| Pension Benefits [Text Block] |
PENSION BENEFITS The Company sponsors a number of U.S. and foreign pension plans to provide retirement benefits for its employees. The majority of these plans are funded or unfunded defined benefit plans, although the Company does participate in a limited number of multiemployer or other defined contribution plans for certain employee groups. See Note 11 for more information regarding the Company’s participation in multiemployer plans. Defined benefits for salaried employees are generally based on salary and years of service, while union employee benefits are generally a negotiated amount for each year of service. Beginning in 2015, the Company used a December 31 measurement date for these plans and, when necessary, adjusts for plan contributions and significant events between December 31 and its fiscal year-end. Obligations and funded status The aggregate change in projected benefit obligation, plan assets, and funded status is presented in the following tables. | | | | | | | | | | (millions) | | 2015 | | 2014 | Change in projected benefit obligation | | | | | Beginning of year | | $ | 5,570 |
| | $ | 4,888 |
| Service cost | | 114 |
| | 106 |
| Interest cost | | 206 |
| | 225 |
| Plan participants’ contributions | | 2 |
| | 2 |
| Amendments | | 25 |
| | 4 |
| Actuarial (gain)loss | | (191 | ) | | 754 |
| Benefits paid | | (262 | ) | | (281 | ) | Curtailment and special termination benefits | | (2 | ) | | — |
| Other | | 4 |
| | 3 |
| Foreign currency adjustments | | (150 | ) | | (131 | ) | End of year | | $ | 5,316 |
| | $ | 5,570 |
| Change in plan assets | | | | | Fair value beginning of year | | $ | 5,028 |
| | $ | 5,014 |
| Actual return on plan assets | | (102 | ) | | 390 |
| Employer contributions | | 19 |
| | 37 |
| Plan participants’ contributions | | 2 |
| | 2 |
| Benefits paid | | (235 | ) | | (261 | ) | Other | | 4 |
| | 3 |
| Foreign currency adjustments | | (132 | ) | | (157 | ) | Fair value end of year | | $ | 4,584 |
| | $ | 5,028 |
| Funded status | | $ | (732 | ) | | $ | (542 | ) | Amounts recognized in the Consolidated Balance Sheet consist of | | | | | Other assets | | $ | 231 |
| | $ | 250 |
| Other current liabilities | | (17 | ) | | (15 | ) | Other liabilities | | (946 | ) | | (777 | ) | Net amount recognized | | $ | (732 | ) | | $ | (542 | ) | Amounts recognized in accumulated other comprehensive income consist of | | | | | Prior service cost | | $ | 67 |
| | $ | 59 |
| Net amount recognized | | $ | 67 |
| | $ | 59 |
|
The accumulated benefit obligation for all defined benefit pension plans was $4.9 billion and $5.1 billion at January 2, 2016 and January 3, 2015, respectively. Information for pension plans with accumulated benefit obligations in excess of plan assets were: | | | | | | | | | | (millions) | | 2015 | | 2014 | Projected benefit obligation | | $ | 3,769 |
| | $ | 3,958 |
| Accumulated benefit obligation | | $ | 3,574 |
| | $ | 3,683 |
| Fair value of plan assets | | $ | 2,835 |
| | $ | 3,179 |
|
Expense The components of pension expense are presented in the following table. Pension expense for defined contribution plans relates to certain foreign-based defined contribution plans and multiemployer plans in the United States in which the Company participates on behalf of certain unionized workforces. | | | | | | | | | | | | | | (millions) | | 2015 | | 2014 | | 2013 | Service cost | | $ | 114 |
| | $ | 106 |
| | $ | 133 |
| Interest cost | | 206 |
| | 225 |
| | 203 |
| Expected return on plan assets | | (399 | ) | | (415 | ) | | (359 | ) | Amortization of unrecognized prior service cost | | 13 |
| | 14 |
| | 16 |
| Recognized net (gain)loss | | 303 |
| | 782 |
| | (854 | ) | Curtailment and special termination benefits | | (1 | ) | | 4 |
| | 34 |
| Pension (income)expense: | | | | | | | Defined benefit plans | | 236 |
| | 716 |
| | (827 | ) | Defined contribution plans | | 40 |
| | 36 |
| | 35 |
| Total | | $ | 276 |
| | $ | 752 |
| | $ | (792 | ) |
The estimated prior service cost for defined benefit pension plans that will be amortized from accumulated other comprehensive income into pension expense over the next fiscal year is approximately $13 million. The Company and certain of its subsidiaries sponsor 401(k) or similar savings plans for active employees. Expense related to these plans was (in millions): 2015 – $40 million; 2014 – $43 million; 2013 – $41 million. These amounts are not included in the preceding expense table. Company contributions to these savings plans approximate annual expense. Company contributions to multiemployer and other defined contribution pension plans approximate the amount of annual expense presented in the preceding table. Assumptions The worldwide weighted-average actuarial assumptions used to determine benefit obligations were: | | | | | | | | | | | | | 2015 | | 2014 | | 2013 | Discount rate | | 4.1 | % | | 3.9 | % | | 4.7 | % | Long-term rate of compensation increase | | 3.9 | % | | 4.0 | % | | 4.1 | % |
The worldwide weighted-average actuarial assumptions used to determine annual net periodic benefit cost were: | | | | | | | | | | | | | 2015 | | 2014 | | 2013 | Discount rate | | 3.9 | % | | 4.7 | % | | 4.1 | % | Long-term rate of compensation increase | | 4.0 | % | | 4.1 | % | | 4.1 | % | Long-term rate of return on plan assets | | 8.3 | % | | 8.5 | % | | 8.5 | % |
To determine the overall expected long-term rate of return on plan assets, the Company models expected returns over a 20-year investment horizon with respect to the specific investment mix of its major plans. The return assumptions used reflect a combination of rigorous historical performance analysis and forward-looking views of the financial markets including consideration of current yields on long-term bonds, price-earnings ratios of the major stock market indices, and long-term inflation. The U.S. model, which corresponds to approximately 68% of consolidated pension and other postretirement benefit plan assets, incorporates a long-term inflation assumption of 2.5% and an active management premium of 1% (net of fees) validated by historical analysis. Similar methods are used for various foreign plans with invested assets, reflecting local economic conditions. The expected rate of return for 2015 of 8.5% equated to approximately the 57th percentile expectation. Refer to Note 1. At the end of 2014, the Company revised their mortality assumption after considering the Society of Actuaries’ (SOA) updated mortality tables and improvement scale, as well as other mortality information available from the Social Security Administration to develop assumptions aligned with the Company’s expectation of future improvement rates. In determining the appropriate mortality assumptions as of January 2, 2016, the Company considered the SOA's 2015 updated improvement scale and believes its assumption is appropriate. To conduct the annual review of discount rates, the Company selected the discount rate based on a cash-flow matching analysis using Towers Watson’s proprietary RATE:Link tool and projections of the future benefit payments that constitute the projected benefit obligation for the plans. RATE:Link establishes the uniform discount rate that produces the same present value of the estimated future benefit payments, as is generated by discounting each year’s benefit payments by a spot rate applicable to that year. The spot rates used in this process are derived from a yield curve created from yields on the 40th to 90th percentile of U.S. high quality bonds. A similar methodology is applied in Canada and Europe, except the smaller bond markets imply that yields between the 10th and 90th percentiles are preferable. The measurement dates for the defined benefit plans are consistent with the Company’s fiscal year end. Accordingly, the Company selected discount rates to measure the benefit obligations consistent with market indices at year-end. Beginning in 2016, the Company will change the method used to estimate the service and interest costs for pension and postretirement benefits. The new method utilizes a full yield curve approach to estimate service and interest costs by applying specific spot rates along the yield curve used to determine the benefit obligation of relevant projected cash outflows. Historically, the Company utilized a single weighted-average discount rate applied to projected cash outflows. The Company made the change to provide a more precise measurement of service and interest costs by aligning the timing of the plan's liability cash flows to the corresponding spot rate on the yield curve. The change does not impact the measurement of the plan's obligations. The Company has accounted for this change as a change in accounting estimate. Plan assets The Company categorized Plan assets within a three level fair value hierarchy described as follows: Investments stated at fair value as determined by quoted market prices (Level 1) include: Cash and cash equivalents: Value based on cost, which approximates fair value. Corporate stock, common: Value based on the last sales price on the primary exchange. Investments stated at estimated fair value using significant observable inputs (Level 2) include: Cash and cash equivalents: Institutional short-term investment vehicles valued daily. Mutual funds: Valued at the net asset value of shares held by the Plan at year end. Collective trusts: Value based on the net asset value of units held at year end. Bonds: Value based on matrices or models from pricing vendors. Limited partnerships: Value based on the ending net capital account balance at year end. Investments stated at estimated fair value using significant unobservable inputs (Level 3) include: Real estate: Value based on the net asset value of units held at year end. The fair value of real estate holdings is based on market data including earnings capitalization, discounted cash flow analysis, comparable sales transactions or a combination of these methods. Buy-in annuity contracts: Value based on the calculated pension benefit obligation covered by the non-participating annuity contracts at year-end. Bonds: Value based on matrices or models from brokerage firms. A limited number of the investments are in default. The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The Company’s practice regarding the timing of transfers between levels is to measure transfers in at the beginning of the month and transfers out at the end of the month. For the year ended January 2, 2016, the Company had no transfers between Levels 1 and 2. The fair value of Plan assets as of January 2, 2016 summarized by level within the fair value hierarchy are as follows: | | | | | | | | | | | | | | | | | | (millions) | | Total Level 1 | | Total Level 2 | | Total Level 3 | | Total | Cash and cash equivalents | | $ | 83 |
| | $ | 8 |
| | $ | — |
| | $ | 91 |
| Corporate stock, common: | | | | | | | | | Domestic | | 608 |
| | — |
| | — |
| | 608 |
| International | | 109 |
| | — |
| | — |
| | 109 |
| Mutual funds: | | | | | | | | | International equity | | — |
| | 441 |
| | — |
| | 441 |
| Collective trusts: | | | | | | | | | Domestic equity | | — |
| | 411 |
| | — |
| | 411 |
| International equity | | — |
| | 1,130 |
| | — |
| | 1,130 |
| Eurozone sovereign debt | | — |
| | 10 |
| | — |
| | 10 |
| Other international debt | | — |
| | 368 |
| | — |
| | 368 |
| Limited partnerships | | — |
| | 455 |
| | — |
| | 455 |
| Bonds, corporate | | — |
| | 419 |
| | — |
| | 419 |
| Bonds, government | | — |
| | 157 |
| | — |
| | 157 |
| Bonds, other | | — |
| | 49 |
| | — |
| | 49 |
| | | — |
| | — |
| | 135 |
| | 135 |
| Real estate | | — |
| | — |
| | 135 |
| | 135 |
| Other | | — |
| | 60 |
| | 6 |
| | 66 |
| Total | | $ | 800 |
| | $ | 3,508 |
| | $ | 276 |
| | $ | 4,584 |
|
The fair value of Plan assets at January 3, 2015 are summarized as follows: | | | | | | | | | | | | | | | | | | (millions) | | Total Level 1 | | Total Level 2 | | Total Level 3 | | Total | Cash and cash equivalents | | $ | 47 |
| | $ | 44 |
| | $ | — |
| | $ | 91 |
| Corporate stock, common: | | | | | | | | | Domestic | | 556 |
| | — |
| | — |
| | 556 |
| International | | 161 |
| | — |
| | — |
| | 161 |
| Mutual funds: | | | | | | | |
|
| International equity | | — |
| | 393 |
| | — |
| | 393 |
| International debt | | — |
| | — |
| | — |
| | — |
| Collective trusts: | | | | | | | | | Domestic equity | | — |
| | 594 |
| | — |
| | 594 |
| International equity | | — |
| | 1,261 |
| | — |
| | 1,261 |
| Eurozone sovereign debt | | — |
| | 11 |
| | — |
| | 11 |
| Other international debt | | — |
| | 534 |
| | — |
| | 534 |
| Limited partnerships | | — |
| | 475 |
| | — |
| | 475 |
| Bonds, corporate | | — |
| | 519 |
| | — |
| | 519 |
| Bonds, government | | — |
| | 172 |
| | — |
| | 172 |
| Bonds, other | | — |
| | 59 |
| | — |
| | 59 |
| Real estate | | — |
| | — |
| | 130 |
| | 130 |
| Other | | — |
| | 64 |
| | 8 |
| | 72 |
| Total | | $ | 764 |
| | $ | 4,126 |
| | $ | 138 |
| | $ | 5,028 |
|
The Company’s investment strategy for its major defined benefit plans is to maintain a diversified portfolio of asset classes with the primary goal of meeting long-term cash requirements as they become due. Assets are invested in a prudent manner to maintain the security of funds while maximizing returns within the Plan’s investment policy. The investment policy specifies the type of investment vehicles appropriate for the Plan, asset allocation guidelines, criteria for the selection of investment managers, procedures to monitor overall investment performance as well as investment manager performance. It also provides guidelines enabling Plan fiduciaries to fulfill their responsibilities. The current weighted-average target asset allocation reflected by this strategy is: equity securities–66%; debt securities–21%; real estate and other–13%. Investment in Company common stock represented 1.4% and 1.3% of consolidated plan assets at January 2, 2016 and January 3, 2015, respectively. Plan funding strategies are influenced by tax regulations and funding requirements. The Company currently expects to contribute approximately $28 million to its defined benefit pension plans during 2016. Level 3 gains and losses Changes in the fair value of the Plan’s Level 3 assets are summarized as follows: | | | | | | | | | | | | | | | | | | | | | | (millions) | | Bonds, corporate | | Real estate | | | | Other | | Total | | | $ | 1 |
| | $ | 125 |
| | — |
| | $ | 8 |
| | $ | 134 |
| Sales | | (1 | ) | | (1 | ) | | — |
| | — |
| | (2 | ) | Realized and unrealized gain | | — |
| | 23 |
| | — |
| | — |
| | 23 |
| Currency translation | | — |
| | (17 | ) | | — |
| | — |
| | (17 | ) | | | $ | — |
| | $ | 130 |
| | $ | — |
| | $ | 8 |
| | $ | 138 |
| Sales | | — |
| | (5 | ) | | — |
| | (3 | ) | | (8 | ) | Purchases | | — |
| | — |
| | 135 |
| | 3 |
| | 138 |
| Realized and unrealized gain | | — |
| | 16 |
| | — |
| | (1 | ) | | 15 |
| Currency translation | | — |
| | (6 | ) | | — |
| | (1 | ) | | (7 | ) | | | $ | — |
| | $ | 135 |
| | $ | 135 |
| | $ | 6 |
| | $ | 276 |
|
The net change in Level 3 assets includes a gain attributable to the change in unrealized holding gains or losses related to Level 3 assets held at January 2, 2016 and January 3, 2015 totaling $15 million and $23 million, respectively. Benefit payments The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in millions): 2016–$416; 2017–$238; 2018–$243; 2019–$254; 2020–$265; 2021 to 2025–$1,501. |
