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Benefit Plans (Tables)
12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Funded status of the defined benefit pension plans
The following table presents the funded status of the defined benefit pension plans. The funded status of the plans is measured as the difference between the plan assets at fair value and the projected benefit obligation.
(dollars in millions)
 
Pension *
At or for the Years Ended December 31,
 
2018
 
2017
 
2016
 
 
 
 
 
 
 
Projected benefit obligation, beginning of period
 
$
354

 
$
385

 
$
388

Interest cost
 
11

 
13

 
16

Actuarial loss (gain)
 
(30
)
 
17

 
(6
)
Benefits paid:
 
 
 
 
 
 
Plan assets
 
(15
)
 
(14
)
 
(13
)
Settlement
 

 
(47
)
 

Projected benefit obligation, end of period
 
320

 
354

 
385

 
 
 
 
 
 
 
Fair value of plan assets, beginning of period
 
341

 
354

 
333

Actual return on plan assets, net of expenses
 
(19
)
 
47

 
33

Company contributions
 
1

 
1

 
1

Benefits paid:
 
 
 
 
 
 
Plan assets
 
(15
)
 
(14
)
 
(13
)
Settlement
 

 
(47
)
 

Fair value of plan assets, end of period
 
308

 
341

 
354

Funded status, end of period
 
$
(12
)
 
$
(13
)
 
$
(31
)
 
 
 
 
 
 
 
Other liabilities recognized in the consolidated balance sheet
 
$
(12
)
 
$
(13
)
 
$
(31
)
 
 
 
 
 
 
 
Pretax net gain (loss) recognized in accumulated other comprehensive income or loss
 
$
(3
)
 
$
4

 
$
(7
)
                                      
*
Includes non-qualified unfunded plans, for which the aggregate projected benefit obligation was $9 million at December 31, 2018 and $10 million at December 31, 2017 and 2016.
Schedule of PBO and ABO exceeding fair value of plan assets
Defined benefit pension plan obligations in which the PBO was in excess of the related plan assets and the ABO was in excess of the related plan assets were as follows:
(dollars in millions)
 
PBO and ABO Exceeds
Fair Value of Plan Assets
December 31,
 
2018
 
2017
 
 
 
 
 
Projected benefit obligation
 
$
320

 
$
354

Accumulated benefit obligation
 
320

 
354

Fair value of plan assets
 
308

 
341

Components of net periodic benefit cost
The following table presents the components of net periodic benefit cost recognized in income and other amounts recognized in accumulated other comprehensive income or loss with respect to the defined benefit pension plans:
(dollars in millions)
 
Pension
Years Ended December 31,
 
2018
 
2017
 
2016
 
 
 
 
 
 
 
Components of net periodic benefit cost:
 
 
 
 
 
 
Interest cost
 
$
11

 
$
13

 
$
16

Expected return on assets
 
(18
)
 
(18
)
 
(17
)
Settlement gain
 

 
(2
)
 

Net periodic benefit cost
 
(7
)
 
(7
)
 
(1
)
 
 
 
 
 
 
 
Other changes in plan assets and projected benefit obligation recognized in other comprehensive income or loss:
 
 
 
 
 
 
Net actuarial loss (gain)
 
7

 
(12
)
 
(22
)
Amortization of net actuarial gain (loss)
 

 
2

 

Total recognized in other comprehensive income or loss
 
7

 
(10
)
 
(22
)
 
 
 
 
 
 
 
Total recognized in net periodic benefit cost and other comprehensive income or loss
 
$

 
$
(17
)
 
$
(23
)
Summary of weighted average assumptions
The following table summarizes the weighted average assumptions used to determine the projected benefit obligations and the net periodic benefit costs:
 
 
Pension
December 31,
 
2018
 
2017
 
 
 
 
 
Projected benefit obligation:
 
 
 
 
Discount rate
 
4.12
%
 
3.49
%
 
 
 
 
 
Net periodic benefit costs:
 
 
 
 
Discount rate
 
3.49
%
 
4.04
%
Expected long-term rate of return on plan assets
 
5.27
%
 
5.28
%
Expected future benefit payments
The expected future benefit payments, net of participants’ contributions, of our defined benefit pension plans at December 31, 2018 are as follows:
(dollars in millions)
 
Pension
 
 
 
2019
 
$
15

2020
 
15

2021
 
16

2022
 
16

2023
 
16

2024-2028
 
86

Information about plan assets measured at fair value
The following table presents information about our plan assets measured at fair value and indicates the fair value hierarchy based on the levels of inputs we utilized to determine such fair value:
(dollars in millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
4

 
$

 
$

 
$
4

Equity securities:
 
 
 
 
 
 
 
 
U.S. (a)
 

 
7

 

 
7

International (b)
 

 
6

 

 
6

Fixed income securities:
 
 
 
 
 
 
 
 
U.S. investment grade (c)
 

 
287

 

 
287

U.S. high yield (d)
 

 
4

 

 
4

Total
 
$
4

 
$
304

 
$

 
$
308

 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
2

 
$

 
$

 
$
2

Equity securities:
 
 
 
 
 
 
 
 
U.S. (a)
 

 
23

 

 
23

International (b)
 

 
24

 

 
24

Fixed income securities:
 
 
 
 
 
 
 
 
U.S. investment grade (c)
 

 
281

 

 
281

U.S. high yield (d)
 

 
11

 

 
11

Total
 
$
2

 
$
339

 
$

 
$
341

                                      
(a)
Includes index mutual funds that primarily track several indices including S&P 500 and S&P 600 in addition to other actively managed accounts, comprised of investments in small cap and large cap companies.

(b)
Includes investment mutual funds in companies in emerging and developed markets.

(c)
Includes investment mutual funds in U.S. and non-U.S. government issued bonds, U.S. government agency or sponsored agency bonds, and investment grade corporate bonds.

(d)
Includes investment mutual funds in securities or debt obligations that have a rating below investment grade.