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Benefit Plans (Tables)
 12 Months Ended
Sep. 30, 2014
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)    2014     2013     2012     2014     2013     2012  

Service cost

    $ 71      $ 84      $ 75      $ 3      $ 6      $ 6   

Interest cost

      93        87        91        9        10        13   

Expected return on plan assets

      (126 )      (116 )      (104 )      —        —        —   

Amortization of prior service credit

      (15 )      (13 )      (11 )      (4 )      (1 )      (1 ) 

Amortization of loss

      49        75        56        2        4        5   

Curtailment/settlement loss

      3        6        20        —        —        (1 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net pension and postretirement cost

    $ 74      $ 123      $ 128      $ 10      $ 19      $ 21   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
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)    2014     2013         2014             2013      

Change in benefit obligation:

         

Beginning obligation

    $ 2,076      $ 2,308      $ 243      $ 267   

Service cost

      71        84        3        6   

Interest cost

      93        87        9        10   

Plan amendments

      (1 )      (23 )      (37 )      —   

Benefits paid

      (142 )      (153 )      (24 )      (28 ) 

Actuarial loss (gain)

      318        (217 )      —        (21 ) 

Settlements

      (7 )      (13 )      —        —   

Other, includes translation

      (42 )      5        6        8   
  

 

 

    

 

 

    

 

 

    

 

 

  

Benefit obligation at September 30

    $ 2,366      $ 2,076      $ 201      $ 243   
  

 

 

    

 

 

    

 

 

    

 

 

  

Change in fair value of plan assets:

         

Beginning fair value

    $ 1,785      $ 1,573      $ —      $ —   

Actual return on plan assets

      119        200        —        —   

Employer contribution

      104        174        —        —   

Benefits paid

      (142 )      (153 )      —        —   

Settlements

      (7 )      (13 )      —        —   

Other, includes translation

      (29 )      3        —        —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Plan assets at September 30

    $ 1,829      $ 1,785      $ —      $ —   
  

 

 

    

 

 

    

 

 

    

 

 

  

Funded Status at September 30:

         

Unfunded benefit obligation

    $ (537 )    $ (292 )    $ (201 )    $ (243 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Amounts recognized in the Consolidated Balance
Sheets at September 30:

         

Other

    $ 3      $ 12      $ —      $ —   

Salaries, wages and related items

      (8 )      (6 )      (16 )      (18 ) 

Long-term Employee Benefit Obligations

      (531 )      (299 )      (184 )      (225 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net amount recognized

    $ (537 )    $ (292 )    $ (201 )    $ (243 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Amounts recognized in Accumulated other
comprehensive (loss) income before income taxes at September 30:

         

Net transition asset

    $ —      $ —      $ —      $ —   

Prior service credit

      119        133        42        9   

Net actuarial loss

      (1,030 )      (774 )      (44 )      (46 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net amount recognized

    $ (911 )    $ (641 )    $ (2 )    $ (37 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  
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)         2014                2013                2014                2013       

Projected benefit obligation

    $ 2,267       $ 1,551       $ 2,324       $ 1,855   

Accumulated benefit obligation

    $ 2,186       $ 1,525         

Fair value of plan assets

    $ 1,738       $ 1,285       $ 1,784       $ 1,551   
Weighted Average Assumptions Determining Pension Plan

The weighted average assumptions used in determining pension plan information were as follows:

 

     2014     2013     2012  

Net Cost

       

Discount rate:

       

U.S. plans(A)

      4.95 %      3.90 %      4.90 %(B) 

Foreign plans

      3.87        3.94        5.26   

Expected return on plan assets:

       

U.S. plans

      7.75        7.75        7.75   

Foreign plans

      5.68        5.68        6.06   

Rate of compensation increase:

       

U.S. plans(A)

      4.25        4.25        4.25   

Foreign plans

      2.46        3.28        3.61   

Benefit Obligation

       

Discount rate:

       

U.S. plans

      4.15 (C)      4.95 (C)      3.90 (A) 

Foreign plans

      3.14        3.87        3.94   

Rate of compensation increase:

       

U.S. plans(A)

      4.25        4.25        4.25   

Foreign plans

      2.49        2.46        3.28   

 

 

(A) Also used to determine other postretirement and postemployment benefit plan information.

 

(B) On November 30, 2011, the Company remeasured its U.S. defined benefit pension plan based upon a 5.10% discount rate compared to the discount rate of 4.90% used on September 30, 2011. All other U.S. plans remained at 4.90%.

 

(C) The discount rates used to determine other postretirement and postemployment benefit plan information in fiscal year 2014 were 3.85% and 3.75%, respectively. The discount rates used in fiscal year 2013 were 4.40% and 4.00%, respectively.
Expected Benefit Payments

Expected benefit payments are as follows:

 

(Millions of dollars)    Pension
Plans		      Other
Postretirement
Benefits		  

2015

    $ 154       $ 16   

2016

      153         16   

2017

      157         16   

2018

      158         16   

2019

      172         16   

2020-2024

      843         71   
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, 2014 and 2013. The categorization of fund investments is based upon the categorization of these funds’ underlying assets.

 

(Millions of dollars)    Total U.S.
Plan Asset
Balances at
September 30,
2014		      Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		      Significant
Other
Observable
Inputs (Level 2)		      Significant
Unobservable
Inputs (Level 3)		  

Fixed Income:

            

Mortgage and asset-backed securities

    $ 150       $         —       $ 150       $         —   

Corporate bonds

      213         105         108         —   

Government and agency-U.S.

      153         124         29         —   

Government and agency-Foreign

      126         74         51         —   

Equity securities

      393         56         337         —   

Cash and cash equivalents

      26         26         —         —   

Other

      193         96         93         4   
  

 

 

     

 

 

     

 

 

     

 

 

  

Fair value of plan assets

    $ 1,255       $ 483       $ 768       $ 4   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(Millions of dollars)    Total U.S.
Plan Asset
Balances at
September 30,
2013		      Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		      Significant
Other
Observable
Inputs (Level 2)		      Significant
Unobservable
Inputs (Level 3)		  

Fixed Income:

            

Mortgage and asset-backed securities

    $ 174       $ —       $ 174       $     —   

Corporate bonds

      217         102         115         —   

Government and agency-U.S.

      142         97         46         —   

Government and agency-Foreign

      122         74         49         —   

Equity securities

      384         62         322         —   

Cash and cash equivalents

      3         3         —         —   

Other

      193         97         84         12   
  

 

 

     

 

 

     

 

 

     

 

 

  

Fair value of plan assets

    $ 1,235       $ 435       $ 788       $ 12   
  

 

 

     

 

 

     

 

 

     

 

 

  
Fair Value Measurements of Foreign Plan Assets

The following table provides the fair value measurements of foreign plan assets, as well as the measurement techniques and inputs utilized to measure fair value of these assets, at September 30, 2014 and 2013.

 

(Millions of dollars)    Total Foreign
Plan Asset
Balances at
September 30,
2014		      Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		      Significant
Other
Observable
Inputs (Level 2)		      Significant
Unobservable
Inputs (Level 3)		  

Fixed Income:

            

Corporate bonds

    $ 35       $ —       $ 35       $ —   

Government and agency-U.S.

      3         3         —         —   

Government and agency-Foreign

      100         59         41         —   

Other fixed income

      47         46         1         —   

Equity securities

      237         221         17         —   

Cash and cash equivalents

      15         15         —         —   

Real estate

      10         —         10         —   

Insurance contracts

      78         —         —         78   

Other

      47         12         35         —   
  

 

 

     

 

 

     

 

 

     

 

 

  

Fair value of plan assets

    $ 574       $ 357       $ 138       $ 78   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

(Millions of dollars)    Total Foreign
Plan Asset
Balances at
September 30,
2013		      Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		      Significant
Other
Observable
Inputs (Level 2)		      Significant
Unobservable
Inputs (Level 3)		  

Fixed Income:

            

Corporate bonds

    $ 46       $ —       $ 46       $ —   

Government and agency-U.S.

      3         3         —         —   

Government and agency-Foreign

      82         47         36         —   

Equity securities

      309         294         14         —   

Cash and cash equivalents

      17         17         —         —   

Real estate

      11         —         9         1   

Insurance contracts

      81         —         —         81   
  

 

 

     

 

 

     

 

 

     

 

 

  

Fair value of plan assets

    $ 549       $ 361       $ 105       $ 83   
  

 

 

     

 

 

     

 

 

     

 

 

  
Postemployment Benefit Costs

Postemployment benefit costs for the years ended September 30 included the following components:

 

(Millions of dollars)    2014     2013     2012  

Service cost

    $ 20      $ 22      $ 16   

Interest cost

      7        6        6   

Amortization of prior service credit

      (2 )      (2 )      (2 ) 

Amortization of loss

      21        21        16   
  

 

 

    

 

 

    

 

 

  

Net postemployment benefit cost

    $ 47      $ 47      $ 36   
  

 

 

    

 

 

    

 

 

  
Changes in Benefit Obligation for Postemployment Benefits

The changes in benefit obligation for these postemployment benefits were as follows:

 

     Postemployment benefits  
(Millions of dollars)        2014             2013      

Change in benefit obligation:

     

Beginning obligation

    $ 186      $ 163   

Service cost

      20        22   

Interest cost

      7        6   

Benefits paid

      (30 )      (29 ) 

Actuarial loss

      1        25   
  

 

 

    

 

 

  

Benefit obligation at September 30

    $ 184      $ 186   
  

 

 

    

 

 

  
U.S. Plans [Member]
  
Changes in Fair Value Pension Assets Measured Using Level 3 Inputs

The following table summarizes the changes, for the years ended September 30, 2014 and 2013, in the fair value of U.S. pension assets measured using Level 3 inputs:

 

(Millions of dollars)    Other
(Hedge
Funds)		  

Balance at September 30, 2012

    $ —   

Actual return on plan assets:

   

Relating to assets held at September 30, 2012

      —   

Purchases, sales and settlements, net

      12   

Transfers (out) in from other categories

      —   

Exchange rate changes

      —   
  

 

 

  

Balance at September 30, 2013

    $ 12   

Actual return on plan assets:

   

Relating to assets held at September 30, 2013

      1   

Purchases, sales and settlements, net

      4   

Transfers (out) in from other categories

      (13 ) 

Exchange rate changes

      —   
  

 

 

  

Balance at September 30, 2014

    $ 4   
  

 

 

  
Foreign Plans [Member]
  
Changes in Fair Value Pension Assets Measured Using Level 3 Inputs

The following table summarizes the changes, for the years ended September 30, 2014 and 2013, in the fair value of foreign pension assets measured using Level 3 inputs:

 

(Millions of dollars)    Real
Estate		     Insurance
Contracts		     Total
Assets		  

Balance at September 30, 2012

    $ 3      $ 80      $ 83   

Actual return on plan assets:

       

Relating to assets held at September 30, 2012

      —        (1 )      (1 ) 

Purchases, sales and settlements, net

      (2 )      6        4   

Transfers (out) in from other categories

      —        (5 )      (5 ) 

Exchange rate changes

      —        1        1   
  

 

 

    

 

 

    

 

 

  

Balance at September 30, 2013

    $ 1      $ 81      $ 83   

Actual return on plan assets:

       

Relating to assets held at September 30, 2013

      —        1        1   

Purchases, sales and settlements, net

      —        3        3   

Transfers (out) in from other categories

      (1 )      (2 )      (3 ) 

Exchange rate changes

      —        (6 )      (6 ) 
  

 

 

    

 

 

    

 

 

  

Balance at September 30, 2014

    $ —      $ 78      $ 78