v3.3.1.900
Pensions and Other Postretirement Benefits (Tables)
 12 Months Ended
Jan. 03, 2016
Compensation and Retirement Disclosure [Abstract]  
Components of net periodic benefit cost
Net periodic benefit costs for the Company’s defined benefit retirement plans and other benefit plans for 2015, 2014 and 2013 include the following components:
 
 
Retirement Plans
 
Other Benefit Plans
(Dollars in Millions)
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Service cost
 
$
1,037

 
882

 
906

 
257

 
211

 
196

Interest cost
 
988

 
1,018

 
908

 
186

 
197

 
151

Expected return on plan assets
 
(1,809
)
 
(1,607
)
 
(1,447
)
 
(7
)
 
(7
)
 
(6
)
Amortization of prior service cost (credit)
 
2

 
6

 
6

 
(33
)
 
(34
)
 
(2
)
Amortization of net transition obligation
 
—

 
1

 
1

 
—

 
—

 
—

Recognized actuarial losses
 
745

 
460

 
681

 
201

 
136

 
111

Curtailments and settlements
 
8

 
(17
)
 
—

 
—

 
—

 
2

Net periodic benefit cost
 
$
971

 
743

 
1,055

 
604

 
503

 
452
Amounts expected to be recognized in net periodic benefit cost
Amounts expected to be recognized in net periodic benefit cost in the coming year for the Company’s defined benefit retirement plans and other post-retirement plans:
(Dollars in Millions)
 
Amortization of net transition obligation
$
—

Amortization of net actuarial losses
638

Amortization of prior service credit
29
Rates Used to Develop Actuarial Present Value of Projected Benefit Obligation
The following table represents the weighted-average actuarial assumptions:
 
 
Retirement Plans
 
Other Benefit Plans
Worldwide Benefit Plans
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
 
3.78
%
 
4.78
 
4.25
 
4.31
 
5.25
 
4.55
Rate of increase in compensation levels
 
4.05
%
 
4.08
 
4.08
 
4.11
 
4.29
 
4.28
Expected long-term rate of return on plan assets
 
8.53
%
 
8.46
 
8.45
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefit Obligation
 
 
 
 
 
 
 
 
 
 
 
 
Discount rate
 
4.11
%
 
3.78
 
4.78
 
4.63
 
4.31
 
5.25
Rate of increase in compensation levels
 
4.01
%
 
4.05
 
4.08
 
4.28
 
4.11
 
4.29
Assumed health care cost trend rates
The following table displays the assumed health care cost trend rates, for all individuals:
Health Care Plans
 
2015
 
2014
Health care cost trend rate assumed for next year
 
6.60
%
 
6.00
%
Rate to which the cost trend rate is assumed to decline (ultimate trend)
 
4.50
%
 
4.50
%
Year the rate reaches the ultimate trend rate
 
2038

 
2032
Effect of one percentage point change in assumed health care cost trend rates
A one-percentage-point change in assumed health care cost trend rates would have the following effect:
 
 
One-Percentage-
 
One-Percentage-
(Dollars in Millions)
 
Point Increase
 
Point Decrease
Health Care Plans
 
 

 
 

Total interest and service cost
 
$
36

 
(29
)
Post-retirement benefit obligation
 
$
417

 
(326
)
Schedule of Net Funded Status
The following table sets forth information related to the benefit obligation and the fair value of plan assets at year-end 2015 and 2014 for the Company’s defined benefit retirement plans and other post-retirement plans:
 
 
Retirement Plans
 
Other Benefit Plans
(Dollars in Millions)
 
2015
 
2014
 
2015
 
2014
Change in Benefit Obligation
 
 
 
 
 
 
 
 
Projected benefit obligation — beginning of year
 
$
26,889

 
21,488

 
5,081

 
4,407

Service cost
 
1,037

 
882

 
257

 
211

Interest cost
 
988

 
1,018

 
186

 
197

Plan participant contributions
 
48

 
59

 
—

 
—

Amendments
 
60

 
(60
)
 
—

 
(254
)
Actuarial (gains) losses
 
(1,578
)
 
5,395

 
(400
)
 
1,030

Divestitures & acquisitions
 
(5
)
 
(121
)
 
—

 
—

Curtailments, settlements & restructuring
 
(20
)
 
(53
)
 
(3
)
 
—

Benefits paid from plan
 
(773
)
 
(813
)
 
(420
)
 
(493
)
Effect of exchange rates
 
(791
)
 
(906
)
 
(32
)
 
(17
)
Projected benefit obligation — end of year
 
$
25,855

 
26,889

 
4,669

 
5,081

Change in Plan Assets
 
 
 
 
 
 
 
 
Plan assets at fair value — beginning of year
 
$
22,575

 
20,901

 
79

 
87

Actual return on plan assets
 
298

 
2,078

 
1

 
8

Company contributions
 
752

 
1,176

 
414

 
477

Plan participant contributions
 
48

 
59

 
—

 
—

Settlements
 
(20
)
 
(40
)
 
—

 
—

Divestitures & acquisitions
 
(5
)
 
(109
)
 
—

 
—

Benefits paid from plan assets
 
(773
)
 
(813
)
 
(420
)
 
(493
)
Effect of exchange rates
 
(621
)
 
(677
)
 
—

 
—

Plan assets at fair value — end of year
 
$
22,254

 
22,575

 
74

 
79

Funded status — end of year
 
$
(3,601
)
 
(4,314
)
 
(4,595
)
 
(5,002
)
Amounts Recognized in the Company’s Balance Sheet consist of the following:
 
 
 
 
 
 
 
 
Non-current assets
 
$
256

 
233

 
—

 
—

Current liabilities
 
(77
)
 
(74
)
 
(324
)
 
(309
)
Non-current liabilities
 
(3,780
)
 
(4,473
)
 
(4,271
)
 
(4,693
)
Total recognized in the consolidated balance sheet — end of year
 
$
(3,601
)
 
(4,314
)
 
(4,595
)
 
(5,002
)
Amounts Recognized in Accumulated Other Comprehensive Income consist of the following:
 
 
 
 
 
 
 
 
Net actuarial loss
 
$
6,501

 
7,547

 
2,013

 
2,611

Prior service cost (credit)
 
34

 
(33
)
 
(185
)
 
(225
)
Unrecognized net transition obligation
 
—

 
1

 
—

 
—

Total before tax effects
 
$
6,535

 
7,515

 
1,828

 
2,386

 
 
 
 
 
 
 
 
 
Accumulated Benefit Obligations — end of year
 
$
23,262

 
23,816

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement Plans
 
Other Benefit Plans
(Dollars in Millions)
 
2015
 
2014
 
2015
 
2014
Amounts Recognized in Net Periodic Benefit Cost and Other Comprehensive Income
 
 
 
 
 
 
 
 
Net periodic benefit cost
 
$
971

 
743

 
604

 
503

Net actuarial (gain) loss
 
(75
)
 
4,942

 
(389
)
 
1,015

Amortization of net actuarial loss
 
(745
)
 
(460
)
 
(201
)
 
(136
)
Prior service cost (credit)
 
60

 
(60
)
 
—

 
(253
)
Amortization of prior service (cost) credit
 
(2
)
 
(6
)
 
33

 
34

Effect of exchange rates
 
(218
)
 
(273
)
 
(1
)
 
—

Total recognized in other comprehensive income, before tax
 
$
(980
)
 
4,143

 
(558
)
 
660

Total recognized in net periodic benefit cost and other comprehensive income
 
$
(9
)
 
4,886

 
46

 
1,163
Information related to the benefit obligation and the fair value of plan assets
The following table displays the funded status of the Company's U.S. Qualified & Non-Qualified pension plans and international funded and unfunded pension plans at December 31, 2015 and December 28, 2014, respectively:

 
U.S. Plans
International Plans
 
Qualified Plans
Non-Qualified Plans
Funded Plans
Unfunded Plans
(Dollars in Millions)
2015
2014
2015
2014
2015
2014
2015
2014
Plan Assets
$
15,113

15,201

—

—

7,141

7,374

—

—

Projected Benefit Obligation
15,280

15,571

1,675

1,683

8,542

9,203

358

432

Accumulated Benefit Obligation
13,876

13,875

1,411

1,363

7,661

8,205

314

373

Over (Under) Funded Status
 
 
 
 
 
 
 
 
Projected Benefit Obligation
$
(167
)
(370
)
(1,675
)
(1,683
)
(1,401
)
(1,829
)
(358
)
(432
)
Accumulated Benefit Obligation
1,237

1,326

(1,411
)
(1,363
)
(520
)
(831
)
(314
)
(373
)
Projected future benefit payments from company's retirement and other benefit plans
The following table displays the projected future benefit payments from the Company’s retirement and other benefit plans:
(Dollars in Millions)
 
2016
 
2017
 
2018
 
2019
 
2020
 
2021-2025
Projected future benefit payments
 
 
 
 
 
 
 
 
 
 
 
 
Retirement plans
 
$
839

 
872

 
911

 
967

 
1,031

 
6,098

Other benefit plans 
 
$
331

 
322

 
315

 
312

 
310

 
1,499
Projected future minimum contributions to the Company's U.S. and international unfunded retirement plans
The following table displays the projected future minimum contributions to the unfunded retirement plans. These amounts do not include any discretionary contributions that the Company may elect to make in the future.
(Dollars in Millions)
 
2016
 
2017
 
2018
 
2019
 
2020
 
2021-2025
Projected future contributions
 
$
76

 
77

 
82

 
88

 
93

 
559
Company' retirement plan asset allocation and target allocations
The Company’s retirement plan asset allocation at the end of 2015 and 2014 and target allocations for 2016 are as follows:
 
 
Percent of
Plan Assets
 
Target
Allocation
 
 
2015
 
2014
 
2016
Worldwide Retirement Plans
 
 
 
 
 
 
Equity securities
 
79
%
 
77
%
 
74
%
Debt securities
 
21

 
23

 
26

Total plan assets
 
100
%
 
100
%
 
100
%
Schedule of Defined Benefit Plans Disclosures
The following table sets forth the Retirement Plans' investments measured at fair value as of December 31, 2015 and December 28, 2014:
 
 
Quoted Prices
in Active
Markets for
Identical Assets
 
Significant
Other
Observable
Inputs
 
Significant
Unobservable
Inputs
 
 
 
 
 
 
(Level 1)
 
(Level 2)
 
(Level 3)
 
Total Assets
(Dollars in Millions)
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
 
2015
 
2014
Short-term investment funds
 
$
184

 
168

 
312

 
551

 
—

 
—

 
496

 
719

Government and agency securities
 
—

 
—

 
1,767

 
1,934

 
—

 
—

 
1,767

 
1,934

Debt instruments
 
—

 
—

 
1,050

 
1,143

 
1

 
1

 
1,051

 
1,144

Equity securities
 
11,317

 
11,204

 
11

 
21

 
—

 
—

 
11,328

 
11,225

Commingled funds
 
—

 
—

 
7,189

 
7,205

 
33

 
46

 
7,222

 
7,251

Insurance contracts
 
—

 
—

 
—

 
—

 
23

 
24

 
23

 
24

Other assets
 
—

 
1

 
314

 
214

 
53

 
63

 
367

 
278

Investments at fair value
 
$
11,501

 
11,373

 
10,643

 
11,068

 
110

 
134

 
22,254

 
22,575
Summary of changes in the fair value of the Plan's Level 3 assets
The table below sets forth a summary of changes in the fair value of the Plan’s Level 3 assets for the years ended December 31, 2015 and December 28, 2014:
(Dollars in Millions)
 
Debt Instruments
 
Equity Securities
 
Commingled Funds
 
Insurance Contracts
 
Other Assets
 
Total Level 3
Balance December 29, 2013
 
$
1

 
4

 
44

 
23

 
69

 
141

Realized gains (losses)
 
—

 
—

 
—

 
—

 
(5
)
 
(5
)
Unrealized gains (losses)
 
—

 
—

 
2

 
—

 
—

 
2

Purchases, sales, issuances and settlements, net
 
—

 
—

 
(2
)
 
3

 
(1
)
 
—

Transfers in/out and exchange rate changes
 
—

 
(4
)
 
2

 
(2
)
 
—

 
(4
)
Balance December 28, 2014
 
1

 
—

 
46

 
24

 
63

 
134

Realized gains (losses)
 
—

 
—

 
1

 
—

 
(2
)
 
(1
)
Unrealized gains (losses)
 
—

 
—

 
(11
)
 
—

 
(5
)
 
(16
)
Purchases, sales, issuances and settlements, net
 
—

 
—

 
(2
)
 
1

 
(2
)
 
(3
)
Transfers in/out and exchange rate changes
 
—

 
—

 
(1
)
 
(2
)
 
(1
)
 
(4
)
Balance December 31, 2015
 
$
1

 
—

 
33

 
23

 
53

 
110