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Retirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2017
Retirement Benefits [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
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
$
424

 
$
446

 
$
484

 
$
23

 
$
30

 
$
35

Interest cost
 
1,234

 
1,284

 
1,224

 
84

 
94

 
94

Expected return on plan assets
 
(1,885
)
 
(1,853
)
 
(1,975
)
 
(89
)
 
(86
)
 
(89
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
 
(57
)
 
(60
)
 
(60
)
 
(22
)
 
(22
)
 
(28
)
Net loss from previous years
 
712

 
714

 
682

 
9

 
16

 
27

Other
 
4

 
—

 
—

 
1

 
—

 
—

Net periodic benefit cost
 
$
432

 
$
531

 
$
355

 
$
6

 
$
32

 
$
39
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, 2015, 2016 and 2017:
$ in millions
 
Pension Benefits
 
Medical and Life Benefits
 
Total
Changes in unamortized benefit plan costs
 
 
 
 
 
 
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

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

Change in net actuarial loss
 
(476
)
 
(95
)
 
(571
)
Amortization of:
 
 
 
 
 
 
Prior service credit
 
57

 
22

 
79

Net loss from previous years
 
(712
)
 
(9
)
 
(721
)
Tax (benefit) expense related to above items
 
365

 
18

 
383

Change in unamortized benefit plan costs – 2017
 
$
(766
)
 
$
(64
)
 
$
(830
)
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
 
2017
 
2016
 
2017
 
2016
Amounts recorded in accumulated other comprehensive loss
 
 
 
 
 
 
 
 
Net actuarial loss
 
$
(7,842
)
 
$
(9,030
)
 
$
(9
)
 
$
(113
)
Prior service credit
 
187

 
244

 
22

 
44

Income tax benefits related to above items
 
3,042

 
3,407

 
14

 
32

Unamortized benefit plan costs
 
$
(4,613
)
 
$
(5,379
)
 
$
27

 
$
(37
)
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
 
2017
 
2016
 
2017
 
2016
Plan Assets
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
$
24,384

 
$
23,950

 
$
1,208

 
$
1,153

Net gain on plan assets
 
3,885

 
1,867

 
208

 
97

Employer contributions
 
596

 
81

 
45

 
83

Participant contributions
 
11

 
11

 
24

 
20

Benefits paid
 
(1,617
)
 
(1,480
)
 
(144
)
 
(146
)
Other
 
(33
)
 
(45
)
 
(3
)
 
1

Fair value of plan assets at end of year
 
27,226

 
24,384

 
1,338

 
1,208

Projected Benefit Obligation
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
 
30,409

 
29,182

 
2,100

 
2,181

Service cost
 
424

 
446

 
23

 
30

Interest cost
 
1,234

 
1,284

 
84

 
94

Participant contributions
 
11

 
11

 
24

 
20

Actuarial loss (gain)
 
1,526

 
1,026

 
26

 
(80
)
Benefits paid
 
(1,617
)
 
(1,480
)
 
(144
)
 
(146
)
Other
 
(20
)
 
(60
)
 
(3
)
 
1

Projected benefit obligation at end of year
 
31,967

 
30,409

 
2,110

 
2,100

Funded status
 
$
(4,741
)
 
$
(6,025
)
 
$
(772
)
 
$
(892
)
 
 
 
 
 
 
 
 
 
Classification of amounts recognized in the consolidated statements of financial position
 
 
 
 
 
 
 
 
Non-current assets
 
$
82

 
$
2

 
$
112

 
$
87

Current liability
 
(154
)
 
(146
)
 
(42
)
 
(42
)
Non-current liability
 
(4,669
)
 
(5,881
)
 
(842
)
 
(937
)
Amounts expected to be recognized in 2018 net periodic benefit cost
The following table shows those amounts expected to be recognized in net periodic benefit cost in 2018:
$ in millions
Pension Benefits
 
Medical and Life Benefits
 
Total
Amounts expected to be recognized in 2018 net periodic benefit cost
 
 
 
 
 
Net actuarial loss
$
535

 
$
—

 
$
535

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
 
2017
 
2016
Projected benefit obligation
 
$
29,804

 
$
30,350

Accumulated benefit obligation
 
29,454

 
30,065

Fair value of plan assets
 
24,981

 
24,322
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
  
 
2017
 
2016
 
2017
 
2016
Assumptions used to determine benefit obligation at December 31
 
 
 
 
 
 
 
 
Discount rate
 
3.68
%
 
4.19
%
 
3.66
%
 
4.13
%
Initial cash balance crediting rate assumed for the next year
 
2.75
%
 
3.10
%
 
 
 
 
Rate to which the cash balance crediting rate is assumed to increase (the ultimate rate)
 
3.00
%
 
3.60
%
 
 
 
 
Year that the cash balance crediting rate reaches the ultimate rate
 
2023

 
2022

 
 
 
 
Rate of compensation increase
 
3.00
%
 
3.00
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
6.50
%
 
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
 
 
 
 
 
2023

 
2020

Assumptions used to determine benefit cost for the year ended 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

 
 
 
 
Expected long-term return on plan assets
 
8.00
%
 
8.00
%
 
7.70
%
 
7.70
%
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
Plan asset allocation
The table below provides the fair values of the company’s pension and Voluntary Employee Beneficiary Association (VEBA) trust plan assets at December 31, 2017 and 2016, 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 net asset value (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, 2017 and 2016, there were no investments expected to be sold at a value materially different than NAV.
 
 
Level 1
 
Level 2
 
Level 3
 
Total
$ in millions
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
55

 
$
72

 
$
4,086

 
$
2,477

 
 
 
 
 
$
4,141

 
$
2,549

U.S. equities
 
3,365

 
3,686

 
 
 
 
 
$
1

 
$
3

 
3,366

 
3,689

International equities
 
2,453

 
2,392

 
—

 
48

 
1

 
1

 
2,454

 
2,441

Fixed-income securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
 
 
 
 
 
1,282

 
1,109

 
 
 
 
 
1,282

 
1,109

U.S. Government Agency
 
 
 
 
 
345

 
424

 
 
 
 
 
345

 
424

Corporate bond
 


 


 
2

 
—

 
 
 
 
 
2

 
—

Non-U.S. Government
 
 
 
 
 
135

 
108

 
 
 
 
 
135

 
108

Corporate debt
 
 
 
 
 
4,404

 
3,723

 
 
 
 
 
4,404

 
3,723

Asset backed
 
 
 
 
 
255

 
296

 
—

 
1

 
255

 
297

High yield debt
 
 
 
 
 
866

 
1,844

 
 
 
 
 
866

 
1,844

Bank loans
 
 
 
 
 
248

 
297

 
 
 
 
 
248

 
297

Other Assets
 
15

 
(10
)
 
3

 
12

 
2

 
—

 
20

 
2

Investments valued using NAV as a practical expedient
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. equities
 
 
 
 
 
 
 
 
 
 
 
 
 
1,053

 
700

International equities
 
 
 
 
 
 
 
 
 
 
 
 
 
4,315

 
3,329

Fixed-income funds
 
 
 
 
 
 
 
 
 
 
 
 
 
129

 
99

Hedge funds
 
 
 
 
 
 
 
 
 
 
 
 
 
166

 
220

Opportunistic investments
 
 
 
 
 
 
 
 
 
 
 
 
 
873

 
581

Private equities
 
 
 
 
 
 
 
 
 
 
 
 
 
2,091

 
1,801

Real estate funds
 
 
 
 
 
 
 
 
 
 
 
 
 
2,419

 
2,379

Fair value of plan assets at the end of the year
 
$
5,888

 
$
6,140

 
$
11,626

 
$
10,338

 
$
4

 
$
5

 
$
28,564

 
$
25,592

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, 2017:
  
 
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%
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, 2017:
$ in millions
 
Pension Plans
 
Medical and Life Plans
 
Total
Year Ending December 31
 
 
 
 
 
 
2018
 
$
1,573

 
$
149

 
$
1,722

2019
 
1,618

 
153

 
1,771

2020
 
1,665

 
144

 
1,809

2021
 
1,713

 
144

 
1,857

2022
 
1,757

 
143

 
1,900

2023 through 2027
 
9,410

 
676

 
10,086