Pension and Other Postretirement Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2017

Obligations and Funded Status at End of Year



	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
Millions of dollars	2017			2016			2017			2016			2017			2016
Funded status
Fair value of plan assets	$	2,746		$	2,664		$	571		$	510		$	—		$	—
Benefit obligations	3,415			3,415			952			855			394			376
Funded status	$	(669	)	$	(751	)	$	(381	)	$	(345	)	$	(394	)	$	(376	)
Amounts recognized in the consolidated balance sheet
Noncurrent asset	$	—		$	—		$	11		$	2		$	—		$	—
Current liability	(16		)	(14		)	(16		)	(10		)	(42		)	(42		)
Noncurrent liability	(653		)	(737		)	(376		)	(337		)	(352		)	(334		)
Amount recognized	$	(669	)	$	(751	)	$	(381	)	$	(345	)	$	(394	)	$	(376	)
Amounts recognized in accumulated other comprehensive loss (pre-tax)
Net actuarial loss	$	1,380		$	1,426		$	201		$	176		$	17		$	3
Prior service (credit) cost	(4		)	(7		)	(4		)	(3		)	(20		)	(40		)
Amount recognized	$	1,376		$	1,419		$	197		$	173		$	(3	)	$	(37	)

Change in Benefit Obligation



	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
Millions of dollars	2017			2016			2017			2016			2017			2016
Benefit obligation, beginning of year	$	3,415		$	3,470		$	855		$	865		$	376		$	441
Service cost	2			3			5			5			7			7
Interest cost	134			147			23			27			16			18
Plan participants' contributions	—			—			1			1			—			6
Actuarial loss (gain)	188			92			30			105			15			(16		)
Benefits paid	(260		)	(286		)	(32		)	(31		)	(40		)	(54		)
Plan amendments	—			—			—			—			16			(30		)
Transfer of liabilities	(64		)	—			—			—			—			—
Special termination benefit	—			—			—			—			4			—
Settlements / curtailment (gain)	—			(11		)	(12		)	(16		)	—			—
Foreign currency exchange rates	—			—			82			(101		)	—			4
Benefit obligation, end of year	$	3,415		$	3,415		$	952		$	855		$	394		$	376
Accumulated benefit obligation, end of year	$	3,403		$	3,406		$	914		$	816		N/A			N/A

Change in Plan Assets



	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
Millions of dollars	2017			2016			2017			2016			2017			2016
Fair value of plan assets, beginning of year	$	2,664		$	2,741		$	510		$	552		$	—		$	—
Actual return on plan assets	359			206			28			47			—			—
Employer contribution	47			14			30			30			40			48
Plan participants' contributions	—			—			1			1			—			6
Benefits paid	(260		)	(286		)	(32		)	(31		)	(40		)	(54		)
Transfer of plan assets	(64		)	—			—			—			—			—
Settlements	—			(11		)	(12		)	(14		)	—			—
Foreign currency exchange rates	—			—			46			(75		)	—			—
Fair value of plan assets, end of year	$	2,746		$	2,664		$	571		$	510		$	—		$	—

Components of Net Periodic Benefit Cost



	United States Pension Benefits									Foreign Pension Benefits									Other Postretirement Benefits
Millions of dollars	2017			2016			2015			2017			2016			2015			2017			2016			2015
Service cost	$	2		$	3		$	3		$	5		$	5		$	5		$	7		$	7		$	2
Interest cost	134			147			150			23			27			31			16			18			19
Expected return on plan assets	(175		)	(186		)	(191		)	(30		)	(30		)	(33		)	—			—			—
Amortization:
Actuarial loss	50			46			53			6			4			5			—			—			—
Prior service cost (credit)	(3		)	(3		)	(3		)	—			—			—			(4		)	(15		)	(23		)
Special termination benefit	—			—			—			—			—			—			4			—			—
Curtailment gain	—			4			—			—			(1		)	—			—			—			(63		)
Settlement loss	—			—			—			2			3			12			—			—			—
Net periodic benefit cost	$	8		$	11		$	12		$	6		$	8		$	20		$	23		$	10		$	(65	)

Net Periodic Cost Recognized in Operating Profit and Interest and Sundry (Income) Expense

The following table summarizes the net periodic cost recognized in operating profit and interest and sundry (income) expense for the years ending December 31, 2017, 2016 and 2015:



	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
Millions of dollars	2017		2016		2015		2017		2016		2015		2017		2016		2015
Operating profit (loss)	$	2	$	3	$	3	$	5	$	5	$	5	$	7	$	7	$	2
Interest and sundry (income) expense	6		8		9		1		3		15		16		3		(67		)
Net periodic benefit cost (credit)	$	8	$	11	$	12	$	6	$	8	$	20	$	23	$	10	$	(65	)

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (Pre-Tax) in 2018

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (Pre-Tax) in 2017



Millions of dollars	United States Pension Benefits			Foreign Pension Benefits			Other Postretirement Benefits
Current year actuarial loss	$	4		$	33		$	14
Actuarial (loss) recognized during the year	(50		)	(9		)	—
Current year prior service cost (credit)	—			—			16
Prior service credit (cost) recognized during the year	3			—			4
Total recognized in other comprehensive loss (pre-tax)	$	(43	)	$	24		$	34
Total recognized in net periodic benefit costs and other comprehensive loss (pre-tax)	$	(35	)	$	30		$	57

Estimated Pre-Tax Amounts that will be amortized from Accumulated Other Comprehensive Loss into Net Periodic Pension Cost in 2013

Estimated Pre-Tax Amounts that will be amortized from Accumulated Other Comprehensive Loss into Net Periodic Pension Cost in 2018



Millions of dollars	United States Pension Benefits			Foreign Pension Benefits		Other Postretirement Benefits
Actuarial loss	$	56		$	10	$	—
Prior service (credit)	(3		)	—		(4		)
Total	$	53		$	10	$	(4	)

We amortize prior service costs (credits) over a period of up to 21 years.

Weighted-average Assumptions Used to Determine Benefit Obligation at the End of the Year and Net Periodic Cost

Weighted-Average Assumptions used to Determine Benefit Obligation at End of Year



	United States Pension Benefits				Foreign Pension Benefits				Other Postretirement Benefits
	2017		2016		2017		2016		2017		2016
Discount rate	3.65	%	4.15	%	2.57	%	2.64	%	4.00	%	4.42	%
Rate of compensation increase	4.50	%	4.50	%	3.20	%	3.08	%	N/A		N/A

Weighted-Average Assumptions used to Determine Net Periodic Cost



	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
	2017		2016		2015		2017		2016		2015		2017		2016		2015
Discount rate	4.15	%	4.45	%	4.05	%	2.64	%	3.40	%	3.32	%	4.73	%	4.88	%	4.74	%
Expected long-term rate of return on plan assets	6.75	%	7.00	%	7.00	%	5.78	%	5.81	%	5.63	%	N/A		N/A		N/A
Rate of compensation increase	4.50	%	4.50	%	4.50	%	3.08	%	3.06	%	3.23	%	N/A		N/A		N/A
Health care cost trend rate
Initial rate	N/A		N/A		N/A		N/A		N/A		N/A		6.75	%	7.00	%	7.00	%
Ultimate rate	N/A		N/A		N/A		N/A		N/A		N/A		5.00	%	5.00	%	5.00	%
Year that ultimate rate will be reached	N/A		N/A		N/A		N/A		N/A		N/A		2025		2019		2019

Estimated Impact of One Percentage-Point Change in Assumed Health Care Cost Trend Rate

A one percentage point change in assumed health care cost trend rates would have the following effects on our health care plan:



Millions of dollars	One Percentage Point Increase		One Percentage Point Decrease
Effect on total of service and interest cost	$	—	$	—
Effect on postretirement benefit obligations	3		(3		)

Expected Employer Contributions to Funded Plans



Millions of dollars	United States Pension Benefits		Foreign Pension Benefits
2018	$	34	$	18

Expected Benefit Payments



Millions of dollars	United States Pension Benefits		Foreign Pension Benefits		Other Postretirement Benefits
2018	$	298	$	42	$	41
2019	271		42		43
2020	260		40		33
2021	259		41		32
2022	250		42		31
2023-2027	1,120		219		130

Schedule of Allocation of Plan Assets

The fair values of our pension plan assets at December 31, 2017 and 2016, by asset category were as follows:



	December 31,
	Quoted prices (Level 1)				Other significant observable inputs (Level 2)				Significant unobservable inputs (Level 3)				Net Asset Value				Total
Millions of dollars	2017		2016		2017		2016		2017		2016		2017		2016		2017		2016
Cash and cash equivalents	$	36	$	47	$	—	$	—	$	—	$	—	$	—	$	—	$	36	$	47
Government and government agency securities ^(a)
U.S. securities	—		—		439		455		—		—		—		—		439		455
International securities	—		—		117		111		—		—		—		—		117		111
Corporate bonds and notes ^(a)
U.S. companies	—		—		976		892		—		—		—		—		976		892
International companies	—		—		153		138		—		—		—		—		153		138
Equity securities ^(b)
U.S. companies	19		14		—		—		—		—		—		—		19		14
International companies	235		186		—		—		—		—		—		—		235		186
Mutual funds ^(c)	59		64		—		—		—		—		—		—		59		64
Investments at net asset value
U.S. equity securities ^(d)	—		—		—		—		—		—		626		650		626		650
International equity securities ^(d)	—		—		—		—		—		—		70		56		70		56
Short-term investment fund ^(d)	—		—		—		—		—		—		33		30		33		30
International debt securities ^(e)	—		—		—		—		—		—		134		104		134		104
International equity securities ^(e)	—		—		—		—		—		—		286		268		286		268
Real estate ^(f)	—		—		—		—		—		—		10		10		10		10
Limited partnerships ^(g)
U.S. private equity investments	—		—		—		—		86		104		—		—		86		104
Diversified fund of funds	—		—		—		—		8		14		—		—		8		14
Emerging growth	—		—		—		—		12		14		—		—		12		14
All other investments	—		—		18		17		—		—		—		—		18		17
	$	349	$	311	$	1,703	$	1,613	$	106	$	132	$	1,159	$	1,118	$	3,317	$	3,174


(a)	Valued using pricing vendors who use proprietary models to estimate the price a dealer would pay to buy a security using significant observable inputs, such as interest rates, yield curves, and credit risk.


(b)	Valued using the closing stock price on a national securities exchange, which reflects the last reported sales price on the last business day of the year.


(c)	Valued using the net asset value (NAV) of the fund, which is based on the fair value of underlying securities. The fund primarily invests in a diversified portfolio of equity securities issued by non-U.S. companies.


(d)	Common and collective trust funds valued using the NAV of the fund, which is based on the fair value of underlying securities.


(e)	Fund of funds valued using the NAV of the fund, which is based on the fair value of underlying securities. International debt securities includes corporate bonds & notes and government & government agency securities.


(f)	Valued using the NAV of the fund, which is based on the fair value of underlying assets.


(g)	Valued at estimated fair value based on the proportionate share of the limited partnership's fair value, as determined by the general partner.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)



Millions of dollars	Limited Partnerships
Balance, December 31, 2016	$	132
Realized gains (net)	21
Unrealized gains (net)	(9		)
Purchases	—
Settlements	(38		)
Balance, December 31, 2017	$	106

Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets

The projected benefit obligation and fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets at December 31, 2017 and 2016 were as follows:



	United States Pension Benefits				Foreign Pension Benefits
Millions of dollars	2017		2016		2017		2016
Projected benefit obligation	$	3,415	$	3,415	$	822	$	759
Fair value of plan assets	2,746		2,664		437		421

Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for pension plans with an accumulated benefit obligation in excess of plan assets at December 31, 2017 and 2016 were as follows:



	United States Pension Benefits				Foreign Pension Benefits
Millions of dollars	2017		2016		2017		2016
Projected benefit obligation	$	3,415	$	3,415	$	816	$	720
Accumulated benefit obligation	3,403		3,406		793		699
Fair value of plan assets	2,746		2,664		432		383