Hess 2014 Annual Report Download - page 83

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68
HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
68
regulations. The plans provide defined benefits based on years of service and final average salary. Additionally, the Corporation
maintains an unfunded postretirement medical plan that provides health benefits to certain qualified retirees from ages 55 through 65.
The measurement date for all retirement plans is December 31.
The following table summarizes the Corporation’s benefit obligations and the fair value of plan assets and shows the funded status
of the pension and postretirement medical plans:
Funded Unfunded Postretirement
Pension Plans Pension Plan Medical Plan
2014 2013 2014 2013 2014 2013
(In millions)
Change in benefit obligation
Balance at January 1 .............................................. $ 1,957 $ 2,110 $ 253 $ 234 $ 97 $ 134
Service cost ............................................................ 45 61 12 12 4 4
Interest cost ............................................................ 91 82 9 7 3 3
Actuarial (gain) loss (a) .......................................... 470 (139) 61 28 (4) (4)
Benefit payments (b) .............................................. (77) (69) (57) (20) (6) (5)
Plan curtailments (c) .............................................. (3) (103)
—
(8)
—
(35)
Special termination benefits ................................... 2 5
—
—
—
—
Foreign currency exchange rate changes ............... (35) 10
—
—
—
—
Balance at December 31 .................................... 2,450 1,957 278 253 94 97
Change in fair value of plan assets ..............................
Balance at January 1 .............................................. $ 2,145 $ 1,763 $
—
$
—
$
—
$
—
Actual return on plan assets ................................... 151 292
—
—
—
—
Employer contributions .......................................... 68 146 56 20 6 5
Benefit payments (b) .............................................. (77) (69) (56) (20) (6) (5)
Foreign currency exchange rate changes ............... (36) 13
—
—
—
—
Balance at December 31 .................................... 2,251 2,145
—
—
—
—
Funded status (plan assets greater (less) than benefit
obligations) at December 31 .................................. $ (199) $ 188 $ (278) $ (253) $ (94) $ (97)
Unrecognized net actuarial (gains) losses ................... 859 405 135 108 (5) (2)
(a) The change in discount rate and mortality assumptions in 2014 resulted in total actuarial losses of approximately $330 million and $125 million,
respectively.
(b) Benefit payments include lump-sum settlement payments of $55 million in 2014.
(c) During the first quarter of 2013, the Corporation’s pension and other postretirement plans were impacted by a significant reduction in the expected future
service from active participants due to the Corporation’s announced asset sales program.
Amounts recognized in the Consolidated Balance Sheet at December 31 consisted of the following:
Funded
Pension Plans
Unfunded
Pension Plan
Postretirement
Medical Plan
2014 2013 2014 2013 2014 2013
(In millions)
Pension asset / (accrued benefit liability) .................... $ (199) $ 188 $ (278) $ (253 ) $ (94) $ (97)
Accumulated other comprehensive loss, pre-tax* ....... 859 405 135 108 (5) (2)
* The after-tax deficit reflected in Accumulated other comprehensive income (loss) for these retirement plans was $652 million at December 31, 2014 and
$342 million at December 31, 2013.
The accumulated benefit obligation for the funded defined benefit pension plans was $2,325 million at December 31, 2014 and
$1,873 million at December 31, 2013. The accumulated benefit obligation for the unfunded defined benefit pension plan was
$214 million at December 31, 2014 and $222 million at December 31, 2013.