XML 57 R41.htm IDEA: XBRL DOCUMENT v3.6.0.2
Retirement Plans (Tables)
12 Months Ended
Dec. 31, 2016
Compensation And Retirement Disclosure [Abstract]  
Change in Benefit Obligation, Fair Value of Plan Assets, and Funded Status of Pension Plans and Postretirement Medical Plan

The following table summarizes the benefit obligations, the fair value of plan assets, and the funded status of our pension and postretirement medical plans:

 

 

Funded

 

 

Unfunded

 

 

Postretirement

 

 

 

Pension Plans

 

 

Pension Plan

 

 

Medical Plan

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(In millions)

 

Change In Benefit Obligation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1

 

$

2,321

 

 

$

2,450

 

 

$

259

 

 

$

278

 

 

$

98

 

 

$

94

 

Service cost

 

 

44

 

 

 

51

 

 

 

16

 

 

 

16

 

 

 

4

 

 

 

4

 

Interest cost

 

 

98

 

 

 

93

 

 

 

9

 

 

 

9

 

 

 

3

 

 

 

3

 

Actuarial loss (gain) (a)

 

 

162

 

 

 

(156

)

 

 

(5

)

 

 

(2

)

 

 

(13

)

 

 

5

 

Benefit payments (b)

 

 

(132

)

 

 

(85

)

 

 

(23

)

 

 

(42

)

 

 

(8

)

 

 

(8

)

Plan curtailments

 

 

(2

)

 

 

(4

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Special termination benefits

 

 

1

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Assumption of HOVENSA pension plan

 

 

151

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Foreign currency exchange rate changes

 

 

(83

)

 

 

(29

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at December 31

 

 

2,560

 

 

 

2,321

 

 

 

256

 

 

 

259

 

 

 

84

 

 

 

98

 

Change In Fair Value of Plan Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at January 1

 

$

2,206

 

 

$

2,251

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Actual return on plan assets

 

 

153

 

 

 

28

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Employer contributions

 

 

26

 

 

 

44

 

 

 

23

 

 

 

42

 

 

 

8

 

 

 

8

 

Benefit payments (b)

 

 

(132

)

 

 

(85

)

 

 

(23

)

 

 

(42

)

 

 

(8

)

 

 

(8

)

Assumption of HOVENSA pension plan

 

 

126

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Foreign currency exchange rate changes

 

 

(95

)

 

 

(32

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at December 31

 

 

2,284

 

 

 

2,206

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Funded Status (Plan assets greater (less) than benefit obligations) at December 31

 

$

(276

)

 

$

(115

)

 

$

(256

)

 

$

(259

)

 

$

(84

)

 

$

(98

)

Unrecognized Net Actuarial (Gains) Losses

 

$

895

 

 

$

775

 

 

$

93

 

 

$

105

 

 

$

(13

)

 

$

—

 

(a)

The change in discount rate in 2016 resulted in total actuarial losses of approximately $175 million.

(b)

Benefit payments include lump-sum settlement payments of $65 million in 2016 (2015: $41 million).

Pension Plans and Postretirement Medical Plan Amounts Recognized in Consolidated Balance Sheet

  Amounts recognized in the Consolidated Balance Sheet at December 31 consisted of the following:

 

 

Funded

 

 

Unfunded

 

 

Postretirement

 

 

 

Pension Plans

 

 

Pension Plan

 

 

Medical Plan

 

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

2016

 

 

2015

 

 

 

(In millions)

 

Pension asset / (accrued benefit liability)

 

$

(276

)

 

$

(115

)

 

$

(256

)

 

$

(259

)

 

$

(84

)

 

$

(98

)

Accumulated other comprehensive loss, pre-tax (a)

 

 

895

 

 

 

775

 

 

 

93

 

 

 

105

 

 

 

(13

)

 

 

—

 

(a)

The after‑tax deficit reflected in Accumulated other comprehensive income (loss) was $660 million at December 31, 2016 (2015: $563 million deficit).

Components of Net Periodic Benefit Cost for Funded and Unfunded Pension Plans and Postretirement Medical Plan

The net periodic benefit cost for funded and unfunded pension plans, and the postretirement medical plan, is as follows:

 

 

Pension Plans

 

 

Postretirement Medical Plan

 

 

 

2016

 

 

2015

 

 

2014

 

 

2016

 

 

2015

 

 

2014

 

 

 

(In millions)

 

Service cost

 

$

60

 

 

$

67

 

 

$

57

 

 

$

4

 

 

$

4

 

 

$

4

 

Interest cost

 

 

107

 

 

 

102

 

 

 

100

 

 

 

3

 

 

 

3

 

 

 

3

 

Expected return on plan assets

 

 

(166

)

 

 

(168

)

 

 

(161

)

 

 

—

 

 

 

—

 

 

 

—

 

Amortization of unrecognized net actuarial losses

 

 

60

 

 

 

75

 

 

 

32

 

 

 

—

 

 

 

—

 

 

 

—

 

Settlement loss

 

 

—

 

 

 

17

 

 

 

24

 

 

 

—

 

 

 

—

 

 

 

—

 

Special termination benefit recognized

 

 

1

 

 

 

1

 

 

 

1

 

 

 

—

 

 

 

—

 

 

 

—

 

Net Periodic Benefit Cost

 

$

62

 

 

$

94

 

 

$

53

 

 

$

7

 

 

$

7

 

 

$

7

 

 

Actuarial Assumptions Used For Pension Plans & Postretirement Medical Plan

The weighted average actuarial assumptions used for funded and unfunded pension plans were as follows:

 

 

2016

 

 

2015

 

 

2014

 

Weighted Average Assumptions Used to Determine Benefit Obligations at December 31

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

3.7

%

 

 

4.1

%

 

 

3.8

%

Rate of compensation increase

 

 

4.6

%

 

 

4.5

%

 

 

5.0

%

Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost for the Years Ended December 31

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

4.1

%

 

 

3.8

%

 

 

4.6

%

Expected return on plan assets

 

 

7.4

%

 

 

7.5

%

 

 

7.5

%

Rate of compensation increase

 

 

4.5

%

 

 

5.0

%

 

 

4.4

%

The actuarial assumptions used for postretirement medical plan, as follows:

 

 

2016

 

 

2015

 

 

2014

 

Assumptions Used to Determine Benefit Obligations at December 31

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

3.5

%

 

 

3.5

%

 

 

3.1

%

Initial health care trend rate

 

 

7.7

%

 

 

6.7

%

 

 

6.8

%

Ultimate trend rate

 

 

4.5

%

 

 

4.5

%

 

 

4.5

%

Year in which ultimate trend rate is reached

 

 

2038

 

 

 

2038

 

 

 

2029

 

 

Fair Value of Financial Assets of Funded Pension Plans

The following tables provide the fair value of the financial assets of the funded pension plans as of December 31, 2016 and 2015 in accordance with the fair value measurement hierarchy described in Note 1, Nature of Operations, Basis of Presentation and Summary of Accounting Policies.

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

 

 

(In millions)

 

December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Short-Term Investment Funds

 

$

9

 

 

$

79

 

 

$

—

 

 

$

88

 

Equities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. equities (domestic)

 

 

550

 

 

 

—

 

 

 

—

 

 

 

550

 

International equities (non-U.S.)

 

 

160

 

 

 

275

 

 

 

—

 

 

 

435

 

Global equities (domestic and non-U.S.)

 

 

2

 

 

 

197

 

 

 

—

 

 

 

199

 

Fixed Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury and government issued (a)

 

 

—

 

 

 

202

 

 

 

—

 

 

 

202

 

Government related (b)

 

 

—

 

 

 

38

 

 

 

—

 

 

 

38

 

Mortgage-backed securities (c)

 

 

—

 

 

 

164

 

 

 

2

 

 

 

166

 

Corporate

 

 

1

 

 

 

186

 

 

 

—

 

 

 

187

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hedge funds

 

 

—

 

 

 

—

 

 

 

209

 

 

 

209

 

Private equity funds

 

 

—

 

 

 

—

 

 

 

126

 

 

 

126

 

Real estate funds

 

 

10

 

 

 

—

 

 

 

52

 

 

 

62

 

Diversified commodities funds

 

 

—

 

 

 

22

 

 

 

—

 

 

 

22

 

 

 

$

732

 

 

$

1,163

 

 

$

389

 

 

$

2,284

 

December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Short-Term Investment Funds

 

$

—

 

 

$

34

 

 

$

—

 

 

$

34

 

Equities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. equities (domestic)

 

 

556

 

 

 

—

 

 

 

—

 

 

 

556

 

International equities (non-U.S.)

 

 

159

 

 

 

266

 

 

 

—

 

 

 

425

 

Global equities (domestic and non-U.S.)

 

 

2

 

 

 

217

 

 

 

—

 

 

 

219

 

Fixed Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury and government issued (a)

 

 

—

 

 

 

213

 

 

 

—

 

 

 

213

 

Government related (b)

 

 

—

 

 

 

6

 

 

 

1

 

 

 

7

 

Mortgage-backed securities (c)

 

 

—

 

 

 

174

 

 

 

2

 

 

 

176

 

Corporate

 

 

—

 

 

 

157

 

 

 

—

 

 

 

157

 

Other:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Hedge funds

 

 

—

 

 

 

—

 

 

 

216

 

 

 

216

 

Private equity funds

 

 

—

 

 

 

—

 

 

 

122

 

 

 

122

 

Real estate funds

 

 

12

 

 

 

—

 

 

 

52

 

 

 

64

 

Diversified commodities funds

 

 

—

 

 

 

17

 

 

 

—

 

 

 

17

 

 

 

$

729

 

 

$

1,084

 

 

$

393

 

 

$

2,206

 

(a)

Includes securities issued and guaranteed by U.S. and non‑U.S. governments.

(b)

Primarily consists of securities issued by governmental agencies and municipalities.

(c)

Comprised of U.S. residential and commercial mortgage-backed securities.

Changes in Financial Assets that are Measured at Fair Value Based on Level 3 Inputs that are held by Institutional Funds

The following tables provide changes in financial assets that are measured at fair value based on Level 3 inputs that are held by institutional funds classified as:

 

 

 

 

 

 

 

 

 

 

Private

 

 

Real

 

 

 

 

 

 

 

Fixed

 

 

Hedge

 

 

Equity

 

 

Estate

 

 

 

 

 

 

 

Income

 

 

Funds

 

 

Funds

 

 

Funds

 

 

Total

 

 

 

(In millions)

 

Balance at January 1, 2015

 

$

2

 

 

$

302

 

 

$

105

 

 

$

48

 

 

$

457

 

Actual return on plan assets

 

 

—

 

 

 

(5

)

 

 

18

 

 

 

9

 

 

 

22

 

Purchases, sales or other settlements

 

 

1

 

 

 

(81

)

 

 

(1

)

 

 

(5

)

 

 

(86

)

Net transfers in (out) of Level 3

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at December 31, 2015

 

 

3

 

 

 

216

 

 

 

122

 

 

 

52

 

 

 

393

 

Actual return on plan assets

 

 

—

 

 

 

(7

)

 

 

5

 

 

 

7

 

 

 

5

 

Purchases, sales or other settlements

 

 

(1

)

 

 

—

 

 

 

(1

)

 

 

(7

)

 

 

(9

)

Net transfers in (out) of Level 3

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Balance at December 31, 2016

 

$

2

 

 

$

209

 

 

$

126

 

 

$

52

 

 

$

389

 

 

Estimated Future Benefit Payments for Funded and Unfunded Pension Plans and Postretirement Medical Plan

Estimated future benefit payments by the funded and unfunded pension plans, and the postretirement medical plan, which reflect expected future service, are as follows (in millions):

2017

 

$

138

 

2018

 

 

123

 

2019

 

 

133

 

2020

 

 

135

 

2021

 

 

136

 

Years 2022 to 2026

 

 

725