XML 54 R40.htm IDEA: XBRL DOCUMENT v3.8.0.1
Employee Benefit Plans (Tables)
12 Months Ended
Sep. 30, 2017
Compensation And Retirement Disclosure [Abstract]  
Change in Benefit Obligations and Change in Plan Assets

The following provides information about projected benefit obligations, plan assets, the funded status and weighted-average assumptions of the defined benefit pension and postretirement benefit plans:

 

 

 

Years Ended September 30

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

Pension Benefits

 

 

Postretirement Benefits

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

 

(In millions)

 

Change in Benefit Obligations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit obligation at beginning of

   year

 

$

175

 

 

$

400

 

 

$

170

 

 

$

348

 

 

$

37

 

 

$

20

 

 

$

38

 

 

$

15

 

Service cost

 

 

1

 

 

 

10

 

 

 

1

 

 

 

8

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest cost

 

 

4

 

 

 

6

 

 

 

4

 

 

 

8

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

1

 

Plan participants’ contribution

 

 

 

 

 

2

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange rate

   changes

 

 

 

 

 

16

 

 

 

 

 

 

(9

)

 

 

 

 

 

 

 

 

 

 

 

(1

)

(Gain) Loss from changes in actuarial

   assumptions and plan experience

 

 

(7

)

 

 

(42

)

 

 

14

 

 

 

62

 

 

 

(2

)

 

 

(1

)

 

 

1

 

 

 

5

 

Benefits paid

 

 

(7

)

 

 

(12

)

 

 

(7

)

 

 

(14

)

 

 

(3

)

 

 

 

 

 

(3

)

 

 

 

Settlements or curtailments

 

 

(5

)

 

 

(3

)

 

 

(6

)

 

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

Benefit obligation at end of year

 

$

160

 

 

$

376

 

 

$

175

 

 

$

400

 

 

$

33

 

 

$

20

 

 

$

37

 

 

$

20

 

 

 

 

Years Ended September 30

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

Pension Benefits

 

 

Postretirement Benefits

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

 

(In millions)

 

Change in Plan Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of plan assets at beginning

   of year

 

$

157

 

 

$

305

 

 

$

153

 

 

$

279

 

 

$

 

 

$

 

 

$

 

 

$

 

Actual return on plan assets

 

 

12

 

 

 

6

 

 

 

18

 

 

 

43

 

 

 

 

 

 

 

 

 

 

 

 

 

Employer contribution

 

 

1

 

 

 

9

 

 

 

 

 

 

10

 

 

 

3

 

 

 

 

 

 

3

 

 

 

1

 

Plan participants’ contribution

 

 

 

 

 

2

 

 

 

 

 

 

2

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange rate

   changes

 

 

 

 

 

12

 

 

 

 

 

 

(11

)

 

 

 

 

 

 

 

 

 

 

 

 

Benefits paid

 

 

(7

)

 

 

(12

)

 

 

(7

)

 

 

(14

)

 

 

(3

)

 

 

 

 

 

(3

)

 

 

(1

)

Settlements

 

 

(6

)

 

 

(3

)

 

 

(6

)

 

 

(3

)

 

 

 

 

 

 

 

 

 

 

 

 

Expenses paid from assets

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

(1

)

 

 

 

 

 

 

 

 

 

 

 

 

Fair value of plan assets at end

   of year

 

$

156

 

 

$

318

 

 

$

157

 

 

$

305

 

 

$

 

 

$

 

 

$

 

 

$

 

Funded status

 

$

(4

)

 

$

(58

)

 

$

(18

)

 

$

(95

)

 

$

(33

)

 

$

(20

)

 

$

(37

)

 

$

(20

)

Recognized liability

 

$

(4

)

 

$

(58

)

 

$

(18

)

 

$

(95

)

 

$

(33

)

 

$

(20

)

 

$

(37

)

 

$

(20

)

 

Assumptions Used to Determine Pension Benefit Obligations and Periodic Benefit Costs, Postretirement Benefit Obligations and Net Costs

Pension Assumptions and Strategy

The following assumptions were used to determine the pension benefit obligations and periodic benefit costs as of and for the years ended September 30:

 

 

 

2017

 

 

2016

 

 

2015

 

 

 

Pension Benefits

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

Actuarial assumptions as of the year-end

   measurement date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

3.6

%

 

 

2.4

%

 

 

3.4

%

 

 

1.8

%

 

 

4.2

%

 

 

2.9

%

Rate of increase in compensation

 

N/A

 

 

 

2.7

%

 

N/A

 

 

 

2.8

%

 

N/A

 

 

 

2.8

%

Actuarial assumptions used to determine net

   periodic benefit cost during the year:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate - benefit obligation

 

 

3.4

%

 

 

1.8

%

 

 

4.2

%

 

 

2.9

%

 

 

4.0

%

 

 

3.0

%

Discount rate - service cost

 

N/A

 

 

 

1.8

%

 

N/A

 

 

 

2.8

%

 

N/A

 

 

 

3.0

%

Discount rate - interest cost

 

 

2.7

%

 

 

1.5

%

 

 

3.3

%

 

 

2.4

%

 

 

4.0

%

 

 

3.0

%

Expected long-term rate of return on

   plan assets

 

 

6.8

%

 

 

4.7

%

 

 

7.5

%

 

 

5.1

%

 

 

7.5

%

 

 

5.4

%

Rate of increase in compensation

 

N/A

 

 

 

2.8

%

 

N/A

 

 

 

2.8

%

 

N/A

 

 

 

2.8

%

Postretirement Assumptions and Strategy

The following assumptions were used to determine the postretirement benefit obligations and net costs as of and for the years ended September 30:

 

 

 

2017

 

 

2016

 

 

2015

 

 

 

Postretirement Benefits

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

Actuarial assumptions as of the year-end

   measurement date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate

 

 

3.4

%

 

 

3.1

%

 

 

3.0

%

 

 

2.8

%

 

 

3.7

%

 

 

3.9

%

Initial health care cost trend rate

 

 

7.0

%

 

 

7.1

%

 

 

7.0

%

 

 

6.1

%

 

 

6.5

%

 

 

6.8

%

Actuarial assumptions used to determine

   net cost during the year:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discount rate - benefit obligation

 

 

3.0

%

 

 

2.8

%

 

 

3.7

%

 

 

3.9

%

 

 

3.8

%

 

 

3.9

%

Discount rate - service cost

 

 

2.6

%

 

 

3.2

%

 

 

3.4

%

 

 

4.1

%

 

 

3.8

%

 

 

3.9

%

Discount rate - interest cost

 

 

2.4

%

 

 

2.6

%

 

 

2.8

%

 

 

3.7

%

 

 

3.8

%

 

 

3.9

%

Initial health care cost trend rate

 

 

7.0

%

 

 

6.1

%

 

 

6.5

%

 

 

6.8

%

 

 

7.0

%

 

 

7.1

%

 

Amounts Recognized in Consolidated Balance Sheets

Amounts recognized in the Consolidated Balance Sheets at September 30, 2017 and 2016 related to the Company's defined benefit pension and postretirement benefit plans were as follows:

 

 

 

September 30

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

Pension Benefits

 

 

Postretirement Benefits

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

 

(In millions)

 

Noncurrent assets

 

$

1

 

 

$

12

 

 

$

 

 

$

8

 

 

$

 

 

$

 

 

$

 

 

$

 

Current liabilities

 

$

(1

)

 

$

(1

)

 

$

 

 

$

(1

)

 

$

(3

)

 

$

(1

)

 

$

(3

)

 

$

(1

)

Noncurrent liabilities

 

$

(4

)

 

$

(69

)

 

$

(18

)

 

$

(102

)

 

$

(30

)

 

$

(19

)

 

$

(34

)

 

$

(19

)

 

Amounts Recognized in AOCI

Amounts recognized in AOCI at September 30, 2017 and 2016 related to the Company's defined benefit pension and postretirement benefit plans were as follows:

 

 

 

September 30

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

Pension Benefits

 

 

Postretirement Benefits

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

 

(In millions)

 

Net actuarial (gain) loss

 

$

3

 

 

$

52

 

 

$

12

 

 

$

92

 

 

$

(6

)

 

$

5

 

 

$

(4

)

 

$

6

 

Net prior service credit

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

 

 

(5

)

 

 

 

 

 

(7

)

 

 

 

Balance in accumulated other

   comprehensive income (loss), pretax

 

$

3

 

 

$

51

 

 

$

12

 

 

$

91

 

 

$

(11

)

 

$

5

 

 

$

(11

)

 

$

6

 

 

Estimated Future Benefit Payments

Estimated Future Benefit Payments

The Company expects that the following benefit payments will be made to plan participants in the years from 2018 to 2027:

 

 

 

Pension Benefits

 

 

Postretirement Benefits

 

Years Ended September 30

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

 

(In millions)

 

2018

 

$

13

 

 

$

13

 

 

$

3

 

 

$

1

 

2019

 

$

12

 

 

$

14

 

 

$

3

 

 

$

1

 

2020

 

$

10

 

 

$

13

 

 

$

3

 

 

$

1

 

2021

 

$

10

 

 

$

17

 

 

$

3

 

 

$

1

 

2022

 

$

10

 

 

$

16

 

 

$

3

 

 

$

1

 

2023 - 2027

 

$

50

 

 

$

86

 

 

$

12

 

 

$

5

 

 

Net Periodic Defined Benefit Pension and Other Postretirement Benefit Costs

Net periodic defined benefit pension and other postretirement benefit costs include the following components:

 

 

 

Years Ended September 30

 

 

 

2017

 

 

2016

 

 

2015

 

 

2017

 

 

2016

 

 

2015

 

 

 

Pension Benefits

 

 

Postretirement Benefits

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

 

(In millions)

 

Service cost

 

$

1

 

 

$

10

 

 

$

1

 

 

$

8

 

 

$

1

 

 

$

9

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Interest cost

 

 

4

 

 

 

6

 

 

 

4

 

 

 

8

 

 

 

7

 

 

 

11

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

1

 

 

 

2

 

 

 

1

 

Expected return on plan

   assets

 

 

(9

)

 

 

(14

)

 

 

(10

)

 

 

(14

)

 

 

(11

)

 

 

(14

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of prior

   service cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

(3

)

 

 

 

 

 

(3

)

 

 

 

 

 

(4

)

 

 

 

Net losses

 

 

 

 

 

5

 

 

 

 

 

 

3

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Settlements or

   Curtailments cost

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

18

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

 

 

 

Net periodic (benefit) cost

 

$

(4

)

 

$

7

 

 

$

(5

)

 

$

6

 

 

$

(3

)

 

$

31

 

 

$

(2

)

 

$

1

 

 

$

(3

)

 

$

1

 

 

$

(2

)

 

$

1

 

 

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

Other changes in plan assets and benefit obligations recognized in Other comprehensive income (loss) are as follows:

 

 

 

Years Ended September 30

 

 

 

2017

 

 

2016

 

 

2015

 

 

2017

 

 

2016

 

 

2015

 

 

 

Pension Benefits

 

 

Postretirement Benefits

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

 

(In millions)

 

Net (gains) losses

 

$

(9

)

 

$

(35

)

 

$

7

 

 

$

31

 

 

$

14

 

 

$

(8

)

 

$

(3

)

 

$

(1

)

 

$

2

 

 

$

5

 

 

$

1

 

 

$

 

Prior service (credit) cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11

)

 

 

 

Amortization of prior

   service credit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

 

 

 

 

 

3

 

 

 

 

 

 

 

 

 

 

Amortization of prior

   unrecognized loss

 

 

 

 

 

(5

)

 

 

 

 

 

(3

)

 

 

 

 

 

(4

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

 

 

 

(27

)

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

 

 

 

 

Net changes recognized in

   Total other comprehensive

   (income) loss (1)

 

$

(9

)

 

$

(40

)

 

$

7

 

 

$

27

 

 

$

14

 

 

$

(41

)

 

$

 

 

$

(1

)

 

$

6

 

 

$

5

 

 

$

(6

)

 

$

 

 

(1)

The tax impact on pension and other postretirement benefit liability adjustments arising during the period was a tax provision of $7 million, tax benefit of $7 million, and tax provision of $5 million for fiscal years 2017, 2016, and 2015, respectively.

Sensitivity Analysis

A one percentage point change in the 2017 assumed health care cost trend rate would have an immaterial impact to the aggregate of the service and interest cost components of the net periodic postretirement benefit and would have the following effect on the postretirement benefit obligation:

 

 

 

1-Percentage-Point

 

 

 

Increase

 

 

Decrease

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

 

 

(In millions)

 

Effect on postretirement benefit obligation

 

$

 

 

$

3

 

 

$

 

 

$

(3

)

 

Defined Benefit Pension Plans Weighted-Average Asset Allocations

The Company’s defined benefit pension plans weighted-average asset allocations at September 30, 2017 and 2016, by asset category, are as follows:

 

 

 

September 30

 

 

 

2017

 

 

2016

 

 

 

Pension Assets

 

 

 

U.S.

 

 

Foreign

 

 

U.S.

 

 

Foreign

 

Equity securities

 

 

48

%

 

 

39

%

 

 

50

%

 

 

39

%

Debt securities

 

 

5

%

 

 

53

%

 

 

50

%

 

 

53

%

Cash and other securities(1)

 

 

47

%

 

 

8

%

 

 

%

 

 

8

%

Total

 

 

100

%

 

 

100

%

 

 

100

%

 

 

100

%

 

(1)

Prior to year-end, within the U.S. defined benefit pension plan, the Company transitioned the majority of its fixed income assets held in a mutual fund investment to a separately managed account.  This transition process temporarily resulted in a larger percentage of the assets being held in cash or cash equivalents on September 30, 2017.

Fair Value of Pension Plan Assets by Asset Category

The fair value of the Company’s pension plan assets at September 30, 2017 and 2016 by asset category is as follows:

 

 

 

September 30

 

 

 

2017

 

 

2016

 

 

 

Quoted Prices in

Active Markets

for Identical

Assets

(Level 1)

 

 

Significant

Observable

Inputs

(Level 2)

 

 

Total

 

 

Quoted Prices in

Active Markets

for Identical

Assets

(Level 1)

 

 

Significant

Observable

Inputs

(Level 2)

 

 

Total

 

 

 

(In millions)

 

Cash

 

$

1

 

 

$

 

 

$

1

 

 

$

1

 

 

$

 

 

$

1

 

Direct investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. equity securities

 

 

 

 

 

 

 

 

 

 

 

18

 

 

 

 

 

 

18

 

Total direct investments

 

 

 

 

 

 

 

 

 

 

 

18

 

 

 

 

 

 

18

 

Investment funds:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity funds(1)

 

 

75

 

 

 

124

 

 

 

199

 

 

 

59

 

 

 

119

 

 

 

178

 

Fixed income funds(2)

 

 

8

 

 

 

168

 

 

 

176

 

 

 

79

 

 

 

162

 

 

 

241

 

Real estate funds(3)

 

 

 

 

 

9

 

 

 

9

 

 

 

1

 

 

 

8

 

 

 

9

 

Cash equivalent funds

 

 

74

 

 

 

 

 

 

74

 

 

 

 

 

 

1

 

 

 

1

 

Total investment funds

 

 

157

 

 

 

301

 

 

 

458

 

 

 

139

 

 

 

290

 

 

 

429

 

Alternative investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance contracts(4)

 

 

 

 

 

15

 

 

 

15

 

 

 

 

 

 

14

 

 

 

14

 

Total alternative investments

 

 

 

 

 

15

 

 

 

15

 

 

 

 

 

 

14

 

 

 

14

 

Total pension plan assets

 

$

158

 

 

$

316

 

 

$

474

 

 

$

158

 

 

$

304

 

 

$

462

 

 

(1)

The equity funds asset class includes funds that invest in U.S. equities as well as equity securities issued by companies incorporated, listed or domiciled in countries in developed and/or emerging markets. These companies may be in the small-, mid- or large-cap categories.

(2)

The fixed income funds asset class includes investments in high quality funds. High quality fixed income funds primarily invest in low risk U.S. and non-U.S. government securities, investment-grade corporate bonds, mortgages and asset-backed securities. A significant portion of the fixed income funds include investment in long-term bond funds.

(3)

The real estate funds asset class includes funds that primarily invest in entities which are principally engaged in the ownership, acquisition, development, financing, sale and/or management of income-producing real estate properties, both commercial and residential. These funds typically seek long-term growth of capital and current income that is above average relative to public equity funds.

(4)

Insurance contracts held by the Company’s non-U.S. plans are issued by well-known, highly rated insurance companies.