XML 33 R19.htm IDEA: XBRL DOCUMENT
v3.6.0.2

Pensions, Other Post-employment Benefits and Employee Benefit Plans | 12 Months Ended
--- | ---
Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract] |
Pensions,Other Post-employment Benefits and Employee Benefit Plans | Pension, Other Post-employment Benefits and Employee Benefit Plans. Federal-Mogul, ARI and Viskase each sponsor several defined benefit pension plans (the ''Pension Benefits''). Additionally, Federal-Mogul and Viskase each sponsors health care and life insurance benefits (''Other Post-Employment Benefits'') for certain employees and retirees around the world. The Pension Benefits are funded based on the funding requirements of federal and international laws and regulations, as applicable, in advance of benefit payments and the Other Benefits as benefits are provided to participating employees. As prescribed by U.S. GAAP, Federal-Mogul, ARI and Viskase each uses, as applicable, appropriate actuarial methods and assumptions in accounting for its defined benefit pension plans, non-pension post-employment benefits, and disability, early retirement and other post-employment benefits. The measurement date for all defined benefit plans is December 31 of each year. Components of net periodic benefit cost (credit) for the years ended December 31, 2016, 2015 and 2014 are as follows:
| Pension Benefits |  | Other Post-Employment Benefits
| Year Ended December 31, |  | Year Ended December 31,
| 2016 |  | 2015 |  | 2014 |  | 2016 |  | 2015 |  | 2014
| (in millions)
Service cost | $ | 18 |  |  | $ | 19 |  |  | $ | 16 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest cost | 70 |  |  | 66 |  |  | 76 |  |  | 14 |  |  | 13 |  |  | 15 |
Expected return on plan assets | (59 | ) |  | (71 | ) |  | (74 | ) |  | — |  |  | — |  |  | — |
Amortization of actuarial losses | 22 |  |  | 26 |  |  | 10 |  |  | 2 |  |  | 5 |  |  | 3 |
Amortization of prior service credit | — |  |  | — |  |  | — |  |  | (4 | ) |  | (4 | ) |  | (5 | )
Settlement (gain) loss | — |  |  | — |  |  | (2 | ) |  | — |  |  | — |  |  | — |
Curtailment gain | — |  |  | (2 | ) |  | — |  |  | — |  |  | — |  |  | — |
| $ | 51 |  |  | $ | 38 |  |  | $ | 26 |  |  | $ | 12 |  |  | $ | 14 |  |  | $ | 13 |
Automotive The following provides disclosures for our Automotive segment's benefit obligations, plan assets, funded status, recognition in the consolidated balance sheets and inputs and valuation assumptions:
| Pension Benefits |  | Other Post-Employment Benefits
| United States Plans |  | Non-U.S. Plans |
| 2016 |  | 2015 |  | 2016 |  | 2015 |  | 2016 |  | 2015
| (in millions)
Change in benefit obligation: |  |  |  |  |  |  |  |  |  |  |
Benefit obligation, beginning of year | $ | 1,221 |  |  | $ | 1,291 |  |  | $ | 487 |  |  | $ | 575 |  |  | $ | 323 |  |  | $ | 368 |
Service cost | 3 |  |  | 3 |  |  | 14 |  |  | 16 |  |  | — |  |  | — |
Interest cost | 49 |  |  | 48 |  |  | 13 |  |  | 10 |  |  | 14 |  |  | 13 |
Benefits paid | (98 | ) |  | (89 | ) |  | (21 | ) |  | (24 | ) |  | (24 | ) |  | (23 | )
Medicare subsidies received | — |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | 3 |
Curtailments | — |  |  | — |  |  | (1 | ) |  | (3 | ) |  | — |  |  | — |
Settlements | — |  |  | — |  |  | (4 | ) |  | — |  |  | — |  |  | — |
Actuarial losses (gains) and changes in actuarial assumptions | (8 | ) |  | (32 | ) |  | 39 |  |  | (75 | ) |  | (21 | ) |  | (35 | )
Net transfers in (out) | — |  |  | — |  |  | — |  |  | 45 |  |  | — |  |  | — |
Currency translation | — |  |  | — |  |  | (17 | ) |  | (57 | ) |  | 1 |  |  | (3 | )
Benefit obligation, end of year | 1,167 |  |  | 1,221 |  |  | 510 |  |  | 487 |  |  | 295 |  |  | 323 |
Change in plan assets: |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets, beginning of year | 870 |  |  | 912 |  |  | 57 |  |  | 54 |  |  | — |  |  | — |
Actual return on plan assets | 45 |  |  | (27 | ) |  | 3 |  |  | 2 |  |  | — |  |  | — |
Settlements | — |  |  | — |  |  | (4 | ) |  | — |  |  | — |  |  | — |
Company contributions | 39 |  |  | 74 |  |  | 30 |  |  | 30 |  |  | 22 |  |  | 20 |
Benefits paid | (98 | ) |  | (89 | ) |  | (21 | ) |  | (24 | ) |  | (24 | ) |  | (23 | )
Acquisitions | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |
Medicare subsidies received | — |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | 3 |
Currency translation | — |  |  | — |  |  | (3 | ) |  | (5 | ) |  | — |  |  | — |
Fair value of plan assets, end of year | 856 |  |  | 870 |  |  | 63 |  |  | 57 |  |  | — |  |  | — |
Funded status of the plan | $ | (311 | ) |  | $ | (351 | ) |  | $ | (447 | ) |  | $ | (430 | ) |  | $ | (295 | ) |  | $ | (323 | )
Amounts recognized in the consolidated balance sheets: |  |  |  |  |  |  |  |  |  |  |
Net liability recognized | $ | (311 | ) |  | $ | (351 | ) |  | $ | (447 | ) |  | $ | (430 | ) |  | $ | (295 | ) |  | $ | (323 | )
Amounts recognized in accumulated other comprehensive loss, inclusive of tax impacts: |  |  |  |  |  |  |  |  |  |  |
Net actuarial loss | $ | 435 |  |  | $ | 452 |  |  | $ | 93 |  |  | $ | 72 |  |  | $ | 34 |  |  | $ | 56 |
Prior service cost (credit) | — |  |  | — |  |  | 1 |  |  | 1 |  |  | 6 |  |  | (10 | )
Total | $ | 435 |  |  | $ | 452 |  |  | $ | 94 |  |  | $ | 73 |  |  | $ | 40 |  |  | $ | 46 |
Weighted-average assumptions used to determine the benefit obligation as of December 31, 2016, 2015 and 2014:
| Pension Benefits |  | Other Post-Employment Benefits
| United States Plans |  | Non-U.S. Plans |
| December 31, |  | December 31,
| 2016 |  | 2015 |  | 2014 |  | 2016 |  | 2015 |  | 2014 |  | 2016 |  | 2015 |  | 2014
| (in millions)
Discount rate | 3.90 | % |  | 4.15 | % |  | 3.85 | % |  | 2.03 | % |  | 2.72 | % |  | 1.77 | % |  | 3.98 | % |  | 4.18 | % |  | 3.84 | %
Rate of compensation increase | n/a |  |  | n/a |  |  | n/a |  |  | 2.96 | % |  | 3.19 | % |  | 3.16 | % |  | n/a |  |  | n/a |  |  | n/a |
Weighted-average assumptions used to determine net periodic benefit cost (credit) for the years ended December 31, 2016, 2015 and 2014:
| Pension Benefits |  | Other Post-Employment Benefits
| United States Plans |  | Non-U.S. Plans |
| Year Ended December 31, |  | Year Ended December 31,
| 2016 |  | 2015 |  | 2014 |  | 2016 |  | 2015 |  | 2014 |  | 2016 |  | 2015 |  | 2014
| (in millions) |  |
Discount rate | 4.15 | % |  | 3.85 | % |  | 4.55 | % |  | 2.72 | % |  | 1.77 | % |  | 3.49 | % |  | 4.18 | % |  | 3.84 | % |  | 4.45 | %
Expected return on plan assets | 5.65 | % |  | 6.55 | % |  | 6.95 | % |  | 3.22 | % |  | 3.52 | % |  | 4.18 | % |  | n/a |  |  | n/a |  |  | n/a |
Rate of compensation increase | n/a |  |  | n/a |  |  | n/a |  |  | 3.19 | % |  | 3.16 | % |  | 3.17 | % |  | n/a |  |  | n/a |  |  | n/a |
Long-term Rate of Return Federal-Mogul’s expected return on assets is established annually through analysis of anticipated future long-term investment performance for the plan based upon the asset allocation strategy and is primarily a long-term prospective rate. The study was performed in December 2016 resulting in changes to the expected long-term rate of return on assets. The weighted-average long-term rate of return on assets for the United States pension plans decreased from 5.65% at December 31, 2015 to 5.55% at December 31, 2016. The expected long-term rate of return on plan assets used in determining pension expense for non-U.S. plans is determined in a similar manner to the U.S. plans and decreased from 3.22% at December 31, 2015 to 3.05% at December 31, 2016. Plan Assets Certain pension plans sponsored by Federal-Mogul invest in a diversified portfolio consisting of an array of asset classes that attempts to maximize returns while minimizing volatility. These asset classes include developed market equities, emerging market equities, private equity, global high quality and high yield fixed income, real estate, and absolute return strategies. As of December 31, 2016, plan assets were comprised of 64% equity investments, 24% fixed income investments, and 12% in other investments which include hedge funds. Approximately 63% of the U.S. plan assets were invested in actively managed investment funds. Federal-Mogul’s investment strategy includes a target asset allocation of 50% equity investments, 25% fixed income investments and 25% in other investment types including hedge funds. The U.S. investment strategy mitigates risk by incorporating diversification across appropriate asset classes to meet the plan’s objectives. It is intended to reduce risk, provide long-term financial stability for the plan, and maintain funded levels that meet long-term plan obligations while preserving sufficient liquidity for near-term benefit payments. Risk assumed is considered appropriate for the return anticipated and consistent with the diversification of plan assets. The insurance contracts guarantee a minimum rate of return. Federal-Mogul has no input into the investment strategy of the assets underlying the contracts, but they are typically heavily invested in active bond markets and are highly regulated by local law. The majority of the assets of the non-U.S. plans are invested through insurance contracts. The target asset allocation for the non-U.S. pension plans is 65% insurance contracts, 30% debt investments and 5% equity investments. Refer to Note 6, “Fair Value Measurements,” for discussion of the fair value of each major category of plan assets, including the inputs and valuation techniques used to develop the fair value measurements of the plans' assets, at December 31, 2016 and 2015. Information for defined benefit plans with projected benefit obligations in excess of plan assets:
| Pension Benefits |  | Other Post-Employment Benefits
| United States Plans |  | Non-U.S. Plans |
| December 31, |  | December 31,
| 2016 |  | 2015 |  | 2016 |  | 2015 |  | 2016 |  | 2015
| (in millions)
Projected benefit obligation | $ | 1,167 |  |  | $ | 1,221 |  |  | $ | 509 |  |  | $ | 486 |  |  | $ | 295 |  |  | $ | 323 |
Fair value of plan assets | 856 |  |  | 870 |  |  | 62 |  |  | 56 |  |  | — |  |  | — |
Information for pension plans with accumulated benefit obligations in excess of plan assets:
| Pension Benefits
| United States Plans |  | Non-U.S. Plans
| December 31,
| 2016 |  | 2015 |  | 2016 |  | 2015
| (in millions)
Projected benefit obligation | $ | 1,167 |  |  | $ | 1,221 |  |  | $ | 494 |  |  | $ | 482 |
Accumulated benefit obligation | 1,167 |  |  | 1,221 |  |  | 459 |  |  | 445 |
Fair value of plan assets | 856 |  |  | 870 |  |  | 50 |  |  | 53 |
The accumulated benefit obligation for all pension plans was approximately $1.6 billion and $1.7 billion as of December 31, 2016 and 2015, respectively. The assumed health care and drug cost trend rates used to measure next year's post-employment healthcare benefits are as follows:
| Other Post-Employment Benefits
| 2016 |  | 2015
Initial health care cost trend rate | 6.69% |  | 6.97%
Ultimate health care cost trend rate | 5.00% |  | 5.00%
Year ultimate health care cost trend rate reached | 2022 |  | 2022
The assumed health care cost trend rate has a significant impact on the amounts reported for OPEB plans. The following table illustrates the sensitivity to a change in the assumed health care cost trend rate:
| Total Service and Interest Cost |  | APBO
| (in millions)
100 basis point (“bp”) increase in health care cost trend rate | $ | 1 |  |  | $ | 24 |
100 bp decrease in health care cost trend rate | (1 | ) |  | (21 | )
Estimated amounts to be amortized from accumulated other comprehensive loss into net period benefit cost for 2017 based on 2016 plan measurements are $9 million, consisting primarily of amortization of net actuarial loss in the U.S. pension plans. Federal-Mogul's projected benefit payments from the plans are estimated as follows:
|  | Pension Benefits |  | Other Post-Employment Benefits
Years |  | United States Plans |  | Non-U.S. Plans |
|  | (in millions)
2017 |  | $ | 84 |  |  | $ | 22 |  |  | $ | 23 |
2018 |  | 84 |  |  | 22 |  |  | 23 |
2019 |  | 86 |  |  | 24 |  |  | 23 |
2020 |  | 87 |  |  | 24 |  |  | 23 |
2021 |  | 86 |  |  | 24 |  |  | 22 |
2022-2026 |  | 387 |  |  | 131 |  |  | 101 |
Federal-Mogul expects to contribute approximately $75 million to its pension plans in 2017. Federal-Mogul also maintains certain defined contribution pension plans for eligible employees. Effective January 1, 2013, Federal-Mogul amended its U.S. defined contribution plan to allow for an enhanced company match and company provided age-based contributions for eligible U.S. salaried and non-union hourly employees. The total expenses attributable to Federal-Mogul's defined contribution savings plan were $43 million, $45 million and $45 million for the years ended December 31, 2016, 2015 and 2014, respectively. Other Benefits Federal-Mogul accounts for benefits to former or inactive employees paid after employment but before retirement pursuant to FASB ASC Topic 712, Compensation - Nonretirement Post-employment Benefits. The liabilities for such U.S. and European post-employment benefits were $60 million and $59 million at December 31, 2016 and 2015, respectively. Railcar and Food Packaging ARI is the sponsor of three defined benefit pension plans, two of which cover certain employees at designated repair facilities. All three of ARI's defined benefit pension plans are frozen and no additional benefits are accruing thereunder. Viskase and its subsidiaries have defined contribution and defined benefit plans varying by country and subsidiary. Viskase's operations in the United States, France, Germany and Canada have historically offered defined benefit retirement plans and post-retirement health care and life insurance benefits to their employees. Most of these benefits have been terminated, resulting in reductions in various liabilities. The following table provides disclosures for ARI's and Viskase's benefit obligations, plan assets, funded status, and recognition in the consolidated balance sheets. As pension costs for ARI and Viskase are not material to our consolidated financial position and results of operations, we do not provide information regarding their inputs and valuation assumptions.
| Pension Benefits
| 2016 |  | 2015
| (in millions)
Change in benefit obligation: |  |  |
Benefit obligation, beginning of year | $ | 191 |  |  | $ | 203 |
Service cost | 1 |  |  | 1 |
Interest cost | 8 |  |  | 8 |
Benefits paid | (15 | ) |  | (10 | )
Actuarial gain (loss) | 4 |  |  | (9 | )
Curtailment gain | — |  |  | (1 | )
Currency translation | — |  |  | (1 | )
Benefit obligation, end of year | 189 |  |  | 191 |
Change in plan assets: |  |  |
Fair value of plan assets, beginning of year | 133 |  |  | 144 |
Actual return on plan assets | 8 |  |  | (3 | )
Company contributions | — |  |  | 2 |
Currency translation | — |  |  | — |
Benefits paid | (15 | ) |  | (10 | )
Fair value of plan assets, end of year | 126 |  |  | 133 |
Funded status of the plan | $ | (63 | ) |  | $ | (58 | )
Amounts recognized in the consolidated balance sheets: |  |  |
Net liability recognized | $ | (63 | ) |  | $ | (58 | )
Amounts recognized in accumulated other comprehensive loss, inclusive of tax impacts: |  |  |
Net actuarial loss | $ | (63 | ) |  | $ | (58 | )
Total | $ | (63 | ) |  | $ | (58 | )

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