EMPLOYEE BENEFIT PLANS (Notes)

12 Months Ended

Dec. 31, 2021

EMPLOYEE BENEFIT PLANS [Abstract]

Pension and Other Postemployment Benefits Disclosure [Text Block]

EMPLOYEE BENEFIT PLANS

Defined Benefit Pension and Other Postemployment Benefit Plans

Defined Benefit Pension Plans - We have a defined benefit pension plan and a supplemental executive retirement plan, both of which are closed to new participants. Certain employees of the Texas Gas Service division are entitled to benefits under a frozen cash-balance pension plan. We fund our defined benefit pension costs at a level needed to maintain or exceed the minimum funding levels required by the Employee Retirement Income Security Act of 1974, as amended, and the Pension Protection Act of 2006.

Other Postemployment Benefit Plans - We sponsor health and welfare plans that provide postemployment medical and life insurance benefits to certain employees who retire with at least five years of service. The postemployment medical plan is contributory based on hire date, age and years of service, with retiree contributions adjusted periodically, and contains other cost-sharing features such as deductibles and coinsurance.

Actuarial Assumptions - The following table sets forth the weighted-average assumptions used to determine benefit obligations for pension and postemployment benefits for the periods indicated:

	December 31,
	2021	2020
Discount rate - pension plans	3.05%	2.80%
Discount rate - other postemployment plans	3.00%	2.70%
Compensation increase rate	3.10% - 5.00%	3.10% - 3.90%

The following table sets forth the weighted-average assumptions used by us to determine the periodic benefit costs for the periods indicated:

	Years Ended December 31,
	2021	2020	2019
Discount rate - pension plans	2.80%	3.50%	4.40%
Discount rate - other postemployment plans	2.70%	3.40%	4.40%
Expected long-term return on plan assets - pension plans	7.15%	7.20%	7.20%
Expected long-term return on plan assets - other postemployment plans	7.50%	7.65%	7.35%
Compensation increase rate	3.10% - 3.90%	3.10% - 4.00%	3.20% - 4.00%

We determine our discount rates annually. We estimate our discount rate based upon a comparison of the expected cash flows associated with our future payments under our defined benefit pension and other postemployment obligations to a hypothetical bond portfolio created using high-quality bonds that closely match expected cash flows. Bond portfolios are developed by selecting a bond for each of the next 60 years based on the maturity dates of the bonds. Bonds selected to be included in the portfolios are only those rated by Moody’s as AA- or better and exclude callable bonds, bonds with less than a minimum issue size, yield outliers and other filtering criteria to remove unsuitable bonds.

We determine our overall expected long-term rate of return on plan assets, based on our review of historical returns and economic growth models. We update our assumed mortality rates to incorporate new tables issued by the Society of Actuaries as needed.

Regulatory Treatment - The OCC, KCC and regulatory authorities in Texas have approved the recovery of pension costs and other postemployment benefits costs through rates for Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, respectively. The costs recovered through rates are based on current funding requirements and the net periodic benefit cost for defined benefit pension and other postemployment costs. Differences, if any, between the net periodic benefit cost, net of deferrals, and the amount recovered through rates are reflected in earnings.

We historically have recovered defined benefit pension and other postemployment benefit costs through rates. We believe it is probable that regulators will continue to include the net periodic pension and other postemployment benefit costs in our cost of service.

We capitalize all eligible service cost and non-service cost components pursuant to the accounting requirements of ASC Topic 980 (Regulated Operations) for rate-regulated entities, as these costs are authorized by our regulators to be included in capitalized costs. Our consolidated balance sheets reflect the capitalized non-service cost components as a regulatory asset. We have recognized a regulatory asset of $6.1 million and $6.0 million as of December 31, 2021 and December 31, 2020, respectively. See Note 10 for additional information.

Obligations and Funded Status - The following table sets forth our defined benefit pension and other postemployment benefit plans, benefit obligations and fair value of plan assets for the periods indicated:

	Pension Benefits				Other Postemployment Benefits
	December 31,				December 31,
	2021		2020		2021		2020
Changes in Benefit Obligation	(Thousands of dollars)
Benefit obligation, beginning of period	$	1,077,641	$	1,001,368	$	239,530	$	230,490
Service cost	13,811		12,869		1,587		1,692
Interest cost	29,458		34,179		6,251		7,557
Plan participants’ contributions	—		—		3,226		3,500
Actuarial loss (gain)	(19,587)		91,566		(8,894)		14,013
Benefits paid	(51,333)		(62,341)		(18,894)		(17,722)
Benefit obligation, end of period	1,049,990		1,077,641		222,806		239,530
Change in Plan Assets
Fair value of plan assets, beginning of period	987,583		907,974		230,895		207,182
Actual return (loss) on plan assets	75,999		140,939		14,786		35,837
Employer contributions	995		1,011		1,981		2,098
Plan participants’ contributions	—		—		3,226		3,500
Benefits paid	(51,333)		(62,341)		(18,894)		(17,722)
Settlements	—		—		—		—
Fair value of assets, end of period	1,013,244		987,583		231,994		230,895
Benefit Asset (Obligation), net at December 31	$	(36,746)	$	(90,058)	$	9,188	$	(8,635)
Other noncurrent assets	—		—		9,188		—
Current liabilities	(1,521)		(1,056)		—		—
Noncurrent liabilities	(35,225)		(89,002)		—		(8,635)
Benefit Asset (Obligation), net at December 31	$	(36,746)	$	(90,058)	$	9,188	$	(8,635)

The accumulated benefit obligation for our defined benefit pension plans was $1.0 billion and $1.0 billion at December 31, 2021 and 2020, respectively. At December 31, 2021 and 2020, the accumulated benefit obligations of each of our plans exceeded the fair value of the related plan’s assets.

For the year ended December 31, 2021, the pension benefit obligations experienced an actuarial gain of $19.6 million primarily due to the impact of increases in the discount rates used to calculate the benefit obligations. For the year ended December 31, 2020, the pension benefit obligations experienced an actuarial loss of $91.6 million primarily due to the impact of decreases in the discount rates used to calculate the benefit obligations. Benefits paid for 2020 reflects $12.5 million of lump sum payments to certain terminated-vested participants.

In 2022, our contributions are expected to be $1.5 million to our defined benefit pension plans, and no contributions are expected to be made to our other postemployment benefit plans.

Components of Net Periodic Benefit Cost - The following tables set forth the components of net periodic benefit cost, prior to regulatory deferrals, for our defined benefit pension and other postemployment benefit plans for the period indicated:

	Pension Benefits
	Year Ended December 31,
	2021		2020		2019
	(Thousands of dollars)
Components of net periodic benefit cost
Service cost	$	13,811	$	12,869	$	12,030
Interest cost (a)	29,458		34,179		40,670
Expected return on assets (a)	(62,382)		(61,119)		(61,939)
Amortization of net loss (a)	45,523		42,319		33,039
Net periodic benefit cost	$	26,410	$	28,248	$	23,800

(a) These amounts, net of any amounts capitalized as a regulatory asset since adoption of ASU 2017-07 on January 1, 2018, have been recognized as other income (expense), net in the Consolidated Statements of Income. See Note 15 for additional detail of our other income (expense), net.

	Other Postemployment Benefits
	Year Ended December 31,
	2021		2020		2019
	(Thousands of dollars)
Components of net periodic benefit cost
Service cost	$	1,587	$	1,692	$	1,734
Interest cost (a)	6,251		7,557		9,318
Expected return on assets (a)	(16,807)		(15,469)		(12,586)
Amortization of unrecognized prior service cost (a)	(279)		(117)		(673)
Amortization of net loss (a)	373		173		2,244
Net periodic benefit cost (credit)	$	(8,875)	$	(6,164)	$	37

(a) These amounts, net of any amounts capitalized as a regulatory asset since adoption of ASU 2017-07 on January 1, 2018, have been recognized as other income (expense), net in the Consolidated Statements of Income. See Note 15 for additional detail of our other income (expense), net.

Other Comprehensive Income (Loss) - The following table sets forth the amounts recognized in other comprehensive income (loss), net of regulatory deferrals, related to our defined benefit pension benefits for the period indicated:

	Pension Benefits
	Year Ended December 31,
	2021		2020		2019
	(Thousands of dollars)
Net gain (loss) arising during the period	$	67	$	(2,519)	$	(2,766)
Amortization of loss	1,562		1,192		852
Deferred income taxes	(379)		289		479
Total recognized in other comprehensive income (loss)	$	1,250	$	(1,038)	$	(1,435)

Due to our regulatory deferrals, there were no amounts recognized in other comprehensive income (loss) related to our other postemployment benefits for the periods presented.

The tables below set forth the amounts in accumulated other comprehensive loss that had not yet been recognized as components of net periodic benefit expense for the periods indicated:

	Pension Benefits
	December 31,
	2021		2020
	(Thousands of dollars)
Accumulated loss	$	(272,332)	$	(351,059)
Accumulated other comprehensive loss   before regulatory assets	(272,332)		(351,059)
Regulatory asset for regulated entities	264,027		341,125
Accumulated other comprehensive loss   after regulatory assets	(8,305)		(9,934)
Deferred income taxes	1,778		2,157
Accumulated other comprehensive loss,   net of tax	$	(6,527)	$	(7,777)

	Other Postemployment Benefits
	December 31,
	2021		2020
	(Thousands of dollars)
Prior service credit	$	(194)	$	85
Accumulated loss	(5,887)		(13,134)
Accumulated other comprehensive loss   before regulatory assets	$	(6,081)	$	(13,049)
Regulatory asset for regulated entities	6,081		13,049
Accumulated other comprehensive loss   after regulatory assets	$	—	$	—

Health Care Cost Trend Rates - The following table sets forth the assumed health care cost-trend rates for the periods indicated:

	2021	2020
Health care cost-trend rate assumed for next year	6.00%	6.25%
Rate to which the cost-trend rate is assumed to decline   (the ultimate trend rate)	4.50%	4.50%
Year that the rate reaches the ultimate trend rate	2028	2026

Plan Assets - Our investment strategy is to invest plan assets in accordance with sound investment practices that emphasize long-term fundamentals. The goal of this strategy is to maximize investment returns while managing risk in order to meet the plan’s current and projected financial obligations. To achieve this strategy, we have established a liability-driven investment strategy to change the allocations as the funded status of the defined benefit pension plan increases. The plan’s investments include a diverse blend of various domestic and international equities, investment-grade debt securities which mirror the cash flows of our liability, insurance contracts and alternative investments. The current target allocation for the assets of our defined benefit pension plan is as follows:

Investment-grade bonds	60.0	%
U.S. large-cap equities	14.0	%
Alternative investments	10.0	%
Developed foreign large-cap equities	7.0	%
Mid-cap equities	5.0	%
Emerging markets equities	1.0	%
Small-cap equities	3.0	%
Total	100	%

As part of our risk management for the plans, minimums and maximums have been set for each of the asset classes listed above. All investment managers for the plan are subject to certain restrictions on the securities they purchase and, with the exception of indexing purposes, are prohibited from owning our stock.

The current target allocation for the assets of our other postemployment benefits plan is 65 percent fixed income securities and 35 percent equity securities.

The following tables set forth our pension benefits and other postemployment benefits plan assets by fair value category as of the measurement date:

	Pension Benefits
	December 31, 2021
Asset Category	Level 1		Level 2		Level 3		Total
	(Thousands of dollars)
Investments:
Equity securities (a)	$	223,871	$	—	$	—	$	223,871
Government obligations	—		205,741		—		205,741
Corporate obligations (b)	—		440,445		—		440,445
Cash and money market funds (c)	3,864		30,546		—		34,410
Insurance contracts and group annuity contracts	—		—		17,301		17,301
Other investments (d)	—		20		91,456		91,476
Total assets	$	227,735	$	676,752	$	108,757	$	1,013,244

(a) - This category represents securities of the various market sectors from diverse industries.

(b) - This category represents bonds from diverse industries.

(c) - This category primarily represents money market funds.

(d) - This category represents alternative investments such as hedge funds and other financial instruments.

	Pension Benefits
	December 31, 2020
Asset Category	Level 1		Level 2		Level 3		Total
	(Thousands of dollars)
Investments:
Equity securities (a)	$	392,639	$	35,454	$	—	$	428,093
Government obligations	—		78,080		—		78,080
Corporate obligations (b)	—		343,118		—		343,118
Cash and money market funds (c)	1,589		23,311		—		24,900
Insurance contracts and group annuity contracts	—		—		24,603		24,603
Other investments (d)	—		1,155		87,634		88,789
Total assets	$	394,228	$	481,118	$	112,237	$	987,583

(a) - This category represents securities of the various market sectors from diverse industries.

(b) - This category represents bonds from diverse industries.

(c) - This category primarily represents money market funds.

(d) - This category represents alternative investments such as hedge funds and other financial instruments.

	Other Postemployment Benefits
	December 31, 2021
Asset Category	Level 1		Level 2		Level 3		Total
	(Thousands of dollars)
Investments:
Equity securities (a)	$	25,577	$	—	$	—	$	25,577
Government obligations	—		41,366		—		41,366
Corporate obligations (b)	—		41,601		—		41,601
Cash and money market funds (c)	542		12,990		—		13,532
Insurance contracts and group annuity contracts (d)	—		109,918		—		109,918
Total assets	$	26,119	$	205,875	$	—	$	231,994

(a) - This category represents securities of the various market sectors from diverse industries.

(b) - This category represents bonds from diverse industries.

(c) - This category primarily represents money market funds.

(d) - This category includes equity securities and bonds held in a captive insurance product.

	Other Postemployment Benefits
	December 31, 2020
Asset Category	Level 1		Level 2		Level 3		Total
	(Thousands of dollars)
Investments:
Equity securities (a)	$	73,578	$	—	$	—	$	73,578
Government obligations	—		—		—		—
Corporate obligations (b)	—		39,115		—		39,115
Cash and money market funds (c)	52		8,071		—		8,123
Insurance contracts and group annuity contracts (d)	—		110,079		—		110,079
Total assets	$	73,630	$	157,265	$	—	$	230,895

(a) - This category represents securities of the various market sectors from diverse industries.

(b) - This category represents bonds from diverse industries.

(c) - This category primarily represents money market funds.

(d) - This category includes equity securities and bonds held in a captive insurance product.

Insurance contracts and group annuity contracts include investments in the Immediate Participation Guarantee Fund (“IPG Fund”) with John Hancock and are valued at fair value. John Hancock invests the IPG Fund in its general fund portfolio. The contract value of the IPG Fund at the end of the year, which approximates fair value, is estimated. The difference between this estimated balance and the actual balance, as subsequently determined by John Hancock, is charged or credited to the net assets of the plans.

Certain investments that are categorized as money market funds in Level 2 and “Other investments” in Level 3 represent alternative investments such as hedge funds and other financial instruments measured using the net asset value per share (or its equivalent) practical expedient.

The following tables set forth additional information regarding commitments and redemption limitations of these other investments at the periods indicated:

	December 31, 2021
	Fair Value		Unfunded Commitments		Redemption Frequency	Redemption Notice Period
	(in thousands)					(in days)
Grosvenor Registered Multi Limited Partnership	$	44,818	$	—	quarterly	65
K2 Institutional Investors II Limited Partnership	$	46,638	$	—	quarterly	91

	December 31, 2020
	Fair Value		Unfunded Commitments		Redemption Frequency	Redemption Notice Period
	(in thousands)					(in days)
Grosvenor Registered Multi Limited Partnership	$	42,632	$	—	quarterly	65
K2 Institutional Investors II Limited Partnership	$	45,002	$	—	quarterly	91

The following table sets forth the reconciliation of Level 3 fair value measurements of our pension plans for the periods indicated:

	Pension Benefits
	Insurance Contracts		Other Investments		Total
	(Thousands of dollars)
January 1, 2020	$	25,988	$	81,793	$	107,781
Unrealized gains	1,764		4,849		6,613
Purchases	—		992		992
Settlements	(3,149)		—		(3,149)
December 31, 2020	$	24,603	$	87,634	$	112,237
Unrealized gains	—		1,625		1,625
Unrealized losses	(3,368)		—		(3,368)
Purchases	—		2,197		2,197
Settlements	(3,934)		—		(3,934)
December 31, 2021	$	17,301	$	91,456	$	108,757

Pension and Other Postemployment Benefit Payments - Benefit payments for our defined benefit pension and other postemployment benefit plans for the year ended December 31, 2021 were $51.3 million and $18.9 million, respectively. The following table sets forth the pension benefits and other postemployment benefits payments expected to be paid in 2022-2031:

	Pension Benefits		Other Postemployment Benefits
Benefits to be paid in:	(Thousands of dollars)
2022	$	52,936	$	15,744
2023	$	53,745	$	15,571
2024	$	54,440	$	15,184
2025	$	55,075	$	14,940
2026	$	55,852	$	14,580
2027 through 2031	$	283,344	$	67,566

The expected benefits to be paid are based on the same assumptions used to measure our benefit obligation at December 31, 2021, and include estimated future employee service.

Other Employee Benefit Plans

401(k) Plan - We have a 401(k) plan which covers all full-time employees, and employee contributions are discretionary. We match 100 percent of each participant’s eligible contribution up to 6 percent of eligible compensation, subject to certain limits. Our contributions to the plan were $14.3 million, $13.8 million and $12.8 million in 2021, 2020 and 2019, respectively.

Profit-Sharing Plan - We have a profit-sharing plan for all employees who do not participate in our defined benefit pension plan. We plan to make a contribution to the profit-sharing plan each quarter equal to 1 percent of each participant’s eligible compensation during the quarter. Additional discretionary employer contributions may be made at the end of each year.

Employee contributions are not allowed under the plan. Our contributions to the plan were $9.9 million, $9.4 million and $8.5 million in 2021, 2020 and 2019, respectively. Effective December 30, 2021, our profit sharing plan was merged with and into our 401(k) Plan.