Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2017

Dec. 31, 2016

Employee Benefits

Schedule of estimated future benefit payments

The qualified pension, non-qualified pension and post-retirement health care benefit payments and premiums and life insurance premium payments are paid by us or distributed from plan assets. The estimated benefit payments provided below are based on actuarial assumptions using the demographics of the employee and retiree populations and have been reduced by estimated participant contributions.

	Pension Plans		Post-Retirement Benefit Plans	Medicare Part D Subsidy Receipts
	(Dollars in millions)
Estimated future benefit payments:
2018	$	1,031	293	(7	)
2019	973		280	(7	)
2020	951		271	(7	)
2021	929		262	(7	)
2022	908		253	(7	)
2023 - 2027	4,170		1,122	(31	)

Schedule of actuarial assumptions used to compute net periodic benefit expense

The actuarial assumptions used to compute the net periodic benefit expense for our qualified pension, non-qualified pension and post-retirement benefit plans are based upon information available as of the beginning of the year, as presented in the following table.

	Pension Plans						Post-Retirement Benefit Plans
	2017		2016		2015		2017		2016		2015
Actuarial assumptions at beginning of year:
Discount rate	3.50% - 4.10%		3.50% - 4.50%		3.50% - 4.10%		3.90	%	4.15	%	3.80	%
Rate of compensation increase	3.25	%	3.25	%	3.25	%	N/A		N/A		N/A
Expected long-term rate of return on plan assets	6.50	%	7.00	%	7.50	%	5.00	%	7.00	%	7.50	%
Initial health care cost trend rate	N/A		N/A		N/A		7.00% / 5.00%		5.00% / 5.25%		6.00% / 6.50%
Ultimate health care cost trend rate	N/A		N/A		N/A		4.50	%	4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		N/A		2025		2025		2025

_______________________________________________________________________________

N/A-Not applicable

Schedule of actuarial assumptions used to compute the funded status for the plans

The actuarial assumptions used to compute the funded status for the plans are based upon information available as of December 31, 2017 and 2016 and are as follows:

	Pension Plans				Post-Retirement Benefit Plans
	December 31,				December 31,
	2017		2016		2017		2016
Actuarial assumptions at end of year:
Discount rate	3.44% - 3.70%		3.50% - 4.10%		3.53	%	3.90	%
Rate of compensation increase	3.25	%	3.25	%	N/A		N/A
Initial health care cost trend rate	N/A		N/A		7.00% / 5.00%		5.00% / 5.50%
Ultimate health care cost trend rate	N/A		N/A		4.50	%	4.50	%
Year ultimate trend rate is reached	N/A		N/A		2025		2025

_______________________________________________________________________________

N/A-Not applicable

Schedule of gross notional exposure of the derivative instruments directly held by the plans

The gross notional exposure of the derivative instruments directly held by the pension benefit plan is shown below. The notional amount of the derivatives corresponds to market exposure but does not represent an actual cash investment. Our post-retirement plans were not invested in derivative instruments for the years ended December 31, 2017 or 2016.

	Gross Notional Exposure
	Pension Plan
	Years Ended December 31,
	2017		2016
	(Dollars in millions)
Derivative instruments:
Exchange-traded U.S. equity futures	$	256	104
Exchange-traded Treasury and other interest rate futures	1,830		1,813
Interest rate swaps	137		260
Credit default swaps	100		240
Equity index swaps	1		—
Foreign exchange forwards	293		778
Options	259		206

Schedule of fair value of the plans' assets by asset category

The table below presents the fair value of plan assets valued at NAV by category for our pension and post-retirement plans at December 31, 2017 and 2016.

	Fair Value of Plan Assets Valued at NAV
	Pension Plans at December 31,			Post-Retirement Benefit Plans at December 31,
	2017		2016	2017	2016
	(Dollars in millions)
Investment grade bonds (a)	$	163	106	—	—
High yield bonds (b)	483		521	—	1
Emerging market bonds (c)	14		6	—	—
Diversified strategies (d)	538		522	—	1
U.S. stocks (e)	73		58	—	—
Non-U.S. stocks (f)	627		560	—	1
Emerging market stocks (g)	98		76	—	—
Private equity (h)	460		506	10	14
Private debt (i)	374		369	1	1
Market neutral hedge funds (j)	769		739	—	1
Directional hedge funds (j)	636		657	—	1
Real estate (k)	903		926	1	8
Multi-asset strategies (l)	424		412	—	—
Cash equivalents and short-term investments (n)	57		106	10	13
Total investments valued at NAV	$	5,619	5,564	22	41

Schedule of the unfunded status of the benefit plans

The following table presents the unfunded status of the pensions and post-retirement benefit plans:

	Pension Plans					Post-Retirement Benefit Plans
	Years Ended December 31,					Years Ended December 31,
	2017			2016		2017		2016
	(Dollars in millions)
Benefit obligation	$	(13,122	)	(13,301	)	(3,375	)	(3,413	)
Fair value of plan assets	11,060			10,892		23		53
Unfunded status	(2,062		)	(2,409	)	(3,352	)	(3,360	)
Current portion of unfunded status	$	(5	)	(6	)	(262	)	(236	)
Non-current portion of unfunded status	$	(2,057	)	(2,403	)	(3,090	)	(3,124	)

Schedule of items not recognized as a component of net periodic benefits expense

The following table presents cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2016, items recognized as a component of net periodic benefits expense in 2017, additional items deferred during 2017 and cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2017. The items not recognized as a component of net periodic benefits expense have been recorded on our consolidated balance sheets in accumulated other comprehensive loss:

	As of and for the Years Ended December 31,
	2016			Recognition of Net Periodic Benefits Expense		Deferrals		Net Change in AOCL		2017
	(Dollars in millions)
Accumulated other comprehensive loss:
Pension plans:
Net actuarial (loss) gain	$	(3,148	)	205		51		256		(2,892	)
Prior service benefit (cost)	62			(8	)	—		(8	)	54
Deferred income tax benefit (expense)	1,191			(72	)	(12	)	(84	)	1,107
Total pension plans	(1,895		)	125		39		164		(1,731	)
Post-retirement benefit plans:
Net actuarial (loss) gain	(137		)	—		(113	)	(113	)	(250	)
Prior service (cost) benefit	(127		)	20		—		20		(107	)
Deferred income tax benefit (expense)	102			(7	)	27		20		122
Total post-retirement benefit plans	(162		)	13		(86	)	(73	)	(235	)
Total accumulated other comprehensive loss	$	(2,057	)	138		(47	)	91		(1,966	)

The following table presents cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2015, items recognized as a component of net periodic benefits expense in 2016, additional items deferred during 2016 and cumulative items not recognized as a component of net periodic benefits expense as of December 31, 2016. The items not recognized as a component of net periodic benefits expense have been recorded on our consolidated balance sheets in accumulated other comprehensive loss:

	As of and for the Years Ended December 31,
	2015			Recognition of Net Periodic Benefits Expense		Deferrals		Net Change in AOCL		2016
	(Dollars in millions)
Accumulated other comprehensive loss:
Pension plans:
Net actuarial (loss) gain	$	(2,857	)	175		(466	)	(291	)	(3,148	)
Prior service benefit (cost)	72			(8	)	(2	)	(10	)	62
Deferred income tax benefit (expense)	1,070			(67	)	188		121		1,191
Total pension plans	(1,715		)	100		(280	)	(180	)	(1,895	)
Post-retirement benefit plans:
Net actuarial (loss) gain	(147		)	—		10		10		(137	)
Prior service (cost) benefit	(147		)	20		—		20		(127	)
Deferred income tax benefit (expense)	114			(8	)	(4	)	(12	)	102
Total post-retirement benefit plans	(180		)	12		6		18		(162	)
Total accumulated other comprehensive loss	$	(1,895	)	112		(274	)	(162	)	(2,057	)

Schedule of estimated items to be recognized in 2013 as a component of net periodic benefit expense

The following table presents estimated items to be recognized in 2018 as a component of net periodic benefit expense of the pension, non-qualified pension and post-retirement benefit plans:

	Pension Plans			Post-Retirement Plans
	(Dollars in millions)
Estimated recognition of net periodic (cost) benefit income in 2018:
Net actuarial loss	$	(205	)	—
Prior service income (cost)	8			(20	)
Deferred income tax benefit	48			4
Estimated net periodic benefit expense to be recorded in 2018 as a component of other comprehensive (loss) income	$	(149	)	(16	)

Pension plans

Employee Benefits

Schedule of components of net periodic pension income and post-retirement benefit expense

Net periodic benefit expense (income) for our qualified and non-qualified pension plans includes the following components:

	Pension Plans Years Ended December 31,
	2017			2016		2015
	(Dollars in millions)
Service cost	$	63		64		83
Interest cost	411			427		568
Expected return on plan assets	(666		)	(732	)	(898	)
Special termination benefits charge	—			13		—
Recognition of prior service (credit) cost	(8		)	(8	)	5
Recognition of actuarial loss	205			175		161
Net periodic pension benefit expense (income)	$	5		(61	)	(81	)

Schedule of change in benefit obligation

The following tables summarize the change in the benefit obligations for the pension and post-retirement benefit plans:

	Pension Plans Years Ended December 31,
	2017			2016		2015
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	13,301		13,349		15,042
Service cost	63			64		83
Interest cost	411			427		568
Plan amendments	—			2		(100	)
Special termination benefits charge	—			13		—
Actuarial loss (gain)	590			487		(800	)
Benefits paid by company	(5		)	(7	)	(6	)
Benefits paid from plan assets	(1,238		)	(1,034	)	(1,438	)
Benefit obligation at end of year	$	13,122		13,301		13,349

Schedule of change in plan assets

The following tables summarize the change in the fair value of plan assets for the pension and post-retirement benefit plans:

	Pension Plans Years Ended December 31,
	2017			2016		2015
	(Dollars in millions)
Change in plan assets
Fair value of plan assets at beginning of year	$	10,892		11,072		12,571
Return on plan assets	1,306			754		(161	)
Employer contributions	100			100		100
Benefits paid from plan assets	(1,238		)	(1,034	)	(1,438	)
Fair value of plan assets at end of year	$	11,060		10,892		11,072

Schedule of fair value of the plans' assets by asset category

The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2017. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivables, pending trades and accrued expenses.

	Fair Value of Pension Plan Assets at December 31, 2017
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	432	1,315	—	$	1,747
High yield bonds (b)	—		575	7	582
Emerging market bonds (c)	217		219	1	437
U.S. stocks (e)	1,030		2	3	1,035
Non-U.S. stocks (f)	706		—	—	706
Private debt (i)	—		—	15	15
Multi-asset strategies (l)	440		—	—	440
Derivatives (m)	2		—	—	2
Cash equivalents and short-term investments (n)	—		476	1	477
Total investments, excluding investments valued at NAV	$	2,827	2,587	27	5,441
Investments valued at NAV					5,619
Total pension plan assets					$	11,060

The tables below present the fair value of plan assets by category and the input levels used to determine those fair values at December 31, 2016. It is important to note that the asset allocations do not include market exposures that are gained with derivatives. Investments include dividend and interest receivable, pending trades and accrued expenses.

	Fair Value of Pension Plan Assets at December 31, 2016
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	420	1,404	—	$	1,824
High yield bonds (b)	7		597	11	615
Emerging market bonds (c)	212		212	—	424
U.S. stocks (e)	1,146		1	—	1,147
Non-U.S. stocks (f)	721		1	—	722
Multi-asset strategies (l)	389		—	—	389
Cash equivalents and short-term investments (n)	—		207	—	207
Total investments, excluding investments valued at NAV	$	2,895	2,422	11	5,328
Investments valued at NAV					5,564
Total pension plan assets					$	10,892

Summary of changes in fair value of defined benefit plans' Level 3 assets

The table below presents a rollforward of the pension plan assets valued using Level 3 inputs:

	Pension Plan Assets Valued Using Level 3 Inputs
	High Yield Bonds			Emerging Market Bonds		U.S. Stocks	Private Debt	Cash	Total
	(Dollars in millions)
Balance at December 31, 2015	$	13		1		—	—	—	14
Net transfers	(2		)	—		—	—	—	(2	)
Acquisitions	1			—		—	—	—	1
Dispositions	(1		)	(1	)	—	—	—	(2	)
Balance at December 31, 2016	11			—		—	—	—	11
Net transfers	(1		)	—		—	14	—	13
Acquisitions	2			1		—	1	1	5
Actual return on plan assets	(5		)	—		3	—	—	(2	)
Balance at December 31, 2017	$	7		1		3	15	1	27

Post-Retirement benefit plans

Employee Benefits

Schedule of effects of a 100 basis point change in assumed health care cost rates

A change of 100 basis points in the assumed initial health care cost trend rate would have had the following effects in 2017:

	100 Basis Points Change
	Increase		(Decrease)
	(Dollars in millions)
Effect on the aggregate of the service and interest cost components of net periodic post-retirement benefit expense (consolidated statement of operations)	$	2	(2	)
Effect on benefit obligation (consolidated balance sheet)	60		(57	)

Schedule of components of net periodic pension income and post-retirement benefit expense

Net periodic benefit expense for our post-retirement benefit plans includes the following components:

	Post-Retirement Plans Years Ended December 31,
	2017			2016		2015
	(Dollars in millions)
Service cost	$	18		19		24
Interest cost	100			111		140
Expected return on plan assets	(2		)	(7	)	(21	)
Special termination benefits charge	—			3		—
Recognition of prior service cost	20			20		19
Net periodic post-retirement benefit expense	$	136		146		162

Schedule of change in benefit obligation

	Post-Retirement Benefit Plans Years Ended December 31,
	2017			2016		2015
	(Dollars in millions)
Change in benefit obligation
Benefit obligation at beginning of year	$	3,413		3,567		3,830
Service cost	18			19		24
Interest cost	100			111		140
Participant contributions	54			57		57
Direct subsidy receipts	7			5		8
Special termination benefits charge	—			3		—
Actuarial loss (gain)	112			(13	)	(148	)
Benefits paid by company	(298		)	(191	)	(181	)
Benefits paid from plan assets	(31		)	(145	)	(163	)
Benefit obligation at end of year	$	3,375		3,413		3,567

Schedule of change in plan assets

	Post-Retirement Benefit Plans Years Ended December 31,
	2017			2016		2015
	(Dollars in millions)
Change in plan assets
Fair value of plan assets at beginning of year	$	53		193		353
Return on plan assets	1			5		3
Benefits paid from plan assets	(31		)	(145	)	(163	)
Fair value of plan assets at end of year	$	23		53		193

Schedule of fair value of the plans' assets by asset category

	Fair Value of Post-Retirement Plan Assets at December 31, 2017
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	—	—	—	$	—
High yield bonds (b)	—		—	—	—
U.S. stocks (e)	1		—	—	1
Non-U.S. stocks (f)	—		—	—	—
Cash equivalents and short-term investments (n)	—		—	—	—
Total investments, excluding investments valued at NAV	$	1	—	—	1
Investments valued at NAV					22
Total post-retirement plan assets					$	23

	Fair Value of Post-Retirement Plan Assets at December 31, 2016
	Level 1		Level 2	Level 3	Total
	(Dollars in millions)
Investment grade bonds (a)	$	1	2	—	$	3
High yield bonds (b)	—		1	—	1
U.S. stocks (e)	2		—	—	2
Non-U.S. stocks (f)	1		—	—	1
Cash equivalents and short-term investments (n)	—		5	—	5
Total investments, excluding investments valued at NAV	$	4	8	—	12
Investments valued at NAV					41
Total post-retirement plan assets					$	53