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Pension Plans and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of changes in benefit obligations

The following tables outline the change in pension benefit obligation and plan assets over the specified periods:



In millions	2019			2018
Change in benefit obligation:
Benefit obligation, beginning of year	$	5,841		$	131
Acquired benefit obligations	—			5,685
Interest cost	225			25
Actuarial loss	530			41
Benefit payments	(357		)	(41		)
Benefit obligation, end of year	6,239			5,841

Change in plan assets:
Fair value of plan assets, beginning of year	5,663			—
Fair value of plan assets acquired	—			5,709
Actual return on plan assets	1,064			(17		)
Employer contributions	25			12
Benefit payments	(357		)	(41		)
Fair value of plan assets, end of year	6,395			5,663

Funded status	$	156		$	(178	)

Schedule of changes in plan assets

The following tables outline the change in pension benefit obligation and plan assets over the specified periods:



In millions	2019			2018
Change in benefit obligation:
Benefit obligation, beginning of year	$	5,841		$	131
Acquired benefit obligations	—			5,685
Interest cost	225			25
Actuarial loss	530			41
Benefit payments	(357		)	(41		)
Benefit obligation, end of year	6,239			5,841

Change in plan assets:
Fair value of plan assets, beginning of year	5,663			—
Fair value of plan assets acquired	—			5,709
Actual return on plan assets	1,064			(17		)
Employer contributions	25			12
Benefit payments	(357		)	(41		)
Fair value of plan assets, end of year	6,395			5,663

Funded status	$	156		$	(178	)

Schedule of assets (liabilities) recognized in Balance Sheet

The assets (liabilities) recognized on the consolidated balance sheets at December 31, 2019 and 2018 for the pension plans consisted of the following:



In millions	2019			2018
Non-current assets reflected in other assets	$	494		$	147
Current liabilities reflected in accrued expenses	(25		)	(25		)
Non-current liabilities reflected in other long-term liabilities	(313		)	(300		)
Net assets (liabilities)	$	156		$	(178	)

Schedule of net periodic benefit cost

The components of net periodic benefit cost (income) for the years ended December 31, 2019, 2018 and 2017 are shown below:



In millions	2019			2018			2017
Components of net periodic benefit cost (income):
Interest cost	$	225		$	25		$	20
Expected return on plan assets	(357		)	(33		)	(20		)
Amortization of net actuarial loss	1			2			21
Settlement losses	—			—			187
Net periodic benefit cost (income)	$	(131	)	$	(6	)	$	208

Weighted average assumptions used in determining benefit obligations and net benefit costs

The Company determined its benefit obligation based on the following weighted average assumptions as of December 31, 2019 and 2018:



	2019		2018
Discount rate	3.2	%	4.3	%

The Company determined its net periodic benefit cost (income) based on the following weighted average assumptions for the years ended December 31, 2019, 2018 and 2017:



	2019		2018		2017
Discount rate	4.0	%	4.0	%	4.0	%
Expected long-term rate of return on plan assets	6.5	%	6.6	%	5.0	%

Schedule of changes in fair value of plan assets

Pension plan assets with changes in fair value measured on a recurring basis at December 31, 2019 were as follows:



In millions	Level 1		Level 2			Level 3		Total
Cash and cash equivalents	$	92	$	65		$	—	$	157
Debt securities:
U.S. government securities	592		31			—		623
States, municipalities and political subdivisions	—		157			—		157
U.S. corporate securities	—		1,849			1		1,850
Foreign securities	—		178			—		178
Residential mortgage-backed securities	—		385			—		385
Commercial mortgage-backed securities	—		89			—		89
Other asset-backed securities	—		150			—		150
Redeemable preferred securities	—		5			—		5
Total debt securities	592		2,844			1		3,437
Equity securities:
U.S. domestic	931		1			—		932
International	481		—			—		481
Domestic real estate	25		—			—		25
Total equity securities	1,437		1			—		1,438
Other investments:
Real estate	—		—			353		353
Common/collective trusts ⁽¹⁾	—		288			—		288
Derivatives	—		(2		)	—		(2		)
Total other investments	—		286			353		639
Total pension investments ⁽²⁾	$	2,121	$	3,196		$	354	$	5,671

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(1)	The assets in the underlying funds of common/collective trusts consist of $137 million of equity securities and $151 million of debt securities.


(2)	Excludes $540 million of private equity limited partnership investments and $184 million of hedge fund limited partnership investments as these amounts are measured at NAV per share or an equivalent and are not subject to leveling within the fair value hierarchy.

Pension plan assets with changes in fair value measured on a recurring basis at December 31, 2018 were as follows:



In millions	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	68	$	30	$	—	$	98
Debt securities:
U.S. government securities	511		38		—		549
States, municipalities and political subdivisions	—		147		—		147
U.S. corporate securities	—		1,671		5		1,676
Foreign securities	—		177		—		177
Residential mortgage-backed securities	—		339		—		339
Commercial mortgage-backed securities	—		70		—		70
Other asset-backed securities	—		162		—		162
Redeemable preferred securities	—		6		—		6
Total debt securities	511		2,610		5		3,126
Equity securities:
U.S. domestic	744		—		—		744
International	356		—		—		356
Domestic real estate	30		—		—		30
Total equity securities	1,130		—		—		1,130
Other investments:
Real estate	—		—		425		425
Common/collective trusts ⁽¹⁾	—		253		—		253
Derivatives	—		2		—		2
Total other investments	—		255		425		680
Total pension investments ⁽²⁾	$	1,709	$	2,895	$	430	$	5,034

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(1)	The assets in the underlying funds of common/collective trusts consist of $109 million of equity securities and $144 million of debt securities.

(2)

Excludes $465 million of private equity limited partnership investments and $164 million of hedge fund limited partnership investments as these amounts are measured at NAV per share or an equivalent and are not subject to leveling within the fair value hierarchy.

Schedule of change in level 3 plan assets

The changes in the balance of Level 3 pension plan assets during 2019 were as follows:



	2019
In millions	Real estate			U.S. corporate securities			Total
Beginning balance	$	425		$	5		$	430
Actual return on plan assets	5			—			5
Purchases, sales and settlements	(77		)	(5		)	(82		)
Transfers into (out of) Level 3	—			1			1
Ending balance	$	353		$	1		$	354

Schedule of expected future benefits payments

The Company estimates the following future benefit payments, which are calculated using the same actuarial assumptions used to measure the pension benefit obligation as of December 31, 2019:



In millions
2020	$	373
2021	415
2022	379
2023	384
2024	380
2025-2029	1,851

The Company estimates the following future benefit payments, which are calculated using the same actuarial assumptions used to measure the accumulated other postretirement benefit obligation as of December 31, 2019:



In millions
2020	$	15
2021	15
2022	15
2023	15
2024	15
2025-2029	72