Additional information related to pension plans was as follows: Weighted-average assumptions used to determine defined benefit pension plan obligations at December 31 were as follows: Weighted-average actuarial assumptions used to determine defined benefit pension plan net periodic benefit cost/(credit) for the years ended December 31 were as follows: The yield on high quality corporate bonds matching the duration of the benefit obligations is used in determining the discount rate. The Citi Pension Discount curve is used in developing the discount rate for the U.S. plans. The expected return on plan assets was determined using the expected rate of return and a calculated value of assets, referred to as the “market- related value” which approximated the fair value of plan assets at December 31, 2018. Differences between assumed and actual returns are amortized to the market-related value on a straight-line basis over a three-year period. Several factors are considered in developing the expected return on plan assets, including long-term historical returns and input from external advisors. Individual asset class return forecasts were developed based upon market conditions, for example, price-earnings levels and yields and long-term growth expectations. The expected long-term rate of return is the weighted-average of the target asset allocation of each individual asset class. Historical long-term actual annualized returns for U.S. pension plans were as follows: Actuarial gains and losses resulted from changes in actuarial assumptions (such as changes in the discount rate and revised mortality rates) and from differences between assumed and actual experience (such as differences between actual and expected return on plan assets). Actuarial gains in 2018 related to plan benefit obligations were primarily the result of increases in discount rates. Actuarial losses in 2017 related to plan benefit obligations were primarily the result of decreases in discount rates. Gains and losses are amortized over the life expectancy of the plan participants for U.S. plans (33 years in 2019) and expected remaining service periods for most other plans to the extent they exceed 10% of the higher of the market-related value or the projected benefit obligation for each respective plan. As the result of adopting ASU 2017-07, refer to “—Note 1. Accounting Policies and Recently Issued Accounting Standards” for further details, the periodic benefit cost or credit is included in Other income (net) except for the service cost component which is included in Cost of products sold, Research and development, and Marketing, selling and administrative expenses. 92 Actuarial Assumptions Dollars in Millions 2018 2017 Pension plans with projected benefit obligations in excess of plan assets: Projected benefit obligation $ 1,275 $ 1,166 Fair value of plan assets 817 678 Pension plans with accumulated benefit obligations in excess of plan assets : Accumulated benefit obligation $ 1,181 $ 1,008 Fair value of plan assets 757 550 2018 2017 Discount rate 3.5 % 3.1 % Rate of compensation increase 0.5% 0.5% 2018 2017 2016 Discount rate 3.1 % 3.5 % 3.8 % Expected long-term return on plan assets 6.2% 7.0% 7.2% Rate of compensation increase 0.5 % 0.5 % 0.5 % 2018 2017 2016 10 years 10.4 % 6.8 % 6.1 % 15 years 7.8% 9.3% 7.1% 20 years 7.1 % 7.5 % 7.7 %