CITIGROUP INC | 2013 | FY | 3


 

 

 

 

Pension plans (1)

 

Postretirement plans (1)

 

 

 

U.S. plans (2)

 

Non-U.S. plans

 

U.S. plans

 

Non-U.S. plans

 

In millions of dollars

 

2014

 

2013

 

2012

 

2014

 

2013

 

2012

 

2014

 

2013

 

2012

 

2014

 

2013

 

2012

 

Cash contributions paid by the Company

 

$

 

$

 

$

 

$

116

 

$

308

 

$

270

 

$

 

$

 

$

 

$

5

 

$

251

 

$

88

 

Benefits paid directly by the Company

 

54

 

51

 

54

 

49

 

49

 

82

 

62

 

52

 

54

 

6

 

5

 

4

 

Total Company contributions

 

$

54

 

$

51

 

$

54

 

$

165

 

$

357

 

$

352

 

$

62

 

$

52

 

$

54

 

$

11

 

$

256

 

$

92

 

 


(1)      Payments reported for 2014 are expected amounts.

(2)      The U.S. pension plans include benefits paid directly by the Company for the nonqualified pension plans.

 


c:ScheduleOfActualAndExpectedEmployerContributionsTableTextBlock

 

 

 

 

One-percentage-point increase

 

In millions of dollars

 

2013

 

2012

 

2011

 

U.S. plans

 

$

16

 

$

18

 

$

19

 

Non-U.S. plans

 

(52

)

(48

)

(57

)

 

 

 

One-percentage-point decrease

 

In millions of dollars

 

2013

 

2012

 

2011

 

U.S. plans

 

$

(57

)

$

(36

)

$

(34

)

Non-U.S. plans

 

79

 

64

 

70

 

 


c:ScheduleOfEffectOfOnePercentagePointChangeInDiscountRatesOnPensionExpenseTableTextBlock

 

 

 

 

One-percentage-point increase

 

In millions of dollars

 

2013

 

2012

 

2011

 

U.S. plans

 

$

(123

)

$

(120

)

$

(118

)

Non-U.S. plans

 

(68

)

(64

)

(62

)

 

 

 

One-percentage-point decrease

 

In millions of dollars

 

2013

 

2012

 

2011

 

U.S. plans

 

$

123

 

$

120

 

$

118

 

Non-U.S. plans

 

68

 

64

 

62

 

 


c:ScheduleOfEffectOfOnePercentagePointChangeInExpectedRatesOfReturnTableTextBlock

 

 

 

 

2013

 

2012

 

2011

 

Expected rate of return (1)

 

7.00

%

7.50

%

7.50

%

Actual rate of return (2)

 

6.00

%

11.00

%

11.00

%

 


(1)         Effective December 31, 2012, the expected rate of return was changed from 7.50% to 7.00%.

(2)         Actual rates of return are presented net of fees.

 


c:ScheduleOfExpectedLongTermRatesOfReturnOnAssetsTableTextBlock

 

 

 

 

U.S. pension and postretirement benefit plans (1)

 

In millions of dollars

 

Fair value measurement at December 31, 2013

 

Asset categories

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Equity securities

 

 

 

 

 

 

 

 

 

U.S. equity

 

$

864

 

$

 

$

 

$

864

 

Non-U.S. equity

 

441

 

 

 

441

 

Mutual funds

 

203

 

 

 

203

 

Commingled funds

 

 

895

 

 

895

 

Debt securities

 

 

 

 

 

 

 

 

 

U.S. Treasuries

 

1,112

 

 

 

1,112

 

U.S. agency

 

 

91

 

 

91

 

U.S. corporate bonds

 

 

1,385

 

 

1,385

 

Non-U.S. government debt

 

 

344

 

 

344

 

Non-U.S. corporate bonds

 

 

403

 

 

403

 

State and municipal debt

 

 

137

 

 

137

 

Hedge funds

 

 

2,014

 

1,180

 

3,194

 

Asset-backed securities

 

 

61

 

 

61

 

Mortgage-backed securities

 

 

64

 

 

64

 

Annuity contracts

 

 

 

91

 

91

 

Private equity

 

 

 

2,106

 

2,106

 

Derivatives

 

8

 

601

 

 

609

 

Other investments

 

 

100

 

157

 

257

 

Total investments at fair value

 

$

2,628

 

$

6,095

 

$

3,534

 

$

12,257

 

Cash and short-term investments

 

$

107

 

$

957

 

$

 

$

1,064

 

Other investment receivables

 

 

49

 

52

 

101

 

Total assets

 

$

2,735

 

$

7,101

 

$

3,586

 

$

13,422

 

Other investment liabilities

 

$

(9

)

$

(650

)

$

 

$

(659

)

Total net assets

 

$

2,726

 

$

6,451

 

$

3,586

 

$

12,763

 

 


(1)         The investments of the U.S. pension and postretirement benefit plans are commingled in one trust. At December 31, 2013, the allocable interests of the U.S. pension and postretirement benefit plans were 99.7% and 0.3%, respectively.

 

 

 

U.S. pension and postretirement benefit plans (1)

 

In millions of dollars

 

Fair value measurement at December 31, 2012

 

Asset categories

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Equity securities

 

 

 

 

 

 

 

 

 

U.S. equity

 

$

677

 

$

 

$

 

$

677

 

Non-U.S. equity

 

412

 

5

 

 

417

 

Mutual funds

 

177

 

 

 

177

 

Commingled funds

 

 

1,132

 

 

1,132

 

Debt securities

 

 

 

 

 

 

 

 

 

U.S. Treasuries

 

1,431

 

 

 

1,431

 

U.S. agency

 

 

112

 

 

112

 

U.S. corporate bonds

 

 

1,397

 

 

1,397

 

Non-U.S. government debt

 

 

387

 

 

387

 

Non-U.S. corporate bonds

 

 

350

 

 

350

 

State and municipal debt

 

 

142

 

 

142

 

Hedge funds

 

 

1,132

 

1,524

 

2,656

 

Asset-backed securities

 

 

55

 

 

55

 

Mortgage-backed securities

 

 

52

 

 

52

 

Annuity contracts

 

 

 

130

 

130

 

Private equity

 

 

 

2,419

 

2,419

 

Derivatives

 

3

 

627

 

 

630

 

Other investments

 

 

 

142

 

142

 

Total investments at fair value

 

$

2,700

 

$

5,391

 

$

4,215

 

$

12,306

 

Cash and short-term investments

 

$

131

 

$

906

 

$

 

$

1,037

 

Other investment receivables

 

 

6

 

24

 

30

 

Total assets

 

$

2,831

 

$

6,303

 

$

4,239

 

$

13,373

 

Other investment liabilities

 

$

(10

)

$

(657

)

$

 

$

(667

)

Total net assets

 

$

2,821

 

$

5,646

 

$

4,239

 

$

12,706

 

 


(1)         The investments of the U.S. pension and postretirement benefit plans are commingled in one trust. At December 31, 2012, the allocable interests of the U.S. pension and postretirement benefit plans were 99.6% and 0.4%, respectively.

 

 

 


c:ScheduleOfFairValueOfPlanAssetsByMeasurementLevelsTableTextBlock

 

 

 

 

Non-U.S. pension and postretirement benefit plans

 

In millions of dollars

 

Fair value measurement at December 31, 2013

 

Asset categories

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Equity securities

 

 

 

 

 

 

 

 

 

U.S. equity

 

$

6

 

$

13

 

$

 

$

19

 

Non-U.S. equity

 

117

 

292

 

49

 

458

 

Mutual funds

 

242

 

3,593

 

 

3,835

 

Commingled funds

 

7

 

22

 

 

29

 

Debt securities

 

 

 

 

 

 

 

 

 

U.S. corporate bonds

 

 

392

 

 

392

 

Non-U.S. government debt

 

2,559

 

232

 

 

2,791

 

Non-U.S. corporate bonds

 

110

 

780

 

5

 

895

 

Hedge funds

 

 

 

11

 

11

 

Mortgage-backed securities

 

3

 

1

 

 

4

 

Annuity contracts

 

 

1

 

32

 

33

 

Derivatives

 

42

 

 

 

42

 

Other investments

 

7

 

12

 

202

 

221

 

Total investments at fair value

 

$

3,093

 

$

5,338

 

$

299

 

$

8,730

 

Cash and short-term investments

 

$

92

 

$

4

 

$

 

$

96

 

Total assets

 

$

3,185

 

$

5,342

 

$

299

 

$

8,826

 

Other investment liabilities

 

$

 

$

(436

)

$

 

$

(436

)

Total net assets

 

$

3,185

 

$

4,906

 

$

299

 

$

8,390

 

 

 

 

Non-U.S. pension and postretirement benefit plans

 

In millions of dollars

 

Fair value measurement at December 31, 2012

 

Asset categories

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Equity securities

 

 

 

 

 

 

 

 

 

U.S. equity

 

$

12

 

$

12

 

$

 

$

24

 

Non-U.S. equity

 

88

 

77

 

48

 

213

 

Mutual funds

 

31

 

4,583

 

 

4,614

 

Commingled funds

 

 

26

 

 

26

 

Debt securities

 

 

 

 

 

 

 

 

 

U.S. Treasuries

 

 

1

 

 

1

 

U.S. corporate bonds

 

 

488

 

 

488

 

Non-U.S. government debt

 

1,806

 

144

 

4

 

1,954

 

Non-U.S. corporate bonds

 

162

 

804

 

4

 

970

 

Hedge funds

 

 

 

16

 

16

 

Mortgage-backed securities

 

 

1

 

 

1

 

Annuity contracts

 

 

5

 

6

 

11

 

Derivatives

 

 

40

 

 

40

 

Other investments

 

3

 

9

 

219

 

231

 

Total investments at fair value

 

$

2,102

 

$

6,190

 

$

297

 

$

8,589

 

Cash and short-term investments

 

$

55

 

$

4

 

$

3

 

$

62

 

Total assets

 

$

2,157

 

$

6,194

 

$

300

 

$

8,651

 

 


c:ScheduleOfFairValueOfPlanAssetsByMeasurementLevelsTableTextBlock

 

 

 

 

Pension plans

 

Postretirement plans

 

 

 

U.S. plans

 

Non-U.S. plans

 

U.S. plans

 

Non-U.S. plans

 

In millions of dollars

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

Change in projected benefit obligation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualified plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projected benefit obligation at beginning of year

 

$

13,268

 

$

12,377

 

$

7,399

 

$

6,262

 

$

1,072

 

$

1,127

 

$

2,002

 

$

1,368

 

Cumulative effect of change in accounting policy (1)

 

(368

)

 

385

 

 

 

 

81

 

 

Benefits earned during the year

 

8

 

12

 

210

 

199

 

 

 

43

 

29

 

Interest cost on benefit obligation

 

538

 

565

 

384

 

367

 

33

 

44

 

146

 

116

 

Plan amendments

 

 

(13

)

(28

)

17

 

 

 

(171

)

 

Actuarial (gain) loss

 

(671

)

965

 

(733

)

923

 

(253

)

(24

)

(617

)

457

 

Benefits paid, net of participants contributions

 

(661

)

(638

)

(296

)

(306

)

(85

)

(85

)

(64

)

(54

)

Expected government subsidy

 

 

 

 

 

13

 

10

 

 

 

Settlements

 

 

 

(57

)

(254

)

 

 

(2

)

 

Curtailment (gain) loss

 

23

 

 

(2

)

(8

)

 

 

(3

)

 

Special/contractual termination benefits

 

 

 

8

 

1

 

 

 

 

 

Foreign exchange impact and other

 

 

 

(76

)

198

 

 

 

(4

)

86

 

Qualified plans

 

$

12,137

 

$

13,268

 

$

7,194

 

$

7,399

 

$

780

 

$

1,072

 

$

1,411

 

$

2,002

 

Nonqualified plans (2)

 

$

692

 

$

769

 

$

 

$

 

$

 

$

 

$

 

$

 

Projected benefit obligation at year end

 

$

12,829

 

$

14,037

 

$

7,194

 

$

7,399

 

$

780

 

$

1,072

 

$

1,411

 

$

2,002

 

 


(1)   See Note 1 to the Consolidated Financial Statements for additional information on the change in accounting policy.

(2)   These plans are unfunded.

 

 

 

Pension plans

 

Postretirement plans

 

 

 

U.S. plans

 

Non-U.S. plans

 

U.S. plans

 

Non-U.S. plans

 

In millions of dollars

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

Change in plan assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualified plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plan assets at fair value at beginning of year

 

$

12,656

 

$

11,991

 

$

7,154

 

$

6,421

 

$

50

 

$

74

 

$

1,497

 

$

1,096

 

Cumulative effect of change in accounting policy (1)

 

(53

)

 

126

 

 

3

 

 

21

 

 

Actual return on plan assets

 

789

 

1,303

 

(256

)

786

 

(1

)

7

 

(223

)

277

 

Company contributions

 

 

 

357

 

352

 

52

 

54

 

256

 

92

 

Plan participants contributions

 

 

 

6

 

6

 

50

 

58

 

 

 

Settlements

 

 

 

(61

)

(254

)

 

 

 

 

Benefits paid

 

(661

)

(638

)

(302

)

(312

)

(122

)

(143

)

(64

)

(54

)

Foreign exchange impact and other

 

 

 

(106

)

155

 

 

 

(15

)

86

 

Qualified plans

 

$

12,731

 

$

12,656

 

$

6,918

 

$

7,154

 

$

32

 

$

50

 

$

1,472

 

$

1,497

 

Nonqualified plans (2)

 

$

 

$

 

$

 

$

 

$

 

$

 

$

 

$

 

Plan assets at fair value at year end

 

$

12,731

 

$

12,656

 

$

6,918

 

$

7,154

 

$

32

 

$

50

 

$

1,472

 

$

1,497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Funded status of the plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualified plans (3)

 

$

593

 

$

(612

)

$

(276

)

$

(245

)

$

(748

)

$

(1,022

)

$

61

 

(505

)

Nonqualified plans (2)

 

(692

)

(769

)

 

 

 

 

 

 

Funded status of the plans at year end

 

$

(99

)

$

(1,381

)

$

(276

)

$

(245

)

$

(748

)

$

(1,022

)

$

61

 

$

(505

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net amount recognized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualified plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefit asset

 

$

593

 

$

 

$

709

 

$

763

 

$

 

$

 

$

407

 

$

 

Benefit liability

 

 

(612

)

(985

)

(1,008

)

(748

)

(1,022

)

(346

)

(505

)

Qualified plans

 

$

593

 

$

(612

)

$

(276

)

$

(245

)

$

(748

)

$

(1,022

)

$

61

 

$

(505

)

Nonqualified plans (2)

 

$

(692

)

$

(769

)

$

 

$

 

$

 

$

 

$

 

$

 

Net amount recognized on the balance sheet

 

$

(99

)

$

(1,381

)

$

(276

)

$

(245

)

$

(748

)

$

(1,022

)

$

61

 

$

(505

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amounts recognized in Accumulated other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualified plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net transition asset (obligation)

 

$

 

$

 

$

(1

)

$

(2

)

$

 

$

 

$

(1

)

$

(1

)

Prior service benefit (cost)

 

7

 

13

 

(2

)

(33

)

1

 

1

 

173

 

5

 

Net actuarial gain (loss)

 

(3,911

)

(4,904

)

(2,007

)

(1,936

)

129

 

(123

)

(555

)

(802

)

Qualified plans

 

$

(3,904

)

$

(4,891

)

$

(2,010

)

$

(1,971

)

$

130

 

$

(122

)

$

(383

)

$

(798

)

Nonqualified plans (2)

 

$

(226

)

$

(298

)

$

 

$

 

$

 

$

 

$

 

$

 

Net amount recognized in equity—pretax

 

$

(4,130

)

$

(5,189

)

$

(2,010

)

$

(1,971

)

$

130

 

$

(122

)

$

(383

)

$

(798

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated benefit obligation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Qualified plans

 

$

12,122

 

$

13,246

 

$

6,652

 

$

6,369

 

$

780

 

$

1,072

 

$

1,411

 

$

2,002

 

Nonqualified plans (2)

 

668

 

738

 

 

 

 

 

 

 

Accumulated benefit obligation at year end

 

$

12,790

 

$

13,984

 

$

6,652

 

$

6,369

 

$

780

 

$

1,072

 

$

1,411

 

$

2,002

 

 


(1)   See Note 1 to the Consolidated Financial Statements for additional information on the change in accounting policy.

(2)   These plans are unfunded.

(3)   The U.S. qualified pension plan is fully funded under specified Employee Retirement Income Security Act (ERISA) funding rules as of January 1, 2014 and no minimum required funding is expected for 2014.

 


us-gaap:ChangesInProjectedBenefitObligationsFairValueOfPlanAssetsAndFundedStatusOfPlanTableTextBlock

 

 

 

 

PBO exceeds fair value of plan assets

 

ABO exceeds fair value plan assets

 

 

 

U.S. plans (1)

 

Non-U.S. plans

 

U.S. plans (1)

 

Non-U.S. plans

 

In millions of dollars

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

2013

 

2012

 

Projected benefit obligation

 

$

692

 

$

14,037

 

$

2,765

 

$

4,792

 

$

692

 

$

14,037

 

$

2,408

 

$

2,608

 

Accumulated benefit obligation

 

668

 

13,984

 

2,375

 

3,876

 

668

 

13,984

 

2,090

 

2,263

 

Fair value of plan assets

 

 

12,656

 

1,780

 

3,784

 

 

12,656

 

1,468

 

1,677

 

 


(1)   At December 31, 2013, assets for the U.S. qualified plan exceeded both the projected benefit obligation (PBO) and accumulated benefit obligation (ABO).  The U.S. nonqualified plans are not funded and thus the PBO and ABO exceeded plan assets as of this date. At December 31, 2012, for both the U.S. qualified and nonqualified plans, the aggregate PBO and the aggregate ABO exceeded plan assets. In 2012, the PBO and ABO of the U.S. plans include $13,268 million and $13,246 million, respectively, relating to the qualified plan and $769 million and $738 million, respectively, relating to the nonqualified plans.

 


us-gaap:ScheduleOfAccumulatedAndProjectedBenefitObligationsTableTextBlock

 

 

 

 

Non-U.S. pension plans

 

 

 

Weighted-average
target asset allocation

 

Actual range
at December 31,

 

Weighted-average
at December 31,

 

Asset category (1)

 

2014

 

2013

 

2012

 

2013

 

2012

 

Equity securities

 

19

%

0 - 69%

 

0 - 63%

 

20

%

16

%

Debt securities

 

74

 

0 - 99

 

0 - 100

 

72

 

72

 

Real estate

 

1

 

0 - 19

 

0 - 41

 

1

 

1

 

Other investments

 

6

 

0 - 100

 

0 - 100

 

7

 

11

 

Total

 

100

%

 

 

 

 

100

%

100

%

 

 

 

Non-U.S. postretirement plans

 

 

 

Weighted-average
target asset allocation

 

Actual range
at December 31,

 

Weighted-average
at December 31,

 

Asset category (1)

 

2014

 

2013

 

2012

 

2013

 

2012

 

Equity securities

 

42

%

0 - 41%

 

0 - 28%

 

41

%

28

%

Debt securities

 

52

 

51 - 100

 

46 - 100

 

51

 

46

 

Other investments

 

6

 

0 - 8

 

0 - 26

 

8

 

26

 

Total

 

100

%

 

 

 

 

100

%

100

%

 


(1)         Similar to the U.S. plans, asset allocations for certain non-U.S. plans are set by investment strategy, not by investment product.

 


us-gaap:ScheduleOfAllocationOfPlanAssetsTableTextBlock

 

 

 

 

Target asset
allocation

 

U.S. pension assets
at December 31,

 

U.S. postretirement assets
at December 31,

 

Asset category (1)

 

2014

 

2013

 

2012

 

2013

 

2012

 

Equity securities (2)

 

0 - 30%

 

19

%

17%

 

19

%

17

%

Debt securities

 

25 - 73

 

42

 

45

 

42

 

45

 

Real estate

 

0 - 7

 

5

 

5

 

5

 

5

 

Private equity

 

0 - 15

 

11

 

11

 

11

 

11

 

Other investments

 

12 - 29

 

23

 

22

 

23

 

22

 

Total

 

 

 

100

%

100

%

100

%

100

%

 


(1)         Asset allocations for the U.S. plans are set by investment strategy, not by investment product. For example, private equities with an underlying investment in real estate are classified in the real estate asset category, not private equity.

(2)         Equity securities in the U.S. pension and postretirement plans do not include any Citigroup common stock at the end of 2013 and 2012.

 


us-gaap:ScheduleOfAllocationOfPlanAssetsTableTextBlock

 

 

At year end

 

2013

 

2012

Discount rate

 

 

 

 

U.S. plans (1)

 

 

 

 

Pension

 

4.75%

 

3.90%

Postretirement

 

4.35

 

3.60

Non-U.S. pension plans (2)

 

 

 

 

Range

 

1.60 to 29.25

 

1.50 to 28.00

Weighted average

 

5.60

 

5.24

Non-U.S. postretirement plans (2)

 

 

 

 

Range

 

3.50 to 11.90

 

3.50 to 10.00

Weighted average

 

8.65

 

7.46

Future compensation increase rate

 

 

 

 

U.S. plans (3)

 

N/A

 

N/A

Non-U.S. pension plans

 

 

 

 

Range

 

1.00 to 26.00

 

1.20 to 26.00

Weighted average

 

3.40

 

3.93

Expected return on assets

 

 

 

 

U.S. plans

 

7.00

 

7.00

Non-U.S. pension plans

 

 

 

 

Range

 

1.20 to 11.50

 

0.90 to 11.50

Weighted average

 

5.68

 

5.76

Non-U.S. postretirement plans

 

 

 

 

Range

 

8.50 to 8.90

 

8.50 to 9.60

Weighted average

 

8.50

 

8.50

 


(1)         Effective April 1, 2013, Citigroup changed to a quarterly remeasurement approach for its six largest plans, including the U.S. qualified pension and postretirement plans.  For the U.S. qualified pension and postretirement plans, the 2013 rates shown above were utilized to calculate the December 31, 2013 benefit obligation and will be used to determine the 2014 first quarter expense.  The 2012 rates shown above were utilized to calculate the December 31, 2012 benefit obligation and used for the 2013 first quarter expense. For the U.S. nonqualified pension plans, the 2013 rates shown above were utilized to calculate the December 31, 2013 benefit obligations and will be used to determine the expense for 2014. The 2012 rates shown above were utilized to calculate the December 31, 2012 benefit obligations and the expense for the full year 2013.

(2)         Effective April 1, 2013, Citigroup changed to a quarterly remeasurement approach for its four largest non-U.S. plans, including the qualified pension and postretirement plans.  For the four largest non-U.S. qualified pension and postretirement plans, the 2013 rates shown above were utilized to calculate the December 31, 2013 benefit obligation and will be used to determine the 2014 first quarter expense.  The 2012 rates shown above were utilized to calculate the December 31, 2012 benefit obligation and used for the 2013 first quarter expense. For all other non-U.S. qualified pension and postretirement plans, the 2013 rates shown above were utilized to calculate the December 31, 2013 benefit obligations and will be used to determine the expense for 2014. The 2012 rates shown above were utilized to calculate the December 31, 2012 benefit obligations and the expense for the full year 2013.

(3)         Since the U.S. qualified pension plan was frozen, a compensation increase rate applies only to certain small groups of grandfathered employees accruing benefits under a final pay plan formula. Only the future compensation increases for these grandfathered employees will affect future pension expense and obligations. Compensation increase rates for these small groups of participants range from 3.00% to 4.00%.

 

During the year

 

2013

 

2012

Discount rate

 

 

 

 

U.S. plans (1)

 

 

 

 

Pension

 

3.90%/4.2%/4.75%/ 4.80%

 

4.70%

Postretirement

 

3.60/3.60/ 4.40/ 4.30

 

4.30

Non-U.S. pension plans

 

 

 

 

Range

 

1.50 to 28.00

 

1.75 to 13.25

Weighted average (2)

 

5.24

 

5.94

Non-U.S. postretirement plans

 

 

 

 

Range

 

3.50 to 10.00

 

4.25 to 10.25

Weighted average (2)

 

7.46

 

8.25

Future compensation increase rate

 

 

 

 

U.S. plans (3)

 

N/A

 

N/A

Non-U.S. pension plans

 

 

 

 

Range

 

1.20 to 26.00

 

1.60 to 13.30

Weighted average (2)

 

3.93

 

4.04

Expected return on assets

 

 

 

 

U.S. plans

 

7.00

 

7.50

Non-U.S. pension plans

 

 

 

 

Range

 

0.90 to 11.50

 

1.00 to 12.50

Weighted average (2)

 

5.76

 

6.25

Non-U.S. postretirement plans

 

 

 

 

Range

 

8.50 to 9.60

 

9.5 to 10.00

Weighted average (2)

 

8.50

 

9.50

 


(1)         For the U.S. qualified pension and postretirement plans, the 2013 rates shown above were utilized to calculate the expense in each of the respective four quarters in 2013.  The 2012 rates shown above were utilized to calculate expense for 2012.

(2)         For the four largest non-U.S. plans, which follow the quarterly remeasurement approach adopted effective April 1, 2013, the 2013 weighted averages shown above reflect the assumptions for the first quarter of 2013.  All other non-U.S. plans were remeasured annually, the weighted averages shown above were used to calculate the expense for the full year.

(3)         Since the U.S. qualified pension plan was frozen, a compensation increase rate applies only to certain small groups of grandfathered employees accruing benefits under a final pay plan formula. Only the future compensation increases for these grandfathered employees will affect future pension expense and obligations. Compensation increase rates for these small groups of participants range from 3.00% to 4.00%.

 


us-gaap:ScheduleOfAssumptionsUsedTableTextBlock

 

 

 

 

2013

 

2012

 

Discount rate

 

4.05

%

3.10

%

Health care cost increase rate

 

 

 

 

 

Following year

 

8.00

%

8.50

%

Ultimate rate to which cost increase is assumed to decline

 

5.00

 

5.00

 

Year in which the ultimate rate is reached

 

2020

 

2020

 

 


us-gaap:ScheduleOfAssumptionsUsedTableTextBlock

 

 

In millions of dollars

 

2013

 

2012

 

2011

 

Balance, January 1, net of tax (1)

 

$

(5,270

)

$

(4,282

)

$

(4,105

)

Cumulative effect of change in accounting policy

 

(22

)

 

 

Actuarial assumptions changes and plan experience (2)

 

2,380

 

(2,400

)

(820

)

Net asset gain (loss) due to difference between actual and expected returns

 

(1,084

)

963

 

197

 

Net amortizations

 

271

 

214

 

183

 

Prior service credit (cost)

 

360

 

 

 

Foreign exchange impact and other

 

74

 

(155

)

28

 

Change in deferred taxes, net

 

(666

)

390

 

235

 

Change, net of tax

 

$

1,313

 

$

(988

)

$

(177

)

Balance, December 31, net of tax (1)

 

$

(3,957

)

$

(5,270

)

$

(4,282

)

 


(1)         See Note 20 to the Consolidated Financial Statements for further discussion of net Accumulated other comprehensive income (loss) balance.

(2)         Includes $58 million and $62 million of actuarial losses related to the U.S. nonqualified pension plans for 2013 and 2012, respectively.

 


us-gaap:ScheduleOfDefinedBenefitPlanAmountsRecognizedInOtherComprehensiveIncomeLossTableTextBlock

 

 

 

 

One-
percentage-
point increase

 

One-
percentage-
point decrease

 

In millions of dollars

 

2013

 

2012

 

2013

 

2012

 

Effect on benefits earned and interest cost for U.S. postretirement plans

 

$

1

 

$

2

 

$

(1

)

$

(1

)

Effect on accumulated postretirement benefit obligation for U.S. postretirement plans

 

24

 

44

 

(19

)

(39

)

 


us-gaap:ScheduleOfEffectOfOnePercentagePointChangeInAssumedHealthCareCostTrendRatesTableTextBlock

In millions of dollars

 

U.S. pension and postretirement benefit plans

 

Asset categories

 

Beginning Level 3 fair
value at Dec. 31, 2012

 

Realized
gains
(losses)

 

Unrealized
gains (losses)

 

Purchases,
sales, and
issuances

 

Transfers in
and/or out of
Level 3

 

Ending Level 3 fair
value at Dec. 31, 2013

 

Hedge funds

 

$

1,524

 

$

45

 

$

69

 

$

19

 

$

(477

)

$

1,180

 

Annuity contracts

 

130

 

 

(9

)

(33

)

3

 

91

 

Private equity

 

2,419

 

264

 

(10

)

(564

)

(3

)

2,106

 

Other investments

 

142

 

 

7

 

8

 

 

157

 

Total investments

 

$

4,215

 

$

309

 

$

57

 

$

(570

)

$

(477

)

$

3,534

 

Other investment receivables

 

24

 

 

 

28

 

 

52

 

Total assets

 

$

4,239

 

$

309

 

$

57

 

$

(542

)

$

(477

)

$

3,586

 

 

In millions of dollars

 

U.S. pension and postretirement benefit plans

 

Asset categories

 

Beginning Level 3 fair
value at Dec. 31, 2011

 

Realized
gains
(losses)

 

Unrealized
gains (losses)

 

Purchases,
sales, and
issuances

 

Transfers in
and/or out of
Level 3

 

Ending Level 3 fair
value at Dec. 31, 2012

 

Equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. equity

 

$

51

 

$

 

$

 

$

 

$

(51

)

$

 

Non-U.S. equity

 

19

 

 

8

 

 

(27

)

 

Debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. corporate bonds

 

5

 

 

1

 

 

(6

)

 

Non-U.S. government debt

 

 

(1

)

 

1

 

 

 

Hedge funds

 

870

 

(28

)

149

 

199

 

334

 

1,524

 

Annuity contracts

 

155

 

 

6

 

(31

)

 

130

 

Private equity

 

2,474

 

267

 

98

 

(484

)

64

 

2,419

 

Other investments

 

121

 

 

14

 

12

 

(5

)

142

 

Total investments

 

$

3,695

 

$

238

 

$

276

 

$

(303

)

$

309

 

$

4,215

 

Other investment receivables

 

221

 

 

 

 

(197

)

24

 

Total assets

 

$

3,916

 

$

238

 

$

276

 

$

(303

)

$

112

 

$

4,239

 


us-gaap:ScheduleOfEffectOfSignificantUnobservableInputsChangesInPlanAssetsTableTextBlock

 

In millions of dollars

 

Non-U.S. pension and postretirement benefit plans

 

Asset categories

 

Beginning Level 3 fair
value at Dec. 31, 2012

 

Realized
gains
(losses)

 

Unrealized
gains (losses)

 

Purchases,
sales, and
issuances

 

Transfers in
and/or out of
Level 3

 

Ending Level 3 fair
value at Dec. 31, 2013

 

Equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-U.S. equity

 

$

48

 

$

 

$

5

 

$

 

$

(4

)

$

49

 

Debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-U.S. government bonds

 

4

 

 

 

 

(4

)

 

Non-U.S. corporate bonds

 

4

 

 

(1

)

2

 

 

5

 

Hedge funds

 

16

 

 

1

 

(6

)

 

11

 

Annuity contracts

 

6

 

 

3

 

(1

)

24

 

32

 

Other investments

 

219

 

 

 

3

 

(20

)

202

 

Total investments

 

$

297

 

$

 

$

8

 

$

(2

)

$

(4

)

$

299

 

Cash and short-term investments

 

3

 

 

 

 

(3

)

 

Total assets

 

$

300

 

$

 

$

8

 

$

(2

)

$

(7

)

$

299

 

 

In millions of dollars

 

Non-U.S. pension and postretirement benefit plans

 

Asset categories

 

Beginning Level 3 fair
value at Dec. 31, 2011

 

Realized
gains
(losses)

 

Unrealized
gains (losses)

 

Purchases,
sales, and
issuances

 

Transfers in
and/or out of
Level 3

 

Ending Level 3 fair
value at Dec. 31, 2012

 

Equity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-U.S. equity

 

$

5

 

$

 

$

 

$

43

 

$

 

$

48

 

Mutual funds

 

32

 

 

 

(10

)

(22

)

 

Debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-U.S. government bonds

 

5

 

 

 

 

(1

)

4

 

Non-U.S. corporate bonds

 

3

 

(3

)

 

2

 

2

 

4

 

Hedge funds

 

12

 

 

 

 

4

 

16

 

Annuity contracts

 

 

 

 

1

 

5

 

6

 

Other investments

 

240

 

7

 

14

 

(23

)

(19

)

219

 

Total investments

 

$

297

 

$

4

 

$

14

 

$

13

 

$

(31

)

$

297

 

Cash and short-term investments

 

 

 

 

 

3

 

3

 

Total assets

 

$

297

 

$

4

 

$

14

 

$

13

 

$

(28

)

$

300

 

 


us-gaap:ScheduleOfEffectOfSignificantUnobservableInputsChangesInPlanAssetsTableTextBlock

 

 

 

 

Pension plans

 

Postretirement benefit plans

 

In millions of dollars

 

U.S. plans

 

Non-U.S. plans

 

U.S. plans

 

Non-U.S. plans

 

2014

 

$

804

 

$

382

 

$

79

 

$

64

 

2015

 

828

 

359

 

76

 

69

 

2016

 

830

 

390

 

73

 

74

 

2017

 

842

 

411

 

70

 

80

 

2018

 

853

 

437

 

67

 

87

 

2019—2023

 

4,473

 

2,699

 

286

 

580

 

 


us-gaap:ScheduleOfExpectedBenefitPaymentsTableTextBlock

 

 

 

 

Expected U.S.
postretirement benefit payments

 

In millions of
dollars

 

Before Medicare
Part D subsidy

 

Medicare
Part D subsidy

 

After Medicare
Part D subsidy

 

2014

 

$

79

 

$

 

$

79

 

2015

 

76

 

 

76

 

2016

 

73

 

 

73

 

2017

 

70

 

 

70

 

2018

 

67

 

 

67

 

2019—2023

 

288

 

2

 

286

 

 


us-gaap:ScheduleOfExpectedBenefitPaymentsTableTextBlock

 

 

 

 

2013

 

2012

 

Health care cost increase rate for U.S. plans

 

 

 

 

 

Following year

 

8.00

%

8.50

%

Ultimate rate to which cost increase is assumed to decline

 

5.00

 

5.00

 

Year in which the ultimate rate is reached

 

2020

 

2020

 

 


us-gaap:ScheduleOfHealthCareCostTrendRatesTableTextBlock

 

 

 

 

Pension plans

 

Postretirement benefit plans

 

 

 

U.S. plans

 

Non-U.S. plans

 

U.S. plans

 

Non-U.S. plans

 

In millions of dollars

 

2013

 

2012

 

2011

 

2013

 

2012

 

2011

 

2013

 

2012

 

2011

 

2013

 

2012

 

2011

 

Qualified plans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Benefits earned during the year

 

$

8

 

$

12

 

$

13

 

$

210

 

$

199

 

$

203

 

$

 

$

 

$

 

$

43

 

$

29

 

$

28

 

Interest cost on benefit obligation

 

538

 

565

 

612

 

384

 

367

 

382

 

33

 

44

 

53

 

146

 

116

 

118

 

Expected return on plan assets

 

(863

)

(897

)

(890

)

(396

)

(399

)

(422

)

(2

)

(4

)

(6

)

(133

)

(108

)

(117

)

Amortization of unrecognized

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net transition obligation

 

 

 

 

 

 

(1

)

 

 

 

 

 

 

Prior service cost (benefit)

 

(4

)

(1

)

(1

)

4

 

4

 

4

 

(1

)

(1

)

(3

)

 

 

 

Net actuarial loss

 

104

 

96

 

64

 

95

 

77

 

72

 

 

4

 

3

 

45

 

25

 

24

 

Curtailment loss

 

21

 

 

 

4

 

10

 

4

 

 

 

 

 

 

 

Settlement (gain) loss

 

 

 

 

13

 

35

 

10

 

 

 

 

(1

)

 

 

Special termination benefits

 

 

 

 

8

 

1

 

27

 

 

 

 

 

 

 

Net qualified (benefit) expense

 

$

(196

)

$

(225

)

$

(202

)

$

322

 

$

294

 

$

279

 

$

30

 

$

43

 

$

47

 

$

100

 

$

62

 

$

53

 

Nonqualified plans expense

 

$

46

 

$

42

 

$

42

 

$

 

$

 

$

 

$

 

$

 

$

 

$

 

$

 

$

 

Cumulative effect of change in accounting policy(1)

 

$

(23

)

$

 

$

 

$

 

$

 

$

 

$

 

$

 

$

 

$

3

 

$

 

$

 

Total net (benefit) expense

 

$

(173

)

$

(183

)

$

(160

)

$

322

 

$

294

 

$

279

 

$

30

 

$

43

 

$

47

 

$

103

 

$

62

 

$

53

 

 


(1)                   See Note 1 to the Consolidated Financial Statements for additional information on the change in accounting policy.

 


us-gaap:ScheduleOfNetBenefitCostsTableTextBlock

 

 

 

 

Net expense

 

In millions of dollars

 

2013

 

2012

 

2011

 

Service related expense

 

 

 

 

 

 

 

Service cost

 

$

20

 

$

22

 

$

16

 

Interest cost

 

10

 

13

 

12

 

Prior service cost (benefit)

 

(3

)

7

 

7

 

Net actuarial loss

 

17

 

13

 

9

 

Total service related expense

 

$

44

 

$

55

 

$

44

 

Non-service related expense (benefit)

 

$

(14

)

$

24

 

$

23

 

Total net expense

 

$

30

 

$

79

 

$

67

 

 


us-gaap:ScheduleOfNetBenefitCostsTableTextBlock