|
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS (Tables)
|
12 Months Ended |
|
Dec. 31, 2014
|
| Pension and Other Postretirement Benefit Plans [Abstract] |
|
| Changes in benefit obligations and the fair value of plan assets for our benefit plans |
The following table sets forth the changes in benefit obligations and the fair value of plan assets for our benefit plans (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
Benefit obligation at beginning of year1
|
$ |
8,845 |
|
|
$ |
9,693 |
|
|
$ |
946 |
|
|
$ |
1,104 |
|
Service cost |
261 |
|
|
280 |
|
|
26 |
|
|
36 |
|
Interest cost |
406 |
|
|
378 |
|
|
43 |
|
|
42 |
|
Foreign currency exchange rate changes |
(183 |
) |
|
(69 |
) |
|
(4 |
) |
|
(2 |
) |
Amendments |
— |
|
|
(1 |
) |
|
(31 |
) |
|
(73 |
) |
Actuarial loss (gain) |
1,519 |
|
|
(899 |
) |
|
88 |
|
|
(91 |
) |
Benefits paid2
|
(522 |
) |
|
(538 |
) |
|
(62 |
) |
|
(77 |
) |
Business combinations |
4 |
|
|
— |
|
|
— |
|
|
— |
|
Settlements |
(7 |
) |
|
(9 |
) |
|
(1 |
) |
|
— |
|
Special termination benefits |
5 |
|
|
2 |
|
|
— |
|
|
— |
|
Other |
18 |
|
|
8 |
|
|
1 |
|
|
7 |
|
Benefit obligation at end of year1
|
$ |
10,346 |
|
|
$ |
8,845 |
|
|
$ |
1,006 |
|
|
$ |
946 |
|
Fair value of plan assets at beginning of year |
$ |
8,746 |
|
|
$ |
7,584 |
|
|
$ |
243 |
|
|
$ |
202 |
|
Actual return on plan assets |
574 |
|
|
1,043 |
|
|
2 |
|
|
40 |
|
Employer contributions |
214 |
|
|
639 |
|
|
— |
|
|
— |
|
Foreign currency exchange rate changes |
(203 |
) |
|
(43 |
) |
|
— |
|
|
— |
|
Benefits paid |
(435 |
) |
|
(474 |
) |
|
(3 |
) |
|
(2 |
) |
Settlements |
(1 |
) |
|
(5 |
) |
|
— |
|
|
— |
|
Other |
7 |
|
|
2 |
|
|
4 |
|
|
3 |
|
Fair value of plan assets at end of year |
$ |
8,902 |
|
|
$ |
8,746 |
|
|
$ |
246 |
|
|
$ |
243 |
|
Net liability recognized |
$ |
(1,444 |
) |
|
$ |
(99 |
) |
|
$ |
(760 |
) |
|
$ |
(703 |
) |
|
|
1 |
For pension benefit plans, the benefit obligation is the projected benefit obligation. For other benefit plans, the benefit obligation is the accumulated postretirement benefit obligation. The accumulated benefit obligation for our pension plans was $10,028 million and $8,523 million as of December 31, 2014 and 2013, respectively.
|
|
|
2 |
Benefits paid to pension plan participants during 2014 and 2013 included $87 million and $64 million, respectively, in payments related to unfunded pension plans that were paid from Company assets. Benefits paid to participants of other benefit plans during 2014 and 2013 included $59 million and $75 million, respectively, that were paid from Company assets.
|
|
| Pension and other benefit amounts recognized in consolidated balance sheets |
Pension and other benefit amounts recognized in our consolidated balance sheets are as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
December 31, |
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
Noncurrent asset |
$ |
479 |
|
|
$ |
1,067 |
|
|
$ |
— |
|
|
$ |
— |
|
Current liability |
(78 |
) |
|
(76 |
) |
|
(20 |
) |
|
(21 |
) |
Long-term liability |
(1,845 |
) |
|
(1,090 |
) |
|
(740 |
) |
|
(682 |
) |
Net liability recognized |
$ |
(1,444 |
) |
|
$ |
(99 |
) |
|
$ |
(760 |
) |
|
$ |
(703 |
) |
|
| Schedule of pension plans with projected benefit obligation in excess of fair value of plan assets |
Certain of our pension plans have projected benefit obligations in excess of the fair value of plan assets. For these plans, the projected benefit obligations and the fair value of plan assets were as follows (in millions):
|
|
|
|
|
|
|
|
|
December 31, |
2014 |
|
|
2013 |
|
Projected benefit obligation |
$ |
8,753 |
|
|
$ |
1,521 |
|
Fair value of plan assets |
6,854 |
|
|
374 |
|
|
| Accumulated benefit obligations in excess of fair value of plan assets |
Certain of our pension plans have accumulated benefit obligations in excess of the fair value of plan assets. For these plans, the accumulated benefit obligations and the fair value of plan assets were as follows (in millions):
|
|
|
|
|
|
|
|
|
December 31, |
2014 |
|
|
2013 |
|
Accumulated benefit obligation |
$ |
8,501 |
|
|
$ |
1,446 |
|
Fair value of plan assets |
6,820 |
|
|
351 |
|
|
| Total pension assets for U.S. and non-U.S. plans |
The following table presents total assets for our U.S. and non-U.S. pension plans (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
December 31, |
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
Cash and cash equivalents |
$ |
186 |
|
|
$ |
240 |
|
|
$ |
75 |
|
|
$ |
274 |
|
Equity securities: |
|
|
|
|
|
|
|
U.S.-based companies |
1,274 |
|
|
1,422 |
|
|
542 |
|
|
280 |
|
International-based companies |
558 |
|
|
698 |
|
|
505 |
|
|
586 |
|
Fixed-income securities: |
|
|
|
|
|
|
|
Government bonds |
455 |
|
|
464 |
|
|
411 |
|
|
304 |
|
Corporate bonds and debt securities |
1,379 |
|
|
1,369 |
|
|
187 |
|
|
137 |
|
Mutual, pooled and commingled funds1
|
863 |
|
|
1,134 |
|
|
400 |
|
|
453 |
|
Hedge funds/limited partnerships |
756 |
|
|
526 |
|
|
43 |
|
|
17 |
|
Real estate |
391 |
|
|
245 |
|
|
17 |
|
|
6 |
|
Other |
481 |
|
|
245 |
|
|
379 |
|
|
346 |
|
Total pension plan assets2
|
$ |
6,343 |
|
|
$ |
6,343 |
|
|
$ |
2,559 |
|
|
$ |
2,403 |
|
|
|
1 |
Mutual, pooled and commingled funds include investments in equity securities, fixed-income securities and combinations of both. There are a significant number of mutual, pooled and commingled funds from which investors can choose. The selection of the type of fund is dictated by the specific investment objectives and needs of a given plan. These objectives and needs vary greatly between plans. |
|
|
2 |
Fair value disclosures related to our pension assets are included in Note 16. Fair value disclosures include, but are not limited to, the levels within the fair value hierarchy in which the fair value measurements in their entirety fall; a reconciliation of the beginning and ending balances of Level 3 assets; and information about the valuation techniques and inputs used to measure the fair value of our pension assets.
|
|
| Other postretirement benefit plan assets |
The following table presents total assets for our other postretirement benefit plans (in millions):
|
|
|
|
|
|
|
|
|
December 31, |
2014 |
|
|
2013 |
|
Cash and cash equivalents |
$ |
10 |
|
|
$ |
10 |
|
Equity securities: |
|
|
|
U.S.-based companies |
114 |
|
|
112 |
|
International-based companies |
7 |
|
|
8 |
|
Fixed-income securities: |
|
|
|
Government bonds |
79 |
|
|
79 |
|
Corporate bonds and debt securities |
9 |
|
|
9 |
|
Mutual, pooled and commingled funds |
16 |
|
|
18 |
|
Hedge funds/limited partnerships |
5 |
|
|
3 |
|
Real estate |
3 |
|
|
2 |
|
Other |
3 |
|
|
2 |
|
Total other postretirement benefit plan assets1
|
$ |
246 |
|
|
$ |
243 |
|
|
|
1 |
Fair value disclosures related to our other postretirement benefit plan assets are included in Note 16. Fair value disclosures include, but are not limited to, the levels within the fair value hierarchy in which the fair value measurements in their entirety fall; a reconciliation of the beginning and ending balances of Level 3 assets; and information about the valuation techniques and inputs used to measure the fair value of our other postretirement benefit plan assets.
|
|
| Net periodic benefit cost for pension and other postretirement benefit plans |
Net periodic benefit cost for our pension and other postretirement benefit plans consisted of the following (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
Year Ended December 31, |
2014 |
|
|
2013 |
|
|
2012 |
|
|
2014 |
|
|
2013 |
|
|
2012 |
|
Service cost |
$ |
261 |
|
|
$ |
280 |
|
|
$ |
291 |
|
|
$ |
26 |
|
|
$ |
36 |
|
|
$ |
34 |
|
Interest cost |
406 |
|
|
378 |
|
|
388 |
|
|
43 |
|
|
42 |
|
|
43 |
|
Expected return on plan assets1
|
(713 |
) |
|
(659 |
) |
|
(573 |
) |
|
(11 |
) |
|
(9 |
) |
|
(8 |
) |
Amortization of prior service cost (credit) |
(2 |
) |
|
(2 |
) |
|
(2 |
) |
|
(17 |
) |
|
(10 |
) |
|
(52 |
) |
Amortization of actuarial loss |
73 |
|
|
197 |
|
|
137 |
|
|
2 |
|
|
13 |
|
|
6 |
|
Net periodic benefit cost |
$ |
25 |
|
|
$ |
194 |
|
|
$ |
241 |
|
|
$ |
43 |
|
|
$ |
72 |
|
|
$ |
23 |
|
Settlement charge |
4 |
|
|
1 |
|
|
3 |
|
|
— |
|
|
— |
|
|
— |
|
Curtailment charge |
— |
|
|
— |
|
|
6 |
|
|
— |
|
|
— |
|
|
— |
|
Special termination benefits2
|
5 |
|
|
2 |
|
|
1 |
|
|
— |
|
|
— |
|
|
— |
|
Total cost recognized in statements of income |
$ |
34 |
|
|
$ |
197 |
|
|
$ |
251 |
|
|
$ |
43 |
|
|
$ |
72 |
|
|
$ |
23 |
|
|
|
1 |
The Company has elected to use the actual fair value of plan assets as the market-related value of assets in the determination of the expected return on plan assets. |
|
|
2 |
The special termination benefits were primarily related to the Company's productivity, restructuring and integration initiatives. Refer to Note 18 for additional information related to our productivity, restructuring and integration initiatives.
|
|
| Changes in AOCI for benefit plans |
The following table sets forth the changes in AOCI for our benefit plans (in millions, pretax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
|
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
Beginning balance in AOCI |
$ |
(1,537 |
) |
|
$ |
(3,032 |
) |
|
$ |
13 |
|
|
$ |
(186 |
) |
Recognized prior service cost (credit) |
(2 |
) |
|
(2 |
) |
|
(17 |
) |
|
(10 |
) |
Recognized net actuarial loss (gain) |
77 |
|
|
198 |
|
|
2 |
|
|
13 |
|
Prior service credit (cost) arising in current year |
— |
|
|
1 |
|
|
31 |
|
|
73 |
|
Net actuarial (loss) gain arising in current year |
(1,658 |
) |
|
1,283 |
|
|
(97 |
) |
|
122 |
|
Foreign currency translation gain (loss) |
51 |
|
|
15 |
|
|
1 |
|
|
1 |
|
Ending balance in AOCI |
$ |
(3,069 |
) |
|
$ |
(1,537 |
) |
|
$ |
(67 |
) |
|
$ |
13 |
|
|
| Amounts in AOCI for benefit plans (pretax) |
The following table sets forth amounts in AOCI for our benefit plans (in millions, pretax):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
December 31, |
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
Prior service credit (cost) |
$ |
10 |
|
|
$ |
12 |
|
|
$ |
100 |
|
|
$ |
86 |
|
Net actuarial loss |
(3,079 |
) |
|
(1,549 |
) |
|
(167 |
) |
|
(73 |
) |
Ending balance in AOCI |
$ |
(3,069 |
) |
|
$ |
(1,537 |
) |
|
$ |
(67 |
) |
|
$ |
13 |
|
|
| Amounts in AOCI expected to be recognized as components of net periodic pension cost in next fiscal year |
Amounts in AOCI expected to be recognized as components of net periodic pension cost in 2015 are as follows (in millions, pretax):
|
|
|
|
|
|
|
|
|
|
Pension Benefits |
|
Other Benefits |
Amortization of prior service cost (credit) |
$ |
(2 |
) |
|
$ |
(19 |
) |
Amortization of actuarial loss |
203 |
|
|
10 |
|
|
$ |
201 |
|
|
$ |
(9 |
) |
|
| Certain weighted average assumptions used in computing the benefit obligations and net periodic benefit cost |
Certain weighted-average assumptions used in computing the benefit obligations are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
December 31, |
2014 |
|
|
2013 |
|
|
2014 |
|
|
2013 |
|
Discount rate |
3.75 |
% |
|
4.75 |
% |
|
3.75 |
% |
|
4.75 |
% |
Rate of increase in compensation levels |
3.50 |
% |
|
3.50 |
% |
|
N/A |
|
|
N/A |
|
Certain weighted-average assumptions used in computing net periodic benefit cost are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
Year Ended December 31, |
2014 |
|
|
2013 |
|
|
2012 |
|
|
2014 |
|
|
2013 |
|
|
2012 |
|
Discount rate |
4.75 |
% |
|
4.00 |
% |
|
4.75 |
% |
|
4.75 |
% |
|
4.00 |
% |
|
4.75 |
% |
Rate of increase in compensation levels |
3.50 |
% |
|
3.50 |
% |
|
3.25 |
% |
|
N/A |
|
|
N/A |
|
|
N/A |
|
Expected long-term rate of return on plan assets |
8.25 |
% |
|
8.25 |
% |
|
8.25 |
% |
|
4.75 |
% |
|
4.75 |
% |
|
4.75 |
% |
|
| Assumed health care cost trend rates |
The assumed health care cost trend rates are as follows:
|
|
|
|
|
|
|
December 31, |
2014 |
|
|
2013 |
|
Health care cost trend rate assumed for next year |
7.50 |
% |
|
8.00 |
% |
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) |
5.00 |
% |
|
5.00 |
% |
Year that the rate reaches the ultimate trend rate |
2020 |
|
|
2020 |
|
|
| Estimated future benefit payments for funded and unfunded plans |
Our estimated future benefit payments for funded and unfunded plans are as follows (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
2015 |
|
|
2016 |
|
|
2017 |
|
|
2018 |
|
|
2019 |
|
|
2020-2024 |
|
Pension benefit payments |
$ |
494 |
|
|
$ |
518 |
|
|
$ |
551 |
|
|
$ |
560 |
|
|
$ |
584 |
|
|
$ |
3,137 |
|
Other benefit payments1
|
61 |
|
|
65 |
|
|
67 |
|
|
67 |
|
|
68 |
|
|
343 |
|
Total estimated benefit payments |
$ |
555 |
|
|
$ |
583 |
|
|
$ |
618 |
|
|
$ |
627 |
|
|
$ |
652 |
|
|
$ |
3,480 |
|
|
|
1 |
The expected benefit payments for our other postretirement benefit plans are net of estimated federal subsidies expected to be received under the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Federal subsidies are estimated to be approximately $5 million for the period 2015–2019, and $4 million for the period 2020–2024.
|
|