Postretirement Benefits

9 Months Ended

Jul. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Postretirement Benefits

Postretirement Benefits

Defined Benefit Plans

We provide postretirement benefits to a substantial portion of our employees and retirees. Costs associated with postretirement benefits include pension and postretirement health care expenses for employees, retirees, and surviving spouses and dependents. Generally, the pension plans are non-contributory. Our policy is to fund the pension plans in accordance with applicable U.S. and Canadian government regulations and to make additional contributions from time to time. For the three and nine months ended July 31, 2013, we contributed $29 million and $86 million, respectively, and for the three and nine months ended July 31, 2012, we contributed $30 million and $112 million, respectively, to our pension plans to meet regulatory funding requirements.We currently anticipate additional contributions of $80 million to our pension plans during the remainder of 2013.

We primarily fund other post-employment benefit ("OPEB") obligations, such as retiree medical, in accordance with a 1993 Settlement Agreement (the "1993 Settlement Agreement"), which requires us to fund a portion of the plans' annual service cost to a retiree benefit trust (the "Base Trust"). The 1993 Settlement Agreement resolved a class action lawsuit originally filed in 1992 regarding the restructuring of the Company's then applicable retiree health care and life insurance benefits. Contributions for the nine months ended July 31, 2013 and 2012, as well as anticipated contributions for the remainder of 2013, are not material.

The Early Retiree Reinsurance Program ("ERRP") was created under the Patient Protection and Affordable Care Act ("PPACA") of 2010 to provide temporary financial assistance to health plan sponsors who provide retirement health coverage to pre-Medicare retirees. Under the terms of ERRP, no amounts were collected and deposited into the Base Trust in the nine months ended July 31, 2013, compared to $3 million collected and deposited into the Base Trust in the nine months ended July 31, 2012. In the three months ended July 31, 2013 and 2012, no amounts were collected and deposited into the Base Trust.

Components of Net Periodic Benefit Expense

The following table presents the components of net postretirement benefits expense included in our Consolidated Statements of Operations:

	Three Months Ended July 31,												Nine Months Ended July 31,
	Pension Benefits						Health and Life Insurance Benefits						Pension Benefits						Health and Life Insurance Benefits
(in millions)	2013			2012			2013			2012			2013			2012			2013			2012
Service cost for benefits earned during the period	$	5		$	5		$	1		$	1		$	15		$	13		$	5		$	5
Interest on obligation	36			43			16			20			108			129			47			62
Amortization of cumulative loss	31			27			7			10			95			82			22			30
Amortization of prior service benefit	1			1			(1		)	(2		)	1			1			(3		)	(4		)
Contractual termination benefits	—			—			—			—			—			—			—			(3		)
Premiums on pension insurance	—			—			—			—			1			1			—			—
Expected return on assets	(48		)	(49		)	(8		)	(8		)	(142		)	(145		)	(25		)	(26		)
Net postretirement benefits expense	$	25		$	27		$	15		$	21		$	78		$	81		$	46		$	64

Defined Contribution Plans and Other Contractual Arrangements

Our defined contribution plans cover a substantial portion of domestic salaried employees and certain domestic represented employees. The defined contribution plans contain a 401(k) feature and provide most participants with a matching contribution from the Company. Effective February 1, 2013, the Company changed the timing for depositing the matching contributions to the end of the calendar year. Many participants covered by the plans receive annual Company contributions to their retirement accounts based on an age-weighted percentage of the participant's eligible compensation for the calendar year. Defined contribution expense pursuant to these plans was $8 million and $23 million in the three and nine months ended July 31, 2013, respectively, and $8 million and $32 million for the three and nine months ended July 31, 2012, respectively.

In accordance with the 1993 Settlement Agreement, an independent Retiree Supplemental Benefit Trust (the "Supplemental Trust") was established. The Supplemental Trust, and the benefits it provides to certain retirees pursuant to a certain Retiree Supplemental Benefit Program under the 1993 Settlement Agreement (“Supplemental Benefit Program”), is not part of the Company's consolidated financial statements. The assets of the Supplemental Trust arise from three sources: (i) the Company's 1993 contribution to the Supplemental Trust of 25.5 million shares of our Class B common stock, which were subsequently sold by the Supplemental Trust prior to 2000, (ii) contingent profit-sharing contributions made by the Company pursuant to a certain Supplemental Benefit Trust Profit Sharing Plan (“Supplemental Benefit Profit Sharing Plan”), and (iii) net investment gains on the Supplemental Trust's assets, if any.

The Company's contingent profit sharing obligations under the Supplemental Benefits Profit Sharing Plan will continue until certain funding targets defined by the 1993 Settlement Agreement are met ("Profit Sharing Cessation"). Upon Profit Sharing Cessation, the Company would assume responsibility for (i) establishing the investment policy for the Supplemental Trust, (ii) approving or disapproving of certain additional supplemental benefits to the extent such benefits would result in higher expenditures than those contemplated upon the Profit Sharing Cessation, and (iii) making additional contributions to the Supplemental Trust as necessary to make up for investment and/or actuarial losses.We have recorded no profit sharing accruals based on our estimate of 2013 results. For more information, see Note 12, Commitments and Contingencies, for a discussion of pending litigation regarding the Supplemental Benefit Profit Sharing Plan.