XML 40 R22.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Employee Benefit Plans | 12 Months Ended
--- | ---
Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract] |
Employee Benefit Plans | Employee Benefit Plans The Company provides substantially all U.S. employees and employees at certain foreign subsidiaries with retirement benefits including defined benefit pension plans and defined contribution plans. The Company provides eligible U.S. employees who retire under qualifying conditions with access to postretirement health care, at full cost to the retiree (certain employees are “grandfathered” into subsidized coverage while others are provided with Health Care Reimbursement Accounts). In December 2016, the Company announced a change to the U.S. retiree medical program which affected employees with less than 30 years of service at January 1, 2017. The change resulted in a curtailment gain of $38 million for the year ended December 31, 2016. The Company maintains 401(k) plans covering substantially all U.S. employees. The Company contributes cash to the plans to match qualifying employee contributions, and also provides a non-matching employer contribution of 1% of pay to eligible participants. Under an employee stock ownership component of the 401(k) plans, employees may choose to invest in in the Company's stock as part of their own investment elections. The employer contributions are expensed when paid. Assets of the Company’s 401(k) plans consist primarily of listed common stocks and pooled funds. The Company’s 401(k) plans held 11 million shares of Company common stock at December 31, 2016, with a market value of $503 million. Cash dividends received on shares of Company common stock by these plans during the year ended December 31, 2016 were $14 million.
| Pension Benefits |  | Postretirement Benefits
(In millions) | Year Ended December 31 |  | Year Ended December 31
| 2016 | 2015 | 2014 |  | 2016 | 2015 | 2014
Retirement plan expense |  |  |  |  |  |  |
Defined benefit plans: |  |  |  |  |  |  |
Service cost (benefits earned during the period) | $ | 82 |  | $ | 92 |  | $ | 71 |  |  | $ | 3 |  | $ | 5 |  | $ | 4 |
Interest cost | 113 |  | 112 |  | 126 |  |  | 8 |  | 8 |  | 8 |
Expected return on plan assets | (137 | ) | (129 | ) | (155 | ) |  | — |  | — |  | — |
Settlement charges | (5 | ) | 60 |  | 95 |  |  | — |  | — |  | — |
Curtailments | — |  | — |  | — |  |  | (38 | ) | — |  | — |
Amortization of actuarial loss | 56 |  | 69 |  | 36 |  |  | 3 |  | 7 |  | 2 |
Amortization of prior service cost (credit) | 2 |  | 2 |  | 3 |  |  | (17 | ) | (17 | ) | (18 | )
Net periodic defined benefit plan expense | 111 |  | 206 |  | 176 |  |  | (41 | ) | 3 |  | (4 | )
Defined contribution plans | 57 |  | 52 |  | 50 |  |  | — |  | — |  | — |
Total retirement plan expense | $ | 168 |  | $ | 258 |  | $ | 226 |  |  | $ | (41 | ) | $ | 3 |  | $ | (4 | )
The following tables set forth changes in the defined benefit obligation and the fair value of defined benefit plan assets for the years ended December 31, 2016 and 2015:
| Pension Benefits |  | Postretirement Benefits
| December 31 2016 |  | December 31 2015 |  | December 31 2016 |  | December 31 2015
| (In millions) |  | (In millions)
Benefit obligation, beginning | $ | 2,880 |  |  | $ | 3,305 |  |  | $ | 199 |  |  | $ | 231 |
Service cost | 82 |  |  | 92 |  |  | 3 |  |  | 5 |
Interest cost | 113 |  |  | 112 |  |  | 8 |  |  | 8 |
Actuarial loss (gain) | 132 |  |  | (117 | ) |  | 5 |  |  | (32 | )
Employee contributions | 1 |  |  | 2 |  |  | — |  |  | — |
Curtailments | — |  |  | (2 | ) |  | (38 | ) |  | — |
Settlements | (10 | ) |  | (323 | ) |  | — |  |  | — |
Divestitures | (8 | ) |  | (1 | ) |  | — |  |  | (1 | )
Benefits paid | (142 | ) |  | (91 | ) |  | (9 | ) |  | (11 | )
Plan amendments | — |  |  | (1 | ) |  | 3 |  |  | — |
Actual expenses | (2 | ) |  | (2 | ) |  | — |  |  | — |
Foreign currency effects | (54 | ) |  | (94 | ) |  | — |  |  | (1 | )
Benefit obligation, ending | $ | 2,992 |  |  | $ | 2,880 |  |  | $ | 171 |  |  | $ | 199 |
Fair value of plan assets, beginning | $ | 1,922 |  |  | $ | 2,194 |  |  | $ | — |  |  | $ | — |
Actual return on plan assets | 232 |  |  | (7 | ) |  | — |  |  | — |
Employer contributions | 183 |  |  | 222 |  |  | 9 |  |  | 11 |
Employee contributions | 1 |  |  | 2 |  |  | — |  |  | — |
Settlements | (10 | ) |  | (328 | ) |  | — |  |  | — |
Divestitures | (2 | ) |  | (1 | ) |  | — |  |  | — |
Benefits paid | (142 | ) |  | (91 | ) |  | (9 | ) |  | (11 | )
Actual expenses | (2 | ) |  | (2 | ) |  | — |  |  | — |
Foreign currency effects | (51 | ) |  | (67 | ) |  | — |  |  | — |
Fair value of plan assets, ending | $ | 2,131 |  |  | $ | 1,922 |  |  | $ | — |  |  | $ | — |
Funded status | $ | (861 | ) |  | $ | (958 | ) |  | $ | (171 | ) |  | $ | (199 | )
Prepaid benefit cost | $ | 30 |  |  | $ | 32 |  |  | $ | — |  |  | $ | — |
Accrued benefit liability – current | (16 | ) |  | (16 | ) |  | (13 | ) |  | (13 | )
Accrued benefit liability – long-term | (875 | ) |  | (974 | ) |  | (158 | ) |  | (186 | )
Net amount recognized in the balance sheet | $ | (861 | ) |  | $ | (958 | ) |  | $ | (171 | ) |  | $ | (199 | )
Included in AOCI for pension benefits at December 31, 2016, are the following amounts that have not yet been recognized in net periodic pension cost: unrecognized prior service cost of $2 million and unrecognized actuarial loss of $824 million. The prior service cost and actuarial loss included in AOCI expected to be recognized in net periodic pension cost during 2017 is $1 million and $62 million, respectively. Included in AOCI for postretirement benefits at December 31, 2016, are the following amounts that have not yet been recognized in net periodic postretirement benefit cost: unrecognized prior service credit of $48 million and unrecognized actuarial loss of $42 million. Prior service credit of $13 million and actuarial loss of $4 million included in AOCI are expected to be recognized in net periodic benefit cost during 2017. The following table sets forth the principal assumptions used in developing net periodic pension cost:
| Pension Benefits |  | Postretirement Benefits
| December 31 2016 |  | December 31 2015 |  | December 31 2016 |  | December 31 2015
Discount rate | 4.0% |  | 3.5% |  | 4.0% |  | 3.8%
Expected return on plan assets | 7.1% |  | 6.3% |  | N/A |  | N/A
Rate of compensation increase | 4.7% |  | 3.8% |  | N/A |  | N/A
The following table sets forth the principal assumptions used in developing the year-end actuarial present value of the projected benefit obligations:
| Pension Benefits |  | Postretirement Benefits
| December 31 2016 |  | December 31 2015 |  | December 31 2016 |  | December 31 2015
Discount rate | 3.7 | % |  | 4.0 | % |  | 3.9% |  | 4.0%
Rate of compensation increase | 4.6 | % |  | 4.7 | % |  | N/A |  | N/A
The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with projected benefit obligations in excess of plan assets were $2.7 billion, $2.3 billion, and $1.8 billion, respectively as of December 31, 2016, and $2.5 billion, $2.2 billion, and $1.5 billion, respectively, as of December 31, 2015. The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were $2.6 billion, $2.3 billion, and $1.7 billion, respectively, as of December 31, 2016 and $2.5 billion, $2.2 billion, and $1.5 billion, respectively, as of December 31, 2015. The accumulated benefit obligation for all pension plans as of December 31, 2016 and 2015, was $2.7 billion and $2.6 billion, respectively. For postretirement benefit measurement purposes, a 7.05% annual rate of increase in the per capita cost of covered health care benefits was assumed for the year ended December 31, 2016. The rate was assumed to decrease gradually to 4.6% by 2025 and remain at that level thereafter. The credits used to fund certain retirees with Health Reimbursement Accounts are indexed up to a maximum of 2% per year. A 1% change in assumed health care cost trend rates would have the following effects:
| 1% Increase |  | 1% Decrease
| (In millions)
Effect on accumulated postretirement benefit obligations | $ | 5 |  |  | $ | (4 | )
The effect on combined service and interest cost components is immaterial. Plan Assets The Company’s employee benefit plan assets are principally comprised of the following types of investments: Common stock: Equity securities are valued based on quoted exchange prices and are classified within Level 1 of the valuation hierarchy. Mutual funds: Mutual funds are valued at the closing price reported on the active market on which they are traded and are classified within Level 1 of the valuation hierarchy. Common collective trust (CCT) funds: The fair values of the CCTs are based on the cumulative net asset value (NAV) of their underlying investments. The investments in CCTs are comprised of international equity funds, a small cap U.S. equity fund, large cap U.S. equity funds, fixed income funds, and other funds. The fund units are valued at NAV based on the closing market value of the units bought or sold as of the valuation date and are classified in Level 2 of the fair value hierarchy. The CCTs seek primarily to provide investment results approximating the aggregate price, dividend performance, total return, and income stream of underlying investments of the funds. Issuances and redemptions of certain of the CCT investments may be restricted by date and/or amount. Corporate debt instruments: Corporate debt instruments are valued using third-party pricing services and are classified within Level 2 of the valuation hierarchy. U.S. Treasury instruments: U.S. Treasury instruments are valued at the closing price reported on the active market on which they are traded and are classified within Level 1 of the valuation hierarchy. U.S. government agency, state, and local government bonds: U.S. government agency obligations and state and municipal debt securities are valued using third-party pricing services and are classified within Level 2 of the valuation hierarchy. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants’ methods, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following tables set forth, by level within the fair value hierarchy, the fair value of plan assets as of December 31, 2016 and 2015.
| Fair Value Measurements at December 31, 2016
| Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
| (In millions)
Common stock |  |  |  |  |  |  |
U.S. companies | $ | 222 |  |  | $ | — |  |  | $ | — |  |  | $ | 222 |
International companies | 2 |  |  | — |  |  | — |  |  | 2 |
Equity mutual funds |  |  |  |  |  |  |  |  |  |  |
Emerging markets | 82 |  |  | — |  |  | — |  |  | 82 |
International | 117 |  |  | — |  |  | — |  |  | 117 |
Large cap U.S. | 447 |  |  | — |  |  | — |  |  | 447 |
Common collective trust funds |  |  |  |  |  |  |  |  |  |  |
International equity | — |  |  | 306 |  |  | — |  |  | 306 |
Large cap U.S. equity | — |  |  | 47 |  |  | — |  |  | 47 |
Fixed income | — |  |  | 190 |  |  | — |  |  | 190 |
Other | — |  |  | 50 |  |  | — |  |  | 50 |
Debt instruments |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | — |  |  | 492 |  |  | — |  |  | 492 |
U.S. Treasury instruments | 150 |  |  | — |  |  | — |  |  | 150 |
U.S. government agency, state and local government bonds | — |  |  | 22 |  |  | — |  |  | 22 |
Other | — |  |  | 4 |  |  | — |  |  | 4 |
Total assets at fair value | $ | 1,020 |  |  | $ | 1,111 |  |  | $ | — |  |  | $ | 2,131 |
| Fair Value Measurements at December 31, 2015
| Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
| (In millions)
Common stock |  |  |  |  |  |  |
U.S. companies | $ | 196 |  |  | $ | — |  |  | $ | — |  |  | $ | 196 |
International companies | 8 |  |  | — |  |  | — |  |  | 8 |
Equity mutual funds |  |  |  |  |  |  |  |  |  |  |
Emerging markets | 58 |  |  | — |  |  | — |  |  | 58 |
International | 105 |  |  | — |  |  | — |  |  | 105 |
Large cap U.S. | 409 |  |  | — |  |  | — |  |  | 409 |
Common collective trust funds |  |  |  |  |  |  |  |  |  |  |
International equity | — |  |  | 278 |  |  | — |  |  | 278 |
Large cap U.S. equity | — |  |  | 45 |  |  | — |  |  | 45 |
Fixed income | — |  |  | 193 |  |  | — |  |  | 193 |
Other | — |  |  | 47 |  |  | — |  |  | 47 |
Debt instruments |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | — |  |  | 457 |  |  | — |  |  | 457 |
U.S. Treasury instruments | 99 |  |  | — |  |  | — |  |  | 99 |
U.S. government agency, state and local government bonds | — |  |  | 24 |  |  | — |  |  | 24 |
Other | — |  |  | 3 |  |  | — |  |  | 3 |
Total assets at fair value | $ | 875 |  |  | $ | 1,047 |  |  | $ | — |  |  | $ | 1,922 |
Level 3 Gains and Losses: There are no Plan assets classified as Level 3 in the fair value hierarchy; therefore there are no gains or losses associated with Level 3 assets. The following table sets forth the actual asset allocation for the Company’s global pension plan assets as of the measurement date:
| December 31 2016(1)(2) |  | December 31 2015(2)
Equity securities | 59% |  | 58%
Debt securities | 40% |  | 40%
Other | 1% |  | 2%
Total | 100% |  | 100%
(1) | The Company’s U.S. pension plans contain approximately 79% of the Company’s global pension plan assets. The actual asset allocation for the Company’s U.S. pension plans as of the measurement date consists of 60% equity securities and 40% debt securities. The target asset allocation for the Company’s U.S. pension plans is approximately the same as the actual asset allocation. The actual asset allocation for the Company’s foreign pension plans as of the measurement date consists of 54% equity securities, 41% debt securities, and 5% in other investments. The target asset allocation for the Company’s foreign pension plans is approximately the same as the actual asset allocation.
(2) | The Company’s pension plans did not directly hold any shares of Company common stock as of the December 31, 2016 and 2015 measurement dates.
Investment objectives for the Company’s plan assets are to:
• | Optimize the long-term return on plan assets at an acceptable level of risk.
• | Maintain a broad diversification across asset classes and among investment managers.
• | Maintain careful control of the risk level within each asset class.
Asset allocation targets promote optimal expected return and volatility characteristics given the long-term time horizon for fulfilling the obligations of the pension plans. Selection of the targeted asset allocation for plan assets was based upon a review of the expected return and risk characteristics of each asset class, as well as the correlation of returns among asset classes. The U.S. pension plans target asset allocation is also based on an asset and liability study that is updated periodically. Investment guidelines are established with each investment manager. These guidelines provide the parameters within which the investment managers agree to operate, including criteria that determine eligible and ineligible securities, diversification requirements, and credit quality standards, where applicable. In some countries, derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of underlying investments. The Company uses external consultants to assist in monitoring the investment strategy and asset mix for the Company’s plan assets. To develop the Company’s expected long-term rate of return assumption on plan assets, the Company generally uses long-term historical return information for the targeted asset mix identified in asset and liability studies. Adjustments are made to the expected long-term rate of return assumption when deemed necessary based upon revised expectations of future investment performance of the overall investment markets. Contributions and Expected Future Benefit Payments Based on actuarial calculations, the Company expects to contribute $30 million to the pension plans and $13 million to the postretirement benefit plan during 2017. The Company may elect to make additional discretionary contributions during this period. The following benefit payments, which reflect expected future service, are expected to be paid by the benefit plans:
| Pension Benefits |  | Postretirement Benefits
| (In millions)
2017 | $ | 94 |  |  | $ | 13 |
2018 | 100 |  |  | 12 |
2019 | 107 |  |  | 12 |
2020 | 113 |  |  | 12 |
2021 | 121 |  |  | 12 |
2022 – 2026 | 709 |  |  | 57 |

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 80 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=65877416&loc=SL14450702-114947 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65897934&loc=d3e2410-114920 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 60 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6414203&loc=d3e39675-114964 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 70 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 60 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=66047640&loc=d3e39622-114963 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration