Employee Pension and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2015

Employee Pension and Other Postretirement Benefits tables

Fair Value of Assets in Pension Plan and Other Benefits Plan

The following table sets forth the fair value of the assets in the Company's Pension Plan and Other Benefits Plan as of December 31, 2015 and 2014.



	Pension Plan						Other Benefits Plan
	Years Ended December 31,						Years Ended December 31,
(Dollars in millions)	2015			2014			2015			2014
Change in plan assets:
Fair value of plan assets, beginning of year	$	2,897		$	2,716		$	257		$	245
Actual return on plan assets	13			164			(2		)	14
Employer contributions	175			100			16			13
Plan participants' contributions	—			—			7			7
Benefits paid	(93		)	(83		)	(24		)	(22		)
Fair value of plan assets, end of year	$	2,992		$	2,897		$	254		$	257

Table of Benefit Obligation Activity and Funded Status for Each of Plans

The following table sets forth the benefit obligation activity and the funded status for each of the Company's plans at December 31, 2015 and 2014. In addition, the table sets forth the over (under) funded status at December 31, 2015 and 2014. This pension benefits table does not include the obligations for the ESBPs.



	Pension Benefits						Other Benefits
	Years Ended December 31,						Years Ended December 31,
(Dollars in millions)	2015			2014			2015			2014
Accumulated benefit obligation	$	2,679		$	2,717
Change in benefit obligation
Benefit obligation, beginning of year	$	2,817		$	2,263		$	290		$	270
Service cost	96			75			10			10
Interest cost	110			105			12			11
Plan participants' contributions	—			—			7			7
Actuarial loss/(gain)	(114		)	607			10			42
Effect of plan amendments	—			(150		)	—			(29		)
Medicare Part D subsidy	—			—			—			1
Benefits paid	(93		)	(83		)	(24		)	(22		)
Benefit obligation, end of year	2,816			2,817			305			290
Fair value of plan assets, end of year	2,992			2,897			254			257
Over (Under) funded status	$	176		$	80		$	(51	)	$	(33	)

Table of Amounts Recognized in Accumulated Other Comprehensive Loss for Pension, Including ESBPs, and Other Benefits

The following table illustrates the changes that were reflected in AOCI during 2015, 2014 and 2013. Pension benefits do not include the ESBPs.



	Pension Benefits						Other Benefits
(Dollars in millions)	Net Actuarial (Gain) Loss			Prior Service Credit			Net Actuarial (Gain) Loss			Prior Service Credit
Amounts Recognized in Other Comprehensive Loss:
Balance, December 31, 2012	$	1,042		$	—		$	80		$	—
Arising during the year	(468		)	—			(56		)	—
Recognized in net income during the year	(107		)	—			(7		)	—
Balance, December 31, 2013	$	467		$	—		$	17		$	—
Arising during the year	636			(150		)	46			(28		)
Recognized in net income during the year	(59		)	12			(1		)	5
Balance, December 31, 2014	$	1,044		$	(138	)	$	62		$	(23	)
Arising during the year	89			—			32			—
Recognized in net income during the year	(106		)	17			(12		)	8
Balance, December 31, 2015	$	1,027		$	(121	)	$	82		$	(15	)

At December 31, 2015 and 2014, the following amounts were recognized in accumulated other comprehensive loss for pension, including ESBPs, and other benefits.



	December 31, 2015
	Pension Benefits									Other Benefits
(Dollars in millions)	Gross			Tax			Net of Tax			Gross			Tax			Net of Tax
Net actuarial loss	$	1,027		$	404		$	623		$	82		$	33		$	49
Prior service credit	(121		)	(47		)	(74		)	(15		)	(6		)	(9		)
Pension and other benefits adjustment	906			357			549			67			27			40
Executive Supplemental Benefits Plans
Net actuarial loss	39			15			24			—			—			—
Prior service credit	(2		)	(1		)	(1		)	—			—			—
Executive supplemental benefits plans adjustment	37			14			23			—			—			—
Pension and other benefits adjustment	$	943		$	371		$	572		$	67		$	27		$	40



	December 31, 2014
	Pension Benefits									Other Benefits
(Dollars in millions)	Gross			Tax			Net of Tax			Gross			Tax			Net of Tax
Net actuarial loss	$	1,044		$	411		$	633		$	62		$	25		$	37
Prior service credit	(138		)	(54		)	(84		)	(23		)	(9		)	(14		)
Pension and other benefits adjustment	906			357			549			39			16			23
Executive Supplemental Benefits Plans
Net actuarial loss	39			15			24			—			—			—
Prior service credit	(2		)	(1		)	(1		)	—			—			—
Executive supplemental benefits plans adjustment	37			14			23			—			—			—
Pension and other benefits adjustment	$	943		$	371		$	572		$	39		$	16		$	23

Estimated Future Benefit Payments and Subsidies

The following pension and postretirement benefit payments, which reflect expected future service, as appropriate, are expected to be paid over the next 10 years and Medicare Part D Subsidies are expected to be received over the next 10 years. This table does not include the ESBPs.



(Dollars in millions)	Pension Benefits		Postretirement Benefits		Medicare Part D Subsidies
Years ending December 31,
2016	$	110	$	18	$	1
2017	126		19		1
2018	136		20		1
2019	145		21		1
2020	153		22		1
Years 2021 - 2025	905		117		7

Summary of Weighted Average Assumptions Used in Computing Present Value of Benefit Obligations and Net Periodic Benefit Cost

The following tables summarize the weighted average assumptions used in computing the present value of the benefit obligations and the net periodic benefit cost.



	Pension Benefits			Other Benefits
	Years Ended December 31,			Years Ended December 31,
	2015	2014		2015	2014
Discount rate in determining net periodic benefit cost prior to Plan amendments	n/a	4.90	%	n/a	4.60	%
Discount rate in determining net periodic benefit cost after Plan amendments	3.90	4.50		3.80	4.20
Discount rate in determining benefit obligations at year end	4.29	3.90		4.11	3.80
Rate of increase in future compensation levels for determining net periodic benefit cost	4.70	4.70		n/a	n/a
Rate of increase in future compensation levels for determining benefit obligations at year end	4.70	4.70		n/a	n/a
Expected return on plan assets	7.50	7.50		7.50	7.50

Components of Net Periodic Benefit Cost



	Pension Benefits									Other Benefits									Superannuation, SERP and ESBP
	Years Ended December 31,									Years Ended December 31,									Years Ended December 31,
(Dollars in millions)	2015			2014			2013			2015			2014			2013			2015		2014		2013
Components of net periodic benefit cost:
Service cost ⁽¹⁾	$	96		$	81		$	87		$	10		$	10		$	14		$	1	$	1	$	1
Interest cost	110			105			99			12			11			11			2		4		3
Expected return on plan assets	(216		)	(193		)	(166		)	(19		)	(18		)	(15		)	—		—		—
Amortization of prior service credit	(17		)	(12		)	—			(8		)	(5		)	—			—		—		—
Recognized net actuarial loss	106			59			107			12			1			7			3		2		2
Total net periodic benefit cost	$	79		$	40		$	127		$	7		$	(1	)	$	17		$	6	$	7	$	6


(1)	Pension Benefits for 2014 includes $6 million of service cost associated with transferred employees as a result of the business integration initiative.

Summary of Amounts Forecasted to be Recognized, Net Periodic Benefit Costs

At December 31, 2015 and 2014, the following amounts were forecasted to be recognized in 2016 and 2015 net periodic benefit costs, respectively.



	Years Ended December 31,
	2016						2015
(Dollars in millions)	Pension Benefits			Other Benefits			Pension Benefits			Other Benefits
Net actuarial loss	$	76		$	10		$	109		$	5
Prior service credit	(18		)	(8		)	(18		)	(8		)
Amounts to be reclassified from accumulated other comprehensive loss	$	58		$	2		$	91		$	(3	)

Schedule of Assumed Weighted-Average Healthcare Cost Trend Rates

The Company's assumed weighted-average healthcare cost trend rates are as follows.



	Years Ended December 31,
	2015		2014		2013
Healthcare cost trend rate assumed for next year	6.29	%	7.53	%	7.71	%
Rate to which cost trend rate is assumed to decline (the ultimate trend rate)	4.50	%	4.50	%	4.50	%
Year the rate reaches the ultimate trend rate	2026		2021		2021

Schedule of Effect of One-Percentage-Point Change in Assumed Healthcare Cost Trend Rates

The healthcare cost trend rate assumptions have a significant effect on the amounts reported for the Health Plan. A one-percentage-point change in assumed healthcare cost trend rates would have the following effects:



(Dollars in millions)	One-Percentage- Point Increase		One-Percentage- Point Decrease
Effect on total of service and interest cost components	$	1	$	(2	)
Effect on postretirement benefit obligation	23		(26		)

Retirement Plan

Employee Pension and Other Postretirement Benefits tables

Fair Value by Level Within Fair Value Hierarchy Assets by Major Asset Category for Pension Plan and Other Benefits Plan

The following table provides the fair value by level within the fair value hierarchy of the Company's period-end assets by major asset category for the Pension Plan and Other Benefits Plan. For information about the fair value hierarchy levels, refer to Note 10 to these consolidated financial statements. The Plans do not hold any equity or debt securities issued by the Company or any related parties.



	December 31, 2015
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Pension Plan Investments:
Cash and cash equivalents	$	3	$	36	$	—	$	39
U.S. government securities	—		248		—		248
Corporate bonds	—		476		—		476
Equity securities	284		9		—		293
Real estate funds	—		—		310		310
Limited partnerships	—		152		28		180
Mutual funds	1,435		—		—		1,435
Other	4		20		—		24
Total plan investments	$	1,726	$	941	$	338	$	3,005
Accrued dividends and interest receivable							6
Net pending trades							(19		)
Total plan assets							$	2,992



	December 31, 2014
(Dollars in millions)	Level 1		Level 2		Level 3		Total
Pension Plan Investments:
Cash and cash equivalents	$	1	$	52	$	—	$	53
U.S. government securities	—		251		—		251
Corporate bonds	—		442		—		442
Equity securities	295		6		—		301
Real estate funds	—		—		270		270
Limited partnerships	—		138		28		166
Mutual funds	1,422		—		—		1,422
Other	6		23		—		29
Total plan investments	$	1,724	$	912	$	298	$	2,934
Accrued dividends and interest receivable							7
Net pending trades							(44		)
Total plan assets							$	2,897

Changes in Fair Value of Assets Measured at Level 3



	Level 3 Assets for Year Ended December 31, 2015
(Dollars in millions)	Real Estate Funds		Limited Partnership			Total
Beginning balance—January 1, 2015	$	270	$	28		$	298
Unrealized gains (losses)	31		4			35
Purchases, issuances, sales, and settlements, net	9		(4		)	5
Ending balance—December 31, 2015	$	310	$	28		$	338



	Level 3 Assets for Year Ended December 31, 2014
(Dollars in millions)	Real Estate Funds		Limited Partnership		Total
Beginning balance—January 1, 2014	$	242	$	22	$	264
Unrealized gains (losses)	21		5		26
Purchases, issuances, sales, and settlements, net	7		1		8
Ending balance—December 31, 2014	$	270	$	28	$	298