Retirement and Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Retirement and Employee Benefit Plans

RETIREMENT AND EMPLOYEE BENEFIT PLANS

401(k) Defined Contribution Plan

The Company has a 401(k) defined contribution plan covering eligible employees. The Company expensed $2 million of contribution expense in each of 2021, 2020 and 2019, respectively. Additionally, the Company capitalized $2 million of contributions in 2021 and $1 million in both 2020 and 2019 directly related to the acquisition, exploration and development activities of the Company’s natural gas and oil properties.

Defined Benefit Pension and Other Postretirement Plans

Prior to January 1, 2021, substantially all of the Company’s employees were covered by the defined benefit pension, a cash balance plan that provided benefits based upon a fixed percentage of an employee’s annual compensation. As part of an ongoing effort to reduce costs, the Company elected to freeze its pension plan effective January 1, 2021. Employees that were participants in the pension plan prior to January 1, 2021 continued to receive the interest component of the plan but no longer received the service component. On September 13, 2021, the Compensation Committee of the Board of Directors approved terminating the Company’s pension plan, effective December 31, 2021, subject to approval by the Internal Revenue Service. This decision, among other benefits, will provide plan participants quicker access to, and greater flexibility in, the management of participants’ respective benefits due under the plan.

The Company has commenced the pension plan termination process, but the specific date for the completion of the process is unknown at this time and will depend on certain legal and regulatory requirements or approvals. As part of the termination process, the Company expects to distribute lump sum payments to or purchase annuities for the benefit of plan participants, which is dependent on the participants’ elections. In addition, the Company expects to make a payment equal to the difference between the total benefits due under the plan and the total value of the assets available, which, as of December 31, 2021, was $11 million.

The postretirement benefit plan provides contributory health care and life insurance benefits. Employees become eligible for these benefits if they meet age and service requirements. Generally, the benefits paid are a stated percentage of medical expenses reduced by deductibles and other coverages.

Substantially all of the Company’s employees continue to be covered by the postretirement benefit plans.  The Company accounts for its defined benefit pension and other postretirement plans by recognizing the funded status of each defined pension benefit plan and other postretirement benefit plan on the Company’s balance sheet. In the event a plan is overfunded, the Company recognizes an asset. Conversely, if a plan is underfunded, the Company recognizes a liability.

The following provides a reconciliation of the changes in the plans’ benefit obligations, fair value of assets and funded status as of December 31, 2021 and 2020:

	Pension Benefits				Other Postretirement Benefits
(in millions)	2021		2020		2021		2020
Change in benefit obligations:
Benefit obligation at January 1	$	139	$	126	$	13	$	13
Service cost (1)	—		7		2		2
Interest cost	4		5		—		—
Participant contributions	—		—		—		—
Actuarial (gain) loss	(4)		16		(2)		1
Benefits paid	(2)		(13)		—		(1)
Plan amendments	—		—		—		(2)
Curtailments	—		(2)		—		—
Settlements	(11)		—		—		—
Benefit obligation at December 31	$	126	$	139	$	13	$	13

(1)The Company froze its pension plan effective January 1, 2021, resulting in no service cost for the year ended December 31, 2021.

	Pension Benefits				Other Postretirement Benefits
(in millions)	2021		2020		2021		2020
Change in plan assets:
Fair value of plan assets at January 1	$	106	$	96	$	—	$	—
Actual return on plan assets	6		11		—		—
Employer contributions	12		12		1		1
Participant contributions	—		—		—		—
Benefits paid	(2)		(13)		(1)		(1)
Settlements	(8)		—		—		—
Fair value of plan assets at December 31	$	114	$	106	$	—	$	—
Funded status of plans at December 31 (1)	$	(12)	$	(33)	$	(13)	$	(13)

(1)The funded status of the pension plan includes a $1 million liability related to a supplemental employee retirement plan as of December 31, 2021 and 2020.

The Company uses a December 31 measurement date for all of its plans and had liabilities recorded for the underfunded status for each period as presented above.

The pension plans’ projected benefit obligation, accumulated benefit obligation and fair value of plan assets as of December 31, 2021 and 2020 are as follows:

(in millions)	2021		2020
Projected benefit obligation	$	126	$	139
Accumulated benefit obligation	126		139
Fair value of plan assets	114		106

Pension and other postretirement benefit costs include the following components for 2021, 2020 and 2019:

	Pension Benefits						Other Postretirement Benefits
(in millions)	2021		2020		2019		2021		2020		2019
Service cost (1)	$	—	$	7	$	7	$	2	$	2	$	1
Interest cost	4		5		5		—		—		—
Expected return on plan assets	(4)		(6)		(6)		—		—		—
Amortization of transition obligation	—		—		—		—		—		—
Amortization of prior service cost	—		—		—		—		—		—
Amortization of net loss	—		1		2		—		—		—
Net periodic benefit cost	—		7		8		2		2		1
Curtailment gain	—		—		—		—		—		—
Settlement loss	2		—		6		—		—		—
Total benefit cost	$	2	$	7	$	14	$	2	$	2	$	1

(1)The Company froze its pension plan effective January 1, 2021, resulting in no service cost for the year ended December 31, 2021.

Service cost is classified as general and administrative expenses on the consolidated statements of operations. All other components of total benefit cost (benefit) are classified as other income (loss), net on the consolidated statements of operations. The Company froze its pension plan effective January 1, 2021, resulting in no service cost for the year ended December 31, 2021. The weighted average interest crediting rate for the pension plan is 6.0%.

The Company recognized a $2 million non-cash settlement loss related to $8 million of lump sum payments from the pension plan for the year ended December 31, 2021. As a result of settlement accounting requirements, the Company recorded a $4 million reduction to its net pension liability as of December 31, 2021, with a corresponding reduction to accumulated other comprehensive loss.

In December 2018, the Company closed the sale of the equity in certain of its subsidiaries that owned and operated its Fayetteville Shale E&P and related midstream gathering assets in Arkansas.  As part of this transaction, many employees associated with those assets were either transferred to the buyer or their employment was terminated.  As a result of the restructuring, the Company recognized a $6 million non-cash settlement loss in 2019 related to $21 million of lump sum payments as a result of these restructuring events. In 2020, the settlement loss was immaterial.

Amounts recognized in other comprehensive income for the years ended December 31, 2021 and 2020 were as follows:

	Pension Benefits				Other Postretirement Benefits
(in millions)	2021		2020		2021		2020
Net actuarial (loss) gain arising during the year	$	5	$	(12)	$	2	$	2
Amortization of prior service cost	—		—		—		—
Amortization of net loss	1		1		—		—
Settlements	5		—		—		—
Curtailments	—		3		—		—
Less: Tax effect (1)	—		3		—		(1)
Amounts recognized in other comprehensive income	$	11	$	(5)	$	2	$	1

(1)Pension and other postretirement benefit tax effects of $2.7 million and $0.4 million, respectively, for the year ended December 31, 2021, were netted against a valuation allowance and therefore included in accumulated other comprehensive income.

Included in accumulated other comprehensive income as of December 31, 2021 and 2020 was a $23 million loss ($18 million net of tax) and a $36 million loss ($28 million net of tax), respectively, related to the Company’s pension and other postretirement benefit plans.  For the year ended December 31, 2021, $13 million was classified from accumulated other comprehensive income, primarily driven by actuarial gains and settlements.  Upon the anticipated termination of the pension plan, the Company expects the remaining associated balance in accumulated other comprehensive income to be reclassified to net income in the periods in which lump sum payments are distributed to, or annuities are purchased for, plan participants.

The assumptions used in the measurement of the Company’s benefit obligations as of December 31, 2021 and 2020 are as follows:

	Pension Benefits				Other Postretirement Benefits
	2021		2020		2021		2020
Discount rate	3.20	%	3.10	%	3.10	%	2.80	%
Rate of compensation increase	3.50	%	3.50	%	n/a		n/a

The assumptions used in the measurement of the Company’s net periodic benefit cost for 2021, 2020 and 2019 are as follows:

	Pension Benefits						Other Postretirement Benefits
	2021		2020		2019		2021		2020		2019
Discount rate	3.20	%	3.70	%	3.70	%	2.80	%	3.50	%	4.35	%
Expected return on plan assets	0.10	%	6.50	%	7.00	%	n/a		n/a		n/a
Rate of compensation increase	3.50	%	3.50	%	3.50	%	n/a		n/a		n/a

The expected return on plan assets for the various benefit plans is based upon a review of the historical returns experienced, combined with the future expected returns based upon the asset allocation strategy employed. The plans seek to achieve an adequate return to fund the obligations in a manner consistent with the federal standards of the Employee Retirement Income Security Act and with a prudent level of diversification.

For measurement purposes, the following trend rates were assumed for 2021 and 2020:

	2021		2020
Health care cost trend assumed for next year	6.5	%	6.5	%
Rate to which the cost trend is assumed to decline	5.0	%	5.0	%
Year that the rate reaches the ultimate trend rate	2038		2037

Pension Payments and Asset Management

In 2021, the Company contributed $12 million to its pension plan and less than $1 million to its other postretirement benefit plan and does not expect to make any additional contributions to its pension plan until the plan termination is completed.

Although the specific date for the completion of the pension plan termination process is unknown at this time and will depend on certain legal and regulatory requirements or approvals, the Company has adjusted actuarial expectations based on an estimated timeline of approvals and completion. As part of the termination process, the Company expects to distribute lump sum payments to, or purchase annuities for, the benefit plan participants, which is dependent on the participants’ elections. The following timeline reflects the Company’s current estimate of benefit payments to be made and the timing thereof, including projected future interest costs:

Pension Benefits			Other Postretirement Benefits
(in millions)			(in millions)
2022	$	48	2022	$	1
2023	70		2023	1
2024	—		2024	1
2025	—		2025	1
2026	—		2026	1
Years 2027-2031	—		Years 2027-2031	4

The Company’s overall investment strategy has been to provide an adequate pool of assets to support both the long-term growth of plan assets and to ensure adequate liquidity exists for the near-term payment of benefit obligations to participants, retirees and beneficiaries. The Benefits Administration Committee (“BAC”) of the Company, appointed by the Compensation Committee of the Board of Directors, currently administers the Company’s pension plan assets. In anticipation of the pension plan termination, the BAC has adjusted the asset-class mix to more investment grade fixed income assets to mitigate equity market risk, while also preserving cash to satisfy potential interim plan termination-related expenditures.

The table below presents the allocations targeted by the BAC and the actual weighted-average asset allocation of the Company’s pension plan as of December 31, 2021, by asset category. The asset allocation targets are subject to change and the

BAC allows for its actual allocations to deviate from target as a result of current and anticipated market conditions.  Plan assets are periodically balanced whenever the allocation to any asset class falls outside of the specified range.

	Pension Plan Asset Allocations
Asset category:	Target		Actual
Fixed income (1)	78	%	78	%
Cash (2)	22	%	22	%
Total	100	%	100	%

(1)Includes fixed income pension plan assets in the table below.

(2)Includes Cash and cash equivalent pension plan assets in the table below.

Utilizing the fair value hierarchy described in Note 8, the Company’s fair value measurement of pension plan assets as of December 31, 2021 is as follows:

(in millions)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured within fair value hierarchy
Fixed income (1)	90		90		—		—
Cash and cash equivalents	24		24		—		—
Total plan assets at fair value	$	114	$	114	$	—	$	—

(1)U.S. Treasury Notes.

Utilizing the fair value hierarchy described in Note 8, the Company’s fair value measurement of pension plan assets at December 31, 2020 was as follows:

(in millions)	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Measured within fair value hierarchy
Equity securities:
U.S. large cap value equity (1)	$	10	$	10	$	—	$	—
U.S. large cap core equity (2)	24		24		—		—
U.S. small cap equity (3)	13		13		—		—
Non-U.S. equity (4)	18		18		—		—
Fixed income (5)	34		34		—		—
Cash and cash equivalents	2		2		—		—
Total measured within fair value hierarchy	$	101	$	101	$	—	$	—
Measured at net asset value (6)
Equity securities:
U.S. large cap growth equity (7)	3
U.S. small cap equity (3)	2
Total measured at net asset value	$	5
Total plan assets at fair value	$	106

(1)Mutual fund that seeks to invest in a diversified portfolio of stocks that will increase in value over the long-term as well as provide current income.

(2)An institutional fund that seeks to replicate the performance of the S&P 500 Index before fees.

(3)Mutual fund that seeks to invest in a diversified portfolio of stocks with small market capitalizations.

(4)Mutual funds that invest primarily in equity securities of companies domiciled outside of the United States, primarily in developed markets.

(5)Institutional funds that seek an investment return that approximates, as closely as practicable, before expenses, the performance of the Barclays U.S. Intermediate Credit Bond Index over the long term and the Barclays Long U.S. Corporate Bond Index over the long-term.

(6)Plan assets for which fair value was measured using net asset value as a practical expedient.

(7)An institutional fund that seeks to invest in companies with sustainable competitive advantages, as identified through proprietary research.

The Company’s pension plan assets that are classified as Level 1 are the investments comprised of either cash or investments in open-ended mutual funds which produce a daily net asset value that is validated with a sufficient level of observable activity to support classification of the fair value measurement as Level 1.  Due to the Company’s implementation of Accounting Standards Update No. 2015-07, assets measured using net asset value as a practical expedient have not been classified in the fair value

hierarchy.  No concentration of risk arising within or across categories of plan assets exists due to any significant investments in a single entity, industry, country or investment fund.