Pension and Postretirement Benefit Obligations

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Pension and Postretirement Benefit Obligations

Pension and Postretirement Benefit Obligations

Pension Plans

There are two Company-sponsored pension plans. The primary Company-sponsored pension plan (the “Primary Plan”) was frozen as of June 30, 2006 and no benefits accrued to participants after that date. The second Company-sponsored pension plan (the “Bargaining Plan”) is for certain employees under collective bargaining agreements. Benefits under the Bargaining Plan are determined in accordance with negotiated formulas for the respective participants. Contributions to the plans are based on actuarially determined amounts and are limited to the amounts currently deductible for income tax purposes.

In 2022, the Company began the process of terminating the Primary Plan. During the first half of 2023, the Company offered a lump sum benefit payout option to certain plan participants. Settlement payments were made to those participants who selected the lump sum benefit payout option during the second quarter of 2023. Additionally, a settlement expense of $39.8 million was recognized related primarily to pre-tax actuarial losses that were reclassified out of accumulated other comprehensive loss associated with the lump sum benefit payout option. During the second quarter of 2023, the Company also entered into a group annuity contract that will transfer the remaining pension benefit obligation for the Primary Plan to an insurance company. With full settlement of the Primary Plan expected to occur during the third quarter of 2023, the remaining liability related to the Primary Plan was reclassified from noncurrent liabilities to current liabilities as of June 30, 2023. The liability for the unfunded

portion of the Primary Plan, which was classified as other accrued liabilities in the condensed consolidated balance sheets, was $12.9 million as of June 30, 2023.

Upon final settlement of the Primary Plan, which occurred subsequent to the end of the second quarter of 2023, the remainder of the gross actuarial losses associated with the Primary Plan will be reclassified out of accumulated other comprehensive loss, resulting in additional settlement expense during the third quarter of 2023. As of June 30, 2023 and December 31, 2022, the gross actuarial losses included in accumulated other comprehensive loss associated with the Primary Plan were approximately $79 million and $117 million, respectively.

The components of total pension expense were as follows:

	Second Quarter				First Half
(in thousands)	2023		2022		2023		2022
Service cost	$	1,100	$	1,861	$	2,199	$	3,721
Interest cost	3,508		2,659		7,016		5,318
Expected return on plan assets	(2,914)		(2,036)		(5,828)		(4,071)
Recognized net actuarial loss	973		988		1,946		1,977
Amortization of prior service cost	4		—		8		—
Net periodic pension cost	2,671		3,472		5,341		6,945
Settlement expense	39,777		—		39,777		—
Total pension expense	$	42,448	$	3,472	$	45,118	$	6,945

The Company did not make any contributions to the two Company-sponsored pension plans during the first half of 2023. Subsequent to the end of the second quarter of 2023, the Company contributed approximately $12 million to fund the termination of the Primary Plan. The Company expects to make additional cash contributions of approximately $1 million to the Primary Plan during the second half of 2023 to fund the remainder of its obligation in connection with the termination of the Primary Plan. The Company also expects to make cash contributions of approximately $5 million to $10 million to the Bargaining Plan during 2023 to fund the ongoing projected benefit obligation of the Bargaining Plan.

Postretirement Benefits

The Company provides postretirement benefits for employees meeting specified qualifying criteria. The Company recognizes the cost of postretirement benefits, which consist principally of medical benefits, during employees’ periods of active service. The Company does not prefund these benefits and has the right to modify or terminate certain of these benefits in the future.

The components of net periodic postretirement benefit cost were as follows:

	Second Quarter				First Half
(in thousands)	2023		2022		2023		2022
Service cost	$	294	$	384	$	588	$	767
Interest cost	697		475		1,395		949
Recognized net actuarial loss	—		91		—		183
Net periodic postretirement benefit cost	$	991	$	950	$	1,983	$	1,899