PENSION AND POSTRETIREMENT BENEFIT PLANS

12 Months Ended

Dec. 31, 2022

Retirement Benefits [Abstract]

PENSION AND POSTRETIREMENT BENEFIT PLANS

PENSION AND POSTRETIREMENT BENEFIT PLANS

We have various qualified and non-qualified benefit plans for our salaried and union and nonunion hourly employees.

Defined Contribution Plans

All of our employees are eligible to participate in our tax-qualified, defined contribution retirement plan that provides for periodic cash contributions by us based on annual cash compensation and employee deferrals.

Certain salaried employees participate in supplemental plans that restore benefits lost due to government limitations on qualified plans. As of December 31, 2022 and 2021, we recognized $24 million and $30 million in other long-term liabilities for these supplemental plans, respectively.

We expensed $18 million in 2022, $19 million in 2021, $4 million in the Successor period of 2020 and $28 million in the Predecessor period of 2020 under the provisions of these defined contribution and supplemental plans.

Defined Benefit Plans

Participation in defined benefit pension plans sponsored by us is limited. During 2022, approximately 60 employees accrued benefits under these plans, all of whom were union employees. 

Pension costs for the defined benefit pension plans, determined by independent actuarial valuations, are funded by us through payments to trust funds, which are administered by independent trustees.

Postretirement Benefit Plans

We provide postretirement medical and dental benefits for our eligible former employees and their dependents. Our former employees are required to make monthly contributions for the coverage, but the benefits are primarily funded by us as claims are paid during the year.

In 2021, we adopted a postretirement benefit design change, which terminated the employer cost sharing for post age 65 retiree health benefits effective as of January 1, 2022. Our retiree health care benefits provided up to age 65 to current and future retirees who meet certain eligibility requirements were not affected by this change. As a result of this change, our postretirement medical benefit obligation was remeasured as of September 30, 2021. The remeasurement resulted in a decrease to the benefit obligation of $65 million with a corresponding increase to accumulated other comprehensive income. The benefit from the change in plan design will be recognized in our statement of operations over the average remaining years of future service for active employees as a component of other non-operating expenses, net.

Obligations and Funded Status of our Defined Benefit Plans

The following table shows the amounts recognized on our balance sheets related to pension and postretirement benefit plans, as well as plans that we or our subsidiaries sponsor (in millions):

	December 31, 2022				December 31, 2021
	Pension		Postretirement		Pension		Postretirement
Amounts recognized on the balance sheet
Other assets	$	2	$	—	$	—	$	—
Accrued liabilities	—		(4)		—		(4)
Other long-term liabilities	—		(33)		(15)		(44)
	$	2	$	(37)	$	(15)	$	(48)
Amounts recognized in accumulated other comprehensive income (loss), net of tax	$	2	$	79	$	(2)	$	74

The following table shows the funding status of our pension and post-retirement benefit plans along with a reconciliation of our benefit obligations and changes in fair value of plan assets (in millions):

	Year ended December 31,		Year ended December 31,
	2022		2021
Pension
Changes in the benefit obligation
Benefit obligation—beginning of year	$	44	$	47
Service cost—benefits earned during the period	1		1
Interest cost on projected benefit obligation	1		1
Actuarial (gain) loss(a)	(12)		2
Benefits paid	(4)		(7)
Benefit obligation—end of year	$	30	$	44
Changes in plan assets
Fair value of plan assets—beginning of year	$	29	$	32
Actual return on plan assets	(5)		2
Employer contributions	12		2
Benefits paid	(4)		(7)
Fair value of plan assets—end of year	$	32	$	29
Net benefit asset (liability)	$	2	$	(15)
Postretirement
Changes in the benefit obligation (in millions)
Benefit obligation—beginning of year	$	49	$	129
Service cost—benefits earned during the period	2		4
Interest cost on projected benefit obligation	1		3
Actuarial (gain) loss(b)	(12)		(17)
Benefits paid	(2)		(5)
Plan amendment	—		(65)
Benefit obligation—end of year	$	38	$	49
Changes in plan assets
Fair value of plan assets—beginning of year	$	1	$	—
Employer contributions	2		6
Benefits paid	(2)		(5)
Fair value of plan assets—end of year	$	1	$	1
Net benefit liability	$	(37)	$	(48)

(a)The gain reflected in the changes in the pension benefit obligation for the year ended December 31, 2022 was primarily due to the increase in the discount rate from 2.79% to 5.19% and other valuation assumption changes.

(b)The gain reflected in the changes in the postretirement benefit obligation for the year ended December 31, 2022 was primarily due to the increase in the discount rate from 2.75% to 5.20%.

The following table sets for the details of our obligations and assets related to our defined benefit pension plans for the years ended December 31:

	2022		2021
(in millions)
Projected benefit obligation	$	30	$	44
Accumulated benefit obligation	$	27	$	39
Fair value of plan assets	$	32	$	29

Components of Net Periodic Benefit Cost

We record the service cost component of net periodic pension cost with other employee compensation and all other components, including settlement costs, are reported as other non-operating income (expenses), net on our consolidated statements of operations. The following table set forth the components of our net periodic pension and postretirement benefit costs (in millions):

	Successor						Predecessor
	Year ended December 31,		Year ended December 31,		November 1, 2020 - December 31, 2020		January 1, 2020 - October 31, 2020
	2022		2021
Pension
Net periodic benefit costs
Service cost—benefits earned during the period	$	1	$	1	$	—	$	1
Interest cost on projected benefit obligation	1		1		—		1
Expected return on plan assets	(1)		(1)		—		(1)
Amortization of net actuarial loss	—		—		—		1
Settlement costs	—		—		—		1
Net periodic benefit costs	$	1	$	1	$	—	$	3
Postretirement
Net periodic benefit costs
Service cost—benefits earned during the period	$	2	$	4	$	1	$	4
Interest cost on projected benefit obligation	1		3		—		3
Amortization of prior service cost credit	(5)		(1)		—		—
Amortization of net actuarial gain/loss	—		—		—		—
Settlement costs	—		—		—		1
Net periodic benefit costs	$	(2)	$	6	$	1	$	8

Components of accumulated other comprehensive income (loss) (AOCI) are presented net of tax. The following table presents the changes in plan assets and benefit obligations recognized in other comprehensive (loss) income attributable to common stock (in millions):

	Successor						Predecessor
	Year ended December 31,		Year ended December 31,		November 1, 2020 - December 31, 2020		January 1, 2020 - October 31, 2020
	2022		2021
Pension
Net actuarial gain (loss)	$	4	$	(1)	$	(1)	$	(1)
Settlement costs	—		—		—		1
Amortization of net actuarial gain/loss	—		—		—		1
Total	$	4	$	(1)	$	(1)	$	1
Postretirement
Net actuarial gain (loss)	$	9	$	17	$	(7)	$	(2)
Net prior service credit	—		65		—		—
Settlement costs	—		—		—		1
Amortization of prior service cost credit	(4)		(1)		—		—
Total	$	5	$	81	$	(7)	$	(1)

Settlement costs related to our pension and postretirement plans in the Predecessor period of 2020 were associated with early retirements.

The following tables sets forth the valuation assumptions, on a weighted-average basis, used to determine our benefit obligations and net periodic benefit cost:

	Year ended December 31,		Year ended December 31,
	2022		2021
Pension
Benefit Obligation Assumptions
Discount rate	5.19	%	2.79	%
Rate of compensation increase	4.00	%	4.00	%
Net Periodic Benefit Cost Assumptions
Discount rate	2.79	%	2.42	%
Assumed long-term rate of return on assets	5.50	%	6.25	%
Rate of compensation increase	4.00	%	4.00	%

	2022		October 1, 2021 - December 31, 2021		January 1, 2021 - September 30, 2021
Postretirement(a)
Benefit Obligation Assumptions
Discount rate	5.20	%	2.75	%	2.69	%
Net Periodic Benefit Cost Assumptions
Discount rate	2.75	%	2.69	%	2.92	%

(a)Our plan design change on September 30, 2021 resulted in a remeasurement of our postretirement benefit obligations.

For pension plans and postretirement benefit plans that we or our subsidiaries sponsor, we based the discount rate on the FTSE Above Median yield curve in 2022 and the Aon AA Above Median yield curve in 2021. The weighted-average rate of increase in future compensation levels is consistent with our past and anticipated future compensation increases for employees participating in pension plans that determine benefits using compensation. The assumed long-term rate of return on assets is estimated with regard to current market factors but within the context of historical returns for the asset mix that exists at year end.

In 2022 and 2021, we used the Society of Actuaries Pri-2012 mortality assumptions reflecting the MP-2021 scale which plan sponsors in the U.S. use in the actuarial valuations that determine a plan sponsor’s pension and postretirement obligations.

The postretirement benefit obligation was determined by application of the terms of medical and dental benefits, including the effect of established maximums on covered costs, together with relevant actuarial assumptions and healthcare cost trend rates projected at an assumed U.S. Consumer Price Index (CPI) increase of 2.52% and 2.57% as of December 31, 2022 and 2021, respectively. Under the terms of our postretirement plans, participants other than certain union employees pay for all medical cost increases in excess of increases in the CPI. For those union employees, we projected that, as of December 31, 2022, health care cost trend rates would be 7.00% in 2023 decreasing until they reach 4.50% in 2033 and remain at 4.50% thereafter. For those union employees, we projected that, as of December 31, 2021, health care cost trend rates would be 6.00% in 2022 decreasing until they reach 4.50% in 2029 and remain at 4.50% thereafter.

The actuarial assumptions used could change in the near term as a result of changes in expected future trends and other factors that, depending on the nature of the changes, could cause increases or decreases in the plan assets and liabilities.

Fair Value of Plan Assets

We employ a total return investment approach that uses a diversified blend of equity and fixed-income investments to optimize the long-term return of plan assets at a prudent level of risk. Equity investments were diversified across U.S. and non-U.S. stocks, as well as differing styles and market capitalizations. Other asset classes, such as private equity and real estate, may have been used with the goals of enhancing long-term returns and improving portfolio diversification. In 2022 and 2021, the target allocation of plan assets was 50% and 65% equity securities and 50% and 35% debt securities, respectively. Investment performance was measured and monitored on an ongoing basis through quarterly investment portfolio and manager guideline compliance reviews, annual liability measurements and periodic studies. Our postretirement benefit plan assets of $1 million are invested in mutual funds (Level 1 on the fair value hierarchy) with target allocations of 40% equities and 60% debt securities.

The fair values of our pension plan assets by asset category are as follows:

	Fair Value Measurements at December 31, 2022
	Level 1		Level 2		Level 3		Total
Asset Class	(in millions)
Comingled funds
Bonds	—		17		—		17
Commodities	—		1		—		1
U.S. equity	—		4		—		4
International equity	—		10		—		10
Total pension plan assets	$	—	$	32	$	—	$	32

	Fair Value Measurements at December 31, 2021
	Level 1		Level 2		Level 3		Total
Asset Class	(in millions)
Cash equivalents	$	5	$	—	$	—	$	5
Commingled funds
Fixed income	—		2		—		2
U.S. equity	—		3		—		3
International equity	—		2		—		2
Mutual funds
Bond funds	5		—		—		5
Value funds	2		—		—		2
Growth funds	5		—		—		5
Guaranteed deposit account	—		—		5		5
Total pension plan assets	$	17	$	7	$	5	$	29

Expected Contributions and Benefit Payments

In 2023, we do not expect to contribute to our pension plans and expect to contribute $5 million to our postretirement benefit plan. Estimated future undiscounted benefit payments by the plans, which reflect expected future service, as appropriate, are as follows:

	Pension Benefits		Postretirement Benefits
For the years ended December 31,	(in millions)
2023	$	7	$	5
2024	$	2	$	4
2025	$	2	$	4
2026	$	2	$	3
2027	$	2	$	3
2028 to 2032 Payouts	$	10	$	12