RETIREMENT PENSION PLANS (Tables)

12 Months Ended

Sep. 30, 2019

Schedule of US Pension Benefit Obligation Expense and Net Expense Assumptions

The following are the significant assumptions used in the measurement of the projected benefit obligation ("PBO") and net periodic pension expense:



	U.S. Plans
	2019			2018	2017
Discount rate	3.10%	-	3.15%	4.30%	3.70%	—	3.75%
Assumed return on plan assets (beginning of the year)	7.75%			7.75%	7.75%

Schedule of Non-US Pension Benefit Obligation Expense and Net Expense Assumptions



	U.K. Plan
	2019	2018	2017
Discount rate	1.80%	2.90%	2.80%
Assumed return on plan assets (beginning of the year)	6.00%	6.00%	6.00%

Rollforward of Pension Liability and Pension Plan Assets

The following table reconciles the change in the PBO, the change in plan assets and amounts included in the Consolidated Balance Sheet for the years ended September 30, 2019 and 2018, respectively (in millions):



	2019									2018
	U.S.			Non- U.S.			Total			U.S.			Non- U.S.			Total
PBO — beginning of year	$	922		$	554		$	1,476		$	1,036		$	599		$	1,635
Interest cost	37			16			53			38			16			54
Actuarial (gain) loss	122			111			233			(70		)	(9		)	(79		)
Prior service cost	—			8			8			—			—			—
Acquisitions	—			1			1			—			—			—
Settlements	—			(3		)	(3		)	—			(18		)	(18		)
Benefit payments	(75		)	(30		)	(105		)	(82		)	(19		)	(101		)
Foreign currency rate changes	—			(36		)	(36		)	—			(15		)	(15		)
PBO — end of year	$	1,006		$	621		$	1,627		$	922		$	554		$	1,476
Change in plan assets
Fair value of assets — beginning of year	$	744		$	702		$	1,446		$	821		$	730		$	1,551
Actual return on plan assets	67			139			206			—			32			32
Employer contributions	5			—			5			5			1			6
Settlements	—			(3		)	(3		)	—			(22		)	(22		)
Benefit payments	(75		)	(30		)	(105		)	(82		)	(19		)	(101		)
Foreign currency rate changes	—			(44		)	(44		)	—			(20		)	(20		)
Fair value of assets — end of year	$	741		$	764		$	1,505		$	744		$	702		$	1,446
Funded status	$	(265	)	$	143		$	(122	)	$	(178	)	$	148		$	(30	)

Schedule of Balance Sheet Classification of Net Pension Liability

Amounts included in the Consolidated Balance Sheet at September 30, 2019 and 2018 are comprised of the following (in millions):



	2019									2018
	U.S.			Non-U.S.			Total			U.S.			Non-U.S.			Total
Non-current assets	$	—		$	149		$	149		$	—		$	152		$	152
Current liabilities	(5		)	—			(5		)	(5		)	—			(5		)
Retirement benefits-non-current	(260		)	(6		)	(266		)	(173		)	(4		)	(177		)
Net amount recognized	$	(265	)	$	143		$	(122	)	$	(178	)	$	148		$	(30	)

Schedule of Pension Costs Recognized in Other Comprehensive Loss

The following tables summarize the amounts included in AOCL net of tax related to pension liabilities as of September 30, 2019 and 2018 and changes recognized in Other Comprehensive Income (Loss) net of tax for the year ended September 30, 2019.



	Net Actuarial Loss
	U.S.			Non-U.S.			Total
Balance at September 30, 2018	$	394		$	184		$	578
Net actuarial loss for the year	113			20			133
Amortization for the year	(20		)	(4		)	(24		)
Deferred tax impact	(20		)	—			(20		)
Balance at September 30, 2019	$	467		$	200		$	667

Balance at September 30, 2017	$	418		$	193		$	611
Net actuarial gain for the year	(11		)	3			(8		)
Amortization for the year	(23		)	(6		)	(29		)
Deferred tax impact	10			—			10
Settlements	—			(6		)	(6		)
Balance at September 30, 2018	$	394		$	184		$	578

Pension and Other Postretirement Benefits

The non-current portion of the pension liability is included in Retirement Benefits in the Consolidated Balance Sheet as follows (in millions):



	September 30,
	2019		2018
Pension liability	$	266	$	177
Retiree medical liability — long term (see Note 22)	56		73
Other	14		12
Total retirement benefits	$	336	$	262

Schedule of Projected Benefit Obligation Accumulated Benefit Obligation and Plan Assets

Additional information is as follows (in millions):



	2019						2018
	ABO Exceeds Assets		Assets Exceed ABO		Total		ABO Exceeds Assets		Assets Exceed ABO		Total
PBO	$	1,012	$	615	$	1,627	$	926	$	550	$	1,476
ABO	1,012		615		1,627		926		550		1,476
Plan Assets	741		764		1,505		744		702		1,446

Schedule of Net Periodic Pension Benefit Costs

The components of net periodic pension expense are as follows (in millions):



	2019			2018			2017
Service cost	$	—		$	—		$	—
Interest cost	53			54			53
Assumed rate of return on plan assets	(97		)	(99		)	(96		)
Amortization of —
Actuarial losses	24			29			30
Settlement loss	—			6			—
Net periodic pension income	$	(20	)	$	(10	)	$	(13	)

Pension Plan Investments Measured at Fair Value by Level Within Fair Value Hierarchy

The fair value of plan assets at September 30, 2019 by asset category is as follows (in millions):



U.S. Plans	2019
Asset Category	Level 1		Level 2		Level 3		Total
Equity investments
U.S. – Large cap	$	38	$	—	$	—	$	38
U.S. – Small cap	15		—		—		15
Private equity	—		—		19		19
International equity	21		—		—		21
Equity investments measured at net asset value ⁽¹⁾	—		—		—		154
Total equity investments	$	74	$	—	$	19	$	247
Fixed income investments
U.S. fixed income	$	3	$	233	$	—	$	236
Emerging fixed income	—		16		—		16
Partnerships fixed income	12		—		—		12
Fixed income investments measured at net asset value ⁽¹⁾	—		—		—		27
Total fixed income	$	15	$	249	$	—	$	291
Alternatives – Partnerships	—		—		86		86
Alternatives – Partnerships measured at net asset value ⁽¹⁾	—		—		—		78
Cash and cash equivalents	—		39		—		39
Total assets at fair value	$	89	$	288	$	105	$	741

Non-U.S. Plans	2019
Asset Category	Level 1		Level 2		Level 3		Total
Equity investments
International equity	$	170	$	—	$	—	$	170
Total equity investments	$	170	$	—	$	—	$	170
Fixed income investments
Other fixed income investments	$	6	$	222	$	—	$	228
Fixed income investments measured at net asset value ⁽¹⁾	—		—		—		189
Total fixed income	$	6	$	222	$	—	$	417
Commingled funds	—		3		—		3
Alternative investments measured at net asset value ⁽¹⁾	—		—		—		124
Real estate measured at net asset value ⁽¹⁾	—		—		—		38
Cash and cash equivalents	—		12		—		12
Total assets at fair value	$	176	$	237	$	—	$	764


⁽¹⁾	In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

The fair value of plan assets at September 30, 2018 by asset category is as follows (in millions):



U.S. Plans	2018
Asset Category	Level 1		Level 2		Level 3		Total
Equity investments
U.S. – Large cap	$	51	$	—	$	—	$	51
U.S. – Small cap	24		—		—		24
Private equity	—		—		17		17
International equity	29		—		—		29
Equity investments measured at net asset value ⁽¹⁾	—		—		—		191
Total equity investments	$	104	$	—	$	17	$	312
Fixed income investments
U.S. fixed income	$	1	$	164	$	—	$	165
Emerging fixed income	—		20		—		20
Partnerships fixed income	13		—		—		13
Fixed income investments measured at net asset value ⁽¹⁾	—		—		—		34
Total fixed income	$	14	$	184	$	—	$	232
Alternatives – Partnerships	—		—		83		83
Alternatives – Partnerships measured at net asset value ⁽¹⁾	—		—		—		85
Cash and cash equivalents	—		32		—		32
Total assets at fair value	$	118	$	216	$	100	$	744

Non-U.S. Plans	2018
Asset Category	Level 1		Level 2		Level 3		Total
Equity investments
International equity	$	171	$	—	$	—	$	171
Total equity investments	$	171	$	—	$	—	$	171
Fixed income investments
Other fixed income investments	$	5	$	145	$	—	$	150
Fixed income investments measured at net asset value ⁽¹⁾	—		—		—		194
Total fixed income	$	5	$	145	$	—	$	344
Commingled funds	—		5		—		5
Alternative investments measured at net asset value ⁽¹⁾	—		—		—		137
Real estate measured at net asset value⁽¹⁾	—		—		—		41
Cash and cash equivalents	—		4		—		4
Total assets at fair value	$	176	$	154	$	—	$	702


⁽¹⁾	In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.

Changes in Level 3, Pension Plan Investments

The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2019 (in millions):



U.S. Plans	2019
	Fair Value at October 1, 2018		Return on Plan Assets: Attributable to Assets Held at September 30, 2019		Purchases		Settlements			Net Transfers Into (Out of) Level 3		Fair Value at September 30, 2019
Asset Category
Private equity	$	17	$	2	$	—	$	—		$	—	$	19
Alternatives –
Partnerships	83		4		—		(1		)	—		86
Total Level 3 fair value	$	100	$	6	$	—	$	(1	)	$	—	$	105

The following table summarizes the changes in Level 3 pension plan assets measured at fair value on a recurring basis for the year ended September 30, 2018 (in millions):



U.S. Plans	2018
	Fair Value at October 1, 2017		Return on Plan Assets: Attributable to Assets Held at September 30, 2018			Purchases		Settlements		Net Transfers Into (Out of) Level 3		Fair Value at September 30, 2018
Asset Category
Private equity	$	19	$	(3	)	$	1	$	—	$	—	$	17
Alternatives –
Partnerships	77		6			—		—		—		83
Total Level 3 fair value	$	96	$	3		$	1	$	—	$	—	$	100

Pension Plan Estimated Future Contributions and Benefit Payments

Information about the expected cash flows for the U.S. and non-U.S. pension plans is as follows (in millions):



	U.S.		Non U.S.		Total
Expected employer contributions:
Fiscal 2020	$	5	$	1	$	6
Expected benefit payments:
Fiscal 2020	71		30		101
Fiscal 2021	70		30		100
Fiscal 2022	70		30		100
Fiscal 2023	67		30		97
Fiscal 2024	67		30		97
Fiscal 2025-2029	308		152		460