v2.4.0.6
Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2012
Employee Benefit Plans  
Components of Net Periodic Benefit Expense
   Pension Postretirement
   2012 2011 2010 2012 2011 2010
              
   (dollars in millions)
Service cost, benefits earned during the period $ 26$ 27$ 99$ 4$ 4$ 7
Interest cost on projected benefit obligation   156  158  152  7  8  11
Expected return on plan assets   (110)  (131)  (128)  —  —  —
Net amortization of prior service costs   —  —  (4)  (14)  (14)  (3)
Net amortization of actuarial loss   27  17  24  2  2  1
Curtailment gain  —  —  (50)  —  —  (4)
Settlement loss  —  1  3  —  —  —
 Net periodic benefit expense $ 99$ 72$ 96$ (1)$ —$ 12
Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Loss (Income) on a Pre-Tax Basis
   Pension Postretirement
   2012 2011 2010 2012 2011 2010
              
   (dollars in millions)
Net loss (gain)$ 416$ (401)$ 34$ 16$ (5)$ 2
Prior service cost (credit)  3  2  —  —  —  (54)
Amortization of prior service credit  —  —  54  14  14  7
Amortization of net loss  (27)  (18)  (27)  (2)  (2)  (1)
Total recognized in other comprehensive loss (income)$ 392$ (417)$ 61$ 28$ 7$ (46)
Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs
   Pension Postretirement
   2012 2011 2010 2012 2011 2010
              
Discount rate 4.57% 5.44% 5.91% 4.56% 5.41% 6.00 / 5.35%
Expected long-term rate of            
 return on plan assets  3.78  4.78  4.78 N/A N/A N/A
Rate of future compensation increases  2.14  2.28  5.13 N/A N/A N/A

________

N/A—Not Applicable.

 
Reconciliation of Changes in Benefit Obligation and Fair Value of Plan Assets
   Pension Postretirement
      
   (dollars in millions)
Reconciliation of benefit obligation:    
 Benefit obligation at December 31, 2010$ 2,953$ 155
 Service cost  27  4
 Interest cost  158  8
 Actuarial loss (gain)  490  (4)
 Plan amendments  4  —
 Plan settlements  (16)  —
 Benefits paid  (98)  (9)
 Other, including foreign currency exchange rate changes  (1)  —
 Benefit obligation at December 31, 2011$ 3,517$ 154
 Service cost  26  4
 Interest cost  156  7
 Actuarial loss  405  15
 Plan settlements  (2)  —
 Benefits paid  (147)  (6)
 Other, including foreign currency exchange rate changes  (72)  —
 Benefit obligation at December 31, 2012$ 3,883$ 174
Reconciliation of fair value of plan assets:    
 Fair value of plan assets at December 31, 2010$ 2,642$ —
 Actual return on plan assets  1,024  —
 Employer contributions  57  9
 Benefits paid  (98)  (9)
 Plan settlements  (16)  —
 Other, including foreign currency exchange rate changes  (5)  —
 Fair value of plan assets at December 31, 2011$ 3,604$ —
 Actual return on plan assets  83  —
 Employer contributions  42  6
 Benefits paid  (147)  (6)
 Plan settlements  (2)  —
 Other, including foreign currency exchange rate changes  (61)  —
 Fair value of plan assets at December 31, 2012$ 3,519$ —
Summary of Funded Status
    Pension Postretirement
    December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
           
    (dollars in millions)
Funded (unfunded) status$ (364)$ 87$ (174)$ (154)
Amounts recognized in the consolidated statements of financial        
condition consist of:        
 Assets$ 97$ 495$ —$ —
 Liabilities  (461)  (408)  (174)  (154)
  Net amount recognized$ (364)$ 87$ (174)$ (154)
Amounts recognized in accumulated other comprehensive loss         
consist of:        
 Prior service credit$ (2)$ (5)$ (24)$ (38)
 Net loss  821  432  41  27
  Net loss (gain) recognized$ 819$ 427$ 17$ (11)
Pension Plans with Projected Benefit Obligations in Excess of Fair Value of Plan Assets
   December 31, 2012 December 31, 2011
      
   (dollars in millions)
Projected benefit obligation$ 552$ 567
Fair value of plan assets  90  159
Pension Plans with Accumulated Benefit Obligations in Excess of Fair Value of Plan Assets
   December 31, 2012 December 31, 2011
      
   (dollars in millions)
Accumulated benefit obligation$ 527$ 450
Fair value of plan assets  90  85
Weighted Average Assumptions used to Determine Benefit Obligations
  Pension Postretirement
  December 31, 2012 December 31, 2011 December 31, 2012 December 31, 2011
         
   
Discount rate 3.95% 4.57% 3.88% 4.56%
Rate of future compensation increase  0.98  2.14 N/A N/A

_______

N/A—Not Applicable.

 
Assumed Health Care Cost Trend Rates used to Determine the Postretirement Benefit Obligations
  December 31, 2012 December 31, 2011
     
Health care cost trend rate assumed for next year:   
 Medical6.93-7.53% 6.95-7.68%
 Prescription8.66% 9.08%
Rate to which the cost trend rate is assumed to decline (ultimate trend rate)4.50% 4.50%
Year that the rate reaches the ultimate trend rate2029 2029
Effects of a One-Percentage Point Change in Assumed Health Care Cost Trend Rates
   One-Percentage Point Increase One-Percentage Point (Decrease)
      
   (dollars in millions)
      
Effect on total postretirement service and interest cost$ 2$ (2)
Effect on postretirement benefit obligation  26  (21)
Fair Value of Net Pension Plan Assets
    Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total
           
    (dollars in millions)
Assets:        
Investments:        
 Cash and cash equivalents(1)$ 80$ —$ —$ 80
 U.S. government and agency securities:        
  U.S. Treasury securities  1,354  —  —  1,354
  U.S. agency securities  —  241  —  241
  Total U.S. government and agency securities  1,354  241  —  1,595
           
 Corporate and other debt:        
  State and municipal securities  —  2  —  2
  Collateralized debt obligations  —  71  —  71
  Total corporate and other debt  —  73  —  73
 Corporate equities  20  —  —  20
 Derivative contracts(2)  —  224  —  224
 Derivative-related cash collateral receivable  —  3  —  3
 Commingled trust funds(3)  —  1,275  —  1,275
 Foreign funds(4)  —  282  —  282
 Other investments  —  11  30  41
  Total investments  1,454  2,109  30  3,593
Receivables:        
 Other receivables(1)  —  71  —  71
  Total receivables  —  71  —  71
Total assets$ 1,454$ 2,180$ 30$ 3,664
           
Liabilities:        
Derivative contracts(5)$ —$ 57$ —$ 57
Derivative-related cash collateral payable  —  28  —  28
Other liabilities(1)  —  60  —  60
Total liabilities  —  145  —  145
 Net pension assets$ 1,454$ 2,035$ 30$ 3,519

_______________________

(1) Cash and cash equivalents, other receivables and other liabilities are valued at cost, which approximates fair value.

(2) Derivative contracts in an asset position include investments in interest rate swaps of $224 million.

(3) Commingled trust funds include investments in fixed income funds of $1,275 million.

(4) Foreign funds include investments in bond funds, targeted cash flow funds, liquidity funds and diversified funds of $141 million, $85 million, $55 million and $1 million, respectively.

(5) Derivative contracts in a liability position include investments in interest rate swaps of $57 million.

 

    Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total
           
    (dollars in millions)
Assets:        
Investments:        
 Cash and cash equivalents(1)$ 11$ —$ —$ 11
 U.S. government and agency securities:        
  U.S. Treasury securities  1,295  —  —  1,295
  U.S. agency securities  —  245  —  245
  Total U.S. government and agency securities  1,295  245  —  1,540
           
 Other sovereign government obligations  16  48  —  64
 Corporate and other debt:        
  State and municipal securities  —  2  —  2
  Corporate bonds  —  142  —  142
  Collateralized debt obligations  —  88  —  88
  Total corporate and other debt  —  232  —  232
 Corporate equities  6  —  —  6
 Derivative contracts(2)  —  230  —  230
 Derivative-related cash collateral receivable  —  1  —  1
 Commingled trust funds(3)  —  1,339  —  1,339
 Foreign funds(4)  —  273  —  273
 Other investments  —  13  26  39
  Total investments  1,328  2,381  26  3,735
Receivables:        
 Other receivables(1)  —  14  —  14
  Total receivables  —  14  —  14
Total assets$ 1,328$ 2,395$ 26$ 3,749
           
Liabilities:        
Derivative contracts(5)$ —$ 105$ —$ 105
Derivative-related cash collateral payable  —  25  —  25
Other liabilities(1)  —  15  —  15
Total liabilities  —  145  —  145
 Net pension assets$ 1,328$ 2,250$ 26$ 3,604

________________________

(1) Cash and cash equivalents, other receivables and other liabilities are valued at cost, which approximates fair value.

(2) Derivative and other contracts in an asset position include investments in interest rate swaps of $230 million.

(3) Commingled trust funds include investments in cash funds and fixed income funds of $39 million and $1,300 million, respectively.

(4) Foreign funds include investments in equity funds, bond funds, targeted cash flow funds and diversified funds of $17 million, $124 million, $131 million and $1 million, respectively.

(5) Derivative and other contracts in a liability position include investments in inflation swaps and interest rate swaps of $9 million and $96 million, respectively.

 
Changes in Level 3 Pension Assets and Liabilities Measured at Fair Value

The following table presents changes in Level 3 pension assets measured at fair value for 2012:

    Beginning Balance at January 1, 2012 Actual Return on Plan Assets Related to Assets Still Held at December 31, 2012 Actual Return on Plan Assets Related to Assets Sold during 2012 Purchases, Sales, Other Settlements and Issuances, net Net Transfers In and/or (Out) of Level 3 Ending Balance at December 31, 2012
    (dollars in millions)
Investments            
 Other investments$ 26$ —$ —$ 4$ —$ 30
  Total investments$ 26$ —$ —$ 4$ —$ 30

The following table presents changes in Level 3 pension assets measured at fair value for 2011:

    Beginning Balance at January 1, 2011 Actual Return on Plan Assets Related to Assets Still Held at December 31, 2011 Actual Return on Plan Assets Related to Assets Sold during 2011 Purchases, Sales, Other Settlements and Issuances, net Net Transfers In and/or (Out) of Level 3 Ending Balance at December 31, 2011
    (dollars in millions)
Investments            
 Other investments$ 23$ (1)$ —$ 4$ —$ 26
  Total investments$ 23$ (1)$ —$ 4$ —$ 26
Expected Benefit Payments Associated with the Pension and Postretirement Benefit Plans
   Pension Postretirement
      
   (dollars in millions)
2013$ 136$ 6
2014  137  6
2015  134  7
2016  137  7
2017  142  8
2018-2022  773  47