Retirement Plans and Postretirement Medical Benefits

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Retirement Plans and Postretirement Medical Benefits

Retirement Plans and Postretirement Medical Benefits

Retirement Plans

We provide retirement benefits to eligible employees in the U.S. and outside the U.S. under various defined benefit retirement plans. Benefit accruals under most of our defined benefit plans have been frozen. The benefit obligations and funded status of defined benefit pension plans are as follows:

	United States				Foreign
	2023		2022		2023		2022
Accumulated benefit obligation	$	1,205,108	$	1,205,135	$	488,531	$	447,401
Projected benefit obligation
Benefit obligation - beginning of year	$	1,205,183	$	1,609,508	$	451,337	$	770,468
Service cost	44		55		766		1,214
Interest cost	63,533		44,348		21,238		13,568
Net actuarial loss (gain)	36,882		(349,261)		22,984		(242,488)
Foreign currency changes	—		—		19,854		(68,519)
Settlements	(2,892)		(1,574)		(213)		—
Benefits paid	(97,610)		(97,893)		(23,199)		(22,906)
Benefit obligation - end of year	$	1,205,140	$	1,205,183	$	492,767	$	451,337

Fair value of plan assets
Fair value of plan assets - beginning of year	$	1,161,361	$	1,549,157	$	438,403	$	737,443
Actual return on plan assets	86,044		(293,968)		17,057		(218,325)
Company contributions	6,587		5,639		16,034		8,731
Settlements	(2,892)		(1,574)		(213)		—
Foreign currency changes	—		—		18,605		(66,540)
Benefits paid	(97,610)		(97,893)		(23,199)		(22,906)
Fair value of plan assets - end of year	$	1,153,490	$	1,161,361	$	466,687	$	438,403

Amounts recognized in the Consolidated Balance Sheets
Noncurrent asset	$	—	$	—	$	27,805	$	26,570
Current liability	(5,057)		(7,294)		(1,694)		(1,351)
Noncurrent liability	(46,593)		(36,528)		(52,191)		(38,153)
Funded status	$	(51,650)	$	(43,822)	$	(26,080)	$	(12,934)

Information provided in the table below is only for pension plans with an accumulated benefit obligation in excess of plan assets:

	United States				Foreign
	2023		2022		2023		2022
Projected benefit obligation	$	1,205,141	$	1,205,183	$	396,690	$	38,238
Accumulated benefit obligation	$	1,205,108	$	1,205,135	$	392,586	$	37,972
Fair value of plan assets	$	1,153,490	$	1,161,361	$	342,805	$	—

Pretax amounts recognized in AOCI consist of:
	United States				Foreign
	2023		2022		2023		2022
Net actuarial loss	$	717,530	$	698,815	$	331,536	$	297,753
Prior service (credit) cost	(85)		(105)		7,266		7,552
Transition asset	—		—		(7)		(7)
Total	$	717,445	$	698,710	$	338,795	$	305,298

The components of net periodic benefit (income) cost for defined benefit pension plans were as follows:

	United States						Foreign
	2023		2022		2021		2023		2022		2021
Service cost	$	44	$	55	$	102	$	766	$	1,214	$	1,528
Interest cost	63,533		44,348		42,434		21,238		13,568		11,811
Expected return on plan assets	(86,008)		(71,080)		(77,119)		(29,899)		(26,770)		(31,869)
Amortization of prior service (credit) cost	(20)		(44)		(60)		286		252		268
Amortization of net actuarial loss	17,362		33,164		38,233		2,068		6,767		9,350
Settlements	771		394		551		(25)		—		—
Net periodic benefit (income) cost	$	(4,318)	$	6,837	$	4,141	$	(5,566)	$	(4,969)	$	(8,912)

Other changes in plan assets and benefit obligations for defined benefit pension plans recognized in other comprehensive income were as follows:

	United States				Foreign
	2023		2022		2023		2022
Net actuarial loss	$	36,846	$	15,788	$	35,826	$	2,607
Amortization of net actuarial loss	(17,362)		(33,164)		(2,068)		(6,767)
Amortization of prior service credit (cost)	20		44		(286)		(252)
Settlements	(771)		(394)		25		—
Total recognized in other comprehensive income	$	18,733	$	(17,726)	$	33,497	$	(4,412)

Weighted-average actuarial assumptions used to determine year end benefit obligations and net periodic benefit cost for defined benefit pension plans include:

	2023				2022				2021
United States
Used to determine benefit obligations
Discount rate	5.15%				5.55%				2.85%
Rate of compensation increase	N/A				N/A				N/A
Used to determine net periodic benefit cost
Discount rate	5.55%				2.85%				2.54%
Expected return on plan assets	6.50%				5.10%				5.60%
Rate of compensation increase	N/A				N/A				N/A
Foreign
Used to determine benefit obligations
Discount rate	1.95	%	-	4.60%	1.95	%	-	5.10%	0.85	%	-	2.85%
Rate of compensation increase	2.00	%	-	3.50%	2.00	%	-	3.00%	1.50	%	-	3.65%
Used to determine net periodic benefit cost
Discount rate	1.95	%	-	5.10%	0.85	%	-	2.85%	0.70	%	-	2.40%
Expected return on plan assets	2.75	%	-	5.26%	3.75	%	-	5.75%	3.50	%	-	5.75%
Rate of compensation increase	2.00	%	-	3.60%	1.50	%	-	2.50%	1.50	%	-	2.50%

A discount rate is used to determine the present value of our future benefit obligations. The discount rate for our U.S. pension plans is determined by matching the expected cash flows associated with our benefit obligations to a pool of corporate long-term, high-quality fixed income debt instruments available as of the measurement date. The discount rate for our largest foreign plan, the U.K. Qualified Pension Plan (the U.K. Plan), is determined using a model that discounts each year's estimated benefit payments by an applicable spot rate derived from a yield curve created from a large number of high quality corporate bonds. For our other smaller foreign pension plans, the discount rate is selected based on high-quality fixed income indices available in the country in which the plan is domiciled.

The expected return on plan assets is based on the target asset allocation for the applicable pension plan and expected rates of return for various asset classes in the investment portfolio after analyzing historical experience, future expectations of returns and volatility of asset classes.

Investment Strategy and Asset Allocation

The investment strategy for our pension plans is to maximize returns within reasonable and prudent risk levels, achieve and maintain full funding of the accumulated benefit obligation and the actuarial liabilities and earn the expected rate of return while adhering to regulations and restrictions.

Pension plan assets are invested in accordance with our strategic asset allocation policy. Pension plan assets are exposed to various risks, including interest rate risks, market risks and credit risks. Investments are diversified across asset classes and within each class to reduce the risk of large losses and are periodically rebalanced. Derivatives, such as swaps, options, forwards and futures contracts may be used for market exposure, to alter risk/return characteristics and to manage foreign currency exposure. We do not have any significant concentrations of credit risk within the plan assets.

U.S. Pension Plans

Investment objectives and investment managers are reviewed periodically. Target and actual asset allocations for the U.S. pension plans were as follows:

	Target allocation		Percent of Plan Assets at December 31,
	2024		2023		2022
Asset category
Equities	16	%	15	%	15	%
Multi-asset credit	2	%	2	%	2	%
Fixed income	76	%	76	%	74	%
Real estate	5	%	6	%	8	%
Private equity	1	%	1	%	1	%
Total	100	%	100	%	100	%

Foreign Pension Plans

Our foreign pension plan assets are managed by outside investment managers and monitored regularly by local trustees and our corporate personnel. Target and actual asset allocations for the U.K. Plan, which comprises 74% of the total foreign pension plan assets, were as follows:

	Target Allocation		Percent of Plan Assets at December 31,
	2024		2023		2022
Asset category
Global equities	10	%	8	%	8	%
Fixed income	70	%	69	%	70	%
Multi-asset credit	10	%	8	%	—	%
Real estate	10	%	13	%	13	%
Diversified growth	—	%	—	%	8	%
Cash	—	%	2	%	1	%
Total	100	%	100	%	100	%

Fair Value Measurements of Plan Assets

The following tables show the U.S. and foreign pension plans' assets, by level within the fair value hierarchy. The plan asset categories presented in the following tables are subsets of the broader asset allocation categories.

United States Pension Plans

	December 31, 2023
	Level 1		Level 2		Level 3		Total
Money market funds	$	—	$	13,842	$	—	$	13,842
Equity securities	—		102,795		—		102,795
Commingled fixed income securities	—		220,041		—		220,041
Government and related securities	170,540		28,518		—		199,058
Corporate debt securities	—		545,615		—		545,615
Mortgage-backed /asset-backed securities	—		49,300		—		49,300
Real estate	—		—		67,256		67,256
Securities lending collateral	—		104,630		—		104,630
Total plan assets at fair value	$	170,540	$	1,064,741	$	67,256	$	1,302,537
Securities lending payable							(104,630)
Investments valued at NAV							5,615
Cash							1,240
Other							(51,272)
Fair value of plan assets							$	1,153,490

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Money market funds	$	—	$	10,623	$	—	$	10,623
Equity securities	—		137,505		—		137,505
Commingled fixed income securities	—		220,281		—		220,281
Government and related securities	114,084		21,479		—		135,563
Corporate debt securities	—		527,407		—		527,407
Mortgage-backed /asset-backed securities	—		26,450		—		26,450
Real estate	—		—		91,500		91,500
Securities lending collateral	—		113,802		—		113,802
Total plan assets at fair value	$	114,084	$	1,057,547	$	91,500	$	1,263,131
Securities lending payable							(113,802)
Investments valued at NAV							10,416
Cash							3,525
Other							(1,909)
Fair value of plan assets							$	1,161,361

Foreign Plans

	December 31, 2023
	Level 1		Level 2		Level 3		Total
Money market funds	$	—	$	5,997	$	—	$	5,997
Equity securities	—		44,088		—		44,088
Commingled fixed income securities	—		295,105		—		295,105
Government and related securities	—		38,028		—		38,028
Corporate debt securities	—		28,389		—		28,389
Real estate	—		4,869		43,205		48,074
Diversified growth funds	—		—		—		—
Total plan assets at fair value	$	—	$	416,476	$	43,205	$	459,681
Cash							6,501
Other							505
Fair value of plan assets							$	466,687

	December 31, 2022
	Level 1		Level 2		Level 3		Total
Money market funds	$	—	$	8,338	$	—	$	8,338
Equity securities	—		42,717		—		42,717
Commingled fixed income securities	—		247,337		—		247,337
Government and related securities	—		35,887		—		35,887
Corporate debt securities	—		26,336		—		26,336
Real estate	—		4,446		42,980		47,426
Diversified growth funds	—		—		24,394		24,394
Total plan assets at fair value	$	—	$	365,061	$	67,374	$	432,435
Cash							5,485
Other							483
Fair value of plan assets							$	438,403

The following information relates to our classification of investments into the fair value hierarchy:

•Money Market Funds: Money market funds typically invest in government securities, certificates of deposit, commercial paper and other highly liquid, low risk securities. Money market funds are principally used for overnight deposits and are classified as Level 1 when unadjusted quoted prices in active markets are available and as Level 2 when they are not actively traded on an exchange.

•Equity Securities: Equity securities are comprised of mutual funds and collective trust funds investing in U.S. and foreign stocks. These mutual funds are classified as Level 2.

•Commingled Fixed Income Securities: Commingled fixed income securities are comprised of mutual funds that invest in a variety of fixed income securities, including securities of the U.S. government and its agencies, corporate debt, mortgage-backed securities and asset-backed securities. Fair value is based on the value of the underlying investments owned by each fund, minus its liabilities, divided by the number of shares outstanding, as reported by the fund manager. These mutual funds are classified as Level 1 when unadjusted quoted prices in active markets are available and as Level 2 when they are not actively traded on an exchange.

•Government and Related Securities: Debt securities are classified as Level 1 where active, high-volume trades for identical securities exist. Valuation adjustments are not applied to these securities. Debt securities are classified as Level 2 where fair value is determined using quoted market prices for similar securities or benchmarking model derived prices to quoted market prices and trade data for identical or comparable securities.

•Corporate Debt Securities: Corporate debt securities are valued using recently executed comparable transactions, market price quotations or bond spreads for the same maturity as the security. These securities are classified as Level 2.

•Mortgage-Backed Securities / Asset-Backed Securities: These securities are valued based on external pricing indices or on external price/spread data. These securities are classified as Level 2.

•Real Estate: include units in open-ended commingled real estate funds. Funds that are valued and traded on a daily basis in an active market are classified as Level 2. Investments that are valued on an annual basis by certified appraisers are classified as Level 3. The valuation techniques used to value Level 3 investments include the cost approach, sales-comparison method and the income approach.

•Diversified Growth Funds: comprised of units in commingled diversified growth funds that comprise a mix of different asset classes. The underlying investments may not be listed on an exchange in an active market or traded on a daily basis and may fall into all three fair value categories. Accordingly, these securities are classified as Level 3.

•Securities Lending Fund: represents a commingled fund through our custodian's securities lending program. The U.S. pension plan lends securities that are held within the plan to other banks and/or brokers, and receives collateral, typically cash. This collateral is invested in a commingled fund that invests in short-term fixed income securities. This investment is classified as Level 2. This amount invested in the fund is offset by a corresponding liability reflected in the U.S. pension plan's net assets available for benefits.

Investments Valued at Net Asset Value

Represents investments in private equity limited partnerships that are measured at fair value using the Net Asset Value (NAV) per share as a practical expedient and are not categorized in the fair value hierarchy. There is no active market for these investments and the pension plan receives a proportionate share of the gains, losses and expenses in accordance with the partnership agreements. There was a remaining unfunded commitment of $6 million at both December 31, 2023 and 2022. These investments comprise approximately 1% of total U.S. Pension Fund assets at both December 31, 2023 and 2022.

Level 3 Gains and Losses

The following table summarizes the changes in the fair value of Level 3 assets:

	U.S. Plans		Foreign Plans
	Real estate		Real estate		Diversified Growth Funds
Balance at December 31, 2021	$	77,494	$	52,491	$	52,169
Realized gains	1,058		—		—
Unrealized gains (losses)	12,666		(6,741)		(5,933)
Net purchases, sales and settlements	282		1,729		(16,474)
Foreign currency and other	—		(4,499)		(5,368)
Balance at December 31, 2022	91,500		42,980		24,394
Realized gains	4,505		—		—
Unrealized losses	(18,386)		(3,951)		(3,133)
Net purchases, sales and settlements	(10,363)		2,014		(22,396)
Foreign currency and other	—		2,162		1,135
Balance at December 31, 2023	$	67,256	$	43,205	$	—

Postretirement Medical Benefits

We provide certain employer subsidized health care and employer provided life insurance benefits in the U.S. and Canada to eligible retirees and their dependents. The cost of these benefits is recognized over the period the employee provides credited service to the company. The benefit obligation and funded status for postretirement medical benefit plans are as follows:

	2023		2022
Benefit obligation
Benefit obligation - beginning of year	$	99,275	$	139,516
Service cost	367		731
Interest cost	5,031		3,679
Net actuarial gain	(206)		(31,512)
Foreign currency changes	214		(740)
Benefits paid, net	(11,194)		(12,399)
Benefit obligation - end of year (1)	$	93,487	$	99,275

Fair value of plan assets
Fair value of plan assets - beginning of year	$	—	$	—
Company contribution	11,194		12,399
Benefits paid, net	(11,194)		(12,399)
Fair value of plan assets - end of year	$	—	$	—

Amounts recognized in the Consolidated Balance Sheets
Current liability	$	(10,265)	$	(11,530)
Noncurrent liability	(83,222)		(87,745)
Funded status	$	(93,487)	$	(99,275)

(1)    Includes a benefit obligation for the U.S. postretirement plan of $84 million and $90 million at December 31, 2023 and 2022, respectively.

Pretax amounts recognized in AOCL consist of:

	2023		2022
Net actuarial gain	$	(14,360)	$	(16,405)

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

	2023		2022		2021
Service cost	$	367	$	731	$	909
Interest cost	5,031		3,679		3,755
Amortization of prior service cost	—		—		129
Amortization of net actuarial loss	(2,249)		68		4,090
Net periodic benefit cost	$	3,149	$	4,478	$	8,883

Other changes in benefit obligation for postretirement medical benefit plans recognized in other comprehensive income were as follows:

	2023		2022
Net actuarial gain	$	(206)	$	(31,512)
Amortization of net actuarial loss	2,249		(68)
Total recognized in other comprehensive income	$	2,043	$	(31,580)

The weighted-average discount rates used to determine end of year benefit obligation and net periodic pension cost include:

	2023		2022		2021
Discount rate used to determine benefit obligation
U.S.	5.20	%	5.60	%	2.80	%
Canada	4.60	%	5.15	%	2.90	%
Discount rate used to determine net period benefit cost
U.S.	5.60	%	2.80	%	2.35	%
Canada	5.15	%	2.90	%	2.50	%

The discount rate for our U.S. postretirement medical benefit plan is determined by matching the expected cash flows associated with our benefit obligations to a pool of corporate long-term, high-quality fixed income debt instruments available as of the measurement date. The discount rate for our Canada postretirement medical benefit plan is determined by matching the expected cash flows associated with our benefit obligations to spot rates along a yield curve developed based on yields of corporate long-term, high-quality fixed income debt instruments available as of the measurement date.

The assumed health care cost trend rate used in measuring the accumulated postretirement benefit obligation for the U.S. plan was 6.75% for 2023 and 6.5% for 2022. The assumed health care trend rate is 6.25% for 2024 and will gradually decline to 5.0% by the year 2028 and remain at that level thereafter. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans.

Estimated Future Benefit Payments

The following benefit payments, which reflect expected future service, are expected to be paid.

	Pension Benefits		Postretirement Medical Benefits
2024	$	123,016	$	10,514
2025	123,566		10,065
2026	121,323		9,626
2027	120,468		9,130
2028	120,025		8,654
Thereafter	576,290		36,181
	$	1,184,688	$	84,170

During 2024, we do not anticipate making contributions to our U.S. pension plans and contributing approximately $6 million to our foreign pension plans.

Savings Plans

We offer a voluntary defined contribution 401(k) plan to our U.S. employees designed to help them accumulate additional savings for retirement. We provide a core contribution to all employees, regardless of if they participate in the plan, and an additional contribution to participating employees based on their eligible pay. Total employer contributions to the 401(k) plan were $28 million in both 2023 and 2022.