days’ prior notice.