Old COPPER Company, Inc. - 10-K filing on 2018-03-19

Retirement Benefit Plans (Tables)

12 Months Ended

Feb. 03, 2018

Retirement and other benefits include:

Defined Benefit Pension Plans

Primary Pension Plan – funded

Supplemental retirement plans – unfunded

Other Benefit Plans

Postretirement benefits – medical and dental

Defined contribution plans:

401(k) savings, profit-sharing and stock ownership plan

Deferred compensation plan



($ in millions)
Primary Pension Plan	2017			2016			2015
Service cost	$	42		$	55		$	69
Interest cost	143			153			196
Expected return on plan assets	(216		)	(215		)	(357		)
Actuarial loss/(gain)	—			—			52
Amortization of prior service cost/(credit)	7			8			8
Settlement expense	13			—			180
Other	—			—			6
Net periodic benefit expense/(income)	$	(11	)	$	1		$	154

Supplemental Pension Plans
Service cost	$	—		$	—		$	—
Interest cost	7			7			7
Actuarial loss/(gain)	25			11			1
Amortization of prior service cost/(credit)	—			—			—
Net periodic benefit expense/(income)	$	32		$	18		$	8

Primary and Supplemental Pension Plans Total
Service cost	$	42		$	55		$	69
Interest cost	150			160			203
Expected return on plan assets	(216		)	(215		)	(357		)
Actuarial loss/(gain)	25			11			53
Amortization of prior service cost/(credit)	7			8			8
Settlement expense	13			—			180
Other	—			—			6
Net periodic benefit expense/(income)	$	21		$	19		$	162



	Primary Pension Plan								Supplemental Plans
($ in millions)	2017				2016				2017				2016
Change in PBO
Beginning balance	$	3,473			$	3,327			$	152			$	176
Service cost	42				55				—				—
Interest cost	143				153				7				7
Special termination benefits ⁽¹⁾	88				—				24				—
Settlements	(217		)		—				—				—
Curtailments	(27		)		—				3				—
Actuarial loss/(gain)	126				151				31				10
Benefits (paid)	(161		)		(213		)		(35		)		(41		)
Balance at measurement date	$	3,467			$	3,473			$	182			$	152

Change in fair value of plan assets
Beginning balance	$	3,455			$	3,287			$	—			$	—
Company contributions	—				—				35				41
Actual return on assets ⁽²⁾	451				381				—				—
Settlements	(217		)		—				—				—
Benefits (paid)	(161		)		(213		)		(35		)		(41		)
Balance at measurement date	$	3,528			$	3,455			$	—			$	—
Funded status of the plan	$	61		⁽³⁾	$	(18	)	⁽³⁾	$	(182	)	⁽⁴⁾	$	(152	)	⁽⁴⁾


(1)	See Note 17 for VERP charges classified in Restructuring and management transition.


(2)	Includes plan administrative expenses.


(3)	$61 million in 2017 was included in Prepaid pension and $18 million in 2016 was included in Other liabilities in the Consolidated Balance Sheets.


(4)	$29 million in 2017 and $26 million in 2016 were included in Other accounts payable and accrued expenses on the Consolidated Balance Sheets, and the remaining amounts were included in Other liabilities.


(1)	In 2018, approximately $7 million for the Primary Pension Plan is expected to be amortized from Accumulated other comprehensive income/(loss) and into the Consolidated Statement of Operations.



	Investments at Fair Value at February 3, 2018
($ in millions)	Level 1 ⁽¹⁾		Level 2 ⁽¹⁾			Level 3		Total
Assets
Cash	$	18	$	—		$	—	$	18
Common collective trusts	—		100			—		100
Cash and cash equivalents total	18		100			—		118
Common collective trusts – international	—		155			—		155
Equity securities – domestic	426		—			—		426
Equity securities – international	160		—			—		160
Equity securities total	586		155			—		741
Common collective trusts	—		904			—		904
Corporate bonds	—		982			10		992
Swaps	—		848			—		848
Government securities	—		187			—		187
Mortgage backed securities	—		6			—		6
Other fixed income	—		143			4		147
Fixed income total	—		3,070			14		3,084
Public REITs	38		—			—		38
Real estate total	38		—			—		38
Total investment assets at fair value	$	642	$	3,325		$	14	$	3,981
Liabilities
Swaps	$	—	$	(837	)	$	—	$	(837	)
Other fixed income	—		(5		)	—		(5		)
Fixed income total	—		(842		)	—		(842		)
Total liabilities at fair value	$	—	$	(842	)	$	—	$	(842	)
Accounts payable, net								(47		)
Investments at Net Asset Value (NAV) ⁽²⁾
Private equity								$	191
Private real estate								62
Hedge funds								183
Total investments at NAV								$	436
Total net assets								$	3,528


(1)	There were no significant transfers in or out of level 1 or 2 investments.


(2)	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 Consolidated Balance Sheet.



	Investments at Fair Value at January 28, 2017
($ in millions)	Level 1 ⁽¹⁾		Level 2 ⁽¹⁾			Level 3		Total
Assets
Cash	$	2	$	—		$	—	$	2
Common collective trusts	—		88			—		88
Cash and cash equivalents total	2		88			—		90
Common collective trusts – international	—		148			—		148
Equity securities – domestic	421		—			—		421
Equity securities – international	113		—			—		113
Equity securities total	534		148			—		682
Common collective trusts	—		864			—		864
Corporate bonds	—		919			7		926
Swaps	—		934			—		934
Government securities	—		185			—		185
Mortgage backed securities	—		4			—		4
Other fixed income	—		149			—		149
Fixed income total	—		3,055			7		3,062
Public REITs	37		—			—		37
Private real estate	—		15			—		15
Real estate total	37		15			—		52
Total investment assets at fair value	$	573	$	3,306		$	7	$	3,886
Liabilities
Swaps	$	—	$	(928	)	$	—	$	(928	)
Other fixed income	—		(6		)	—		(6		)
Fixed income total	—		(934		)	—		(934		)
Total liabilities at fair value	$	—	$	(934	)	$	—	$	(934	)
Accounts payable, net								(76		)
Investments at Net Asset Value (NAV) ⁽²⁾
Private equity								$	220
Private real estate								135
Hedge funds								224
Total investments at NAV								$	579
Total net assets								$	3,455


(1)	There were no significant transfers in or out of level 1 or 2 investments.


(2)	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 Consolidated Balance Sheet.



	2017
($ in millions)	Corporate Loans		Corporate Bonds
Balance, beginning of year	$	—	$	7
Transfers, net	—		—
Realized gains/(loss)	—		(7		)
Unrealized (losses)/gains	—		6
Purchases and issuances	4		6
Sales, maturities and settlements	—		(2		)
Balance, end of year	$	4	$	10



	2016
($ in millions)	Corporate Loans			Corporate Bonds
Balance, beginning of year	$	3		$	5
Realized gains/(loss)	—			3
Unrealized (losses)/gains	—			(4		)
Purchases and issuances	—			15
Sales, maturities and settlements	(3		)	(12		)
Balance, end of year	$	—		$	7



	2017 Target	Plan Assets
Asset Class	Allocation Ranges	2017		2016
Equity	15% - 35%	23	%	22	%
Fixed income	55% - 70%	62	%	60	%
Real estate, cash and other investments	10% - 20%	15	%	18	%
Total		100	%	100	%



	2017			2016		2015
Expected return on plan assets	6.50	%		6.75	%	6.75	%
Discount rate	4.40	%	⁽¹⁾	4.73	%	3.87	%
Salary increase	3.9	%		3.9	%	3.5	%


(1)	As of January 31, 2017. The Primary Pension Plan was remeasured as of March 31, 2017 using a discount rate of 4.34% and as of October 31, 2017 using a discount rate of 3.94%.