XML 77 R40.htm IDEA: XBRL DOCUMENT v3.10.0.1
Retirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2018
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
 
2018
 
2017
 
2016
 
2018
 
2017
 
2016
Components of net periodic benefit cost
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
 
$
404

 
$
388

 
$
390

 
$
21

 
$
20

 
$
29

Interest cost
 
1,226

 
1,250

 
1,302

 
76

 
85

 
95

Expected return on plan assets
 
(2,217
)
 
(1,885
)
 
(1,853
)
 
(101
)
 
(89
)
 
(86
)
Amortization of prior service credit
 
(58
)
 
(57
)
 
(60
)
 
(21
)
 
(22
)
 
(22
)
Mark-to-market expense (benefit)
 
699

 
(445
)
 
1,041

 
(44
)
 
(91
)
 
(91
)
Other
 
—

 
(7
)
 
—

 
—

 
—

 
—

Net periodic benefit cost
 
$
54

 
$
(756
)
 
$
820

 
$
(69
)
 
$
(97
)
 
$
(75
)
Changes in unamortized benefit plan costs
The table below summarizes the components of changes in unamortized prior service credit for the years ended December 31, 2016, 2017 and 2018:
$ in millions
 
Pension Benefits
 
Medical and Life Benefits
 
Total
Changes in unamortized prior service credit
 
 
 
 
 
 
Amortization of prior service credit
 
$
60

 
$
22

 
$
82

Tax expense
 
(11
)
 
(9
)
 
(20
)
Change in unamortized prior service credit – 2016
 
49

 
13

 
62

Amortization of prior service credit
 
57

 
22

 
79

Tax expense
 
(26
)
 
(9
)
 
(35
)
Change in unamortized prior service credit – 2017
 
31

 
13

 
44

Amortization of prior service credit
 
58

 
21

 
79

Tax expense
 
(14
)
 
(5
)
 
(19
)
Change in unamortized prior service credit – 2018
 
$
44

 
$
16

 
$
60
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 defined benefit retirement 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
 
2018
 
2017
 
2018
 
2017
Plan Assets
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
 
$
27,226

 
$
24,384

 
$
1,338

 
$
1,208

Net (loss) gain on plan assets
 
(1,043
)
 
3,885

 
(65
)
 
208

Employer contributions
 
370

 
596

 
38

 
45

Participant contributions
 
9

 
11

 
25

 
24

Benefits paid
 
(1,685
)
 
(1,617
)
 
(148
)
 
(144
)
Acquired plan assets
 
2,293

 
—

 
58

 
—

Other
 
(20
)
 
(33
)
 
1

 
(3
)
Fair value of plan assets at end of year
 
27,150

 
27,226

 
1,247

 
1,338

Projected Benefit Obligation
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
 
31,967

 
30,409

 
2,110

 
2,100

Service cost
 
404

 
388

 
21

 
20

Interest cost
 
1,226

 
1,250

 
76

 
85

Participant contributions
 
9

 
11

 
25

 
24

Actuarial loss (gain)
 
(2,561
)
 
1,544

 
(211
)
 
26

Benefits paid
 
(1,685
)
 
(1,617
)
 
(148
)
 
(144
)
Acquired benefit obligation
 
2,895

 
—

 
50

 
—

Other
 
(24
)
 
(18
)
 
7

 
(1
)
Projected benefit obligation at end of year
 
32,231

 
31,967

 
1,930

 
2,110

Funded status
 
$
(5,081
)
 
$
(4,741
)
 
$
(683
)
 
$
(772
)
 
 
 
 
 
 
 
 
 
Classification of amounts recognized in the consolidated statements of financial position
 
 
 
 
 
 
 
 
Non-current assets
 
$
77

 
$
82

 
$
124

 
$
112

Current liability
 
(164
)
 
(154
)
 
(46
)
 
(42
)
Non-current liability
 
(4,994
)
 
(4,669
)
 
(761
)
 
(842
)
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
 
2018
 
2017
Projected benefit obligation
 
$
30,259

 
$
29,804

Accumulated benefit obligation
 
29,961

 
29,454

Fair value of plan assets
 
25,101

 
24,981
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
  
 
2018
 
2017
 
2018
 
2017
Assumptions used to determine benefit obligation at December 31
 
 
 
 
 
 
 
 
Discount rate
 
4.31
%
 
3.68
%
 
4.30
%
 
3.66
%
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)
 
3.25
%
 
3.00
%
 
 
 
 
Year that the cash balance crediting rate reaches the ultimate rate
 
2024

 
2023

 
 
 
 
Rate of compensation increase
 
3.00
%
 
3.00
%
 
 
 
 
Initial health care cost trend rate assumed for the next year
 
 
 
 
 
6.20
%
 
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

 
2023

Assumptions used to determine benefit cost for the year ended 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

 
 
 
 
Expected long-term return on plan assets
 
8.00
%
 
8.00
%
 
7.65
%
 
7.70
%
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
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, 2018:
  
 
Asset Allocation Ranges
Cash and cash equivalents
 
0% - 12%
Global Public Equities
 
35% - 55%
Fixed-income securities
 
20% - 40%
Alternative investments
 
13% - 33%
The table below provides the fair values of the company’s pension and Voluntary Employee Beneficiary Association (VEBA) trust plan assets at December 31, 2018 and 2017, 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, 2018 and 2017, there were no investments expected to be sold at a value materially different than NAV.
 
 
Level 1
 
Level 2
 
Level 3
 
Total
$ in millions
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Asset category
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
209

 
$
55

 
$
2,655

 
$
4,086

 
 
 
 
 
$
2,864

 
$
4,141

U.S. equities
 
2,859

 
3,365

 
 
 
 
 
 
 
$
1

 
2,859

 
3,366

International equities
 
2,711

 
2,453

 
 
 
 
 
$
1

 
1

 
2,712

 
2,454

Fixed-income securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasuries
 
26

 
—

 
1,501

 
1,282

 
 
 
 
 
1,527

 
1,282

U.S. Government Agency
 
 
 
 
 
322

 
345

 
 
 
 
 
322

 
345

Non-U.S. Government
 
 
 
 
 
206

 
135

 
 
 
 
 
206

 
135

Corporate debt
 
34

 
—

 
4,141

 
4,406

 
 
 
 
 
4,175

 
4,406

Asset backed
 
 
 
 
 
297

 
255

 
 
 
 
 
297

 
255

High yield debt
 
11

 
—

 
153

 
866

 
 
 
 
 
164

 
866

Bank loans
 
 
 
 
 
20

 
248

 
 
 
 
 
20

 
248

Other Assets
 
15

 
15

 
51

 
3

 
2

 
2

 
68

 
20

Investments valued using NAV as a practical expedient
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. equities
 
 
 
 
 
 
 
 
 
 
 
 
 
1,170

 
1,053

International equities
 
 
 
 
 
 
 
 
 
 
 
 
 
4,017

 
4,315

Fixed-income funds
 
 
 
 
 
 
 
 
 
 
 
 
 
1,386

 
129

Hedge funds
 
 
 
 
 
 
 
 
 
 
 
 
 
351

 
166

Opportunistic investments
 
 
 
 
 
 
 
 
 
 
 
 
 
1,367

 
873

Private equities
 
 
 
 
 
 
 
 
 
 
 
 
 
2,510

 
2,091

Real estate funds
 
 
 
 
 
 
 
 
 
 
 
 
 
2,382

 
2,419

Fair value of plan assets at the end of the year
 
$
5,865

 
$
5,888

 
$
9,346

 
$
11,626

 
$
3

 
$
4

 
$
28,397

 
$
28,564
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, 2018:
$ in millions
 
Pension Plans
 
Medical and Life Plans
 
Total
Year Ending December 31
 
 
 
 
 
 
2019
 
$
1,781

 
$
153

 
$
1,934

2020
 
1,834

 
155

 
1,989

2021
 
1,880

 
142

 
2,022

2022
 
1,928

 
141

 
2,069

2023
 
1,970

 
139

 
2,109

2024 through 2028
 
10,384

 
651

 
11,035