Employee Benefit Plans

12 Months Ended

Dec. 31, 2023

Retirement Benefits [Abstract]

Employee Benefit Plans

Employee Benefit Plans

Pension Benefits

The Company has defined benefit pension plans covering a certain number of employees. The defined benefits for salaried employees generally are based on years of service and the employee's level of compensation during specified periods of employment. Defined benefit pension plans covering hourly employees generally provide benefits of stated amounts for each year of service. MEPPs in which the Company participates provide benefits to certain unionized employees. The Company's funding policy for qualified plans is consistent with statutory requirements. Periodic voluntary contributions are made, as recommended, by the Company's Pension Committee.

Accrued service is no longer granted to the U.S. defined benefit pension plans and a majority of international defined benefit pension plans due to the plans being frozen. In place of these plans, the Company has established defined contribution plans providing for the Company to contribute a specified matching amount for participating employees' contributions to the plan. For U.S. employees, this match is made on employee contributions up to 4% of eligible compensation. Additionally, the Company may provide a discretionary contribution for eligible employees. There have been no discretionary contributions provided for the years 2023, 2022 and 2021. For non-U.S. employees, this match is up to 6% of eligible compensation with an additional 2% going towards insurance and administrative costs.

Changes in the discount rate assumption and the actual performance of plan assets, compared with the expected long-term rate of return on plan assets, are the primary drivers in the change in funded status of the Company's defined benefit pension plans. These factors are components of actuarial loss (gain) and impact the amount recognized in AOCI, as such actuarial changes are not reflected directly on the Consolidated Statements of Operations but amortized over time as permitted by U.S. GAAP.

NPPC from continuing operations for U.S. and international plans for 2023, 2022 and 2021 is as follows:

	U.S. Plans						International Plans
(In thousands)	2023		2022		2021		2023		2022		2021
Net Periodic Pension Cost (Income):
Defined benefit pension plans:
Service cost	$	—	$	—	$	—	$	1,221	$	1,867	$	1,805
Interest cost	10,173		5,716		4,813		30,166		16,500		12,652
Expected return on plan assets	(7,000)		(10,795)		(12,199)		(31,198)		(38,891)		(45,018)
Recognized prior service costs	—		—		—		519		534		582
Recognized losses	4,601		4,732		5,538		14,316		13,060		18,119
Settlement/curtailment loss (gain)	—		—		—		(42)		(33)		(6)
Defined benefit pension plan cost (income)	7,774		(347)		(1,848)		14,982		(6,963)		(11,866)
Multiemployer pension plans	595		642		640		1,209		1,114		1,035
Defined contribution plans	6,656		5,401		5,660		4,123		4,122		4,196
Net periodic pension cost (income)	$	15,025	$	5,696	$	4,452	$	20,314	$	(1,727)	$	(6,635)

The change in the financial status of the defined benefit pension plans and amounts recognized on the Consolidated Balance Sheets at December 31, 2023 and 2022 are as follows:

	U.S. Plans				International Plans
(In thousands)	2023		2022		2023		2022
Change in benefit obligation:
Benefit obligation at beginning of year	$	209,182	$	277,007	$	597,190	$	1,022,198
Service cost	—		—		1,221		1,867
Interest cost	10,173		5,716		30,166		16,500
Plan participants' contributions	—		—		13		14
Amendments	—		—		74		—
Actuarial (gain) loss	5,736		(57,841)		17,899		(299,841)
Settlements/curtailments	—		—		(203)		(132)
Benefits paid	(15,914)		(15,700)		(36,650)		(37,135)
Effect of foreign currency	—		—		31,785		(106,281)
Benefit obligation at end of year	$	209,177	$	209,182	$	641,495	$	597,190
Change in plan assets:
Fair value of plan assets at beginning of year	$	177,044	$	232,947	$	607,234	$	973,252
Actual return on plan assets	18,123		(41,909)		40,507		(250,002)
Employer contributions	1,674		1,706		24,715		22,614
Plan participants' contributions	—		—		13		14
Settlements/curtailments	—		—		(203)		(132)
Benefits paid	(15,914)		(15,700)		(36,650)		(37,135)
Effect of foreign currency	—		—		31,908		(101,377)
Fair value of plan assets at end of year	$	180,927	$	177,044	$	667,524	$	607,234
Funded status at end of year	$	(28,250)	$	(32,138)	$	26,029	$	10,044

Significant items impacting actuarial gains and losses for 2023 for U.S. and U.K. plans included the actual return on the fair value of plan assets since the prior measurement date was greater than assumed, which caused the funded position to improve; partially offset by a decrease in the discount rate used to measure the benefit obligation compared with the prior year, which caused deterioration in the funded position.

Amounts recognized on the Consolidated Balance Sheets for defined benefit pension plans consist of the following at December 31, 2023 and 2022:

	U.S. Plans				International Plans
	December 31				December 31
(In thousands)	2023		2022		2023		2022
Noncurrent assets	$	—	$	—	$	44,241	$	26,033
Current liabilities	1,832		1,851		726		924
Noncurrent liabilities	26,418		30,287		17,486		15,065
AOCI	95,016		105,005		358,763		346,068

Amounts recognized in AOCI for defined benefit pension plans consist of the following at December 31, 2023 and 2022:

	U.S. Plans				International Plans
(In thousands)	2023		2022		2023		2022
Net actuarial loss	$	95,016	$	105,005	$	350,601	$	337,849
Prior service cost	—		—		8,162		8,219
Total	$	95,016	$	105,005	$	358,763	$	346,068

The Company's estimate of expected contributions to be paid in 2024 for the U.S. and international defined benefit plans total $7.7 million and $17.6 million, respectively.

Future Benefit Payments

Expected benefit payments for defined benefit pension plans over the next ten years are as follows:

(In millions)	2024		2025		2026		2027		2028		2029-2033
U.S. Plans	$	26.0	$	16.3	$	16.2	$	16.1	$	15.9	$	75.1
International Plans	37.2		37.8		38.8		39.8		41.3		221.3

Net Periodic Pension Cost and Defined Benefit Pension Obligation Assumptions

The weighted-average actuarial assumptions used to determine the defined benefit pension plan NPPC for 2023, 2022 and 2021 were as follows:

	U.S. Plans December 31						International Plans December 31						Global Weighted-Average December 31
	2023		2022		2021		2023		2022		2021		2023		2022		2021
Discount rates	5.3	%	2.7	%	2.4	%	5.1	%	1.9	%	1.4	%	5.1	%	2.1	%	1.6	%
Expected long-term rates of return on plan assets	7.0	%	6.3	%	6.8	%	5.1	%	4.4	%	4.7	%	5.5	%	4.7	%	5.1	%

The expected long-term rates of return on defined benefit pension plan assets for the 2024 NPPC are 7.0% for the U.S. plans and 5.3% for the international plans. The expected global long-term rate of return on assets for 2024 is 5.7%.

The weighted-average actuarial assumptions used to determine the defined benefit pension plan obligations at December 31, 2023 and 2022 were as follows:

	U.S. Plans				International Plans				Global Weighted-Average
	December 31				December 31				December 31
	2023		2022		2023		2022		2023		2022
Discount rates	5.0	%	5.3	%	4.8	%	5.1	%	4.8	%	5.1	%

Since accrued service is no longer granted to the U.S. defined benefit plans and the majority of the international defined benefit pension plans, the rate of compensation increase did not have a significant impact on the defined benefit pension obligation at December 31, 2023 and 2022 or the defined benefit pension plan NPPC for the years ended 2023, 2022 and 2021.

The U.S. discount rate was determined using a yield curve that was produced from a universe containing approximately 1,100 U.S. dollar-denominated, AA-graded corporate bonds, all of which were noncallable (or callable with make-whole provisions) and excluding the 10% of the bonds with the highest deviation from the expected yield and the 10% with the lowest deviation from the expected yield within each duration group. The discount rate was then developed as the level-equivalent rate that would produce the same present value as that using spot rates to discount the projected benefit payments. For international plans, the discount rate is aligned to corporate bond yields in the local markets, normally AA-rated corporations. The process and selection seek to approximate the cash inflows with the timing and amounts of the expected benefit payments.

Accumulated Benefit Obligation

The accumulated benefit obligation for all defined benefit pension plans at December 31, 2023 and 2022 was as follows:

	U.S. Plans				International Plans
	December 31				December 31
(In millions)	2023		2022		2023		2022
Accumulated benefit obligation	$	209.2	$	209.2	$	636.4	$	593.4

Defined Benefit Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets

The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for defined benefit pension plans with accumulated benefit obligations in excess of plan assets at December 31, 2023 and 2022 were as follows:

	U.S. Plans				International Plans
	December 31				December 31
(In millions)	2023		2022		2023		2022
Projected benefit obligation	$	209.2	$	209.2	$	27.8	$	25.3
Accumulated benefit obligation	209.2		209.2		24.1		22.6
Fair value of plan assets	180.9		177.0		9.7		9.4

At December 31, 2023 and 2022, the asset allocations attributable to the Company's U.S. defined benefit pension plans and the long-term target allocation of plan assets, by asset category, are as follows:

	Target  Long-Term Allocation	Percentage of Plan Assets December 31
U.S. Plans Asset Category		2023		2022
Domestic equity securities	6%-16%	10.7	%	21.0	%
International equity securities	22%-32%	24.3	%	22.2	%
Fixed income securities	51%-61%	52.8	%	44.6	%
Cash and cash equivalents	Less than 5%	0.9	%	1.0	%
Other (a)	1%-11%	11.3	%	11.2	%

(a)    Investments within this caption include diversified global asset allocation funds and credit collection funds.

Defined benefit pension plan assets are allocated among various categories of equities, fixed income securities and cash and cash equivalents with professional investment managers whose performance is actively monitored. The primary investment objective is long-term growth of assets in order to meet present and future benefit obligations. The Company periodically conducts an asset/liability modeling study and accordingly adjusts investments among and within asset categories to ensure the long-term investment strategy is aligned with the profile of benefit obligations.

The Company reviews the long-term expected return on asset assumption on a periodic basis considering a variety of factors including historical investment returns achieved over a long-term period, the targeted allocation of plan assets and future expectations based on a model of asset returns for an actively managed portfolio. The model simulates 1,000 different capital market results over 20 years. The expected return-on-asset assumption for U.S. defined benefit pension plans for both 2024 and 2023 is 7.0%.

The U.S. defined benefit pension plans' assets include 310,000 shares at December 31, 2023 and 310,000 shares at December 31, 2022 of the Company's common stock, valued at $2.8 million and $2.0 million, respectively. These shares represented 1.5% and 1.1% of total U.S. plan assets at December 31, 2023 and 2022, respectively.

The asset allocations attributable to the Company's international defined benefit pension plans at December 31, 2023 and 2022 and the long-term target allocation of plan assets, by asset category, are as follows:

International Plans Asset Category	Target Long-Term Allocation		Percentage of Plan Assets December 31
			2023		2022
Equity securities	16.0	%	10.8	%	24.8	%
Fixed income securities	78.0	%	83.3	%	65.5	%
Cash and cash equivalents	—		0.5	%	1.5	%
Other (b)	6.0	%	5.4	%	8.2	%

(b)     Investments within this caption include diversified growth funds and real estate funds.

International defined benefit pension plan assets at December 31, 2023 in the U.K. defined benefit pension plan totaled approximately 94% of the international defined benefit pension plan assets. The U.K. plan assets are allocated among various categories of equities, fixed income securities and cash and cash equivalents with professional investment managers whose performance is actively monitored. The primary investment objective is long-term growth of assets in order to meet present and future benefit obligations. The Company periodically conducts asset/liability modeling studies and accordingly adjusts investment amounts within asset categories to ensure the long-term investment strategy is aligned with the profile of benefit obligations.

For the international long-term rate of return assumption, the Company considered the current level of expected returns in risk-free investments (primarily government bonds), the historical level of the risk premium associated with other asset classes in which the portfolio is invested, and the expectations for future returns of each asset class and plan expenses. The expected return for each asset class is then weighted based on the target asset allocation to develop the expected long-term rate of return on assets. The expected return on asset assumption for the U.K. defined benefit pension plan for 2024 and 2023 are 5.3% and 5.0%, respectively. The remaining international defined benefit pension plans, with plan assets representing approximately 6% of the international defined benefit pension plan assets, are under the guidance of professional investment managers and have similar investment objectives.

The fair values of the Company's U.S. defined benefit pension plans' assets at December 31, 2023 by asset class are as follows:

(In thousands)	Total		Level 1		Investments Valued at Net Asset Value (c)
Domestic equities:
Common stocks	$	2,791	$	2,791	$	—
Mutual funds—equities	16,583		16,583		—
International equities:
Mutual funds—equities	43,994		43,994		—
Fixed income investments:
U.S. Treasuries and collateralized securities	13,920		13,920		—
Mutual funds—bonds	81,634		81,634		—
Other—mutual funds	4,913		4,913		—
Cash and money market accounts	1,661		1,661		—
Other—partnerships/joint ventures	15,431		—		15,431
Total	$	180,927	$	165,496	$	15,431

(c)     Certain investments that are measured at fair value using Net Asset Value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy.

The fair values of the Company's U.S. defined benefit pension plans' assets at December 31, 2022 by asset class are as follows:

(In thousands)	Total		Level 1		Investments Valued at Net Asset Value
Domestic equities:
Common stocks	$	1,951	$	1,951	$	—
Mutual funds—equities	35,177		35,177		—
International equities:
Mutual funds—equities	39,287		39,287		—
Fixed income investments:
Mutual funds—bonds	78,943		78,943		—
Other—mutual funds	6,699		6,699		—
Cash and money market accounts	1,780		1,780		—
Other - partnerships/joint ventures	13,207		—		13,207
Total	$	177,044	$	163,837	$	13,207

The fair values of the Company's international defined benefit pension plans' assets at December 31, 2023 by asset class are as follows:

(In thousands)	Total		Level 1		Level 2
Equity securities:
Mutual funds—equities	$	71,755	$	—	$	71,755
Fixed income investments:
Mutual funds—bonds	551,701		—		551,701
Insurance contracts	4,631		—		4,631
Other:
Other mutual funds	36,188		—		36,188
Cash and money market accounts	3,249		3,249		—
Total	$	667,524	$	3,249	$	664,275

The fair values of the Company's international defined benefit pension plans' assets at December 31, 2022 by asset class are as follows:

(In thousands)	Total		Level 1		Level 2
Equity securities:
Mutual funds—equities	$	150,813	$	—	$	150,813
Fixed income investments:
Mutual funds—bonds	392,960		—		392,960
Insurance contracts	4,636		—		4,636
Other:
Other mutual funds	49,805		—		49,805
Cash and money market accounts	9,020		9,020		—
Total	$	607,234	$	9,020	$	598,214

The following is a description of the valuation methodologies used for the defined benefit pension plans' investments measured at fair value:

•Level 1 Fair Value Measurements—Investments in interest-bearing cash are stated at cost, which approximates fair value. The fair values of money market accounts and certain mutual funds are based on quoted net asset values of the shares held by the plan at year-end. The fair values of domestic and international stocks and corporate bonds, notes and convertible debentures are valued at the closing price reported in the active market on which the individual securities are traded.

•Level 2 Fair Value Measurements—The fair values of investments in mutual funds for which quoted net asset values in an active market are not available are valued by the investment advisor based on the current market values of the underlying assets of the mutual fund based on information reported by the investment consistent with audited financial statements of the mutual fund. Further information concerning these mutual funds may be obtained from their separate audited financial statements. Investments in U.S. Treasury notes and collateralized securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings.

Multiemployer Pension Plans

The Company, through HE, contributes to several MEPPs under the terms of collective-bargaining agreements that cover union-represented employees, many of whom are temporary in nature. The Company's total contributions to MEPPs were $1.9 million, $1.9 million and $1.7 million for the years ended December 31, 2023, 2022 and 2021, respectively.