Pension and Other Postretirement Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2018

Obligations and Funded Status at End of Year



	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
Millions of dollars	2018			2017			2018			2017			2018			2017
Funded status
Fair value of plan assets	$	2,676		$	2,746		$	518		$	571		$	—		$	—
Benefit obligations	3,033			3,415			834			952			356			394
Funded status	$	(357	)	$	(669	)	$	(316	)	$	(381	)	$	(356	)	$	(394	)
Amounts recognized in the consolidated balance sheets
Noncurrent asset	$	—		$	—		$	12		$	11		$	—		$	—
Current liability	(38		)	(16		)	(10		)	(16		)	(38		)	(42		)
Noncurrent liability	(319		)	(653		)	(318		)	(376		)	(318		)	(352		)
Amount recognized	$	(357	)	$	(669	)	$	(316	)	$	(381	)	$	(356	)	$	(394	)
Amounts recognized in accumulated other comprehensive loss (pre-tax)
Net actuarial loss	$	1,445		$	1,380		$	192		$	201		$	1		$	17
Prior service (credit) cost	(1		)	(4		)	(2		)	(4		)	(16		)	(20		)
Amount recognized	$	1,444		$	1,376		$	190		$	197		$	(15	)	$	(3	)

Change in Benefit Obligation



	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
Millions of dollars	2018			2017			2018			2017			2018			2017
Benefit obligation, beginning of year	$	3,415		$	3,415		$	952		$	855		$	394		$	376
Service cost	2			2			5			5			7			7
Interest cost	118			134			23			23			15			16
Plan participants' contributions	—			—			1			1			—			—
Actuarial loss (gain)	(197		)	188			(33		)	30			(16		)	15
Benefits paid	(305		)	(260		)	(31		)	(32		)	(36		)	(40		)
Plan amendments	—			—			1			—			4			16
Transfer of liabilities	—			(64		)	—			—			—			—
Special termination benefit	—			—			(5		)	—			—			4
Settlements / curtailment (gain)	—			—			(22		)	(12		)	—			—
Foreign currency exchange rates	—			—			(53		)	82			(5		)	—
Reclassification of obligation to held for sale	—			—			(4		)	—			(7		)	—
Benefit obligation, end of year	$	3,033		$	3,415		$	834		$	952		$	356		$	394
Accumulated benefit obligation, end of year	$	3,022		$	3,403		$	804		$	914		N/A			N/A

Change in Plan Assets



	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
Millions of dollars	2018			2017			2018			2017			2018			2017
Fair value of plan assets, beginning of year	$	2,746		$	2,664		$	571		$	510		$	—		$	—
Actual return on plan assets	(145		)	359			(7		)	28			—			—
Employer contribution	380			47			39			30			36			40
Plan participants' contributions	—			—			1			1			—			—
Benefits paid	(305		)	(260		)	(31		)	(32		)	(36		)	(40		)
Transfer of plan assets	—			(64		)	—			—			—			—
Settlements	—			—			(22		)	(12		)	—			—
Foreign currency exchange rates	—			—			(31		)	46			—			—
Reclassification of plan assets to held for sale	—			—			(2		)	—			—			—
Fair value of plan assets, end of year	$	2,676		$	2,746		$	518		$	571		$	—		$	—

Components of Net Periodic Benefit Cost



	United States Pension Benefits									Foreign Pension Benefits									Other Postretirement Benefits
Millions of dollars	2018			2017			2016			2018			2017			2016			2018		2017			2016
Service cost	$	2		$	2		$	3		$	5		$	5		$	5		$	7	$	7		$	7
Interest cost	118			134			147			23			23			27			15		16			18
Expected return on plan assets	(170		)	(175		)	(186		)	(32		)	(30		)	(30		)	—		—			—
Amortization:
Actuarial loss	53			50			46			9			6			4			—		—			—
Prior service cost (credit)	(3		)	(3		)	(3		)	—			—			—			—		(4		)	(15		)
Special termination benefit	—			—			—			—			—			—			—		4			—
Curtailment gain	—			—			4			(4		)	—			(1		)	—		—			—
Settlement loss	—			—			—			3			2			3			—		—			—
Net periodic benefit cost	$	—		$	8		$	11		$	4		$	6		$	8		$	22	$	23		$	10

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, 2018, 2017 and 2016:



	United States Pension Benefits							Foreign Pension Benefits							Other Postretirement Benefits
Millions of dollars	2018			2017		2016		2018			2017		2016		2018		2017		2016
Operating profit (loss)	$	2		$	2	$	3	$	5		$	5	$	5	$	7	$	7	$	7
Interest and sundry (income) expense	(2		)	6		8		(1		)	1		3		15		16		3
Net periodic benefit cost	$	—		$	8	$	11	$	4		$	6	$	8	$	22	$	23	$	10

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 Income (Loss) (Pre-Tax) in 2018



Millions of dollars	United States Pension Benefits			Foreign Pension Benefits			Other Postretirement Benefits
Current year actuarial loss	$	118		$	—		$	(16	)
Actuarial (loss) recognized during the year	(53		)	(9		)	—
Current year prior service cost (credit)	—			1			4
Prior service credit (cost) recognized during the year	3			—			—
Total recognized in other comprehensive income (loss) (pre-tax)	$	68		$	(8	)	$	(12	)
Total recognized in net periodic benefit costs and other comprehensive income (loss) (pre-tax)	$	68		$	(4	)	$	10

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 2019



Millions of dollars	United States Pension Benefits			Foreign Pension Benefits		Other Postretirement Benefits
Actuarial loss	$	47		$	8	$	1
Prior service (credit)	(2		)	—		(9		)
Total	$	45		$	8	$	(8	)

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
	2018		2017		2018		2017		2018		2017
Discount rate	4.30	%	3.65	%	2.90	%	2.57	%	4.64	%	4.00	%
Rate of compensation increase	4.50	%	4.50	%	3.29	%	3.20	%	N/A		N/A

Weighted-Average Assumptions used to Determine Net Periodic Cost



	United States Pension Benefits						Foreign Pension Benefits						Other Postretirement Benefits
	2018		2017		2016		2018		2017		2016		2018		2017		2016
Discount rate	3.65	%	4.15	%	4.45	%	2.57	%	2.64	%	3.40	%	4.35	%	4.73	%	4.88	%
Expected long-term rate of return on plan assets	6.75	%	6.75	%	7.00	%	5.81	%	5.78	%	5.81	%	N/A		N/A		N/A
Rate of compensation increase	4.50	%	4.50	%	4.50	%	3.20	%	3.08	%	3.06	%	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		6.50	%	6.75	%	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		2025		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	4		(3		)

Expected Employer Contributions to Funded Plans



Millions of dollars	United States Pension Benefits		Foreign Pension Benefits
2019	$	—	$	17

Expected Benefit Payments



Millions of dollars	United States Pension Benefits		Foreign Pension Benefits		Other Postretirement Benefits
2019	$	308	$	39	$	38
2020	243		37		35
2021	245		37		34
2022	238		39		32
2023	231		40		31
2024-2028	1,055		209		129

Schedule of Allocation of Plan Assets

The fair values of our pension plan assets at December 31, 2018 and 2017, 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	2018		2017		2018		2017		2018		2017		2018		2017		2018		2017
Cash and cash equivalents	$	—	$	—	$	10	$	36	$	—	$	—	$	—	$	—	$	10	$	36
Government and government agency securities ^(a)
U.S. securities	—		—		761		439		—		—		—		—		761		439
International securities	—		—		97		117		—		—		—		—		97		117
Corporate bonds and notes ^(a)
U.S. companies	—		—		860		976		—		—		—		—		860		976
International companies	—		—		155		153		—		—		—		—		155		153
Equity securities ^(b)
U.S. companies	18		19		—		—		—		—		—		—		18		19
International companies	185		235		—		—		—		—		—		—		185		235
Mutual funds ^(c)	35		59		—		—		—		—		—		—		35		59
Investments at net asset value
U.S. equity securities ^(d)	—		—		—		—		—		—		501		689		501		689
International equity securities ^(d)	—		—		—		—		—		—		52		70		52		70
Short-term investment fund ^(d)	—		—		—		—		—		—		102		70		102		70
International debt securities ^(e)	—		—		—		—		—		—		209		229		209		229
International equity securities ^(e)	—		—		—		—		—		—		50		46		50		46
Real estate ^(f)	—		—		—		—		—		—		36		44		36		44
Limited partnerships ^(g)
U.S. private equity investments	—		—		—		—		68		86		—		—		68		86
Diversified fund of funds	—		—		—		—		6		8		—		—		6		8
Emerging growth	—		—		—		—		12		12		—		—		12		12
All other investments	—		—		18		18		—		—		19		11		37		29
	$	238	$	313	$	1,901	$	1,739	$	86	$	106	$	969	$	1,159	$	3,194	$	3,317


(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 and notes and government and 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, 2017	$	106
Realized gains (net)	16
Unrealized gains (net)	(4		)
Purchases	—
Settlements	(32		)
Balance, December 31, 2018	$	86

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, 2018 and 2017 were as follows:



	United States Pension Benefits				Foreign Pension Benefits
Millions of dollars	2018		2017		2018		2017
Projected benefit obligation	$	3,033	$	3,415	$	753	$	822
Fair value of plan assets	2,676		2,746		430		437

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, 2018 and 2017 were as follows:



	United States Pension Benefits				Foreign Pension Benefits
Millions of dollars	2018		2017		2018		2017
Projected benefit obligation	$	3,033	$	3,415	$	720	$	816
Accumulated benefit obligation	3,022		3,403		699		793
Fair value of plan assets	2,676		2,746		396		432