Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Employee Benefit Plans

NOTE 15. EMPLOYEE BENEFIT PLANS

The Company provides defined benefit pension plans, defined contribution plans and/or other postretirement benefit plans to certain employees globally. However, contributions to the Company’s various international benefit plans are not material for the periods presented. The Company’s defined benefit pension plans generally provide benefits of negotiated, stated amounts for each year of service as well as significant supplemental benefits for eligible employees. The Company sponsors defined contribution retirement savings plans for eligible employees, based on employee location and status. The Company’s salaried defined contribution retirement savings plans provide for a Company match of employee contributions up to certain limits based upon eligible base salary. The charge to expense for the Company’s defined contribution retirement savings plans was $18 million, $16 million and $14 million for the years ended December 31, 2023, 2022 and 2021, respectively. The Company is also responsible for OPEB costs (medical, dental, vision, and life insurance) for hourly employees hired prior to May 19, 2008, excluding those employees eligible to retire at the time of the sale of the Company. The plan is unfunded and any future payments will be funded by the Company’s operating cash flows.

Obligations, Funded Status and Recognition in the Consolidated Balance Sheets

The following table provides a reconciliation of the changes in the benefit obligations, funded status and amounts recognized in the Consolidated Balance Sheets for the years ended December 31, 2023 and 2022 (dollars in millions):

	Pension Plans						Post-retirement Benefits
	Year ended December 31, 2023			Year ended December 31, 2022			Year ended December 31, 2023			Year ended December 31, 2022
Benefit Obligations:
Benefit obligation at beginning of year	$	161		$	220		$	73		$	102
Service cost		4			7			—			1
Interest cost		8			6			4			3
Benefits paid		(12	)		(15	)		(5	)		(4	)
Actuarial loss (gain)		8			(57	)		(8	)		(29	)
Benefit obligation at end of year	$	169		$	161		$	64		$	73
Fair Value of Plan Assets:
Fair value of plan assets at beginning of year	$	158		$	213		$	—		$	—
Actual return on plan assets		10			(43	)		—			—
Employer contributions		8			3			5			4
Benefits paid		(12	)		(15	)		(5	)		(4	)
Fair value of plan assets at end of year	$	164		$	158		$	—		$	—
Net Funded Status	$	(5	)	$	(3	)	$	(64	)	$	(73	)
Amounts Recognized in Balance Sheet:
Non-current assets	$	1		$	3		$	—		$	—
Current liabilities		—			—			(4	)		(4	)
Non-current liabilities		(6	)		(6	)		(60	)		(69	)
Total liabilities	$	(5	)	$	(3	)	$	(64	)	$	(73	)
Accumulated Other Comprehensive Loss:
Prior service credit	$	1		$	1		$	14		$	24
Actuarial (gain) loss		(7	)		(1	)		33			27
Total	$	(6	)	$	—		$	47		$	51

The accumulated benefit obligation for the Company's pension plans as of December 31, 2023 and 2022 was $164 million and $159 million, respectively.

The table below provides the weighted-average actuarial assumptions used to determine the benefit obligations of the Company’s plans.

	Pension Plans		Post-retirement Benefits
	As of December 31,
	2023	2022	2023	2022
Discount rate	5.00%	5.20%	5.00%	5.20%
Rate of compensation increase (salaried)	3.00%	3.00%	N/A	N/A

The discount rate is used to determine the present value of the Company’s benefit obligations. The Company’s discount rate is determined by matching the plans’ projected cash flows to a yield curve based on long-term, fixed income debt instruments available as of the measurement date of December 31, 2023. The Company reviews all actuarial assumptions on an annual basis and in the case of remeasurement.

As of December 31, 2023 and 2022, the projected benefit obligation, the accumulated benefit obligation, and the fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets and for pension plans with an accumulated benefit obligation in excess of plan assets were as follows (dollars in millions):

	Hourly Plan		Salary Plan
	As of December 31,
	2023	2022	2023		2022
Plans with projected benefit obligation in excess of plan assets:
Projected benefit obligation	N/A 1	N/A 1	$	83	$	79
Fair value of plan assets	N/A 1	N/A 1	$	77	$	73
Plans with accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation	N/A 1	N/A 1	$	79	$	76
Fair value of plan assets	N/A 1	N/A 1	$	77	$	73

(1)As of December 31, 2023 and 2022, the hourly defined pension plan had plan assets greater than the projected benefit obligation and the accumulated benefit obligation.

Net Periodic Benefit Cost

Information about the net periodic benefit cost (credit) and other changes recognized in AOCL for the pension and post-retirement benefit plans is as follows (dollars in millions):

	Pension Plans									Post-retirement Benefits
	Year ended December 31, 2023			Year ended December 31, 2022			Year ended December 31, 2021			Year ended December 31, 2023			Year ended December 31, 2022			Year ended December 31, 2021
Net Periodic Benefit Cost (Credit):
Service cost	$	4		$	7		$	9		$	—		$	1		$	1
Interest cost		8			6			5			4			3			3
Expected return on assets		(8	)		(8	)		(8	)		—			—			—
Prior service credit		—			(1	)		—			(10	)		(10	)		(10	)
Recognized actuarial loss (gain)		—			1			1			(2	)		—			—
Net Periodic Benefit Cost (Credit)	$	4		$	5		$	7		$	(8	)	$	(6	)	$	(6	)
Other changes in other    comprehensive loss (income):
Net loss (gain)	$	6		$	(6	)	$	(6	)	$	(8	)	$	(29	)	$	(5	)
Amortizations		—			—			(1	)		12			10			10
Total recognized – other    comprehensive loss (income)	$	6		$	(6	)	$	(7	)	$	4		$	(19	)	$	5

The components of net periodic benefit costs other than the service cost component are included in Other income (expense), net in the Consolidated Statements of Comprehensive Income.

The table below provides the weighted-average actuarial assumptions used to determine the net periodic benefit cost (credit).

	Pension Plans			Post-retirement Benefits
	Year ended December 31, 2023	Year ended December 31, 2022	Year ended December 31, 2021	Year ended December 31, 2023	Year ended December 31, 2022	Year ended December 31, 2021
Discount rate	5.20%	2.70%	2.30%	5.20%	2.80%	2.40%
Rate of compensation    increase (salaried)	3.00%	3.00%	3.00%	N/A	N/A	N/A
Expected return on assets	5.30%	3.80%	3.70%	N/A	N/A	N/A

The overall expected rate of return on plan assets is based upon historical and expected future returns consistent with the expected benefit duration of the plan for each asset group adjusted for investment and administrative fees. Health care cost trends are used to project future post-retirement benefits payable from the Company’s plans. As of December 31, 2023, future post-retirement health care costs were forecasted assuming an initial annual increase of up to 9.75%, decreasing to an annual increase of up to 4.00% by the year 2048. The Company reviews all actuarial assumptions on an annual basis and in the case of remeasurement.

Pension Plan Assets

The Company’s pension plan assets mostly consist of diversified equity securities and diversified debt securities. The fair values of plan assets for the Company’s pension plans as of December 31, 2023 and 2022 are as follows (dollars in millions):

	Fair Value Measurements Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				TOTAL
	2023		2022		2023		2022		2023		2022
Diversified debt securities	$	12	$	8	$	123	$	123	$	135	$	131
Diversified equity securities		18		18		7		7		25		25
Cash equivalents		4		2		—		—		4		2
Total	$	34	$	28	$	130	$	130	$	164	$	158

The Company’s investment strategy with respect to pension plan assets is to invest the assets in accordance with laws and regulations. The long-term primary objectives for the Company’s pension assets are to provide results that meet or exceed the plans’ actuarially assumed long-term rate of return without subjecting the funds to undue risk. To achieve these objectives the Company has established the following targets:

	Target
Asset Category	Hourly			Salary
Cash equivalents		2	%		2	%
Diversified equity securities		15			15
Diversified debt securities		83			83
Total		100	%		100	%

Throughout 2023, the Company’s investment committee has continued to evaluate the investments and take steps toward the established targets.

Expected Contributions and Benefit Payments

Information about expected cash flows for the Company’s pension and post-retirement benefit plans is as follows (dollars in millions):

	Pension Plans		Post-retirement Benefits
Employer Contributions:
2024 expected contributions	$	—	$	4
Expected Benefit Payments:
2024		11		4
2025		12		5
2026		12		4
2027		12		4
2028		12		4
2029-2033		66		23

Expected benefit payments for pension and post-retirement benefits will be paid from plan trusts or corporate assets. The Company’s funding policy is to contribute amounts annually that are at least equal to the amounts required by applicable laws and regulations or to directly fund payments to plan participants. Additional discretionary contributions will be made when deemed appropriate to meet the Company’s long-term obligation to the plans.

Non-qualified Deferred Compensation Plan

The Company maintains a non-qualified deferred compensation plan (“Deferred Compensation Plan”) for a select group of management. Under the terms of the plan, the Company has utilized a rabbi trust to accumulate assets to fund its promise to pay benefits under the Deferred Compensation Plan. The rabbi trust is an irrevocable trust, which restricts any use of funds (operational or otherwise) by the Company other than to pay benefits under the Deferred Compensation Plan, and prevents immediate taxation of contributed amounts. Funds are accumulated through both employee deferrals and a Company match. Funds can be invested by the employee into a diversified group of investment options, which have been selected by the Company’s investment committee, that are all categorized as Level 1 in the fair value hierarchy. The Company match resulted in $1 million of expense recorded for the year ended December 31, 2023 and no charge to the Consolidated Statements of Comprehensive Income for either of the years ended December 31, 2022 and 2021. The fair value of the rabbi trust plan assets and deferred compensation obligation was $18 million and $15 million as of December 31, 2023 and 2022, respectively.