PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables)
|
12 Months Ended |
Dec. 31, 2018 |
|---|
| Funded Status of Our Plans |
The funded status of the plans we sponsor is determined by comparing the projected benefit obligation with the fair value of plan assets at the end of the year. The following table demonstrates how our plans' funded status is reflected on the Consolidated Balance Sheet. | | | | | | | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | | PENSION | OTHER POSTRETIREMENT BENEFITS | | 2018 |
| 2017 |
| 2018 |
| 2017 |
| Funded status: | | | | | Fair value of plan assets | $ | 4,930 |
| $ | 5,514 |
| $ | 18 |
| $ | — |
| Projected benefit obligations | (5,263 | ) | (6,795 | ) | (166 | ) | (200 | ) | Funded status | $ | (333 | ) | $ | (1,281 | ) | $ | (148 | ) | $ | (200 | ) | Presentation on our Consolidated Balance Sheet: | | | | | Noncurrent assets | $ | 74 |
| $ | 45 |
| $ | — |
| $ | — |
| Current liabilities | (18 | ) | (21 | ) | (10 | ) | (19 | ) | Noncurrent liabilities | (389 | ) | (1,305 | ) | (138 | ) | (181 | ) | Funded status | $ | (333 | ) | $ | (1,281 | ) | $ | (148 | ) | $ | (200 | ) |
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| Changes in Fair Value of Plan Assets |
Changes in Fair Value of Plan Assets | | | | | | | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | | PENSION | OTHER POSTRETIREMENT BENEFITS | | 2018 |
| 2017 |
| 2018 |
| 2017 |
| Fair value of plan assets at beginning of year (estimated) | $ | 5,514 |
| $ | 5,351 |
| $ | — |
| $ | — |
| Adjustment for final fair value of plan assets | 44 |
| 18 |
| — |
| — |
| Actual return on plan assets | 123 |
| 553 |
| — |
| — |
| Foreign currency translation | (73 | ) | 59 |
| — |
| — |
| Employer contributions and benefit payments | 345 |
| 57 |
| 36 |
| 20 |
| Plan participants’ contributions | — |
| — |
| 4 |
| 6 |
| Plan transfers | 1 |
| 3 |
| — |
| — |
| Benefits paid (includes lump sum settlements) | (1,024 | ) | (527 | ) | (22 | ) | (26 | ) | Fair value of plan assets at end of year (estimated) | $ | 4,930 |
| $ | 5,514 |
| $ | 18 |
| $ | — |
|
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| Changes in Projected Benefit Obligations of Our Pension and Other Postretirement Benefit Plans |
Changes in Projected Benefit Obligations of Our Pension and Other Postretirement Benefit Plans | | | | | | | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | | PENSION | OTHER POSTRETIREMENT BENEFITS | | 2018 |
| 2017 |
| 2018 |
| 2017 |
| Reconciliation of projected benefit obligation: | | | | | Projected benefit obligation beginning of year | $ | 6,795 |
| $ | 6,469 |
| $ | 200 |
| $ | 225 |
| Service cost | 37 |
| 35 |
| — |
| — |
| Interest cost | 236 |
| 264 |
| 7 |
| 8 |
| Plan participants’ contributions | — |
| — |
| 4 |
| 6 |
| Actuarial (gains) losses | (718 | ) | 489 |
| (18 | ) | (18 | ) | Foreign currency translation | (69 | ) | 59 |
| (5 | ) | 5 |
| Benefits paid (includes lump sum settlements) | (1,024 | ) | (527 | ) | (22 | ) | (26 | ) | Plan amendments and other | 5 |
| 3 |
| — |
| — |
| Plan transfers | 1 |
| 3 |
| — |
| — |
| Projected benefit obligation at end of year | $ | 5,263 |
| $ | 6,795 |
| $ | 166 |
| $ | 200 |
|
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| Schedules of Allocation of Our Plans' Assets |
The net pension plan assets, when categorized in accordance with this fair value hierarchy, are as follows. Investments valued using net asset value (NAV) as a practical expedient are presented to reconcile with total plan assets. | | | | | | | | | | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | 2018 | LEVEL 1 |
| LEVEL 2 |
| LEVEL 3 |
| NAV |
| TOTAL |
| Pension trust investments: | | | | | |
| Cash and short-term investments | $ | 275 |
| $ | 12 |
| $ | — |
| $ | — |
| $ | 287 |
| Common and preferred stock | — |
| — |
| — |
| — |
| — |
| Fixed income investments: | | | | | | Corporate | — |
| 1,054 |
| — |
| — |
| 1,054 |
| Government | — |
| 426 |
| — |
| — |
| 426 |
| Hedge fund and related investments | — |
| — |
| 3 |
| 1,811 |
| 1,814 |
| Private equity and related investments | — |
| — |
| 65 |
| 1,014 |
| 1,079 |
| Derivative instruments | — |
| 15 |
| 262 |
| — |
| 277 |
| Total pension trust investments | 275 |
| 1,507 |
| 330 |
| 2,825 |
| 4,937 |
| Accrued liabilities, net | | | | | (17 | ) | Pension trust net assets | | | | | 4,920 |
| Canadian nonregistered plan assets: | | | | | | Cash and short-term investments | 5 |
| — |
| — |
| — |
| 5 |
| Common and preferred stock | 5 |
| — |
| — |
| — |
| 5 |
| Total Canadian nonregistered plan assets | 10 |
| — |
| — |
| — |
| 10 |
| Total plan assets | | | | | $ | 4,930 |
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| | | | | | | | | | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | 2017 | LEVEL 1 |
| LEVEL 2 |
| LEVEL 3 |
| NAV |
| TOTAL |
| Pension trust investments: | | | | | |
| Cash and short-term investments | $ | 580 |
| $ | 2 |
| $ | — |
| $ | — |
| $ | 582 |
| Common and preferred stock | 1 |
| — |
| — |
| — |
| 1 |
| Hedge fund and related investments | 59 |
| — |
| 10 |
| 3,168 |
| 3,237 |
| Private equity and related investments | — |
| — |
| 102 |
| 1,120 |
| 1,222 |
| Derivative instruments | — |
| 31 |
| 445 |
| — |
| 476 |
| Total pension trust investments | 640 |
| 33 |
| 557 |
| 4,288 |
| 5,518 |
| Accrued liabilities, net | | | | | (16 | ) | Pension trust net investments | | | | | 5,502 |
| Canadian nonregistered plan assets: | | | | | | Cash and short-term investments | 6 |
| — |
| — |
| — |
| 6 |
| Common and preferred stock | 6 |
| — |
| — |
| — |
| 6 |
| Total Canadian nonregistered plan assets | 12 |
| — |
| — |
| — |
| 12 |
| Total plan assets | | | | | $ | 5,514 |
|
|
| Reconciliation of Pension Plan Assets Measured at Level 3 Fair Value |
A reconciliation of the beginning and ending balances of the pension plan assets measured at fair value using significant unobservable inputs (Level 3) is presented below: | | | | | | | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | | INVESTMENTS | | | Hedge funds and related investments |
| Private equity and related investments |
| Derivative instruments, net |
| Total |
| Balance as of December 31, 2016 | $ | 4 |
| $ | 75 |
| $ | 376 |
| $ | 455 |
| Net realized gains (losses) | (1 | ) | (30 | ) | 15 |
| (16 | ) | Net change in unrealized gains (losses) | 2 |
| 41 |
| 67 |
| 110 |
| Purchases | — |
| 14 |
| — |
| 14 |
| Sales | (1 | ) | — |
| — |
| (1 | ) | Settlements | — |
| — |
| (13 | ) | (13 | ) | Transfers into Level 3 | 6 |
| 19 |
| — |
| 25 |
| Transfers out of Level 3 | — |
| (17 | ) | — |
| (17 | ) | Balance as of December 31, 2017 | 10 |
| 102 |
| 445 |
| 557 |
| Net realized gains (losses) | — |
| — |
| 238 |
| 238 |
| Net change in unrealized gains (losses) | 1 |
| (5 | ) | (184 | ) | (188 | ) | Purchases | — |
| 5 |
| — |
| 5 |
| Sales | — |
| (2 | ) | — |
| (2 | ) | Settlements | — |
| — |
| (237 | ) | (237 | ) | Transfers into Level 3 | — |
| 18 |
| — |
| 18 |
| Transfers out of Level 3 | (8 | ) | (53 | ) | — |
| (61 | ) | Balance as of December 31, 2018 | $ | 3 |
| $ | 65 |
| $ | 262 |
| $ | 330 |
|
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| Assumptions We Use in Estimating Health Care Benefit Costs |
Assumptions We Use in Estimating Health Care Benefit Cost Trends | | | | | | | | | | | 2018 | 2017 | | U.S. |
| CANADA |
| U.S. |
| CANADA |
| Weighted health care cost trend rate assumed for next year | 7.80% for Pre-Medicare and 4.50% for HRA |
| 4.90 | % | 8.40% for Pre-Medicare and 4.50% for HRA |
| 5.10 | % | Rate that the cost trend rate gradually declines to | 4.50 | % | 4.00 | % | 4.50 | % | 4.30 | % | Year the cost trend rate is reached | 2037 |
| 2039 |
| 2037 |
| 2028 |
|
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| Effect of a One Percent Change in Health Care Costs |
Effect of a One Percent Change in Health Care Costs | | | | | | | | AS OF DECEMBER 31, 2018 (DOLLAR AMOUNTS IN MILLIONS) | | 1% INCREASE |
| 1% DECREASE |
| Effect on total service and interest cost components | Less than $1 |
| Less than $(1) |
| Effect on accumulated postretirement benefit obligation | $ | 5 |
| $ | (4 | ) |
|
| Net Periodic Benefit Cost (Credit) |
Net Periodic Benefit Cost (Credit) | | | | | | | | | | | | | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | | PENSION | OTHER POSTRETIREMENT BENEFITS | | 2018 |
| 2017 |
| 2016 |
| 2018 |
| 2017 |
| 2016 |
| Net periodic benefit cost (credit): | | | | | | | Service cost(1) | $ | 37 |
| $ | 35 |
| $ | 48 |
| $ | — |
| $ | — |
| $ | — |
| Interest cost | 236 |
| 264 |
| 277 |
| 7 |
| 8 |
| 8 |
| Expected return on plan assets | (399 | ) | (409 | ) | (495 | ) | — |
| — |
| — |
| Amortization of actuarial loss | 225 |
| 195 |
| 156 |
| 8 |
| 8 |
| 9 |
| Amortization of prior service cost (credit) | 3 |
| 4 |
| 4 |
| (8 | ) | (8 | ) | (7 | ) | Accelerated pension costs for Plum Creek merger-related change-in-control provisions | — |
| — |
| 5 |
| — |
| — |
| — |
| Settlement charge | 200 |
| — |
| — |
| — |
| — |
| — |
| Net periodic benefit cost (credit) | $ | 302 |
| $ | 89 |
| $ | (5 | ) | $ | 7 |
| $ | 8 |
| $ | 10 |
| (1) Service cost includes $13 million in 2016 for employees that were part of our Cellulose Fibers divestitures. These charges are included in our results of discontinued operations. Curtailment and special termination benefits are related to involuntary terminations due to restructuring activities. |
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| Estimated Amortization from Cumulative Other Comprehensive Loss |
Estimated Amortization from Accumulated Other Comprehensive Loss in 2019 | | | | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | | PENSION |
| OTHER POSTRETIREMENT BENEFITS |
| TOTAL |
| Net actuarial loss | $ | 108 |
| $ | 7 |
| $ | 115 |
| Prior service cost (credit) | 4 |
| (1 | ) | 3 |
| Net effect cost | $ | 112 |
| $ | 6 |
| $ | 118 |
|
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| Estimated Projected Benefit Payments for the Next 10 Years |
Estimated Projected Benefit Payments for the Next 10 Years | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | | | | PENSION (1) |
| OTHER POSTRETIREMENT BENEFITS |
| 2019 | $ | 272 |
| $ | 17 |
| 2020 | 233 |
| 16 |
| 2021 | 231 |
| 15 |
| 2022 | 232 |
| 14 |
| 2023 | 234 |
| 14 |
| 2024-2028 | 1,161 |
| 57 |
| (1) Estimated payments exclude future payments transferred in conjunction with our January 2019 group annuity contract purchase. |
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| Qualified and Registered Plans [Member] |
|
| Schedules of Allocation of Our Plans' Assets |
Assets within our qualified and registered pension plans in our U.S. and Canadian pension trusts were invested as follows: | | | | | | | DECEMBER 31, 2018 |
| DECEMBER 31, 2017 |
| Cash and short-term investments | 5.8 | % | 10.6 | % | Fixed income investments: | | | Corporate | 21.5 |
| — |
| Government | 8.6 |
| — |
| Hedge funds and related investments | 36.9 |
| 58.8 |
| Private equity and related investments | 21.9 |
| 22.2 |
| Derivative instruments, net | 5.6 |
| 8.7 |
| Accrued liabilities | (0.3 | ) | (0.3 | ) | Total | 100.0 | % | 100.0 | % |
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| Pension |
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| Rates We Use in Estimating Our Benefit Obligations |
Rates We Use in Estimating Our Benefit Obligations | | | | | | | PENSION | | DECEMBER 31,
2018 |
| DECEMBER 31,
2017 |
| Discount rates: | |
| |
| United States | 4.40 | % | 3.70 | % | Canada | 3.70 | % | 3.50 | % | Lump sum distributions(1)(2) | PPA Table |
| PPA Table |
| Rate of compensation increase: | |
| |
| Salaried: | |
| |
| United States | 13.00% to 2.00% decreasing with participant age |
| 13.00% to 2.00% decreasing with participant age |
| Canada | 3.25 | % | 3.25 | % | Hourly: | |
| |
| United States | 13.00% to 2.30% decreasing with participant age |
| 13.00% to 2.30% decreasing with participant age |
| Canada | 3.00 | % | 3.00 | % | Lump sum or installment distributions election(2) | 60.00 | % | 60.00 | % | (1) PPA Phased Table: Interest and mortality assumptions as mandated by Pension Protection Act of 2006 including the phase out of the prior interest rate basis in 2013. (2) U.S. qualified salaried and nonqualified plans only. |
|
| Estimating Our Net Periodic Benefit Costs |
Estimating Our Net Periodic Benefit Costs | | | | | | | | | PENSION | | 2018 |
| 2017 |
| 2016 |
| Discount rates: | |
| |
| |
| United States | 3.70 | % | 4.30 | % | 4.50 | % | Canada | 3.50 | % | 3.70 | % | 4.00 | % | Lump sum distributions(1)(2) | PPA Table |
| PPA Table |
| PPA Table |
| Expected return on plan assets: | |
| |
| |
| Qualified/registered plans(3) | 8.00 | % | 8.00 | % | 9.00% for all plans except 7.00% for plans assumed from Plum Creek |
| Nonregistered plans | 3.50 | % | 3.50 | % | 3.50 | % | Rate of compensation increase: | |
| |
| |
| Salaried: | |
| |
| |
| United States | 13.00% to 2.00% decreasing with participant age
|
| 13.00% to 2.00% decreasing with participant age
|
| 13.00% to 2.00% decreasing with participant age |
| Canada | 3.25 | % | 3.50 | % | 3.50 | % | Hourly: | |
| |
| |
| United States | 13.00% to 2.30% decreasing with participant age
|
| 13.00% to 2.30% decreasing with participant age
|
| 13.00% to 2.30% decreasing with participant age |
| Canada | 3.00 | % | 3.25 | % | 3.25 | % | Lump sum distributions election(2) | 60.00 | % | 60.00 | % | 60.00 | % | (1) PPA Phased Table: Interest and mortality assumptions as mandated by Pension Protection Act of 2006 including the phase out of the prior interest rate basis in 2013. (2) U.S. qualified salaried and nonqualified plans only. (3) Beginning in 2017 we used an assumed expected return on plan assets of 8.00 percent for qualified and registered pension plans. |
|
| Derivative instruments | Qualified and Registered Plans [Member] |
|
| Schedules of Allocation of Our Plans' Assets |
The table below shows the fair value and aggregate notional amount of the derivative instruments held by our pension trusts at the end of the last two years. | | | | | | | | | | | | | | DOLLAR AMOUNTS IN MILLIONS | | FAIR VALUE | NOTIONAL | | DECEMBER 31,
2018 |
| DECEMBER 31,
2017 |
| DECEMBER 31,
2018 |
| DECEMBER 31,
2017 |
| Equity and fixed income index derivatives, net | $ | — |
| $ | 19 |
| $ | — |
| $ | 501 |
| Foreign currency derivatives, net | — |
| 12 |
| 13 |
| 1,413 |
| Futures contracts, net | 15 |
| — |
| 1,073 |
| — |
| Total return swaps, net | 262 |
| 445 |
| 558 |
| 1,443 |
| Total | $ | 277 |
| $ | 476 |
| $ | 1,644 |
| $ | 3,357 |
|
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