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Benefit Plans (Tables)
 12 Months Ended
Sep. 30, 2017
Net Pension and Other Postretirement Cost
Net pension and other postretirement cost for the years ended September 30 included the following components:
 
Pension Plans
 
Other Postretirement Benefits
(Millions of dollars)
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Service cost
$
110

 
$
81

 
$
77

 
$
3

 
$
3

 
$
3

Interest cost
61

 
72

 
87

 
4

 
5

 
7

Expected return on plan assets
(112
)
 
(109
)
 
(123
)
 
—

 
—

 
—

Amortization of prior service credit
(14
)
 
(15
)
 
(15
)
 
(5
)
 
(5
)
 
(5
)
Amortization of loss
92

 
77

 
68

 
2

 
2

 
3

Settlements
—

 
7

 
—

 
—

 
—

 
—

Net pension and postretirement cost
$
138

 
$
113

 
$
93

 
$
4

 
$
5

 
$
9

 
 
 
 
 
 
 
 
 
 
 
 
Net pension cost attributable to international plans
$
43

 
$
35

 
$
32

 
 
 
 
 
 
Change in Benefit Obligation, Change in Fair Value of Plan Assets
The change in benefit obligation, change in fair value of plan assets, funded status and amounts recognized in the Consolidated Balance Sheets for these plans were as follows:
 
Pension Plans
 
Other Postretirement
Benefits
(Millions of dollars)
2017
 
2016
 
2017
 
2016
Change in benefit obligation:
 
 
 
 
 
 
 
Beginning obligation
$
2,719

 
$
2,426

 
$
184

 
$
186

Service cost
110

 
81

 
3

 
3

Interest cost
61

 
72

 
4

 
5

Plan amendments
(1
)
 
—

 
—

 
(1
)
Benefits paid
(123
)
 
(116
)
 
(16
)
 
(17
)
Impact of divestitures
(19
)
 
—

 
—

 
—

Actuarial (gain) loss
(134
)
 
302

 
(15
)
 
3

Settlements
(1
)
 
(15
)
 
—

 
—

Other, includes translation
36

 
(30
)
 
4

 
4

Benefit obligation at September 30
$
2,647

 
$
2,719

 
$
165

 
$
184

Change in fair value of plan assets:
 
 
 
 
 
 
 
Beginning fair value
$
1,855

 
$
1,732

 
$
—

 
$
—

Actual return on plan assets
134

 
131

 
—

 
—

Employer contribution
54

 
145

 
—

 
—

Benefits paid
(123
)
 
(116
)
 
—

 
—

Impact of divestitures
(13
)
 
—

 
—

 
—

Settlements
(1
)
 
(15
)
 
—

 
—

Other, includes translation
26

 
(21
)
 
—

 
—

Plan assets at September 30
$
1,932

 
$
1,855

 
$
—

 
$
—

Funded Status at September 30:
 
 
 
 
 
 
 
Unfunded benefit obligation
$
(715
)
 
$
(864
)
 
$
(165
)
 
$
(184
)
Amounts recognized in the Consolidated Balance
Sheets at September 30:
 
 
 
 
 
 
 
Other
$
9

 
$
5

 
$
—

 
$
—

Salaries, wages and related items
(17
)
 
(12
)
 
(14
)
 
(15
)
Long-term Employee Benefit Obligations
(707
)
 
(857
)
 
(150
)
 
(169
)
Net amount recognized
$
(715
)
 
$
(864
)
 
$
(165
)
 
$
(184
)
Amounts recognized in Accumulated other
comprehensive income (loss) before income taxes at September 30:
 
 
 
 
 
 
 
Prior service credit
74

 
87

 
28

 
33

Net actuarial loss
(1,065
)
 
(1,307
)
 
(15
)
 
(32
)
Net amount recognized
$
(991
)
 
$
(1,221
)
 
$
14

 
$
1
Pension Plans with Accumulated Benefit Obligations
Pension plans with accumulated benefit obligations in excess of plan assets and plans with projected benefit obligations in excess of plan assets consist of the following at September 30:
 
Accumulated Benefit
Obligation Exceeds the
Fair Value of Plan Assets
 
Projected Benefit
Obligation Exceeds the
Fair Value of Plan Assets
(Millions of dollars)
2017
 
2016
 
2017
 
2016
Projected benefit obligation
$
2,551

 
$
2,616

 
$
2,613

 
$
2,682

Accumulated benefit obligation
$
2,470

 
$
2,529

 
 
 
 
Fair value of plan assets
$
1,833

 
$
1,757

 
$
1,889

 
$
1,813
Weighted Average Assumptions Determining Pension Plan
The weighted average assumptions used in determining pension plan information were as follows:
 
2017
 
2016
 
2015
 
Net Cost
 
 
 
 
 
 
Discount rate:
 
 
 
 
 
 
U.S. plans (A)
3.42
%
 
4.15
%
 
4.15
%
 
International plans
1.70

 
2.84

 
3.14

 
Expected return on plan assets:
 
 
 
 
 
 
U.S. plans
7.25

 
7.50

 
7.50

 
International plans
4.65

 
5.02

 
5.45

 
Rate of compensation increase:
 
 
 
 
 
 
U.S. plans
4.25

 
4.25

 
4.25

 
International plans
2.33

 
2.33

 
2.49

 
Benefit Obligation
 
 
 
 
 
 
Discount rate:
 
 
 
 
 
 
U.S. plans
3.72

 
3.42

 
4.15

 
International plans
2.25

 
1.70

 
2.84

 
Rate of compensation increase:
 
 
 
 
 
 
U.S. plans
4.51

 
4.25

 
4.25

 
International plans
2.30

 
2.33

 
2.33

 
 
(A)
In 2015 the Company calculated the service and interest components utilizing a single weighted-average discount rate derived from the yield curve used to measure the benefit obligation at the beginning of the period. Effective September 30, 2015, the Company elected to utilize an approach that discounts the individual expected cash flows using the applicable spot rates derived from the yield curve over the projected cash flow period. The Company accounted for this change as a change in accounting estimate that is inseparable from a change in accounting principle and as such, the change was accounted for prospectively.
Expected Benefit Payments
Expected benefit payments are as follows:
(Millions of dollars)
Pension
Plans
 
Other
Postretirement
Benefits
2018
$
173

 
$
14

2019
158

 
14

2020
159

 
14

2021
163

 
13

2022
165

 
13

2023-2027
859

 
56
Fair Value Measurements of U.S. Plan Assets
The following table provides the fair value measurements of U.S. plan assets, as well as the measurement techniques and inputs utilized to measure fair value of these assets, at September 30, 2017 and 2016. The categorization of fund investments is based upon the categorization of these funds’ underlying assets.
(Millions of dollars)
Total U.S.
Plan Asset
Balances
 
Investments Measured at Net Asset Value (A)
 
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
 
Significant
Other
Observable
Inputs (Level 2)
 
Significant
Unobservable
Inputs (Level 3)
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Fixed Income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgage and asset-backed securities
$
155

 
$
169

 
$
—

 
$
—

 
$
—

 
$
—

 
$
155

 
$
169

 
$
—

 
$
—

Corporate bonds
232

 
197

 
—

 
—

 
89

 
68

 
144

 
129

 
—

 
—

Government and agency-U.S.
107

 
103

 
—

 
—

 
83

 
67

 
25

 
36

 
—

 
—

Government and agency-Foreign
98

 
90

 
12

 
32

 
63

 
52

 
22

 
6

 
—

 
—

Equity securities
369

 
348

 
307

 
287

 
62

 
61

 
—

 
—

 
—

 
—

Cash and cash equivalents
40

 
89

 
—

 
—

 
40

 
89

 
—

 
—

 
—

 
—

Other
252

 
234

 
217

 
201

 
34

 
33

 
—

 
—

 
—

 
—

Fair value of plan assets
$
1,254

 
$
1,231

 
$
537

 
$
520

 
$
371

 
$
371

 
$
346

 
$
340

 
$
—

 
$
—

 
(A)
As per applicable disclosure requirements, certain investments that were measured at net asset value per share or its equivalent have not been categorized within the fair value hierarchy. Values of such assets are based on the corroborated net asset value provided by the fund administrator.
Fair Value Measurements of Foreign Plan Assets
The following table provides the fair value measurements of international plan assets, as well as the measurement techniques and inputs utilized to measure fair value of these assets, at September 30, 2017 and 2016.
(Millions of dollars)
Total International
Plan Asset
Balances
 
Investments Measured at Net Asset Value (A)
 
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
 
Significant
Other
Observable
Inputs (Level 2)
 
Significant
Unobservable
Inputs (Level 3)
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Fixed Income:


 
 
 
 
 
 


 
 


 
 

 
 
Corporate bonds
$
14

 
$
34

 
$
—

 
$
—

 
$
—

 
$
—

 
$
13

 
$
34

 
$
—

 
$
—

Government and agency-U.S.
5

 
5

 
—

 
—

 
1

 
2

 
3

 
3

 
—

 
—

Government and agency-Foreign
127

 
119

 
—

 
—

 
83

 
73

 
45

 
46

 
—

 
—

Other fixed income
64

 
51

 
—

 
—

 
57

 
46

 
7

 
5

 
—

 
—

Equity securities
256

 
228

 
13

 
14

 
242

 
214

 
—

 
—

 
—

 
—

Cash and cash equivalents
28

 
13

 
—

 
—

 
28

 
13

 
—

 
—

 
—

 
—

Real estate
26

 
17

 
—

 
—

 
—

 
—

 
26

 
17

 
—

 
—

Insurance contracts
98

 
102

 
—

 
—

 
—

 
—

 
—

 
—

 
98

 
102

Other
62

 
57

 
—

 
—

 
47

 
43

 
15

 
14

 
—

 
—

Fair value of plan assets
$
678

 
$
624

 
$
13

 
$
14

 
$
459

 
$
391

 
$
108

 
$
119

 
$
98

 
$
102


(A)
As per applicable disclosure requirements, certain investments that were measured at net asset value per share or its equivalent have not been categorized within the fair value hierarchy. Values of such assets are based on the corroborated net asset value provided by the fund administrator.
Pension Plans | Foreign Plans  
Changes in Fair Value Pension Assets Measured Using Level 3 Inputs
The following table summarizes the changes, for the years ended September 30, 2017 and 2016, in the fair value of international pension assets measured using Level 3 inputs:
(Millions of dollars)
Insurance
Contracts
Balance at September 30, 2015
$
90

Actual return on plan assets:
 
Relating to assets held at September 30, 2015
8

Purchases, sales and settlements, net
2

Exchange rate changes
1

Balance at September 30, 2016
$
102

Actual return on plan assets:
 
Relating to assets held at September 30, 2016
1

Purchases, sales and settlements, net
(11
)
Transfers in from other categories
1

Exchange rate changes
4

Balance at September 30, 2017
$
98