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Retirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2012
Compensation and Retirement Disclosure [Abstract]  
Components of net periodic benefit cost
The cost to the company of its retirement benefit plans in each of the three years ended December 31 is shown in the following table: 
 
 
Year Ended December 31
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2012

 
2011

 
2010

 
2012

 
2011

 
2010

Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 

$ 522

 

$ 520

 

$ 531

 

$ 34

 

$ 32

 

$ 34

Interest cost
 
1,184

 
1,223

 
1,212

 
109

 
114

 
117

Expected return on plan assets
 
(1,708
)
 
(1,690
)
 
(1,517
)
 
(68
)
 
(62
)
 
(56
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
 
Prior service cost (credit)
 
(58
)
 
23

 
35

 
(51
)
 
(51
)
 
(51
)
Net loss from previous years
 
427

 
162

 
206

 
21

 
17

 
18

Other
 
7

 
—

 
—

 
—

 
(6
)
 
—

Net periodic benefit cost
 

$ 374

 

$ 238

 

$ 467

 

$ 45

 

$ 44

 

$ 62
Changes in unamortized benefit plan costs
The table below summarizes the components of changes in unamortized benefit plan costs for the years ended December 31, 2012, 2011, and 2010:
 
Pension
 
Medical and
 
 
$ in millions
Benefits
 
Life Benefits
 
Total

Changes in unamortized benefit plan costs
 
 
 
 
 
 
Change in net actuarial loss
 

($ 158
)
 

($ 64
)
 

($ 222
)
Amortization of:
 
 
 
 
 
 
Prior service (cost) credit
 
(48
)
 
60

 
12

Net loss from previous years
 
(244
)
 
(26
)
 
(270
)
Tax expense related to above items
 
171

 
12

 
183

Change in unamortized benefit plan costs – 2010
 

($ 279
)
 

($ 18
)
 

($ 297
)
Change in net actuarial loss
 

$2,687

 

$138

 

$2,825

Change in prior service cost
 
(608
)
 
6

 
(602
)
Amortization of:
 
 
 
 
 
 
Prior service (cost) credit
 
(23
)
 
51

 
28

Net loss from previous years
 
(162
)
 
(17
)
 
(179
)
Tax benefit related to above items
 
(752
)
 
(71
)
 
(823
)
Change in unamortized benefit plan costs – 2011
 

$1,142

 

$107

 

$1,249

Change in net actuarial loss
 

$2,353

 

$151

 

$2,504

Change in prior service cost
 
(2
)
 
—

 
(2
)
Amortization of:
 
 
 
 
 
 
Prior service credit
 
58

 
51

 
109

Net loss from previous years
 
(427
)
 
(21
)
 
(448
)
Tax benefit related to above items
 
(788
)
 
(72
)
 
(860
)
Change in unamortized benefit plan costs – 2012
 

$1,194

 

$109

 

$1,303
Amounts recorded in accumulated other comprehensive loss
 
 
Pension
Benefits
 
Medical and Life
Benefits
$ in millions
 
2012
 
2011
 
2012

 
2011

Amounts recorded in accumulated other comprehensive loss
 
 
 
 
 
 
 
 
Net actuarial loss
 
($8,057
)
 
($6,131
)
 
($461
)
 
($331
)
Prior service credit
 
481

 
537

 
98

 
149

Income tax benefits related to above items
 
3,003

 
2,215

 
146

 
74

Unamortized benefit plan costs
 
($4,573
)
 
($3,379
)
 
($217
)
 
($108
)
Change in Projected Benefit Obligation
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2012

 
2011

 
2012

 
2011

Change in projected benefit obligation
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
 
$24,129

 
$21,820

 
$2,235

 
$2,104

Service cost
 
522

 
520

 
34

 
32

Interest cost
 
1,184

 
1,223

 
109

 
114

Plan participants’ contributions
 
12

 
14

 
81

 
82

Plan amendments
 
(1
)
 
(608
)
 
—

 
6

Actuarial loss
 
3,114

 
2,379

 
202

 
107

Benefits paid
 
(1,220
)
 
(1,197
)
 
(227
)
 
(224
)
Other
 
6

 
(22
)
 
14

 
14

Projected benefit obligation at end of year
 
$27,746

 
$24,129

 
$2,448

 
$2,235
Change in plan assets and amounts recognized in the consolidated statements of financial position
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2012

 
2011

 
2012

 
2011

Change in plan assets
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
$21,340

 
$20,081

 
$ 946

 
$ 932

Gain on plan assets
 
2,463

 
1,342

 
119

 
31

Employer contributions
 
366

 
1,084

 
129

 
111

Plan participants’ contributions
 
12

 
14

 
81

 
82

Benefits paid
 
(1,220
)
 
(1,197
)
 
(227
)
 
(224
)
Other
 
1

 
16

 
14

 
14

Fair value of plan assets at end of year
 
22,962

 
21,340

 
1,062

 
946

Funded status
 
($ 4,784
)
 
($ 2,789
)
 
($1,386
)
 
($1,289
)
Amounts recognized in the Consolidated Statements of Financial Position
 
 
 
 
 
 
 
 
Non-current assets
 

$ 7

 

$ 112

 

$ 49

 

$ 41

Current liability
 
(111
)
 
(104
)
 
(30
)
 
(48
)
Non-current liability
 
(4,680
)
 
(2,797
)
 
(1,405
)
 
(1,282
)
Amounts expected to be Recognized in 2013 Net Periodic Benefit Cost
The following table shows those amounts expected to be recognized in net periodic benefit cost in 2013:
$ in millions
Pension Benefits
 
Medical and
Life Benefits
Amounts expected to be recognized in 2013 net periodic benefit cost
 
 
 
 
 
Net actuarial loss
 
$608

 
 
$30

Prior service credit
 
(58
)
 
 
(51
)
Pension plans with accumulated benefit obligations in excess of fair value of plan assets
Amounts for pension plans with accumulated benefit obligations in excess of fair value of plan assets are as follows: 
 
 
December 31
$ in millions
 
2012
 
2011
Projected benefit obligation
 
$
27,645

 
$
22,451

Accumulated benefit obligation
 
27,146

 
21,949

Fair value of plan assets
 
22,853

 
19,550
Weighted-average plan assumptions
On a weighted-average basis, the following assumptions were used to determine the benefit obligations and the net periodic benefit cost:
 
 
Pension Benefits  
 
Medical and
Life Benefits
  
 
2012

 
2011

 
2012

 
2011

Assumptions used to determine benefit obligation at December 31
 
 
 
 
 
 
 
 
Discount rate
 
4.12
%
 
5.03
%
 
4.02
%
 
5.02
%
Rate of compensation increase
 
2.75
%
 
2.75
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
7.00
%
 
7.50
%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
 
 
 
 
 
5.00
%
 
5.00
%
Year that the rate reaches the ultimate trend rate
 
 
 
 
 
2017

 
2017

Assumptions used to determine benefit cost for the year ended December 31
 
 
 
 
 
 
 
 
Discount rate
 
5.03
%
 
5.75
%
 
5.02
%
 
5.62
%
Expected long-term return on plan assets
 
8.25
%
 
8.50
%
 
7.44
%
 
6.86
%
Rate of compensation increase
 
2.75
%
 
3.50
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
7.50
%
 
8.00
%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
 
 
 
 
 
5.00
%
 
5.00
%
Year that the rate reaches the ultimate trend rate
 
 
 
 
 
2017

 
2017
Effect of one-percentage point change in assumed health care cost trend rates
A one-percentage-point change in the initial through the ultimate health care cost trend rates would have the following effects:
$ in millions
1-Percentage-
Point Decrease
 
1-Percentage-
Point Increase
Increase (decrease) from change in health care cost trend rates to
 
 
 
 
 
Post-retirement benefit expense
 

($6
)
 
 

$5

Post-retirement benefit liability
 
(88
)
 
 
73
Plan asset allocation ranges
 
 
Level 1
 
Level 2
 
Level 3
 
Total
$ in millions
 
2012

 
2011

 
2012
 
2011
 
2012
 
2011
 
2012
 
2011
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Domestic equities
 

$3,657

 

$3,849

 

$ 318

 

$ 1

 

$ 2

 

$ 2

 

$ 3,977

 

$ 3,852

International equities
 
1,700

 
1,266

 
2,319

 
1,716

 
 
 
 
 
4,019

 
2,982

Fixed income securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents(1)
 
92

 
75

 
1,748

 
1,528

 
 
 
 
 
1,840

 
1,603

U.S. Treasuries
 
 
 
 
 
1,780

 
1,872

 
 
 
 
 
1,780

 
1,872

U.S. Government Agency
 
 
 
 
 
968

 
965

 
 
 
 
 
968

 
965

Non-U.S. Government
 
 
 
 
 
401

 
324

 
 
 
 
 
401

 
324

Corporate debt
 
 
 
 
 
4,123

 
3,686

 
 
 
 
 
4,123

 
3,686

Asset backed
 
 
 
 
 
528

 
525

 
4

 
4

 
532

 
529

High yield debt
 
 
 
 
 
1,139

 
977

 
28

 
41

 
1,167

 
1,018

Bank loans
 
 
 
 
 
223

 
150

 
 
 
 
 
223

 
150

Alternative Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
 
 
 
 
 
 
 
 
758

 
1,405

 
758

 
1,405

Private equities
 
 
 
 
 
 
 
 
 
1,980

 
2,098

 
1,980

 
2,098

Real estate
 
 
 
 
 
 
 
 
 
2,256

 
1,788

 
2,256

 
1,788

Other
 
(5
)
 
  
 
5

 
14

 
  
 
  
 
—

 
14

Fair value of plan assets at the end of the year
 

$5,444

 

$5,190

 

$13,552

 
$
11,758

 
$
5,028

 

$5,338

 
$
24,024

 
$
22,286


(1)Cash and cash equivalents are predominantly held in money market funds.
For the majority of the plans’ assets, the investment policies require that the asset allocation be maintained within the following ranges as of December 31, 2012:
  
 
Asset Allocation Ranges
Domestic equities
 
10% - 30%
International equities
 
  5% - 25%
Fixed income securities
 
30% - 50%
Alternative investments
 
15% - 30%
Changes in fair value of plan assets, significant unobservable inputs
The changes in the fair value of the pension and VEBA plan trust assets measured using Level 3 significant unobservable inputs during 2012 and 2011, are as follows:
$ in millions
 
Domestic
equities
 
Asset
Backed
 
High yield
debt
 
Hedge
funds
 
Private
equities
 
Real
Estate
 
Total
Balance as of December 31, 2010
 

$2

 

$4

 

$78

 

$1,521

 

$1,945

 

$1,402

 

$4,952

Actual return on plan assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains (losses), net
 
—

 
—

 
(2
)
 
(43
)
 
19

 
198

 
172

Realized gains (losses), net
 
—

 
—

 
—

 
25

 
(13
)
 
(4
)
 
8

Purchases
 
—

 
—

 
10

 
413

 
503

 
460

 
1,386

Sales
 
—

 
—

 
(45
)
 
(511
)
 
(356
)
 
(268
)
 
(1,180
)
Balance as of December 31, 2011
 

$2

 

$4

 

$41

 

$1,405

 

$2,098

 

$1,788

 

$5,338

Actual return on plan assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains (losses), net
 
5

 
—

 
10

 
13

 
(122
)
 
68

 
(26
)
Realized gains (losses), net
 
(5
)
 
—

 
—

 
47

 
—

 
—

 
42

Purchases
 
—

 
—

 
—

 
—

 
259

 
846

 
1,105

Sales
 
—

 
—

 
(23
)
 
(707
)
 
(255
)
 
(446
)
 
(1,431
)
Balance as of December 31, 2012
 

$2

 

$4

 

$28

 

$758

 

$1,980

 

$2,256

 

$5,028
Estimated benefit payments
The following table reflects estimated future benefit payments, based upon the same assumptions used to measure the benefit obligation, and includes expected future employee service, as of December 31, 2012:
$ in millions
 
Pension Plans
 
Medical and
Life Plans
Year Ending December 31
 
 
 
 
2013
 

$1,291

 

$147

2014
 
1,347

 
153

2015
 
1,402

 
157

2016
 
1,454

 
160

2017
 
1,507

 
162

2018 through 2022
 
8,410

 
829