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Pension Plan And Other Postretirement Benefits
 6 Months Ended
Jun. 30, 2016
Pension Plan And Other Postretirement Benefits [Abstract]  
Pension Plan And Other Postretirement Benefits



(12) PENSION PLAN AND OTHER POSTRETIREMENT BENEFITS



The Company has defined pension and postretirement benefit plans which cover substantially all of the Company’s employees.  Net periodic pension costs include the following components for the three and six months ended June 30, 2016 and 2015:  





 

 

 

 

 

 

 

 

 

 

 

 



 

Pension Benefits



 

For the three months ended

 

For the six months ended



 

June 30,

 

June 30,



 

2016

 

2015

 

2016

 

2015



 

(in millions)

Service cost

 

$

 2 

 

$

 4 

 

$

 6 

 

$

 8 

Interest cost

 

 

 1 

 

 

 2 

 

 

 3 

 

 

 3 

Expected return on plan assets

 

 

 (1)

 

 

 (2)

 

 

 (3)

 

 

 (4)

Amortization of prior service cost

 

 

– 

 

 

– 

 

 

– 

 

 

– 

Amortization of net loss

 

 

 1 

 

 

– 

 

 

 1 

 

 

 1 

Curtailment loss

 

 

 1 

 

 

 – 

 

 

 1 

 

 

 – 

Settlement loss

 

 

 8 

 

 

– 

 

 

 8 

 

 

– 

Net periodic benefit cost

 

$

 12 

 

$

 4 

 

$

 16 

 

$

 8 



In January 2016, the Company initiated a reduction in workforce that was effectively completed by the end of the first quarter. As a result of the workforce reduction, the Company recognized a  $1 million non-cash curtailment loss related to its pension plan for both the curtailment-related decrease to the benefit obligation and the recognition of the proportionate share of unrecognized prior service cost and net loss from other comprehensive income (loss) in the second quarter of 2016. Additionally, the Company recognized a non-cash settlement loss of $8 million related to $28 million of lump sum payments from the pension plan in the second quarter of 2016. The Company expects pension settlements related to the reduction in workforce to be substantially complete by the end of the third quarter.  



The Company’s other postretirement benefit plan had a net periodic benefit cost (gain) of ($6),  $1,  ($5) and $2 million for the three months ended June  30, 2016 and 2015 and six months ended June 30, 2016 and 2015, respectively. Included in the net periodic benefit cost for the second quarter is a curtailment gain of $6 million, which more than offset the other components of net periodic benefit cost for the three and six months ended June 30, 2016.



As of June 30, 2016, the Company has contributed $6 million to the pension and other postretirement benefit plans. The Company expects to contribute an additional $5 million during the remainder of 2016. The Company recognized a liability of $40 million and $12 million related to its pension and other postretirement benefits, respectively, as of June 30, 2016 compared to a liability of $31 million and $20 million as of December 31, 2015. The Company updated the discount rate used in the measurement of the benefit obligation of the pension plan and other postretirement benefits plan to 4.20% in the second quarter of 2016. The Company used an assumption of 4.60% from January 1, 2016 to March 31, 2016 for both the pension and other postretirement benefit plans.



The Company maintains a non-qualified deferred compensation supplemental retirement savings plan (“Non-Qualified Plan”) for certain key employees who may elect to defer and contribute a portion of their compensation, as permitted by the plan.  Shares of the Company’s common stock purchased under the terms of the Non-Qualified Plan are presented as treasury stock and totaled 31,269 shares at June  30, 2016, compared to 47,149  shares at December 31, 2015.