Annual report pursuant to Section 13 and 15(d)

COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS (Tables)

v3.20.4
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS (Tables)
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Net Periodic Benefit Cost for Pension and Postretirement Benefit Plans
Information about net periodic benefit cost for the company-sponsored pension and postretirement defined benefit plans is as follows (in millions):
  U.S. Pension Benefits U.S. Postretirement
Medical Benefits		 International
Pension Benefits
  2020 2019 2018 2020 2019 2018 2020 2019 2018
Net Periodic Benefit Cost:
Service cost $ 1,853  $ 1,439  $ 1,661  $ 29  $ 23  $ 29  $ 67  $ 57  $ 62 
Interest cost 1,977  2,067  1,799  91  108  104  40  47  45 
Expected return on plan assets (3,549) (3,130) (3,201) (8) (8) (8) (86) (76) (77)
Amortization of prior service cost 218  218  193  7  7  7  2  2  1 
Actuarial (gain) loss 6,211  2,296  1,603  246  37  —  27  54  24 
Curtailment and settlement loss —  —  —  —  —  —  —  —  — 
Net periodic benefit cost $ 6,710  $ 2,890  $ 2,055  $ 365  $ 167  $ 132  $ 50  $ 84  $ 55 
Weighted Average Actuarial Assumptions Used Disclosure
The table below provides the weighted-average actuarial assumptions used to determine the net periodic benefit cost:
  U.S. Pension Benefits U.S. Postretirement
Medical Benefits		 International
Pension Benefits
  2020 2019 2018 2020 2019 2018 2020 2019 2018
Service cost discount rate 3.60  % 4.50  % 3.84  % 3.59  % 4.51  % 3.82  % 3.01  % 3.58  % 3.35  %
Interest cost discount rate 3.60  % 4.50  % 3.84  % 3.59  % 4.51  % 3.82  % 2.67  % 3.25  % 3.01  %
Rate of compensation increase 4.22  % 4.25  % 4.25  % N/A N/A N/A 3.00  % 3.24  % 3.22  %
Expected return on plan assets 7.77  % 7.75  % 7.75  % 7.20  % 7.20  % 7.20  % 5.55  % 5.69  % 5.76  %
Cash balance interest credit rate 2.50  % 2.98  % 2.50  % N/A N/A N/A 2.59  % 3.17  % 3.07  %
The table below provides the weighted-average actuarial assumptions used to determine the benefit obligations of our plans:
  U.S. Pension Benefits U.S. Postretirement
Medical Benefits		 International
Pension Benefits
  2020 2019 2020 2019 2020 2019
Discount rate 2.90  % 3.60  % 2.88  % 3.59  % 1.94  % 2.21  %
Rate of compensation increase 4.21  % 4.22  % N/A N/A 2.93  % 3.00  %
Cash balance interest credit rate 2.50  % 2.50  % N/A N/A 2.74  % 2.59  %
Reconciliation of the Changes in the Plans' Benefit Obligations and Fair Value of Plan Assets The following tables provide a reconciliation of the changes in the plans’ benefit obligations and fair value of plan assets as of the respective measurement dates in each year (in millions):
  U.S. Pension Benefits U.S. Postretirement
Medical Benefits		 International
Pension Benefits
  2020 2019 2020 2019 2020 2019
Benefit Obligations:
Projected benefit obligation at beginning of year $ 54,039  $ 45,333  $ 2,616  $ 2,510  $ 1,906  $ 1,552 
Service cost 1,853  1,439  29  23  67  57 
Interest cost 1,977  2,067  91  108  40  47 
Gross benefits paid (1,846) (2,394) (274) (288) (38) (40)
Plan participants’ contributions —  —  32  30  3  3 
Plan amendments 171  —  —  —  1  1 
Actuarial (gain)/loss 9,728  7,594  265  233  123  213 
Foreign currency exchange rate changes —  —  —  —  80  47 
Curtailments and settlements —  —  —  —  (6) (2)
Other —  —  —  —  1  28 
Projected benefit obligation at end of year $ 65,922  $ 54,039  $ 2,759  $ 2,616  $ 2,177  $ 1,906 
  U.S. Pension Benefits U.S. Postretirement
Medical Benefits		 International
Pension Benefits
  2020 2019 2020 2019 2020 2019
Fair Value of Plan Assets:
Fair value of plan assets at beginning of year $ 46,172  $ 39,554  $ 37  $ 26  $ 1,558  $ 1,284 
Actual return on plan assets 5,878  6,991  (9) (5) 184  171 
Employer contributions 2,793  2,021  263  274  69  67 
Plan participants’ contributions —  —  32  30  3  3 
Gross benefits paid (1,846) (2,394) (274) (288) (38) (40)
Foreign currency exchange rate changes —  —  —  —  62  49 
Curtailments and settlements —  —  —  —  (3) (2)
Other —  —  —  —  —  26 
Fair value of plan assets at end of year $ 52,997  $ 46,172  $ 49  $ 37  $ 1,835  $ 1,558 
Funded Status as of the Respective Measurement Dates in Each Year and the Amounts Recognized in Balance Sheet
The following table discloses the funded status of our plans and the amounts recognized in our consolidated balance sheets as of December 31 (in millions):
  U.S. Pension Benefits U.S. Postretirement
Medical Benefits		 International
Pension Benefits
  2020 2019 2020 2019 2020 2019
Funded Status:
Fair value of plan assets $ 52,997  $ 46,172  $ 49  $ 37  $ 1,835  $ 1,558 
Benefit obligation (65,922) (54,039) (2,759) (2,616) (2,177) (1,906)
Funded status $ (12,925) $ (7,867) $ (2,710) $ (2,579) $ (342) $ (348)
Funded Status Recognized in our Balance Sheet:
Other non-current assets $ —  $ —  $ —  $ —  $ 51  $ 34 
Other current liabilities (22) (22) (184) (200) (5) (5)
Pension and postretirement benefit obligations (12,903) (7,845) (2,526) (2,379) (388) (377)
Net liability $ (12,925) $ (7,867) $ (2,710) $ (2,579) $ (342) $ (348)
Amounts Recognized in AOCI:
Unrecognized net prior service cost $ (753) $ (800) $ (9) $ (16) $ (11) $ (12)
Unrecognized net actuarial gain (loss) (6,592) (5,404) (276) (240) (151) (162)
Gross unrecognized cost (7,345) (6,204) (285) (256) (162) (174)
Deferred tax assets (liabilities) 1,770  1,497  69  62  38  40 
Net unrecognized cost $ (5,575) $ (4,707) $ (216) $ (194) $ (124) $ (134)
Projected Benefit Obligation, Accumulated Benefit Obligation, and Fair Value of Plan Assets for Pension Plans With an Accumulated Benefit Obligation in Excess of Plan Assets
As of December 31, 2020 and 2019, the projected benefit obligation, the accumulated benefit obligation and the fair value of plan assets for pension plans with benefit obligations in excess of plan assets were as follows (in millions):
  Projected Benefit Obligation
Exceeds the Fair Value of Plan Assets		 Accumulated Benefit Obligation
Exceeds the Fair Value of Plan Assets
2020 2019 2020 2019
U.S. Pension Benefits:
Projected benefit obligation $ 65,922  $ 54,039  $ 65,922  $ 54,039 
Accumulated benefit obligation 64,937  53,194  64,937  53,194 
Fair value of plan assets 52,997  46,172  52,997  46,172 
International Pension Benefits:
Projected benefit obligation $ 845  $ 1,319  $ 845  $ 1,319 
Accumulated benefit obligation 728  1,210  728  1,210 
Fair value of plan assets 452  948  452  948 
Fair Values of U.S. Pension and Postretirement Benefit Plan Assets by Asset Category as Well as the Percentage That Each Category Comprises of Total Plan Assets and the Respective Target Allocations
The fair values of U.S. and international pension and postretirement benefit plan assets by asset category as of December 31, 2020 are presented below (in millions), as well as the percentage that each category comprises of our total plan assets and the respective target allocations:
Total
Assets(1)
Level 1 Level 2 Level 3 Percentage of
Plan Assets 		Target
Allocation
Asset Category (U.S. Plans):
Cash and cash equivalents $ 1,593  $ 1,510  $ 83  $ —  3.0  %
1-5
Equity Securities:
U.S. Large Cap 8,294  4,272  4,022  — 
U.S. Small Cap 370  370  —  — 
Emerging Markets 2,106  1,503  603  — 
Global Equity 3,940  3,624  316  — 
International Equity 4,335  2,043  2,292  — 
Total Equity Securities 19,045  11,812  7,233  —  35.9 
25-55
Fixed Income Securities:
U.S. Government Securities 16,145  14,646  1,499  — 
Corporate Bonds 6,146  —  6,143  3 
Global Bonds 42  —  42  — 
Municipal Bonds 27  —  27  — 
Total Fixed Income Securities 22,360  14,646  7,711  3  42.2 
35-55
Other Investments:
Hedge Funds 3,518  —  1,652  —  6.6 
5-15
Private Equity 3,424  —  —  —  6.5 
1-10
Private Debt 695  —  —  —  1.3 
1-10
Real Estate 1,986  244  82  —  3.7 
1-10
Structured Products(2)
161  —  161  —  0.3 
1-5
Risk Parity Funds 264  —  —  —  0.5 
1-10
Total U.S. Plan Assets $ 53,046  $ 28,212  $ 16,922  $ 3  100.0  %
Asset Category (International Plans):
Cash and cash equivalents $ 84  $ 45  $ 39  —  4.6 
1-10
Equity Securities:
Local Markets Equity 214  —  214  — 
U.S. Equity 59  —  59  — 
Emerging Markets 55  41  14  — 
International / Global Equity 534  210  324  — 
Total Equity Securities 862  251  611  —  47.0 
25-55
Fixed Income Securities:
Local Government Bonds 102  —  102  — 
Corporate Bonds 215  22  193  — 
Global Bonds 125  125  —  — 
Total Fixed Income Securities 442  147  295  —  24.1 
20-40
Other Investments:
Real Estate 154  —  80  21  8.3 
5-10
Other 293  —  236  41  16.0 
1-20
Total International Plan Assets $ 1,835  $ 443  $ 1,261  $ 62  100.0  %
Total Plan Assets $ 54,881  $ 28,655  $ 18,183  $ 65 
(1) Certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy but are included in the category totals.
(2) Represents mortgage and asset-backed securities.
The fair values of U.S. and international pension and postretirement benefit plan assets by asset category as of December 31, 2019 are presented below (in millions), as well as the percentage that each category comprises of our total plan assets and the respective target allocations:
Total
Assets(1)
Level 1 Level 2 Level 3 Percentage of
Plan Assets 		Target
Allocation
Asset Category (U.S. Plans):
Cash and cash equivalents $ 964  $ 818  $ 146  $ —  2.1  %
1-5
Equity Securities:
U.S. Large Cap 6,607  2,889  3,718  — 
U.S. Small Cap 505  376  129  — 
Emerging Markets 2,039  1,523  516  — 
Global Equity 2,892  2,553  339  — 
International Equity 4,591  2,499  2,092  — 
Total Equity Securities 16,634  9,840  6,794  —  36.0 
25-55
Fixed Income Securities:
U.S. Government Securities 14,077  12,980  1,097  — 
Corporate Bonds 5,051  —  5,051  — 
Global Bonds 50  —  50  — 
Municipal Bonds 24  —  24  — 
Total Fixed Income Securities 19,202  12,980  6,222  —  41.5 
35-55
Other Investments:
Hedge Funds 3,273  —  1,380  —  7.1 
5-15
Private Equity 3,030  —  —  —  6.6 
1-10
Private Debt 772  —  —  —  1.7 
1-10
Real Estate 1,940  149  74  —  4.2 
1-10
Structured Products(2)
153  —  153  —  0.3 
1-5
Risk Parity Funds 241  —  —  —  0.5 
1-10
Total U.S. Plan Assets $ 46,209  $ 23,787  $ 14,769  $ —  100.0  %
Asset Category (International Plans):
Cash and cash equivalents $ 72  $ 32  $ 40  —  4.6 
1-10
Equity Securities:
Local Markets Equity 209  —  209  — 
U.S. Equity 47  —  47  — 
Emerging Markets 33  33  —  — 
International / Global Equity 441  179  262  — 
Total Equity Securities 730  212  518  —  46.8 
30-60
Fixed Income Securities:
Local Government Bonds 94  —  94  — 
Corporate Bonds 177  20  157  — 
Global Bonds 110  110  —  — 
Total Fixed Income Securities 381  130  251  —  24.5 
25-45
Other Investments:
Real Estate 128  —  80  —  8.2 
5-10
Other 247  —  218  12  15.9 
1-20
Total International Plan Assets $ 1,558  $ 374  $ 1,107  $ 12  100.0  %
Total Plan Assets $ 47,767  $ 24,161  $ 15,876  $ 12 
(1) Certain investments that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy but are included in the category totals.
(2) Represents mortgage and asset-backed securities.
Fair Value Measurement of Plan Assets Using Significant Unobservable Inputs (Level 3)
The following table presents the changes in the Level 3 instruments measured on a recurring basis for the years ended December 31, 2020 and 2019 (in millions):
Corporate Bonds Other Total
Balance on January 1, 2019 $ 2  $ 4  $ 6 
Actual Return on Assets:
Assets Held at End of Year —  1  1 
Assets Sold During the Year (4) —  (4)
Purchases 4  7  11 
Sales (2) —  (2)
Transfers Into (Out of) Level 3 —  —  — 
Balance on December 31, 2019 $ —  $ 12  $ 12 
Actual Return on Assets:
Assets Held at End of Year —  3  3 
Assets Sold During the Year (5) —  (5)
Purchases 10  51  61 
Sales (2) (4) (6)
Transfers Into (Out of) Level 3 —  —  — 
Balance on December 31, 2020 $ 3  $ 62  $ 65 
Expected Cash Flows for Pension and Postretirement Benefit Plans Information about expected cash flows for the pension and postretirement medical benefit plans is as follows (in millions):
U.S.
Pension Benefits		 U.S. Postretirement
Medical Benefits		 International  Pension Benefits
Expected Employer Contributions:
2021 to plan trusts $ —  $ 186  $ 66 
2021 to plan participants 23  70  6 
Expected Benefit Payments:
2021 $ 1,758  $ 236  $ 37 
2022 1,892  227  42 
2023 2,022  216  47 
2024 2,156  205  54 
2025 2,395  195  60 
2026 - 2030 14,745  831  406 
schedule of one basis point change in discount rate on the projected benefit obligation [Table Text Block]
As of December 31, 2020, the impact of each basis point change in the discount rate on the projected benefit obligation of our pension and postretirement medical benefit plans is as follows (in millions):
  Increase (Decrease) in the Projected Benefit Obligation
  Pension Benefits Postretirement Medical Benefits
One basis point increase in discount rate $ (110) $ (2)
One basis point decrease in discount rate 118  3