Annual report pursuant to Section 13 and 15(d)

Employee Benefit Plans (Tables)

v3.6.0.2
Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract]  
Schedule of Defined Benefit Plans Disclosures
 
 
 
 
 
 
 
 
Pension and Postretirement Plans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified
Pension Plan (1)
 
Non-U.S.
Pension Plans (1)
 
Nonqualified
and Other
Pension Plans (1)
 
Postretirement
Health and Life
Plans (1)
(Dollars in millions)
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Change in fair value of plan assets
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Fair value, January 1
$
17,962

 
$
18,614

 
$
2,738

 
$
2,564

 
$
2,805

 
$
2,927

 
$
—

 
$
28

Actual return on plan assets
1,075

 
199

 
541

 
342

 
74

 
14

 
—

 
—

Company contributions
—

 
—

 
48

 
58

 
104

 
97

 
104

 
79

Plan participant contributions
—

 
—

 
1

 
1

 
—

 
—

 
125

 
127

Settlements and curtailments
—

 
—

 
(20
)
 
(7
)
 
(6
)
 
—

 
—

 
—

Benefits paid
(798
)
 
(851
)
 
(118
)
 
(78
)
 
(233
)
 
(233
)
 
(242
)
 
(247
)
Federal subsidy on benefits paid
 n/a

 
n/a

 
 n/a

 
n/a

 
 n/a

 
n/a

 
13

 
13

Foreign currency exchange rate changes
 n/a

 
n/a

 
(401
)
 
(142
)
 
 n/a

 
n/a

 
 n/a

 
n/a

Fair value, December 31
$
18,239

 
$
17,962

 
$
2,789

 
$
2,738

 
$
2,744

 
$
2,805

 
$
—

 
$
—

Change in projected benefit obligation
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Projected benefit obligation, January 1
$
14,461

 
$
15,508

 
$
2,580

 
$
2,688

 
$
3,053

 
$
3,329

 
$
1,152

 
$
1,346

Service cost
—

 
—

 
25

 
27

 
—

 
—

 
7

 
8

Interest cost
634

 
621

 
86

 
93

 
127

 
122

 
47

 
48

Plan participant contributions
—

 
—

 
1

 
1

 
—

 
—

 
125

 
127

Plan amendments
—

 
—

 
—

 
(1
)
 
—

 
—

 
—

 
—

Settlements and curtailments
—

 
—

 
(31
)
 
(7
)
 
(6
)
 
—

 
—

 
—

Actuarial loss (gain)
685

 
(817
)
 
535

 
(2
)
 
106

 
(165
)
 
25

 
(141
)
Benefits paid
(798
)
 
(851
)
 
(118
)
 
(78
)
 
(233
)
 
(233
)
 
(242
)
 
(247
)
Federal subsidy on benefits paid
 n/a

 
n/a

 
 n/a

 
n/a

 
 n/a

 
n/a

 
13

 
13

Foreign currency exchange rate changes
 n/a

 
n/a

 
(315
)
 
(141
)
 
 n/a

 
n/a

 
(2
)
 
(2
)
Projected benefit obligation, December 31
$
14,982

 
$
14,461

 
$
2,763

 
$
2,580

 
$
3,047

 
$
3,053

 
$
1,125

 
$
1,152

Amount recognized, December 31
$
3,257

 
$
3,501

 
$
26

 
$
158

 
$
(303
)
 
$
(248
)
 
$
(1,125
)
 
$
(1,152
)
Funded status, December 31
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Accumulated benefit obligation
$
14,982

 
$
14,461

 
$
2,645

 
$
2,479

 
$
3,046

 
$
3,052

 
n/a

 
n/a

Overfunded (unfunded) status of ABO
3,257

 
3,501

 
144

 
259

 
(302
)
 
(247
)
 
n/a

 
n/a

Provision for future salaries
—

 
—

 
118

 
101

 
1

 
1

 
n/a

 
n/a

Projected benefit obligation
14,982

 
14,461

 
2,763

 
2,580

 
3,047

 
3,053

 
$
1,125

 
$
1,152

Weighted-average assumptions, December 31
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Discount rate
4.16
%
 
4.51
%
 
2.56
%
 
3.59
%
 
4.01
%
 
4.34
%
 
3.99
%
 
4.32
%
Rate of compensation increase
 n/a

 
n/a

 
4.51

 
4.64

 
4.00

 
4.00

 
n/a

 
n/a

(1) 
The measurement date for the Qualified Pension Plan, Non-U.S. Pension Plans, Nonqualified and Other Pension Plans, and Postretirement Health and Life Plans was December 31 of each year reported.
n/a = not applicable
Schedule of Amounts Recognized in Balance Sheet
 
 
 
 
 
 
 
 
Amounts Recognized on Consolidated Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified
Pension Plan
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
 
Postretirement
Health and Life
Plans
(Dollars in millions)
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Other assets
$
3,257

 
$
3,501

 
$
475

 
$
548

 
$
760

 
$
825

 
$
—

 
$
—

Accrued expenses and other liabilities
—

 
—

 
(449
)
 
(390
)
 
(1,063
)
 
(1,073
)
 
(1,125
)
 
(1,152
)
Net amount recognized at December 31
$
3,257

 
$
3,501

 
$
26

 
$
158

 
$
(303
)
 
$
(248
)
 
$
(1,125
)
 
$
(1,152
)
Schedule of Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets
Pension Plans with ABO and PBO in excess of plan assets as of December 31, 2016 and 2015 are presented in the table below. For these plans, funding strategies vary due to legal requirements and local practices.
 
 
 
 
 
 
 
 
Plans with PBO and ABO in Excess of Plan Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
(Dollars in millions)
2016
 
2015
 
2016
 
2015
PBO
$
626

 
$
574

 
$
1,065

 
$
1,075

ABO
594

 
551

 
1,064

 
1,074

Fair value of plan assets
179

 
183

 
1

 
1

Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets
Pension Plans with ABO and PBO in excess of plan assets as of December 31, 2016 and 2015 are presented in the table below. For these plans, funding strategies vary due to legal requirements and local practices.
 
 
 
 
 
 
 
 
Plans with PBO and ABO in Excess of Plan Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
(Dollars in millions)
2016
 
2015
 
2016
 
2015
PBO
$
626

 
$
574

 
$
1,065

 
$
1,075

ABO
594

 
551

 
1,064

 
1,074

Fair value of plan assets
179

 
183

 
1

 
1

Schedule of Net Benefit Costs

 
 
 
 
 
 
 
 
 
 
 
 
Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified Pension Plan
 
Non-U.S. Pension Plans
(Dollars in millions)
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Components of net periodic benefit cost (income)
 

 
 

 
 

 
 

 
 

 
 

Service cost
$
—

 
$
—

 
$
—

 
$
25

 
$
27

 
$
29

Interest cost
634

 
621

 
665

 
86

 
93

 
109

Expected return on plan assets
(1,038
)
 
(1,045
)
 
(1,018
)
 
(123
)
 
(133
)
 
(137
)
Amortization of prior service cost
—

 
—

 
—

 
1

 
1

 
1

Amortization of net actuarial loss
139

 
170

 
111

 
6

 
6

 
3

Recognized loss due to settlements and curtailments
—

 
—

 
—

 
1

 
—

 
2

Net periodic benefit cost (income)
$
(265
)
 
$
(254
)
 
$
(242
)
 
$
(4
)
 
$
(6
)
 
$
7

Weighted-average assumptions used to determine net cost for years ended December 31
 

 
 

 
 

 
 

 
 

 
 

Discount rate
4.51
%
 
4.12
%
 
4.85
%
 
3.59
%
 
3.56
%
 
4.30
%
Expected return on plan assets
6.00

 
6.00

 
6.00

 
4.84

 
5.27

 
5.52

Rate of compensation increase
n/a

 
n/a

 
n/a

 
4.67

 
4.70

 
4.91

 
 
 
 
 
 
 
 
 
 
 
 
 
Nonqualified and
Other Pension Plans
 
Postretirement Health
and Life Plans
(Dollars in millions)
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Components of net periodic benefit cost (income)
 

 
 

 
 

 
 

 
 

 
 

Service cost
$
—

 
$
—

 
$
1

 
$
7

 
$
8

 
$
8

Interest cost
127

 
122

 
133

 
47

 
48

 
58

Expected return on plan assets
(101
)
 
(92
)
 
(124
)
 
—

 
(1
)
 
(4
)
Amortization of prior service cost
—

 
—

 
—

 
4

 
4

 
4

Amortization of net actuarial loss (gain)
25

 
34

 
25

 
(81
)
 
(46
)
 
(89
)
Recognized loss due to settlements and curtailments
3

 
—

 
—

 
—

 
—

 
—

Net periodic benefit cost (income)
$
54

 
$
64

 
$
35

 
$
(23
)
 
$
13

 
$
(23
)
Weighted-average assumptions used to determine net cost for years ended December 31
 

 
 

 
 

 
 

 
 

 
 

Discount rate
4.34
%
 
3.80
%
 
4.55
%
 
4.32
%
 
3.75
%
 
4.50
%
Expected return on plan assets
3.66

 
3.26

 
4.60

 
 n/a

 
6.00

 
6.00

Rate of compensation increase
4.00

 
4.00

 
4.00

 
 n/a

 
n/a

 
n/a


n/a = not applicable
Schedule of Pretax Amounts Included in Accumulated OCI

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax Amounts Included in Accumulated OCI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified
Pension Plan
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
 
Postretirement
Health and
Life Plans
 
Total
(Dollars in millions)
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Net actuarial loss (gain)
$
4,429

 
$
3,920

 
$
216

 
$
137

 
$
953

 
$
848

 
$
(44
)
 
$
(150
)
 
$
5,554

 
$
4,755

Prior service cost (credits)
—

 
—

 
4

 
(10
)
 
—

 
—

 
12

 
16

 
16

 
6

Amounts recognized in accumulated OCI
$
4,429

 
$
3,920

 
$
220

 
$
127

 
$
953

 
$
848

 
$
(32
)
 
$
(134
)
 
$
5,570

 
$
4,761

Schedule of Pretax Amounts Recognized in OCI

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax Amounts Recognized in OCI
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Qualified
Pension Plan
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
 
Postretirement
Health and
Life Plans
 
Total
(Dollars in millions)
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Current year actuarial loss (gain)
$
648

 
$
29

 
$
100

 
$
(211
)
 
$
133

 
$
(86
)
 
$
25

 
$
(140
)
 
$
906

 
$
(408
)
Amortization of actuarial gain (loss)
(139
)
 
(170
)
 
(6
)
 
(6
)
 
(28
)
 
(34
)
 
81

 
46

 
(92
)
 
(164
)
Current year prior service cost (credit)
—

 
—

 
—

 
(1
)
 
—

 
—

 
—

 
—

 
—

 
(1
)
Amortization of prior service cost
—

 
—

 
(1
)
 
(1
)
 
—

 
—

 
(4
)
 
(4
)
 
(5
)
 
(5
)
Amounts recognized in OCI
$
509

 
$
(141
)
 
$
93

 
$
(219
)
 
$
105

 
$
(120
)
 
$
102

 
$
(98
)
 
$
809

 
$
(578
)
Schedule of Estimated Pretax Amounts Amortized from Accumulated OCI into Period Cost

 
 
 
 
 
 
 
 
 
 
Estimated Pretax Amounts Amortized from Accumulated OCI into Period Cost in 2017
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
Qualified
Pension Plan
 
Non-U.S.
Pension Plans
 
Nonqualified
and Other
Pension Plans
 
Postretirement
Health and
Life Plans
 
Total
Net actuarial loss (gain)
$
152

 
$
10

 
$
34

 
$
(20
)
 
$
176

Prior service cost
—

 
1

 
—

 
4

 
5

Total amounts amortized from accumulated OCI
$
152

 
$
11

 
$
34

 
$
(16
)
 
$
181


Schedule of Allocation of Plan Assets
The target allocations for 2017 by asset category for the Qualified Pension Plan, Non-U.S. Pension Plans, and Nonqualified and Other Pension Plans are presented in the table below.
 
 
 
 
2017 Target Allocation
 
 
 
 
 
Percentage
Asset Category
Qualified
Pension Plan
Non-U.S.
Pension Plans
Nonqualified
and Other
Pension Plans
Equity securities
30 - 60
10 - 35
0 - 5
Debt securities
40 - 70
40 - 80
95 - 100
Real estate
0 - 10
0 - 15
0 - 5
Other
0 - 5
0 - 25
0 - 5
Combined plan investment assets measured at fair value by level and in total at December 31, 2016 and 2015 are summarized in the Fair Value Measurements table.
 
 
 
 
 
 
 
 
Fair Value Measurements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
(Dollars in millions)
Level 1
 
Level 2
 
Level 3
 
Total
Cash and short-term investments
 

 
 

 
 

 
 

Money market and interest-bearing cash
$
776

 
$
—

 
$
—

 
$
776

Cash and cash equivalent commingled/mutual funds
—

 
997

 
—

 
997

Fixed income
 

 
 

 
 

 
 

U.S. government and agency securities
3,125

 
816

 
10

 
3,951

Corporate debt securities
—

 
1,892

 
—

 
1,892

Asset-backed securities
—

 
2,246

 
—

 
2,246

Non-U.S. debt securities
789

 
705

 
—

 
1,494

Fixed income commingled/mutual funds
778

 
1,503

 
—

 
2,281

Equity
 

 
 

 
 

 
 

Common and preferred equity securities
6,120

 
—

 
—

 
6,120

Equity commingled/mutual funds
735

 
1,225

 
—

 
1,960

Public real estate investment trusts
145

 
—

 
—

 
145

Real estate
 

 
 

 
 

 
 

Private real estate
—

 
—

 
150

 
150

Real estate commingled/mutual funds
—

 
12

 
748

 
760

Limited partnerships
—

 
132

 
38

 
170

Other investments (1)
15

 
732

 
83

 
830

Total plan investment assets, at fair value
$
12,483

 
$
10,260

 
$
1,029

 
$
23,772

 
 
 
 
 
 
 
 
 
December 31, 2015
Cash and short-term investments
 

 
 

 
 

 
 

Money market and interest-bearing cash
$
3,061

 
$
—

 
$
—

 
$
3,061

Cash and cash equivalent commingled/mutual funds
—

 
4

 
—

 
4

Fixed income
 

 
 

 
 

 
 

U.S. government and agency securities
2,723

 
881

 
11

 
3,615

Corporate debt securities
—

 
1,795

 
—

 
1,795

Asset-backed securities
—

 
1,939

 
—

 
1,939

Non-U.S. debt securities
632

 
662

 
—

 
1,294

Fixed income commingled/mutual funds
551

 
1,421

 
—

 
1,972

Equity
 

 
 

 
 

 
 

Common and preferred equity securities
6,735

 
—

 
—

 
6,735

Equity commingled/mutual funds
3

 
1,503

 
—

 
1,506

Public real estate investment trusts
138

 
—

 
—

 
138

Real estate
 

 
 

 
 

 
 

Private real estate
—

 
—

 
144

 
144

Real estate commingled/mutual funds
—

 
12

 
731

 
743

Limited partnerships
—

 
121

 
49

 
170

Other investments (1)
—

 
287

 
102

 
389

Total plan investment assets, at fair value
$
13,843

 
$
8,625

 
$
1,037

 
$
23,505

(1) 
Other investments include interest rate swaps of $257 million and $114 million, participant loans of $36 million and $58 million, commodity and balanced funds of $369 million and $165 million and other various investments of $168 million and $52 million at December 31, 2016 and 2015.
Schedule of Changes in Fair Value of Plan Assets
The Level 3 Fair Value Measurements table presents a reconciliation of all plan investment assets measured at fair value using significant unobservable inputs (Level 3) during 2016, 2015 and 2014.
 
 
 
 
 
 
 
 
 
 
Level 3 Fair Value Measurements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
(Dollars in millions)
Balance
January 1
 
Actual Return on
Plan Assets Still
Held at the
Reporting Date
 
Purchases, Sales and Settlements
 
Transfers
out of Level 3
 
Balance
December 31
Fixed income
 

 
 

 
 

 
 

 
 

U.S. government and agency securities
$
11

 
$
—

 
$
(1
)
 
$
—

 
$
10

Real estate
 

 
 

 
 
 
 

 
 

Private real estate
144

 
1

 
5

 
—

 
150

Real estate commingled/mutual funds
731

 
21

 
(4
)
 
—

 
748

Limited partnerships
49

 
(2
)
 
(9
)
 
—

 
38

Other investments
102

 
4

 
(23
)
 
—

 
83

Total
$
1,037

 
$
24

 
$
(32
)
 
$
—

 
$
1,029

 
 
 
 
 
 
 
 
 
 
 
2015
Fixed income
 

 
 

 
 

 
 

 
 

U.S. government and agency securities
$
11

 
$
—

 
$
—

 
$
—

 
$
11

Real estate
 

 
 

 
 
 
 

 
 

Private real estate
127

 
14

 
3

 
—

 
144

Real estate commingled/mutual funds
632

 
37

 
62

 
—

 
731

Limited partnerships
65

 
(1
)
 
(15
)
 
—

 
49

Other investments
127

 
(5
)
 
(20
)
 
—

 
102

Total
$
962

 
$
45

 
$
30

 
$
—

 
$
1,037

 
 
 
 
 
 
 
 
 
 
 
2014
Fixed income
 
 
 
 
 
 
 
 
 
U.S. government and agency securities
$
12

 
$
—

 
$
(1
)
 
$
—

 
$
11

Non-U.S. debt securities
6

 
—

 
(2
)
 
(4
)
 
—

Real estate
 
 
 
 
 
 
 
 
 

Private real estate
119

 
5

 
3

 
—

 
127

Real estate commingled/mutual funds
462

 
20

 
150

 
—

 
632

Limited partnerships
145

 
5

 
(85
)
 
—

 
65

Other investments
135

 
1

 
(9
)
 
—

 
127

Total
$
879

 
$
31

 
$
56

 
$
(4
)
 
$
962

Schedule of Expected Benefit Payments
Benefit payments projected to be made from the Qualified Pension Plan, Non-U.S. Pension Plans, Nonqualified and Other Pension Plans, and Postretirement Health and Life Plans are presented in the table below.
 
 
 
 
 
 
 
 
 
 
Projected Benefit Payments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Postretirement Health and Life Plans
(Dollars in millions)
Qualified
Pension Plan (1)
 
Non-U.S.
Pension Plans (2)
 
Nonqualified
and Other
Pension Plans (2)
 
Net Payments (3)
 
Medicare
Subsidy
2017
$
906

 
$
55

 
$
240

 
$
111

 
$
13

2018
906

 
55

 
239

 
108

 
12

2019
898

 
58

 
241

 
102

 
12

2020
909

 
61

 
241

 
99

 
12

2021
905

 
66

 
236

 
96

 
11

2022 - 2026
4,446

 
427

 
1,091

 
425

 
49

(1) 
Benefit payments expected to be made from the plan’s assets.
(2) 
Benefit payments expected to be made from a combination of the plans’ and the Corporation’s assets.
(3) 
Benefit payments (net of retiree contributions) expected to be made from the Corporation’s assets.