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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2024
Retirement Benefits [Abstract]  
Employee Benefit Plans Employee Benefit Plans
Defined Contribution Savings Plans
We sponsor several defined contribution savings plans in the United States and certain foreign subsidiaries that provide certain of our eligible employees an opportunity to accumulate funds for retirement. We match portions of the contributions of participating employees on the basis specified by the plans. Our contributions to these plans were $31 million, $29 million, and $26 million during 2024, 2023 and 2022, respectively.
Defined Benefit Pension Plans
We sponsor defined benefit pension plans in the United States and in certain foreign subsidiaries with some plans offering participation in the plans at the employees’ option. Under these plans, benefits are based on an employee’s years of credited service and a percentage of final average compensation. However, the majority of the plans are closed to new employees and participants are no longer accruing benefits.
The funded status of the defined benefit pension plans is recognized on the Consolidated Balance Sheets and the gains or losses and prior service costs or credits that arise during the period, but are not recognized as components of net periodic benefit cost, are recognized as a component of accumulated other comprehensive income (loss), net of tax.
The components of net periodic (benefit) cost consisted of the following:
Year Ended December 31,
202420232022
Service cost (a)
$3 $3 $5 
Interest cost (b)
28 27 16 
Expected return on plan assets (b)
(32)(30)(37)
Amortization of unrecognized amounts (b)
5 5 5 
Net periodic cost (benefit)$4 $5 $(11)
__________ 
(a)For the years ended December 31, 2024, 2023, and 2022, $3 million, $3 million, and $4 million was included in operating expenses, respectively. For the year ended December 31, 2022, $1 million was included in selling, general and administrative expenses.
(b)Included in selling, general and administrative expenses.
We use a measurement date of December 31st for our pension plans. The funded status of the pension plans were as follows:
As of December 31,
Change in Benefit Obligation20242023
Benefit obligation at end of prior year$620 $575 
Service cost3 3 
Interest cost28 27 
Actuarial (gain) loss(43)30 
Plan amendments(1)— 
Currency translation adjustment
(11)15 
Net benefits paid(31)(30)
Benefit obligation at end of current year$565 $620 
Change in Plan Assets
Fair value of assets at end of prior year$540 $514 
Actual return on plan assets3 35 
Employer contributions4 6 
Currency translation adjustment
(6)15 
Net benefits paid(31)(30)
Fair value of assets at end of current year$510 $540 
Amounts recognized in the statement of financial position consist of the following:
As of December 31,
Funded Status20242023
Classification of net balance sheet assets (liabilities):
Non-current assets$39 $24 
Current liabilities(4)(4)
Non-current liabilities(90)(100)
Net funded status$(55)$(80)
The following assumptions were used to determine pension obligations and pension costs for the principal plans in which our employees participated:
For the Year Ended December 31,
U.S. Pension Benefit Plans202420232022
Discount rate:
Net periodic benefit cost4.96 %5.18 %2.67 %
Benefit obligation5.51 %4.96 %5.18 %
Long-term rate of return on plan assets6.25 %6.25 %6.25 %
Non-U.S. Pension Benefit Plans
Discount rate:
Net periodic benefit cost4.40 %4.79 %1.83 %
Benefit obligation5.01 %4.40 %4.79 %
Long-term rate of return on plan assets5.97 %5.59 %4.39 %
To select discount rates for our defined benefit pension plans, we use a modeling process that involves matching the expected cash outflows of such plans, to yield curves constructed from portfolios of AA-rated fixed-income debt instruments. We use the average yields of the hypothetical portfolios as a discount rate benchmark.
Our expected rate of return on plan assets of 6.25% and 5.97% for the U.S. plans and non-U.S. plans, respectively, used to determine pension obligations and pension costs, are long-term rates based on historic plan asset returns in individual jurisdictions, over varying long-term periods combined with current market expectations and broad asset mix considerations.
As of December 31, 2024 and 2023, plans with projected benefit obligations in excess of plan assets had projected benefit obligations of $330 million and $350 million, respectively, and plan assets of $236 million and $246 million, respectively. As of December 31, 2024 and 2023, plans with accumulated benefit obligations in excess of plan assets had accumulated benefit obligations of $327 million and $346 million, respectively, and plan assets of $236 million and $246 million, respectively. The accumulated benefit obligation for all plans was $561 million and $615 million as of December 31, 2024 and 2023, respectively. We expect to contribute approximately $3 million to the plans in 2025.
Our defined benefit pension plans’ assets are invested primarily in mutual funds and may change in value due to various risks, such as interest rate and credit risk and overall market volatility. Due to the level of risk associated with investment securities, it is reasonably possible that changes in the values of the pension plans’ investment securities will occur in the near term and that such changes would materially affect the amounts reported in our financial statements.
The defined benefit pension plans’ investment goals and objectives are managed by us or Company-appointed and member-appointed trustees with consultation from independent investment advisors. While the objectives may vary slightly by country and jurisdiction, collectively we seek to produce returns on pension plan investments, which are based on levels of liquidity and investment risk that we believe are prudent and reasonable, given prevailing capital market conditions. The pension plans’ assets are managed in the long-term interests of the participants and the beneficiaries of the plans. A suitable strategic asset allocation benchmark is determined for each plan to maintain a diversified portfolio, taking into account government requirements, if any, regarding unnecessary investment risk and protection of pension plans’ assets. We believe that diversification of the pension plans’ assets is an important investment strategy to provide reasonable assurance that no single security or class of securities will have a disproportionate impact on the pension plans. As such, we allocate assets among traditional equity, fixed income (government issued securities, corporate bonds and short-term cash investments) and other investment strategies.
The equity component’s purpose is to provide a total return that will help preserve the purchasing power of the assets. The pension plans hold various mutual funds that invest in equity securities and are diversified
among funds that invest in large cap, small cap, growth, value and international stocks as well as funds that are intended to “track” an index, such as the S&P 500. The equity investments in the portfolios will represent a greater assumption of market volatility and risk as well as provide higher anticipated total return over the long term. The equity component is expected to approximate 35%-55% of the plans’ assets.
The purpose of the fixed income component is to provide a deflation hedge, to reduce the overall volatility of the pension plans’ assets in relation to the liability and to produce current income. The pension plans hold mutual funds that invest in securities issued by governments, government agencies and corporations. The fixed income component is expected to approximate 35%-55% of the plans’ assets.
The purpose of the alternative investment component is to provide diversification and risk reduction through less correlated investment strategies with the goal of enhanced returns and downside protection. Alternative strategies will not be used if they are designed solely to enhance return and/or employ significant leverage. Diversification of asset categories, investment styles and managers is central to managing investment risk. The alternative investment component is expected to approximate 5%-15% of the plans’ assets.
The following table presents the defined benefit pension plans’ assets measured at fair value:
As of December 31, 2024
Asset ClassLevel 1Level 2Level 3Total
Cash equivalents and short-term investments$8 $12 $— $20 
U.S. equities49 10 — 59 
Non-U.S. equities29 15 — 44 
Government bonds9 48 — 57 
Corporate bonds159 39 — 198 
Other assets— 73 59 132 
Total assets$254 $197 $59 $510 
As of December 31, 2023
Asset ClassLevel 1Level 2Level 3Total
Cash equivalents and short-term investments$12 $12 $— $24 
U.S. equities73 15 — 88 
Non-U.S. equities40 23 — 63 
Government bonds1 — — 1 
Corporate bonds138 47 — 185 
Other assets— 118 61 179 
Total assets$264 $215 $61 $540 
__________
For the years ended December 31, 2024 and 2023, we purchased and classified investments of $2 million and $11 million, respectively, as Level 3.
We estimate that future benefit payments from plan assets will be $33 million, $34 million, $35 million, $36 million, $37 million and $197 million for 2025, 2026, 2027, 2028, 2029 and 2030 to 2034, respectively.
Multiemployer Plans
We contribute to a number of multiemployer plans under the terms of collective-bargaining agreements that cover a portion of our employees. The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects: (i) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; (ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; (iii) if we elect to stop participating in a multiemployer plan, we may be required to contribute to such plan an amount based on the under-funded status of the plan; and (iv) we have no involvement in the management of the multiemployer plans’ investments. For the years ended December 31, 2024, 2023, and 2022, we contributed $10 million, $10 million and $8 million, respectively, to multiemployer plans.