Employee and Retiree Benefit Plans

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Employee and Retiree Benefit Plans

Note H – Employee and Retiree Benefit Plans

The Company has defined benefit pension plans that are principally noncontributory and cover most full-time employees.  All pension plans are funded except for the U.S. and Canadian nonqualified supplemental plan and the U.S. director’s plan.  All U.S. tax qualified plans meet the funding requirements of federal laws and regulations.  Contributions to foreign plans are based on local laws and tax regulations.  The Company also sponsors health care and life insurance benefit plans, which are not funded, that cover most retired U.S. employees.  The health care benefits are contributory; the life insurance benefits are noncontributory.

On May 6, 2020, the Company announced that it was closing its headquarter office in El Dorado, Arkansas, its office in Calgary, Alberta, and consolidating all worldwide staff activities to its existing office location in Houston, Texas. As a result of this decision and the subsequent restructuring activities, a pension remeasurement was triggered and the Company incurred pension curtailment and special termination benefit charges as a result of the associated reduction of force. The Company elected the use of a practical expedient to perform the pension remeasurement as of May 31, 2020, which resulted in an increase in our pension and other postretirement benefit liabilities of $63.0 million due to lower discount rate and lower plan assets relative to December 31, 2019.

The table that follows provides the components of net periodic benefit expense for the three-month and six-month periods ended June 30, 2020 and 2019.

	Three Months Ended June 30,
	Pension Benefits			Other Postretirement Benefits
(Thousands of dollars)	2020		2019	2020	2019
Service cost	$	2,166	2,062	446	420
Interest cost	5,763		7,100	794	943
Expected return on plan assets	(6,297)		(6,370)	—	—
Amortization of prior service cost (credit)	183		246	—	(97)
Recognized actuarial loss	4,264		3,508	—	—
Net periodic benefit expense	6,079		6,546	1,240	1,266
Other - curtailment	586		—	(1,825)	—
Other - special termination benefits	8,435		—	—	—
Total net periodic benefit expense	$	15,100	6,546	(585)	1,266
	Six Months Ended June 30,
	Pension Benefits			Other Postretirement Benefits
(Thousands of dollars)	2020		2019	2020	2019
Service cost	$	4,332	4,124	893	840
Interest cost	11,554		14,251	1,588	1,888
Expected return on plan assets	(12,641)		(12,830)	—	—
Amortization of prior service cost (credit)	366		493	—	(195)
Recognized actuarial loss	8,533		7,022	—	—
Net periodic benefit expense	12,144		13,060	2,481	2,533
Other - curtailment	586		—	(1,825)	—
Other - special termination benefits	8,435		—	—	—
Total net periodic benefit expense	$	21,165	13,060	656	2,533

The components of net periodic benefit expense, other than the service cost, curtailment and special termination benefits components, are included in the line item “Interest and other income (loss)” in Consolidated Statements of Operations. The curtailment and special termination benefits components are included in the line item “Restructuring expenses” in Consolidated Statement of Operations.

During the six-month period ended June 30, 2020, the Company made contributions of $15.3 million to its defined benefit pension and postretirement benefit plans.  Remaining funding in 2020 for the Company’s defined benefit pension and postretirement plans is anticipated to be $22.4 million.