PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

The components of net periodic pension cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents:


	2017		2016		2015
Pensions
Service cost	$	274	$	254	$	282
Interest cost		361		391		474
Expected return on plan assets		(790)		(775)		(769)
Amortization of actuarial loss		247		211		223
Amortization of prior service cost		12		16		25
Other postemployment benefits				2		1
Settlements/curtailments		2		11		11
Net cost	$	106	$	110	$	247
Weighted-average assumptions
Discount rates - service cost		3.5%		4.3%		4.0%
Discount rates - interest cost		3.0%		3.4%		4.0%
Rate of compensation increase		3.8%		3.8%		3.8%
Expected long-term rates of return		7.3%		7.3%		7.3%

The components of net periodic postretirement benefits cost and the assumptions related to the cost consisted of the following in millions of dollars and in percents:


	2017		2016		2015
Health care and life insurance
Service cost	$	42	$	38	$	46
Interest cost		194		204		259
Expected return on plan assets		(17)		(35)		(55)
Amortization of actuarial loss		99		73		91
Amortization of prior service credit		(77)		(78)		(77)
Settlements/curtailments						1
Net cost	$	241	$	202	$	265
Weighted-average assumptions
Discount rates - service cost		4.7%		5.0%		4.2%
Discount rates - interest cost		3.2%		3.5%		4.2%
Expected long-term rates of return		6.3%		6.6%		7.0%

The previous pension cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:


	2017		2016		2015
Pensions
Net cost	$	106	$	110	$	247
Retirement benefit adjustments included in other comprehensive (income) loss:
Net actuarial (gain) loss		(702)		1,140		361
Prior service cost				1		66
Amortization of actuarial loss		(247)		(211)		(223)
Amortization of prior service cost		(12)		(16)		(25)
Settlements/curtailments		(2)		(14)		(11)
Total (gain) loss recognized in other comprehensive (income) loss		(963)		900		168
Total recognized in comprehensive (income) loss	$	(857)	$	1,010	$	415

The previous postretirement benefits cost in net income and other changes in plan assets and benefit obligations in other comprehensive income in millions of dollars were as follows:


	2017		2016		2015
Health care and life insurance
Net cost	$	241	$	202	$	265
Retirement benefit adjustments included in other comprehensive (income) loss:
Net actuarial (gain) loss		(309)		496		(141)
Prior service credit				(3)		(3)
Amortization of actuarial loss		(99)		(73)		(91)
Amortization of prior service credit		77		78		77
Settlements/curtailments						(2)
Total (gain) loss recognized in other comprehensive (income) loss		(331)		498		(160)
Total recognized in comprehensive (income) loss	$	(90)	$	700	$	105

The benefit plan obligations, funded status, and the assumptions related to the obligations at October 29, 2017 and October 30, 2016, respectively, in millions of dollars follow:


					Health Care
					and
	Pensions				Life Insurance
	2017		2016		2017		2016
Change in benefit obligations
Beginning of year balance	$	(13,086)	$	(12,186)	$	(6,500)	$	(6,084)
Service cost		(274)		(254)		(42)		(38)
Interest cost		(361)		(391)		(194)		(204)
Actuarial gain (loss)		(35)		(1,001)		280		(478)
Amendments				(1)				3
Benefits paid		704		702		312		321
Health care subsidies						(9)		(16)
Other postemployment benefits				(2)
Settlements/curtailments		2		6
Foreign exchange and other		(116)		41		(9)		(4)
End of year balance		(13,166)		(13,086)		(6,162)		(6,500)

Change in plan assets (fair value)
Beginning of year balance		11,137		11,164		435		689
Actual return on plan assets		1,517		628		46		17
Employer contribution		62		80		366		47
Benefits paid		(704)		(702)		(312)		(321)
Settlements		(2)		(3)
Foreign exchange and other		83		(30)		4		3
End of year balance		12,093		11,137		539		435
Funded status	$	(1,073)	$	(1,949)	$	(5,623)	$	(6,065)

Weighted-average assumptions
Discount rates		3.6%		3.6%		3.7%		3.8%
Rate of compensation increase		3.8%		3.8%

The amounts recognized at October 29, 2017 and October 30, 2016, respectively, in millions of dollars consist of the following:


					Health Care
					and
	Pensions				Life Insurance
	2017		2016		2017		2016
Amounts recognized in balance sheet
Noncurrent asset	$	538	$	94
Current liability		(40)		(33)	$	(63)	$	(32)
Noncurrent liability		(1,571)		(2,010)		(5,560)		(6,033)
Total	$	(1,073)	$	(1,949)	$	(5,623)	$	(6,065)
Amounts recognized in accumulated other comprehensive income – pretax
Net actuarial loss	$	4,358	$	5,309	$	1,457	$	1,865
Prior service cost (credit)		55		67		(182)		(259)
Total	$	4,413	$	5,376	$	1,275	$	1,606

The amounts in accumulated other comprehensive income that are expected to be amortized as net expense (income) and reported outside of income from operations during fiscal 2018 in millions of dollars follow:


			Health Care
			and
	Pensions		Life Insurance
Net actuarial loss	$	225	$	67
Prior service cost (credit)		12		(77)
Total	$	237	$	(10)

The benefits expected to be paid from the benefit plans, which reflect expected future years of service, are as follows in millions of dollars:


			Health Care
			and
	Pensions		Life Insurance*
2018	$	721	$	334
2019		726		337
2020		713		342
2021		701		346
2022		693		352
2023 to 2027		3,458		1,758

* Net of prescription drug group benefit subsidy under Medicare Part D.

The fair values of the pension plan assets at October 29, 2017 follow in millions of dollars:


	Total		Level 1		Level 2
Cash and short-term investments	$	618	$	349	$	269
Equity:
U.S. equity securities		1,871		1,850		21
International equity securities		1,551		1,541		10
Fixed Income:
Government and agency securities		483		241		242
Corporate debt securities		1,285				1,285
Mortgage-backed securities		42				42
Real estate		103		101		2
Derivative contracts - assets*		159		28		131
Derivative contracts - liabilities**		(76)		(2)		(74)
Receivables, payables, and other		1		1
Securities lending collateral		420				420
Securities lending liability		(420)				(420)
Securities sold short		(379)		(375)		(4)
Total of Level 1 and Level 2 assets		5,658	$	3,734	$	1,924
Investments at net asset value:
Short-term investments		203
U.S. equity funds		1,704
International equity funds		921
Corporate debt funds		28
Fixed income funds		772
Real estate		567
Hedge funds		651
Private equity/venture capital		1,560
Other investments		29
Total net assets	$	12,093

* Includes contracts for interest rates of $79 million, foreign currency of $49 million, equity of $27 million, and other of $4 million.

** Includes contracts for interest rates of $48 million, foreign currency of $26 million, and other of $2 million.

The fair values of the health care assets at October 29, 2017 follow in millions of dollars:


	Total		Level 1		Level 2
Cash and short-term investments	$	30	$	28	$	2
Equity:
U.S. equity securities and funds		42		42
International equity securities		9		9
Fixed Income:
Government and agency securities		40		37		3
Corporate debt securities		21				21
Mortgage-backed securities		10				10
Real estate		1		1
Interest rate derivative contracts - assets		1				1
Securities lending collateral		25				25
Securities lending liability		(25)				(25)
Securities sold short		(2)		(2)
Total of Level 1 and Level 2 assets		152	$	115	$	37
Investments at net asset value:
Short-term investments		1
U.S. equity funds		164
International equity funds		117
Fixed income funds		87
Real estate funds		4
Hedge funds		4
Private equity/venture capital		10
Total net assets	$	539

The fair values of the pension plan assets at October 30, 2016 follow in millions of dollars:


	Total		Level 1		Level 2
Cash and short-term investments	$	684	$	322	$	362
Equity:
U.S. equity securities and funds		3,000		2,965		35
International equity securities and funds		1,711		1,697		14
Fixed Income:
Government and agency securities		440		224		216
Corporate debt securities		1,205				1,205
Mortgage-backed securities		39				39
Fixed income funds		20		20
Real estate		121		118		3
Derivative contracts - assets*		191		3		188
Derivative contracts - liabilities**		(59)		(14)		(45)
Receivables, payables, and other		6		5		1
Securities lending collateral		693		108		585
Securities lending liability		(693)		(108)		(585)
Securities sold short		(338)		(333)		(5)
Total of Level 1 and Level 2 assets		7,020	$	5,007	$	2,013
Investments at net asset value:
Short-term investments		216
U.S. equity funds		30
International equity funds		595
Corporate debt funds		25
Fixed income funds		482
Real estate		515
Hedge funds		624
Private equity/venture capital		1,603
Other investments		27
Total net assets	$	11,137

* Includes contracts for interest rates of $125 million, foreign currency of $59 million, equity of $4 million, and other of $3 million.

** Includes contracts for interest rates of $19 million, foreign currency of $33 million, equity of $6 million, and other of $1 million.

The fair values of the health care assets at October 30, 2016 follow in millions of dollars:


	Total		Level 1		Level 2
Cash and short-term investments	$	32	$	27	$	5
Equity:
U.S. equity securities and funds		138		138
International equity securities and funds		25		25
Fixed Income:
Government and agency securities		43		40		3
Corporate debt securities		30				30
Mortgage-backed securities		11				11
Real estate		2		2
Derivative contracts - assets*		3				3
Securities lending collateral		48		11		37
Securities lending liability		(48)		(11)		(37)
Securities sold short		(5)		(5)
Total of Level 1 and Level 2 assets		279	$	227	$	52
Investments at net asset value:
Short-term investments		3
International equity funds		60
Fixed income funds		20
Real estate funds		7
Hedge funds		44
Private equity/venture capital		22
Total net assets	$	435

* Includes contracts for interest rates of $2 million and foreign currency of $1 million.