Annual report pursuant to Section 13 and 15(d)

PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)

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PENSION AND OTHER POSTRETIREMENT BENEFITS (Tables)
 12 Months Ended
Dec. 31, 2023
Pension and other postretirement benefits  
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets
The following table summarizes the total accumulated benefit obligation (ABO), the ABO for defined benefit pension plans with ABO in excess of plan assets and the PBO for defined benefit pension plans with PBO in excess of plan assets:
  Qualified and Non-Qualified Pension Plans
  U.S. Plans U.K. Plans
In millions 2023 2022 2023 2022
Total ABO $ 3,334  $ 3,138  $ 1,504  $ 1,376 
Plans with ABO in excess of plan assets
ABO 1,067  1,044  —  — 
Plans with PBO in excess of plan assets
PBO 1,116  1,078  —  — 
Pension Plan  
Pension and other postretirement benefits  
Schedule of Net Funded Status The changes in the benefit obligations, the various plan assets, the funded status of the plans and the amounts recognized in our Consolidated Balance Sheets for our significant pension plans at December 31 were as follows:
  Qualified and Non-Qualified Pension Plans
  U.S. Plans U.K. Plans
In millions 2023 2022 2023 2022
Change in benefit obligation        
Benefit obligation at the beginning of the year $ 3,171  $ 3,012  $ 1,398  $ 1,887 
Service cost 117  137  17  30 
Interest cost 168  101  70  39 
Actuarial loss (gain) 172  (643) 47  (702)
Benefits paid from fund (223) (200) (87) (70)
Benefits paid directly by employer (25) (25) —  — 
Plan amendment 1  3  —  — 
Assumption of Meritor's benefit obligation —  786  —  418 
Foreign currency translation adjustments —  —  80  (204)
Benefit obligation at end of year $ 3,381  $ 3,171  $ 1,525  $ 1,398 
Change in plan assets        
Fair value of plan assets at beginning of year $ 3,828  $ 3,548  $ 1,670  $ 2,390 
Actual return on plan assets 221  (244) (51) (960)
Employer contributions —  25  90  3 
Benefits paid from fund (223) (200) (87) (70)
Assumption of Meritor's plan assets —  699  —  565 
Foreign currency translation adjustments —  —  98  (258)
Fair value of plan assets at end of year $ 3,826  $ 3,828  $ 1,720  $ 1,670 
Funded status (including unfunded plans) at end of year $ 445  $ 657  $ 195  $ 272 
Amounts recognized in consolidated balance sheets        
Pension assets $ 1,002  $ 1,126  $ 195  $ 272 
Accrued compensation, benefits and retirement costs (27) (24) —  — 
Other liabilities (530) (445) —  — 
Net amount recognized $ 445  $ 657  $ 195  $ 272 
Amounts recognized in accumulated other comprehensive loss        
Net actuarial loss $ 493  $ 273  $ 606  $ 402 
Prior service cost 8  8  8  10 
Net amount recognized $ 501  $ 281  $ 614  $ 412 
Schedule of Net Benefit Costs
The following table presents the net periodic pension cost (income) under our plans for the years ended December 31:
  Qualified and Non-Qualified Pension Plans
  U.S. Plans U.K. Plans
In millions 2023 2022 2021 2023 2022 2021
Service cost $ 117  $ 137  $ 139  $ 17  $ 30  $ 33 
Interest cost 168  101  79  70  39  30 
Expected return on plan assets (277) (229) (199) (105) (87) (85)
Amortization of prior service cost 2  1  1  1  1  2 
Recognized net actuarial loss 8  23  47  —  3  31 
Net periodic pension cost (income) $ 18  $ 33  $ 67  $ (17) $ (14) $ 11 
Schedule of Amounts Recognized in Other Comprehensive Income (Loss)
Other changes in benefit obligations and plan assets recognized in other comprehensive loss (income) for the years ended December 31 were as follows:
In millions 2023 2022 2021
Amortization of prior service cost $ (3) $ (2) $ (3)
Recognized net actuarial loss (8) (26) (78)
Incurred prior service cost 1  3  — 
Incurred actuarial loss (gain) 432  173  (368)
Foreign currency translation adjustments —  —  5 
Total recognized in other comprehensive loss (income) $ 422  $ 148  $ (444)
Total recognized in net periodic pension cost and other comprehensive loss (income) $ 423  $ 167  $ (366)
Schedule of Assumptions Used
The table below presents various assumptions used in determining the PBO for each year and reflects weighted-average percentages for the various plans as follows:
  Qualified and Non-Qualified Pension Plans
  U.S. Plans U.K. Plans
  2023 2022 2023 2022
Discount rate 5.15  % 5.55  % 4.72  % 4.99  %
Cash balance crediting rate 4.55  % 4.56  % —  — 
Compensation increase rate 5.34  % 5.35  % 3.75  % 3.75  %
The table below presents various assumptions used in determining the net periodic pension cost and reflects weighted-average percentages for the various plans as follows:
  Qualified and Non-Qualified Pension Plans
  U.S. Plans U.K. Plans
  2023 2022 2021 2023 2022 2021
Discount rate 5.55  % 3.31  % 2.62  % 4.99  % 2.26  % 1.50  %
Expected return on plan assets 7.00  % 6.50  % 6.25  % 5.00  % 4.01  % 4.00  %
Compensation increase rate 5.35  % 2.71  % 2.72  % 3.75  % 3.75  % 3.75  %
Schedule of Expected Benefit Payments The table below presents expected future benefit payments under our pension plans:
  Qualified and Non-Qualified Pension Plans
In millions 2024 2025 2026 2027 2028 2029 - 2033
Expected benefit payments $ 360  $ 358  $ 361  $ 364  $ 370  $ 1,872 
Other Postretirement Benefit Plan  
Pension and other postretirement benefits  
Schedule of Net Funded Status The changes in the benefit obligations, the funded status of the plans and the amounts recognized in our Consolidated Balance Sheets for our significant OPEB plans were as follows:
December 31,
In millions 2023 2022
Change in benefit obligation    
Benefit obligation at the beginning of the year $ 162  $ 192 
Interest cost 9  5 
Plan participants' contributions 18  4 
Actuarial gain (2) (25)
Benefits paid directly by employer (37) (36)
Assumption of Meritor's benefit obligation —  22 
Benefit obligation at end of year $ 150  $ 162 
Funded status at end of year $ (150) $ (162)
Amounts recognized in consolidated balance sheets    
Accrued compensation, benefits and retirement costs $ (19) $ (21)
Other liabilities (131) (141)
Net amount recognized $ (150) $ (162)
Amounts recognized in accumulated other comprehensive loss    
Net actuarial gain $ (44) $ (44)
Prior service credit (3) (3)
Net amount recognized $ (47) $ (47)
Schedule of Net Benefit Costs
The following table presents the net periodic OPEB cost under our plans:
Years ended December 31,
In millions 2023 2022 2021
Interest cost $ 9  $ 5  $ 5 
Recognized net actuarial gain (2) —  — 
Net periodic OPEB cost $ 7  $ 5  $ 5 
Schedule of Amounts Recognized in Other Comprehensive Income (Loss)
Other changes in benefit obligations recognized in other comprehensive loss (income) for the years ended December 31 were as follows:
Years ended December 31,
In millions 2023 2022 2021
Recognized net actuarial gain $ 2  $ —  $ — 
Incurred actuarial gain (2) (25) (8)
Total recognized in other comprehensive loss (income) $ —  $ (25) $ (8)
Total recognized in net periodic OPEB cost and other comprehensive loss (income) $ 7  $ (20) $ (3)
Schedule of Assumptions Used
The table below presents assumptions used in determining the OPEB obligation for each year and reflects weighted-average percentages for our other OPEB plans as follows:
2023 2022
Discount rate 5.19  % 5.59  %
The table below presents assumptions used in determining the net periodic OPEB cost and reflects weighted-average percentages for the various plans as follows:
2023 2022 2021
Discount rate 5.59  % 2.93  % 2.30  %
Schedule of Expected Benefit Payments
The table below presents expected benefit payments under our OPEB plans:
In millions 2024 2025 2026 2027 2028 2029 - 2033
Expected benefit payments $ 20  $ 18  $ 16  $ 16  $ 15  $ 58 
UNITED STATES  
Pension and other postretirement benefits  
Schedule of Allocation of Plan Assets
To achieve these objectives, we established the following targets:
Asset Class Plan Target
U.S. equities 8  %
Non-U.S. equities 3  %
Global equities 5  %
Total equities 16  %
Real assets 5  %
Private equity/venture capital 5  %
Opportunistic credit 3  %
Fixed income 71  %
Total 100  %
Fair Value, Assets Measured on Recurring Basis
The fair values of U.S. pension plan assets by asset category were as follows:
  Fair Value Measurements at December 31, 2023
In millions Quoted prices in active
markets for identical assets
(Level 1)		 Significant other
observable inputs
(Level 2)		 Significant
unobservable inputs
(Level 3)		 Total
Equities        
U.S. $ 73  $ —  $ —  $ 73 
Non-U.S. 36  —  —  36 
Fixed income
Government debt 157  —  157 
Corporate debt
U.S. —  603  —  603 
Non-U.S. —  49  —  49 
Asset/mortgaged backed securities —  8  —  8 
Net cash equivalents (1)
467  —  —  467 
Private markets and real assets (2)
—  —  604  604 
Net plan assets subject to leveling $ 576  $ 817  $ 604  $ 1,997 
Pending trade/purchases/sales       (16)
Accruals (3)
      10 
Investments measured at net asset value 1,835 
Net plan assets       $ 3,826 
  Fair Value Measurements at December 31, 2022
In millions Quoted prices in active
markets for identical assets
(Level 1)		 Significant other
observable inputs
(Level 2)		 Significant
unobservable inputs
(Level 3)		 Total
Equities        
U.S. $ 118  $ —  $ —  $ 118 
Non-U.S. 31  —  —  31 
Fixed income
Government debt —  188  —  188 
Corporate debt
U.S. —  423  —  423 
Non-U.S. 12  41  —  53 
Asset/mortgaged backed securities 7  —  —  7 
Net cash equivalents (1)
499  9  —  508 
Diversified strategies 14  —  —  14 
Private markets and real assets (2)
—  —  641  641 
Net plan assets subject to leveling $ 681  $ 661  $ 641  $ 1,983 
Accruals (3)
      7 
Investments measured at net asset value 1,838 
Net plan assets       $ 3,828 
(1) Cash equivalents include commercial paper, short-term government/agency, mortgage and credit instruments.
(2) The instruments in private markets and real assets, for which quoted market prices are not available, are valued at their estimated fair value as determined by applicable investment managers or by audited financial statements of the funds. Private markets include equity, venture capital and private credit instruments and funds. Real assets include real estate and infrastructure.
(3) Accruals include interest or dividends that were not settled at December 31.
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets
The reconciliation of Level 3 assets was as follows:
  Fair Value Measurements
Using Significant Unobservable Inputs (Level 3)
In millions Private Markets Real Assets Total
Balance at December 31, 2021 $ 471  $ 80  $ 551 
Actual return on plan assets  
Unrealized gains on assets still held at the reporting date 6  19  25 
Purchases, sales and settlements, net (12) (17) (29)
Assumption of Meritor's plan assets 94  —  94 
Balance at December 31, 2022 559  82  641 
Actual return on plan assets      
Unrealized gains on assets still held at the reporting date 6  (13) (7)
Purchases, sales and settlements, net (28) (2) (30)
Balance at December 31, 2023 $ 537  $ 67  $ 604 
UNITED KINGDOM  
Pension and other postretirement benefits  
Schedule of Allocation of Plan Assets To achieve these objectives, we established the following targets:
Asset Class Plan Target
Equities 1  %
Property/secure income assets 8  %
Credit/bank loans 5  %
Diversified strategies 1  %
Private equity 5  %
Fixed income/insurance annuity 78  %
Cash 2  %
Total 100  %
Fair Value, Assets Measured on Recurring Basis
The fair values of U.K. pension plan assets by asset category were as follows:
  Fair Value Measurements at December 31, 2023
In millions Quoted prices in active
markets for identical assets
(Level 1)		 Significant other
observable inputs
(Level 2)		 Significant
unobservable inputs
(Level 3)		 Total
Equities        
U.S. $ 12  $ —  $ —  $ 12 
Non-U.S. 8  —  —  8 
Fixed income  
Government debt —  232  —  232 
Corporate debt
U.S. —  30  —  30 
Non-U.S. —  95  —  95 
Net cash equivalents (1)
17  18  —  35 
Insurance annuity —  —  436  436 
Private markets and real assets (2)
—  —  103  103 
Net plan assets subject to leveling $ 37  $ 375  $ 539  $ 951 
Pending trade/purchases/sales       1 
Accruals (3)
      2 
Investments measured at net asset value 766 
Net plan assets       $ 1,720 
  Fair Value Measurements at December 31, 2022
In millions Quoted prices in active
markets for identical assets
(Level 1)		 Significant other
observable inputs
(Level 2)		 Significant
unobservable inputs
(Level 3)		 Total
Equities        
U.S. $ 13  $ —  $ —  $ 13 
Non-U.S. 9  —  —  9 
Fixed income
Government debt —  222  —  222 
Corporate debt
U.S. —  24  —  24 
Non-U.S. —  80  —  80 
Net cash equivalents (1)
27  11  —  38 
Insurance annuity —  —  428  428 
Private markets and real assets (2)
—  —  390  390 
Net plan assets subject to leveling $ 49  $ 337  $ 818  $ 1,204 
Pending trade/purchases/sales       141 
Accruals (3)
      2 
Investments measured at net asset value 323 
Net plan assets       $ 1,670 
(1) Cash equivalents include commercial paper, short-term government/agency, mortgage and credit instruments.
(2) The instruments in private markets and real assets, for which quoted market prices are not available, are valued at their estimated fair value as determined by applicable investment managers or by audited financial statements of the funds. Private markets include equity, venture capital and private credit instruments and funds. Real assets include real estate and infrastructure.
(3) Accruals include interest or dividends that were not settled at December 31.
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets
The reconciliation of Level 3 assets was as follows:
  Fair Value Measurements
Using Significant Unobservable Inputs (Level 3)
In millions Insurance Annuity Real Assets Private Markets Total
Balance at December 31, 2021 $ 514  $ 33  $ 356  $ 903 
Actual return on plan assets
Unrealized (losses) gains on assets still held at the reporting date (178) (2) 39  (141)
Purchases, sales and settlements, net —  (23) (13) (36)
Assumption of Meritor's plan assets 92  —  —  92 
Balance at December 31, 2022 428  8  382  818 
Actual return on plan assets        
Unrealized (losses) gains on assets still held at the reporting date 8  —  (35) (27)
Purchases, sales and settlements, net —  (1) (251) (252)
Balance at December 31, 2023 $ 436  $ 7  $ 96  $ 539