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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract] |
Employee Benefit Plans | 10. Employee Benefit Plans We have benefit plans covering substantially all of our employees. Defined-contribution benefit plans cover most of the U.S. and Canadian employees, and benefits are based on years of service, a percentage of current earnings and matching of employee contributions. We also have defined contribution plans in Norway and the United Kingdom. For the years ended December 31, 2016, 2015 and 2014, expenses for defined-contribution plans were $66 million, $95 million, and $115 million, respectively, and all funding is current. Certain retired or terminated employees of predecessor or acquired companies participate in a defined benefit plan in the United States. Approximately 75 employees represented by certain collective bargaining agreements continue to accrue benefits under the plan. In addition, approximately 1,900 U.S. retirees and spouses participate in defined benefit health care plans of predecessor or acquired companies that provide postretirement medical and life insurance benefits. Except for two locations represented by certain collective bargaining agreements, active employees are ineligible to participate in any of these U.S. defined benefit plans. Active employees based in the United Kingdom are ineligible to participate in any defined benefit plans. During 2014, the Company sold certain industrial assets of which the impact on the defined benefit plans is reflected in the table below. During 2016, the Company settled its Norway defined benefit plan and transferred all participants to the defined-contribution plan. The impact on the defined benefit plans is reflected in the table below. Net periodic benefit cost for our defined benefit plans aggregated $5 million, $5 million and $7 million for the years ended December 31, 2016, 2015 and 2014, respectively. The change in benefit obligation, plan assets and the funded status of the defined benefit pension plans in the United States, United Kingdom, Norway, Germany and the Netherlands and defined postretirement plans in the United States, using a measurement date of December 31, 2016 and 2015, is as follows (in millions):
|  | Pension benefits |  |  | Postretirement benefits |
At year end |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Benefit obligation at beginning of year |  | $ | 703 |  |  | $ | 792 |  |  | $ | 90 |  |  | $ | 53 |
Service cost |  |  | 5 |  |  |  | 6 |  |  |  | — |  |  |  | — |
Interest cost |  |  | 25 |  |  |  | 26 |  |  |  | 3 |  |  |  | 3 |
Actuarial loss (gain) |  |  | 42 |  |  |  | (38 | ) |  |  | (29 | ) |  |  | (7 | )
Benefits paid |  |  | (30 | ) |  |  | (34 | ) |  |  | (16 | ) |  |  | (5 | )
Participants contributions |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 1 |
Exchange rate loss (gain) |  |  | (37 | ) |  |  | (33 | ) |  |  | — |  |  |  | — |
Acquisitions (disposals) |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |
Curtailments |  |  | (71 | ) |  |  | — |  |  |  | — |  |  |  | — |
Settlements |  |  | (17 | ) |  |  | (16 | ) |  |  | — |  |  |  | — |
Other |  |  | — |  |  |  | — |  |  |  | 42 |  |  |  | 45 |
Benefit obligation at end of year |  | $ | 622 |  |  | $ | 703 |  |  | $ | 92 |  |  | $ | 90 |
Fair value of plan assets at beginning of year |  | $ | 601 |  |  | $ | 660 |  |  | $ | — |  |  | $ | — |
Actual return |  |  | 60 |  |  |  | 3 |  |  |  | — |  |  |  | — |
Benefits paid |  |  | (30 | ) |  |  | (34 | ) |  |  | (16 | ) |  |  | (5 | )
Company contributions |  |  | 16 |  |  |  | 12 |  |  |  | 14 |  |  |  | 4 |
Participants contributions |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 1 |
Exchange rate gain (loss) |  |  | (34 | ) |  |  | (23 | ) |  |  | — |  |  |  | — |
Curtailments |  |  | (71 | ) |  |  | — |  |  |  | — |  |  |  | — |
Acquisitions (disposals) |  |  | 1 |  |  |  | (17 | ) |  |  | — |  |  |  | — |
Fair value of plan assets at end of year |  | $ | 543 |  |  | $ | 601 |  |  | $ | — |  |  | $ | — |
Funded status |  | $ | (79 | ) |  | $ | (102 | ) |  | $ | (92 | ) |  | $ | (90 | )
Accumulated benefit obligation at end of year |  | $ | 617 |  |  | $ | 685 |  |  |  |  |  |  |  |  |
Liabilities associated with the funded status of the defined benefit pension plans are included in the balances of accrued liabilities and other liabilities in the Consolidated Balance Sheet. Defined Benefit Pension Plans Assumed long-term rates of return on plan assets, discount rates and rates of compensation increases vary for the different plans according to the local economic conditions. The assumption rates used for benefit obligations are as follows:
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |
Discount rate: |  |  |  |  |  |  |  |
United States plan |  |  | 3.10% - 4.00 | % |  |  | 3.40% - 3.90 | %
International plans |  |  | 1.80% - 2.80 | % |  |  | 2.10% - 3.60 | %
Salary increase: |  |  |  |  |  |  |  |
United States plan |  |  | N/A |  |  |  | N/A |
International plans |  |  | 1.80% - 3.50 | % |  |  | 2.00% - 4.20 | %
The assumption rates used for net periodic benefit costs are as follows:
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Discount rate: |  |  |  |  |  |  |  |  |  |  |  |
United States plan |  |  | 3.20% - 4.20 | % |  |  | 3.70% - 4.20 | % |  |  | 3.99% - 4.67 | %
International plans |  |  | 2.20% - 3.70 | % |  |  | 2.20% - 3.70 | % |  |  | 3.50% - 4.40 | %
Salary increase: |  |  |  |  |  |  |  |  |  |  |  |
United States plan |  |  | N/A |  |  |  | N/A |  |  |  | N/A |
International plans |  |  | 2.00% - 4.20 | % |  |  | 2.00% - 4.20 | % |  |  | 2.00% - 4.40 | %
Expected return on assets: |  |  |  |  |  |  |  |  |  |  |  |
United States plan |  |  | 5.60 | % |  |  | 5.50 | % |  |  | 6.50 | %
International plans |  |  | 1.80% - 3.00 | % |  |  | 2.30% - 5.12 | % |  |  | 3.50% - 5.53 | %
In determining the overall expected long-term rate of return for plan assets, the Company takes into consideration the historical experience as well as future expectations of the asset mix involved. As different investments yield different returns, each asset category is reviewed individually and then weighted for significance in relation to the total portfolio. The majority of our plans have projected benefit obligations in excess of plan assets. The Company expects to pay future benefit amounts on its defined benefit plans of approximately $35 million for each of the next five years and aggregate payments of $338 million over the next five years thereafter. Plan Assets The Company and its investment advisers collaboratively reviewed market opportunities using historic and statistical data, as well as the actuarial valuation reports for the plans, to ensure that the levels of acceptable return and risk are well-defined and monitored. Currently, the Company’s management believes that there are no significant concentrations of risk associated with plan assets. Our pension investment strategy worldwide prohibits a direct investment in our own stock. The following table sets forth by level, within the fair value hierarchy, the Plan’s assets carried at fair value (in millions):
|  | Fair Value Measurements |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
December 31, 2015: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | 186 |  |  | $ | — |  |  | $ | 186 |  |  | $ | — |
Bonds |  |  | 259 |  |  |  | — |  |  |  | 259 |  |  |  | — |
Other (insurance contracts) |  |  | 156 |  |  |  | — |  |  |  | 57 |  |  |  | 99 |
Total Fair Value Measurements |  | $ | 601 |  |  | $ | — |  |  | $ | 502 |  |  | $ | 99 |
December 31, 2016: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities |  | $ | 181 |  |  | $ | — |  |  | $ | 181 |  |  | $ | — |
Bonds |  |  | 262 |  |  |  | — |  |  |  | 262 |  |  |  | — |
Other (insurance contracts) |  |  | 100 |  |  |  | — |  |  |  | 47 |  |  |  | 53 |
Total Fair Value Measurements |  | $ | 543 |  |  | $ | — |  |  | $ | 490 |  |  | $ | 53 |
Level 3 inputs are unobservable (i.e., supported by little or no market activity). Level 3 inputs include management’s own judgement about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). The following table sets forth a summary of changes in the fair value of the Plan’s Level 3 assets (in millions):
|  | Level 3 Plan Assets |
Balance at December 31, 2014 |  | $ | 108 |
Actual return on plan assets still held at reporting date |  |  | 3 |
Purchases, sales and settlements |  |  | 2 |
Currency translation adjustments |  |  | (14 | )
Balance at December 31, 2015 |  | $ | 99 |
Actual return on plan assets still held at reporting date |  |  | 5 |
Purchases, sales and settlements |  |  | (50 | )
Currency translation adjustments |  |  | (1 | )
Balance at December 31, 2016 |  | $ | 53 |

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