v3.25.4
Postemployment benefit plans
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Postemployment benefit plans Postemployment benefit plans
 
We provide defined benefit pension plans, defined contribution plans and/or other postretirement benefit plans (retirement health care and life insurance) to employees in many of our locations throughout the world. Our defined benefit pension plans provide a benefit based on years of service and/or the employee’s average earnings near retirement. Our defined contribution plans allow employees to contribute a portion of their salary to help save for retirement, and in most cases, we provide a matching contribution. The benefit obligation related to our non-U.S. defined benefit pension plans are for employees located primarily in Europe, Japan and Brazil. For other postretirement benefits (OPEB), substantially all of our benefit obligation is for employees located in the United States.
A. Obligations, assets and funded status
 U.S. Pension BenefitsNon-U.S. 
Pension Benefits		Other Postretirement 
Benefits
(Millions of dollars)202520242025202420252024
Accumulated benefit obligation, end of year
$12,066 $12,171 $3,011 $2,880   
Change in benefit obligation:
Benefit obligation, beginning of year
$12,171 $13,137 $2,989 $3,265 $2,469 $2,741 
Service cost 1
— — 49 43 63 67 
Interest cost612 625 118 118 125 131 
Plan amendments— — 6 — — — 
Actuarial loss (gain) 276 (603)(93)(31)(96)(202)
Foreign currency exchange rates— — 291 (203)21 (33)
Participant contributions— — 5 5 41 45 
Benefits paid - gross(993)(988)(189)(193)(287)(286)
Less: federal subsidy on benefits paid
— — — — 6 6 
Curtailments, settlements and termination benefits
— — (45)(15)— — 
Benefit obligation, end of year$12,066 $12,171 $3,131 $2,989 $2,342 $2,469 
Change in plan assets:
Fair value of plan assets, beginning of year
$11,898 $12,738 $3,203 $3,467 $88 $144 
Actual return on plan assets1,158 96 103 74 25 25 
Foreign currency exchange rates
— — 307 (194)— — 
Company contributions50 52 70 59 261 160 
Participant contributions— — 5 5 41 45 
Benefits paid(993)(988)(189)(193)(287)(286)
Settlements and termination benefits
— — (45)(15)— — 
Fair value of plan assets, end of year
$12,113 $11,898 $3,454 $3,203 $128 $88 
Over (under) funded status
$47 $(273)$323 $214 $(2,214)$(2,381)
Amounts recognized in Statement 3:      
Other assets (non-current asset)$670 $354 $681 $541 $— $— 
Accrued wages, salaries and employee benefits (current liability)
(50)(50)(22)(21)(146)(204)
Liability for postemployment benefits (non-current liability) 2
(573)(577)(336)(306)(2,068)(2,177)
Net (liability) asset recognized$47 $(273)$323 $214 $(2,214)$(2,381)
Amounts recognized in AOCI (pre-tax):
Prior service cost (credit)$— $— $27 $21 $— $(5)
Weighted-average assumptions used to determine benefit obligation, end of year:
Discount rate5.3 %5.6 %4.3 %4.1 %5.3 %5.6 %
Rate of compensation increase 1
— %— %2.2 %2.2 %4.0 %4.0 %

1 All U.S. pension benefits are frozen, and accordingly there is no longer any service cost and certain assumptions are no longer applicable.
2 The Liability for postemployment benefits reported in Statement 3 includes liabilities for other postemployment benefits and non-qualified deferred compensation plans. For 2025 and 2024, these liabilities were $861 million and $697 million, respectively.
For 2025, Actuarial loss (gain) impacting the benefit obligation was primarily due to lower discount rates at the end of 2025 compared to the end of 2024. For 2024, Actuarial loss (gain) impacting the benefit obligation was primarily due to higher discount rates at the end of 2024 compared to the end of 2023.

 U.S. Pension BenefitsNon-U.S. 
Pension Benefits
(Millions of dollars)2025202420252024
Pension plans with projected benefit obligation in excess of plan assets:
Projected benefit obligation$623 $627 $412 $370 
Fair value of plan assets$— $— $54 $43 
Pension plans with accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation$623 $627 $300 $279 
Fair value of plan assets$— $— $19 $7 

The accumulated postretirement benefit obligation exceeds plan assets for all of our other postretirement benefit plans for all years presented.
B. Net periodic benefit cost
 
 U.S. Pension BenefitsNon-U.S. Pension BenefitsOther Postretirement Benefits
(Millions of dollars)202520242023202520242023202520242023
Net periodic benefit cost:         
Service cost 1
$— $— $— $49 $43 $40 $63 $67 $67 
Interest cost612 625 656 118 118 124 125 131 144 
Expected return on plan assets(720)(699)(689)(171)(165)(163)(9)(7)(11)
Curtailments, settlements and termination benefits— — — — — 1 — — — 
Amortization of prior service cost (credit) — — — 1 — — (5)(14)(12)
Actuarial loss (gain) 2
(162)— (138)(26)59 172 (106)(213)(131)
Net periodic benefit cost (benefit) 3
$(270)$(74)$(171)$(29)$55 $174 $68 $(36)$57 
Amounts recognized in other comprehensive income (pre-tax):         
Current year prior service cost (credit)
$— $— $— $7 $— $1 $— $— $(2)
Amortization of prior service (cost) credit — — — (1)— — 5 14 12 
Total recognized in other comprehensive income
— — — 6 — 1 5 14 10 
Total recognized in net periodic cost and other comprehensive income
$(270)$(74)$(171)$(23)$55 $175 $73 $(22)$67 
Weighted-average assumptions used to determine net periodic benefit cost:         
Discount rate used to measure service cost 1
— %— %— %3.2 %3.6 %3.8 %5.7 %5.1 %5.4 %
Discount rate used to measure interest cost
5.3 %5.0 %5.2 %3.9 %3.9 %4.2 %5.3 %5.0 %5.3 %
Expected rate of return on plan assets6.3 %5.7 %5.8 %5.2 %5.1 %5.2 %6.1 %7.4 %7.4 %
Rate of compensation increase 1
— %— %— %2.2 %2.3 %2.3 %4.0 %4.0 %4.0 %
1 All U.S. pension benefits are frozen, and accordingly there is no longer any service cost and certain assumptions are no longer applicable.
2 Actuarial loss (gain) represents the effects of actual results differing from our assumptions and the effects of changing assumptions. We recognize actuarial loss (gain) immediately through earnings upon the annual remeasurement in the fourth quarter, or on an interim basis as triggering events warrant remeasurement.
3 The service cost component is included in Operating costs and all other components are included in Other income (expense) in Statement 1.

Our expected rate of return on U.S. plan assets is based on our estimate of long-term returns for equities and fixed income securities weighted by the asset allocations as of December 31. We use a similar process to determine this rate for our non-U.S. plans.

The assumed health care cost trend rate represents the rate at which costs are assumed to increase. We assumed a weighted-average increase of 6.0 percent in our calculation of 2025 benefit expense.  We expect a weighted-average increase of 6.7 percent during 2026.  The 2026 rates are assumed to decrease gradually to the ultimate health care trend rate of 4.7 percent in 2037.
 C. Expected contributions and Benefit payments

The following table presents information about expected contributions and benefit payments for pension and other postretirement benefit plans:
 
(Millions of dollars)2026
Expected employer contributions:   
U.S. Pension Benefits$50 
Non-U.S. Pension Benefits$64 
Other Postretirement Benefits$246 
Expected benefit payments:202620272028202920302031-2035Total
U.S. Pension Benefits$1,000 $985 $975 $965 $950 $4,510 $9,385 
Non-U.S. Pension Benefits$215 $200 $210 $215 $220 $1,120 $2,180 
Other Postretirement Benefits$225 $225 $220 $215 $210 $1,010 $2,105 
Expected Medicare Part D subsidy:$6 $5 $5 $5 $4 $17 $42 
 
The above table reflects the total expected employer contributions and expected benefits to be paid from the plan or from company assets and does not include the participants’ share of the cost. The expected benefit payments for our other postretirement benefits include payments for prescription drug benefits. The above table also includes Medicare Part D subsidy amounts expected to be received by the company which will offset other postretirement benefit payments.
D. Plan assets

In general, our strategy for both the U.S. and non-U.S. pensions is designed to decrease funded status volatility through ongoing alignment of the interest rate sensitivity of our investments to our obligations, while reducing risk from return seeking assets in our portfolio. The current U.S. pension target asset allocation is 87 percent fixed income and 13 percent equities. We will revise this target allocation periodically to ensure it reflects our overall objectives. The non-U.S. pension weighted-average target allocations are 59 percent fixed income, 18 percent insurance contracts, 11 percent equities, 7 percent real estate, and 5 percent other.  The target allocations for each plan vary based upon local statutory requirements, demographics of plan participants and funded status.  We primarily invest the non-U.S. plan assets in non-U.S. securities.
 
Our target allocation for the other postretirement benefit plans is 40 percent equities and 60 percent fixed income. 
 
We rebalance the U.S. plans to within the appropriate target asset allocation ranges on a monthly basis.  The frequency of rebalancing for the non-U.S. plans varies depending on the plan. As a result of our diversification strategies, there are no significant concentrations of risk within the portfolio of investments.
 
We permit the use of certain derivative instruments where appropriate and necessary for achieving overall investment policy objectives.  The plans do not use derivative contracts for speculative purposes.
 
The accounting guidance on fair value measurements specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques (Level 1, 2 and 3). Certain assets that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. See Note 18 for a discussion of the fair value hierarchy.
 
We determine fair values as follows:
 
•Equity securities are primarily based on valuations for identical instruments in active markets.
•Fixed income securities are primarily based upon models that take into consideration such market-based factors as recent sales, risk-free yield curves and prices of similarly rated bonds.
•Real estate is stated at the fund’s net asset value or at appraised value.
•Insurance contracts are valued on an insurer pricing basis updated for changes in insurance market pricing, market rates, and inflation.
•Cash, short-term instruments and other are based on the carrying amount, which approximates fair value, or the fund’s net asset value.

The fair value of the pension and other postretirement benefit plan assets by category is summarized below:
 
 December 31, 2025
(Millions of dollars)Level 1Level 2Level 3Measured at NAVTotal Assets at Fair Value
U.S. Pension     
Equity securities:     
U.S. equities$1,049 $1 $22 $50 $1,122 
Non-U.S. equities998 — 14 — 1,012 
Fixed income securities:    
U.S. corporate bonds— 5,598 28 91 5,717 
Non-U.S. corporate bonds— 958 — — 958 
U.S. government bonds— 2,619 — — 2,619 
U.S. governmental agency mortgage-backed securities— 184 — — 184 
Non-U.S. government bonds— 151 — — 151 
Cash, short-term instruments and other68 10 — 272 350 
Total U.S. pension assets$2,115 $9,521 $64 $413 $12,113 

 December 31, 2024
(Millions of dollars)Level 1Level 2Level 3Measured at NAVTotal Assets at Fair Value
U.S. Pension    
Equity securities:    
U.S. equities$1,087 $— $28 $62 $1,177 
Non-U.S. equities946 — 10 — 956 
Fixed income securities:    
U.S. corporate bonds— 5,396 33 36 5,465 
Non-U.S. corporate bonds— 972 — — 972 
U.S. government bonds— 2,656 — — 2,656 
U.S. governmental agency mortgage-backed securities— 180 — — 180 
Non-U.S. government bonds— 132 — — 132 
Cash, short-term instruments and other48 12 — 300 360 
Total U.S. pension assets$2,081 $9,348 $71 $398 $11,898 
 December 31, 2025
(Millions of dollars)Level 1Level 2Level 3Measured at NAVTotal Assets at Fair Value
Non-U.S. Pension    
Equity securities:    
U.S. equities$78 $— $— $— $78 
Non-U.S. equities232 27 — 3 262 
Global equities 1 
41 — — 10 51 
Fixed income securities:    
U.S. corporate bonds— 89 — — 89 
Non-U.S. corporate bonds— 917 — — 917 
U.S. government bonds— 73 — — 73 
Non-U.S. government bonds— 606 — — 606 
Global fixed income 1 
— 113 — 213 326 
Real estate— 250 — 10 260 
Insurance contracts— — 577 — 577 
Cash, short-term instruments and other 2 
24 191 — — 215 
Total non-U.S. pension assets$375 $2,266 $577 $236 $3,454 

 December 31, 2024
(Millions of dollars)Level 1Level 2Level 3Measured at NAVTotal Assets at Fair Value
Non-U.S. Pension    
Equity securities:    
U.S. equities$74 $— $— $— $74 
Non-U.S. equities197 26 — 20 243 
Global equities 1 
32 — — 17 49 
Fixed income securities:    
U.S. corporate bonds— 87 — — 87 
Non-U.S. corporate bonds— 468 — — 468 
U.S. government bonds— 61 — — 61 
Non-U.S. government bonds— 916 — — 916 
Global fixed income 1 
— 104 — 193 297 
Real estate— 207 — 9 216 
Insurance contracts— — 601 — 601 
Cash, short-term instruments and other 2 
35 156 — — 191 
Total non-U.S. pension assets$338 $2,025 $601 $239 $3,203 
1 Includes funds that invest in both U.S. and non-U.S. securities.
2 Includes funds that invest in multiple asset classes, hedge funds and other.
 December 31, 2025
(Millions of dollars)Level 1Level 2Level 3Measured at NAVTotal Assets at Fair Value
Other Postretirement Benefits    
Equity securities:    
U.S. equities$46 $— $— $3 $49 
Non-U.S. equities23 — — 3 26 
Fixed income securities:    
U.S. corporate bonds— — — 21 21 
Cash, short-term instruments and other— — — 32 32 
Total other postretirement benefit assets$69 $— $— $59 $128 
 December 31, 2024
(Millions of dollars)Level 1Level 2Level 3Measured at NAVTotal Assets at Fair Value
Other Postretirement Benefits    
Equity securities:    
U.S. equities$41 $— $— $2 $43 
Non-U.S. equities18 — — 2 20 
Fixed income securities:    
U.S. corporate bonds— — — 20 20 
Cash, short-term instruments and other— — — 5 5 
Total other postretirement benefit assets$59 $— $— $29 $88 

The activity attributable to U.S. pension assets measured at fair value using Level 3 inputs for the years ended December 31, 2025 and 2024 was insignificant. The activity in our non-U.S. pension Level 3 assets involved insurance contracts. During 2025, activity was settlements of $58 million and unrealized gains of $34 million. During 2024, activity was settlements of $59 million and unrealized losses of $15 million. We valued these instruments using pricing models that, in management’s judgment, reflect the assumptions a market participant would use.
E. Defined contribution plans
 
We have both U.S. and non-U.S. employee defined contribution plans to help employees save for retirement. Our primary U.S. 401(k) plan allows eligible employees to contribute a portion of their cash compensation to the plan. Employees are eligible for matching contributions equal to 100 percent of employee contributions to the plan up to 6 percent of cash compensation and an annual employer contribution that ranges from 3 to 5 percent of cash compensation (depending on years of service and age).

These 401(k) plans include various investment funds, including a non-leveraged employee stock ownership plan (ESOP). As of December 31, 2025 and 2024, the ESOP held 9.6 million and 10.4 million shares, respectively. We allocate all of the shares held by the ESOP to participant accounts. Dividends paid to participants are automatically reinvested into company shares unless the participant elects to have all or a portion of the dividend paid to the participant. Various other U.S. and non-U.S. defined contribution plans generally allow eligible employees to contribute a portion of their cash compensation to the plans, and in most cases, we provide a matching contribution to the funds.
 
Total company costs related to U.S. and non-U.S. defined contribution plans were as follows:
 
(Millions of dollars)202520242023
U.S. plans 1
$696 $610 $567 
Non-U.S. plans139 131 114 
 $835 $741 $681 

1 Includes costs related to our non-qualified deferred compensation plans. We utilize total return swaps to economically hedge this exposure to offset the related costs. See Note 4 for additional information.

For our U.S. plans, changes in annual defined contribution costs are primarily due to fair value adjustments related to our non-qualified deferred compensation plans.