Annual report pursuant to Section 13 and 15(d)

COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS (Tables)

v3.19.3.a.u2
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS (Tables)
12 Months Ended
Dec. 31, 2019
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
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Net Periodic Benefit Cost:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
1,439

 
$
1,661

 
$
1,543

 
$
23

 
$
29

 
$
29

 
$
57

 
$
62

 
$
60

Interest cost
2,067

 
1,799

 
1,813

 
108

 
104

 
112

 
47

 
45

 
40

Expected return on assets
(3,130
)
 
(3,201
)
 
(2,883
)
 
(8
)
 
(8
)
 
(7
)
 
(76
)
 
(77
)
 
(66
)
Amortization of prior service cost
218

 
193

 
192

 
7

 
7

 
7

 
2

 
1

 
1

Actuarial (gain) loss
2,296

 
1,603

 
729

 
37

 

 
53

 
54

 
24

 
18

Curtailment and settlement loss

 

 

 

 

 

 

 

 
2

Net periodic benefit cost
$
2,890

 
$
2,055

 
$
1,394

 
$
167

 
$
132

 
$
194

 
$
84

 
$
55

 
$
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
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Discount rate
4.50
%
 
3.84
%
 
4.41
%
 
4.51
%
 
3.82
%
 
4.23
%
 
2.94
%
 
2.78
%
 
2.75
%
Rate of compensation increase
4.25
%
 
4.25
%
 
4.27
%
 
N/A

 
N/A

 
N/A

 
3.24
%
 
3.22
%
 
3.17
%
Expected return on assets
7.75
%
 
7.75
%
 
8.75
%
 
7.20
%
 
7.20
%
 
8.75
%
 
5.69
%
 
5.76
%
 
5.65
%
Cash balance interest credit rate
2.98
%
 
2.50
%
 
2.91
%
 
N/A

 
N/A

 
N/A

 
3.17
%
 
3.07
%
 
2.65
%

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
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Discount rate
3.60
%
 
4.50
%
 
3.59
%
 
4.51
%
 
2.21
%
 
2.94
%
Rate of compensation increase
4.22
%
 
4.25
%
 
N/A

 
N/A

 
3.00
%
 
3.24
%
Cash balance interest credit rate
2.50
%
 
2.98
%
 
N/A

 
N/A

 
2.59
%
 
3.17
%

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
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Benefit Obligations:
 
 
 
 
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
$
45,333

 
$
45,847

 
$
2,510

 
$
2,792

 
$
1,552

 
$
1,651

Service cost
1,439

 
1,661

 
23

 
29

 
57

 
62

Interest cost
2,067

 
1,799

 
108

 
104

 
47

 
45

Gross benefits paid
(2,394
)
 
(1,390
)
 
(288
)
 
(263
)
 
(40
)
 
(33
)
Plan participants’ contributions

 

 
30

 
26

 
3

 
3

Plan amendments

 
331

 

 

 
1

 
13

Actuarial (gain)/loss
7,594

 
(2,915
)
 
233

 
(178
)
 
213

 
(81
)
Foreign currency exchange rate changes

 

 


 

 
47

 
(110
)
Curtailments and settlements

 

 


 

 
(2
)
 
(1
)
Other

 

 


 

 
28

 
3

Projected benefit obligation at end of year
$
54,039

 
$
45,333

 
$
2,616

 
$
2,510

 
$
1,906

 
$
1,552

 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Pension Benefits
 
U.S. Postretirement
Medical Benefits
 
International
Pension Benefits
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Fair Value of Plan Assets:
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
$
39,554

 
$
41,932

 
$
26

 
$
183

 
$
1,284

 
$
1,333

Actual return on plan assets
6,991

 
(1,007
)
 
(5
)
 
(7
)
 
171

 
(6
)
Employer contributions
2,021

 
19

 
274

 
87

 
67

 
80

Plan participants’ contributions

 

 
30

 
26

 
3

 
3

Gross benefits paid
(2,394
)
 
(1,390
)
 
(288
)
 
(263
)
 
(40
)
 
(33
)
Foreign currency exchange rate changes

 

 

 

 
49

 
(92
)
Curtailments and settlements

 

 

 

 
(2
)
 
(1
)
Other

 

 

 

 
26

 

Fair value of plan assets at end of year
$
46,172

 
$
39,554

 
$
37

 
$
26

 
$
1,558

 
$
1,284


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 31st (in millions):
 
U.S. Pension Benefits
 
U.S. Postretirement
Medical Benefits
 
International
Pension Benefits
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Funded Status:
 
 
 
 
 
 
 
 
 
 
 
Fair value of plan assets
$
46,172

 
$
39,554

 
$
37

 
$
26

 
$
1,558

 
$
1,284

Benefit obligation
(54,039
)
 
(45,333
)
 
(2,616
)
 
(2,510
)
 
(1,906
)
 
(1,552
)
Funded status recognized at December 31
$
(7,867
)
 
$
(5,779
)
 
$
(2,579
)
 
$
(2,484
)
 
$
(348
)
 
$
(268
)
Funded Status Recognized in our Balance Sheet:
 
 
 
 
 
 
 
 
 
 
 
Other non-current assets
$

 
$

 
$

 
$

 
$
34

 
$
35

Other current liabilities
(22
)
 
(20
)
 
(200
)
 
(195
)
 
(5
)
 
(4
)
Pension and postretirement benefit obligations
(7,845
)
 
(5,759
)
 
(2,379
)
 
(2,289
)
 
(377
)
 
(299
)
Net liability at December 31
$
(7,867
)
 
$
(5,779
)
 
$
(2,579
)
 
$
(2,484
)
 
$
(348
)
 
$
(268
)
Amounts Recognized in AOCI:
 
 
 
 
 
 
 
 
 
 
 
Unrecognized net prior service cost
$
(800
)
 
$
(1,018
)
 
$
(16
)
 
$
(21
)
 
$
(12
)
 
$
(14
)
Unrecognized net actuarial gain (loss)
(5,404
)
 
(3,967
)
 
(240
)
 
(32
)
 
(162
)
 
(100
)
Gross unrecognized cost at December 31
(6,204
)
 
(4,985
)
 
(256
)
 
(53
)
 
(174
)
 
(114
)
Deferred tax assets (liabilities) at December 31
1,497

 
1,205

 
62

 
13

 
40

 
28

Net unrecognized cost at December 31
$
(4,707
)
 
$
(3,780
)
 
$
(194
)
 
$
(40
)
 
$
(134
)
 
$
(86
)

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
At December 31, 2019 and 2018, 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
 
2019
 
2018
 
2019
 
2018
U.S. Pension Benefits:
 
 
 
 
 
 
 
Projected benefit obligation
$
54,039

 
$
45,333

 
$
54,039

 
$
45,333

Accumulated benefit obligation
53,194

 
44,284

 
53,194

 
44,284

Fair value of plan assets
46,172

 
39,554

 
46,172

 
39,554

International Pension Benefits:
 
 
 
 
 
 
 
Projected benefit obligation
$
1,319

 
$
630

 
$
1,319

 
$
630

Accumulated benefit obligation
1,210

 
539

 
1,210

 
539

Fair value of plan assets
948

 
339

 
948

 
339


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, 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.
The fair values of U.S. and international pension and postretirement benefit plan assets by asset category as of December 31, 2018 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
$
157

 
$
108

 
$
49

 
$

 
0.4
%
 
1-5
Equity Securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Large Cap
5,276

 
2,155

 
3,121

 

 
 
 
 
U.S. Small Cap
542

 
386

 
156

 

 
 
 
 
Emerging Markets
1,859

 
1,436

 
423

 

 
 
 
 
Global Equity
2,320

 
2,056

 
264

 

 
 
 
 
International Equity
3,670

 
2,189

 
1,481

 

 
 
 
 
Total Equity Securities
13,667

 
8,222

 
5,445

 

 
34.5

 
25-55
Fixed Income Securities:
 
 
 
 
 
 
 
 
 
 
 
U.S. Government Securities
12,295

 
11,922

 
373

 

 
 
 
 
Corporate Bonds
4,303

 

 
4,301

 
2

 
 
 
 
Global Bonds
55

 

 
55

 

 
 
 
 
Municipal Bonds
16

 

 
16

 

 
 
 
 
Total Fixed Income Securities
16,669

 
11,922

 
4,745

 
2

 
42.1

 
35-55
Other Investments:
 
 
 
 
 
 
 
 
 
 
 
Hedge Funds
3,154

 

 
1,185

 

 
8.0

 
5-15
Private Equity
2,763

 

 

 

 
7.0

 
1-10
Private Debt
836

 

 
178

 

 
2.1

 
1-10
Real Estate
1,989

 
152

 
53

 

 
5.0

 
1-10
Structured Products(2)
138

 

 
138

 

 
0.4

 
1-5
Risk Parity Funds
207

 

 

 

 
0.5

 
1-10
Total U.S. Plan Assets
$
39,580

 
$
20,404

 
$
11,793

 
$
2

 
100.0
%
 
 
Asset Category (International Plans):
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
45

 
$
4

 
$
41

 

 
3.5

 
1-10
Equity Securities:
 
 
 
 
 
 
 
 
 
 
 
Local Markets Equity
171

 

 
171

 

 
 
 
 
U.S. Equity
34

 

 
34

 

 
 
 
 
Emerging Markets
33

 
33

 

 

 
 
 
 
International / Global Equity
348

 
150

 
198

 

 
 
 
 
Total Equity Securities
586

 
183

 
403

 

 
45.6

 
30-60
Fixed Income Securities:
 
 
 
 
 
 
 
 
 
 
 
Local Government Bonds
102

 
24

 
78

 

 
 
 
 
Corporate Bonds
195

 
54

 
141

 

 
 
 
 
Global Bonds
27

 
27

 

 

 
 
 
 
Total Fixed Income Securities
324

 
105

 
219

 

 
25.2

 
25-45
Other Investments:
 
 
 
 
 
 
 
 
 
 
 
Real Estate
121

 

 
76

 

 
9.4

 
5-10
Other
208

 

 
191

 
4

 
16.3

 
1-20
Total International Plan Assets
$
1,284

 
$
292

 
$
930

 
$
4

 
100.0
%
 
 
Total Plan Assets
$
40,864

 
$
20,696

 
$
12,723

 
$
6

 
 
 
 

(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, 2019 and 2018 (in millions).
 
Corporate Bonds
 
Other
 
Total
Balance on January 1, 2018
$
8

 
$

 
$
8

Actual Return on Assets:
 
 
 
 
 
Assets Held at End of Year

 

 

Assets Sold During the Year
(7
)
 

 
(7
)
Purchases
11

 
9

 
20

Sales
(10
)
 
(5
)
 
(15
)
Transfers Into (Out of) Level 3

 

 

Balance on December 31, 2018
$
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


Expected Cash Flows for Pension and Postretirement Benefit Plans
Information about expected cash flows for the pension and postretirement benefit plans is as follows (in millions):
 
U.S.
Pension Benefits
 
U.S. Postretirement
Medical Benefits
 
International  Pension Benefits
Expected Employer Contributions:
 
 
 
 
 
2020 to plan trusts
$
1,000

 
$
186

 
$
62

2020 to plan participants
21

 
11

 
5

2020
$
1,645

 
$
241

 
$
32

2021
1,802

 
225

 
36

2022
1,942

 
215

 
41

2023
2,085

 
206

 
46

2024
2,230

 
196

 
52

2025 - 2029
13,293

 
857

 
353

schedule of one basis point change in discount rate on the projected benefit obligation [Table Text Block]
As of December 31, 2019, 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
$
(86
)
 
$
(2
)
One basis point decrease in discount rate
92

 
3