United states securities and exchange commission

NOTE 18 - NONCONTROLLING INTERESTS

Ownership interests in the Company's subsidiaries held by parties other than the Company are presented separately from the Company's equity in the consolidated balance sheets as "Noncontrolling interests." The amount of consolidated net income attributable to the Company and the noncontrolling interests are both presented on the face of the consolidated statements of income.
The following table summarizes the activity for equity attributable to noncontrolling interests in the years ended December 31, 2017 , 2016 and 2015 :

Noncontrolling Interests
In millions						2017			2016			2015
Balance at Jan 1						$	1,242		$	809		$	931
Net income attributable to noncontrolling interests						132			86			98
Distributions to noncontrolling interests 1						(116		)	(123		)	(76		)
Capital contributions 2						—			—			38
Purchases of noncontrolling interests 3						—			—			(42		)
Transfers of redeemable noncontrolling interest 4						—			—			(108		)
Acquisition of noncontrolling interests 5						3			473			—
Noncontrolling interests from Merger 6						417			—			—
Deconsolidation of noncontrolling interests 7						(123		)	—			—
Cumulative translation adjustments						41			(4		)	(34		)
Other						1			1			2
Balance at Dec 31						$	1,597		$	1,242		$	809
1.	Distributions to noncontrolling interests is net of $20 million in 2017 ( $53 million in 2016 and $36 million in 2015 ) in dividends paid to a joint venture, which were reclassified to "Equity in earnings of nonconsolidated affiliates" in the consolidated statements of income.
2.				Includes non-cash capital contributions of $21 million in 2015.
3.	The 2016 value excludes a $202 million cash payment as the noncontrolling interest was classified as "Accrued and other current liabilities" in the consolidated balance sheets. The 2015 value excludes a $133 million cash payment for the purchase of a Redeemable Noncontrolling Interest. See Notes 6 and 23 for additional information.
4.					See Notes 6 and 23 for additional information.
5.			The 2016 value reflects the amount assumed in the DCC Transaction. See Note 3 for additional information.
6.					See Note 3 for additional information.
7.		At June 30, 2017, Dow sold its ownership interest in the SKC Haas Display Films group of companies. See Note 13 for additional information.

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DuPont Preferred Stock

Each share of DuPont Preferred Stock - $4.50 Series and DuPont Preferred Stock - $3.50 Series issued and outstanding at the effective date of the Merger remains issued and outstanding as to DuPont and was unaffected by the Merger.

Below is a summary of the DuPont Preferred Stock at December 31, 2017 , which was classified as "Noncontrolling Interests" in the consolidated balance sheets:

DuPont Preferred Stock	Number of Shares
Shares in thousands
Authorized	23,000
$4.50 Series, callable at $120	1,673
$3.50 Series, callable at $102	700

NOTE 19 - PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

Dow and DuPont did not merge their defined benefit pension and OPEB plans as a result of the Merger. See Note 3 for additional information on the Merger. The significant defined benefit pension and OPEB plans of Dow and DuPont are summarized below. Information provided for DuPont represents activity subsequent to the effective date of the Merger.
Defined Benefit Pension Plans

Dow

Dow has both funded and unfunded defined benefit pension plans that cover employees in the United States and a number of other countries. The U.S. qualified plan covering the parent company is the largest plan. Benefits for employees hired before January 1, 2008, are based on length of service and the employee’s three highest consecutive years of compensation. Employees hired after January 1, 2008, earn benefits that are based on a set percentage of annual pay, plus interest.

Dow's funding policy is to contribute to the plans when pension laws and/or economics either require or encourage funding. In 2017, Dow contributed $1,676 million to its pension plans, including contributions to fund benefit payments for its non-qualified pension plans. Dow expects to contribute approximately $500 million to its pension plans in 2018.
The provisions of a U.S. non-qualified pension plan for Dow require the payment of plan obligations to certain participants upon a change in control of Dow, which occurred at the time of the Merger. Certain participants could elect to receive a lump-sum payment or direct Dow to purchase an annuity on their behalf using the after-tax proceeds of the lump sum. In the fourth quarter of 2017, Dow paid $940 million to plan participants and $230 million to an insurance company for the purchase of annuities, which were included in "Pension contributions" in the consolidated statements of cash flows. Dow also paid $205 million for income and payroll taxes for participants electing the annuity option, of which $201 million was included in "Cost of sales" and $4 million was included in "Selling, general and administrative expenses" in the consolidated statements of income and related to Corporate. Dow recorded a settlement charge of $687 million associated with the payout in the fourth quarter of 2017, which was included in "Cost of sales" in the consolidated statements of income and related to Corporate.
DuPont

DuPont has both funded and unfunded noncontributory defined benefit pension plans covering a majority of the U.S. employees. The U.S. qualified plan is the largest pension plan held by DuPont. Most employees hired on or after January 1, 2007, are not eligible to participate in the U.S. defined benefit pension plans. The benefits under these plans are based primarily on years of service and employees' pay near retirement. DuPont will freeze the pay and service amounts used to calculate pension benefits for active employees who participate in the U.S. pension plans as of November 30, 2018. Therefore, as of November 30, 2018, active employees participating in the U.S. pension plans will not accrue additional benefits for future service and eligible compensation received.

DuPont's funding policy is consistent with the funding requirements of federal laws and regulations. Pension coverage for employees of DuPont's non-U.S. consolidated subsidiaries is provided, to the extent deemed appropriate, through separate plans. Obligations under such plans are funded by depositing funds with trustees, covered by insurance contracts, or remain unfunded. In 2017, DuPont contributed $68 million post-Merger to its pension plans, including contributions to fund benefit payments for its pension plans where funding is not customary. DuPont expects to contribute approximately $200 million to its pension plans in 2018.
In the fourth quarter of 2017, approximately $140 million of lump-sum payments were made from the U.S. qualified pension plan trust fund to a group of separated, vested plan participants who were extended a limited-time opportunity and voluntarily elected
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to receive their pension benefits in a single lump-sum payment. Since DuPont recognizes pension settlements only when the lump sum payments exceed the sum of the plan's service and interest cost components of net periodic pension cost for the year, these lump-sum payments did not result in the recognition of a pension settlement charge.
The weighted-average assumptions used to determine pension plan obligations and net periodic benefit costs for all plans are summarized in the table below:

Weighted-Average Assumptions for All Pension Plans		Benefit Obligations  at Dec 31				Net Periodic Costs for the Year Ended
		2017		2016		2017 1		2016		2015
Discount rate		3.26	%	3.52	%	3.50	%	3.85	%	3.60	%
Rate of compensation increase		3.95	%	3.90	%	3.88	%	4.04	%	4.13	%
Expected return on plan assets		—		—		6.94	%	7.22	%	7.35	%
1.	Includes DuPont plans subsequent to the Merger date.

The weighted-average assumptions used to determine pension plan obligations and net periodic benefit costs for U.S. plans are summarized in the table below:

Weighted-Average Assumptions for U.S. Pension Plans		Benefit Obligations  at Dec 31				Net Periodic Costs for the Year Ended
		2017		2016		2017 1		2016		2015
Discount rate		3.66	%	4.11	%	4.02	%	4.40	%	4.04	%
Rate of compensation increase		4.25	%	4.25	%	4.18	%	4.50	%	4.50	%
Expected return on plan assets		—		—		7.46	%	7.77	%	7.85	%
1.	Includes DuPont plans subsequent to the Merger date.