XML 54 R33.htm IDEA: XBRL DOCUMENT v3.6.0.2
Retirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2016
Compensation and Retirement Disclosure [Abstract]  
Components of net periodic benefit cost
The cost to the company of its retirement benefit plans is shown in the following table:
 
 
Year Ended December 31
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
$
446

 
$
484

 
$
457

 
$
30

 
$
35

 
$
34

Interest cost
 
1,284

 
1,224

 
1,260

 
94

 
94

 
99

Expected return on plan assets
 
(1,853
)
 
(1,975
)
 
(1,871
)
 
(86
)
 
(89
)
 
(83
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
 
(60
)
 
(60
)
 
(59
)
 
(22
)
 
(28
)
 
(45
)
Net loss from previous years
 
714

 
682

 
327

 
16

 
27

 
13

Other
 
—

 
—

 
1

 
—

 
—

 
—

Net periodic benefit cost
 
$
531

 
$
355

 
$
115

 
$
32

 
$
39

 
$
18
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, 2014, 2015 and 2016:
$ in millions
 
Pension Benefits
 
Medical and
Life Benefits
 
Total
Changes in unamortized benefit plan costs
 
 
 
 
 
 
Change in net actuarial loss
 
$
3,833

 
$
234

 
$
4,067

Change in prior service cost
 
—

 
(92
)
 
(92
)
Amortization of:
 
 
 
 
 
 
Prior service credit
 
59

 
45

 
104

Net loss from previous years
 
(327
)
 
(13
)
 
(340
)
Tax benefit related to above items
 
(1,357
)
 
(66
)
 
(1,423
)
Change in unamortized benefit plan costs – 2014
 
2,208

 
108

 
2,316

Change in net actuarial loss
 
626

 
(125
)
 
501

Amortization of:
 
 
 
 
 
 
Prior service credit
 
60

 
28

 
88

Net loss from previous years
 
(682
)
 
(27
)
 
(709
)
Tax (benefit) expense related to above items
 
(1
)
 
46

 
45

Change in unamortized benefit plan costs – 2015
 
3

 
(78
)
 
(75
)
Change in net actuarial loss
 
1,003

 
(91
)
 
912

Change in prior service cost
 
—

 
—

 
—

Amortization of:
 
 
 
 
 
 
Prior service credit
 
60

 
22

 
82

Net loss from previous years
 
(714
)
 
(16
)
 
(730
)
Tax (benefit) expense related to above items
 
(121
)
 
32

 
(89
)
Change in unamortized benefit plan costs – 2016
 
$
228

 
$
(53
)
 
$
175
Amounts recorded in accumulated other comprehensive loss
The table below presents the components of accumulated other comprehensive loss related to the company's retirement benefit plans:
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2016
 
2015
 
2016
 
2015
Amounts recorded in accumulated other comprehensive loss
 
 
 
 
 
 
 
 
Net actuarial loss
 
$
(9,030
)
 
$
(8,741
)
 
$
(113
)
 
$
(220
)
Prior service credit
 
244

 
304

 
44

 
66

Income tax benefits related to above items
 
3,407

 
3,286

 
32

 
64

Unamortized benefit plan costs
 
$
(5,379
)
 
$
(5,151
)
 
$
(37
)
 
$
(90
)
Change in plan assets and amounts recognized in the consolidated statements of financial position
The following table sets forth the funded status and amounts recognized in the consolidated statements of financial position for the company’s retirement benefit plans. Pension benefits data includes the qualified plans, foreign plans and U.S. unfunded non-qualified plans for benefits provided to directors, officers and certain employees. The company uses a December 31 measurement date for its plans.
 
 
Pension Benefits
 
Medical and
Life Benefits
$ in millions
 
2016
 
2015
 
2016
 
2015
Plan Assets
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
$
23,950

 
$
25,063

 
$
1,153

 
$
1,216

Net gain (loss) on plan assets
 
1,867

 
(258
)
 
97

 
(5
)
Employer contributions
 
81

 
578

 
83

 
68

Participant contributions
 
11

 
10

 
20

 
22

Benefits paid
 
(1,480
)
 
(1,428
)
 
(146
)
 
(151
)
Other
 
(45
)
 
(15
)
 
1

 
3

Fair value of plan assets at end of year
 
24,384

 
23,950

 
1,208

 
1,153

Projected Benefit Obligation
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
 
29,182

 
30,525

 
2,181

 
2,398

Service cost
 
446

 
484

 
30

 
35

Interest cost
 
1,284

 
1,224

 
94

 
94

Participant contributions
 
11

 
10

 
20

 
22

Actuarial loss (gain)
 
1,026

 
(1,602
)
 
(80
)
 
(219
)
Benefits paid
 
(1,480
)
 
(1,428
)
 
(146
)
 
(151
)
Other
 
(60
)
 
(31
)
 
1

 
2

Projected benefit obligation at end of year
 
30,409

 
29,182

 
2,100

 
2,181

Funded status
 
$
(6,025
)
 
$
(5,232
)
 
$
(892
)
 
$
(1,028
)
 
 
 
 
 
 
 
 
 
Classification of amounts recognized in the consolidated statements of financial position
 
 
 
 
 
 
 
 
Non-current assets
 
$
2

 
$
18

 
$
87

 
$
79

Current liability
 
(146
)
 
(142
)
 
(42
)
 
(43
)
Non-current liability
 
(5,881
)
 
(5,108
)
 
(937
)
 
(1,064
)
Amounts expected to be recognized in 2017 net periodic benefit cost
The following table shows those amounts expected to be recognized in net periodic benefit cost in 2017:
$ in millions
Pension Benefits
 
Medical and
Life Benefits
 
Total
Amounts expected to be recognized in 2017 net periodic benefit cost
 
 
 
 
 
Net actuarial loss
$
712

 
$
9

 
$
721

Prior service credit
(58
)
 
(21
)
 
(79
)
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
 
2016
 
2015
Projected benefit obligation
 
$
30,350

 
$
29,131

Accumulated benefit obligation
 
30,065

 
28,923

Fair value of plan assets
 
24,322

 
23,882
Weighted-average plan assumptions
On a weighted-average basis, the following assumptions were used to determine benefit obligations and net periodic benefit cost:
 
 
Pension Benefits  
 
Medical and
Life Benefits
  
 
2016
 
2015
 
2016
 
2015
Assumptions used to determine benefit obligation at December 31
 
 
 
 
 
 
 
 
Discount rate
 
4.19
%
 
4.53
%
 
4.13
%
 
4.47
%
Initial cash balance crediting rate assumed for the next year
 
3.10
%
 
3.00
%
 
 
 
 
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
 
3.60
%
 
3.75
%
 
 
 
 
Year that the cash balance crediting rate reaches the ultimate rate
 
2022

 
2021

 
 
 
 
Rate of compensation increase
 
3.00
%
 
3.00
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
6.50
%
 
7.00
%
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate)
 
 
 
 
 
5.00
%
 
5.00
%
Year that the health care cost trend rate reaches the ultimate trend rate
 
 
 
 
 
2020

 
2020

Assumptions used to determine benefit cost for the year ended December 31
 
 
 
 
 
 
 
 
Discount rate
 
4.53
%
 
4.12
%
 
4.47
%
 
4.04
%
Initial cash balance crediting rate assumed for the next year
 
3.00
%
 
2.75
%
 
 
 
 
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
 
3.75
%
 
3.50
%
 
 
 
 
Year that the cash balance crediting rate reaches the ultimate rate
 
2021

 
2020

 
 
 
 
Expected long-term return on plan assets
 
8.00
%
 
8.00
%
 
7.70
%
 
7.58
%
Rate of compensation increase
 
3.00
%
 
3.00
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
7.00
%
 
6.50
%
Rate to which the health care cost trend rate is assumed to decline (the ultimate trend rate)
 
 
 
 
 
5.00
%
 
5.00
%
Year that the health care cost trend rate reaches the ultimate trend rate
 
 

 
 

 
2020

 
2019
Plan asset allocation
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, 2016:
  
 
Asset Allocation Ranges
Cash and cash equivalents
 
0% - 12%
U.S. equities
 
15% - 35%
International equities
 
10% - 30%
Fixed-income securities
 
20% - 55%
Alternative investments
 
8% - 28%
The table below provides the fair values of the company’s pension and VEBA trust plan assets at December 31, 2016 and 2015, by asset category. The table also identifies the level of inputs used to determine the fair value of assets in each category. See Note 1 for the definitions of these levels. Certain investments that are measured at fair value using NAV per share (or its equivalent) as a practical expedient are not required to be categorized in the fair value hierarchy table. The total fair value of these investments is included in the table below to permit reconciliation of the fair value hierarchy to amounts presented in the funded status table above. As of December 31, 2016 and 2015, there were no investments expected to be sold at a value materially different than NAV.
 
 
Level 1
 
Level 2
 
Level 3
 
Total
$ in millions
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 

$ 72

 

$ 37

 

$ 2,477

 

$ 1,457

 
 
 
 
 

$ 2,549

 

$ 1,494

U.S. equities
 
3,686

 
4,043

 
—

 
—

 
$
3

 

$ 2

 
3,689

 
4,045

International equities
 
2,392

 
2,300

 
48

 
81

 
$
1

 
 
 
2,441

 
2,381

Fixed-income securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
 
 
 
 
 
1,109

 
530

 
 
 
 
 
1,109

 
530

U.S. Government Agency
 
 
 
 
 
424

 
717

 
 
 
 
 
424

 
717

Non-U.S. Government
 
 
 
 
 
108

 
274

 
 
 
 
 
108

 
274

Corporate debt
 
 
 
 
 
3,723

 
4,876

 
 
 
 
 
3,723

 
4,876

Asset backed
 
 
 
 
 
296

 
392

 
1

 
1

 
297

 
393

High yield debt
 
 
 
 
 
1,844

 
1,678

 
 
 
 
 
1,844

 
1,678

Bank loans
 
 
 
 
 
297

 
261

 
 
 
 
 
297

 
261

Other Assets
 
(10
)
 
20

 
12

 
5

 
 
 
 
 
2

 
25

Investments valued using NAV as a practical expedient
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. equities
 
 
 
 
 
 
 
 
 
 
 
 
 
700

 
593

International equities
 
 
 
 
 
 
 
 
 
 
 
 
 
3,329

 
2,470

Fixed-income funds
 
 
 
 
 
 
 
 
 
 
 
 
 
99

 
133

Hedge funds
 
 
 
 
 
 
 
 
 
 
 
 
 
220

 
219

Opportunistic investments
 
 
 
 
 
 
 
 
 
 
 
 
 
581

 
278

Private equities
 
 
 
 
 
 
 
 
 
 
 
 
 
1,801

 
1,850

Real estate funds
 
 
 
 
 
 
 
 
 
 
 
 
 
2,379

 
2,886

Fair value of plan assets at the end of the year
 

$6,140

 

$6,400

 

$10,338

 

$10,271

 

$5

 

$3

 

$25,592

 

$25,103
Estimated benefit payments
The following table reflects estimated future benefit payments for the next ten years, based upon the same assumptions used to measure the benefit obligation, and includes expected future employee service, as of December 31, 2016:
$ in millions
 
Pension Plans
 
Medical and
Life Plans
 
Total
Year Ending December 31
 
 
 
 
 
 
2017
 
$
1,531

 
$
150

 
$
1,681

2018
 
1,575

 
154

 
1,729

2019
 
1,622

 
152

 
1,774

2020
 
1,670

 
153

 
1,823

2021
 
1,718

 
153

 
1,871

2022 through 2026
 
9,251

 
731

 
9,982