Pension and Postretirement Benefits

9 Months Ended

Sep. 30, 2021

Retirement Benefits [Abstract]

Pension and Postretirement Benefits

Pension and Postretirement Benefits

Net periodic pension expense is presented below:

	Three Months Ended September 30, 2021						Three Months Ended September 30, 2020
	Total		U.S. Plans		International Plans		Total		U.S. Plans		International Plans
Service cost(i)	$	0.7	$	—	$	0.7	$	0.8	$	—	$	0.8
Interest cost	38.2		29.4		8.8		54.1		40.6		13.5
Expected return on plan assets	(69.8)		(50.0)		(19.8)		(75.0)		(52.1)		(22.9)
Amortization of prior service benefit	(1.3)		(0.7)		(0.6)		(1.3)		(0.6)		(0.7)
Recognized net actuarial loss	45.8		34.0		11.8		44.8		33.8		11.0
Settlement losses	—		—		—		—		—		—
Net periodic pension expense	$	13.6	$	12.7	$	0.9	$	23.4	$	21.7	$	1.7

	Nine Months Ended September 30, 2021						Nine Months Ended September 30, 2020
	Total		U.S. Plans		International Plans		Total		U.S. Plans		International Plans
Service cost(i)	$	2.4	$	—	$	2.4	$	2.2	$	—	$	2.2
Interest cost	116.2		88.2		28.0		161.7		121.8		39.9
Expected return on plan assets	(212.3)		(149.9)		(62.4)		(224.0)		(156.4)		(67.6)
Amortization of prior service benefit	(4.0)		(1.9)		(2.1)		(3.8)		(1.9)		(1.9)
Recognized net actuarial loss	138.6		101.8		36.8		133.8		101.6		32.2
Settlement losses	368.7		158.0		210.7		—		—		—
Net periodic pension expense	$	409.6	$	196.2	$	213.4	$	69.9	$	65.1	$	4.8

(i)Service cost is reported in selling, general and administrative expense. All other components of net periodic pension expense are reported in other (expense), net in the consolidated statements of income (loss).

In January of 2021, the company purchased a group annuity contract for $279 million to transfer projected benefit obligations related to approximately 11,600 retirees of the company’s U.S. defined benefit pension plans. This action resulted in a first quarter 2021 pre-tax settlement loss of $158.0 million.

Effective May 1, 2021, the company’s primary pension plan related to its Dutch subsidiary was transferred to a multi-client circle within a multi-employer fund. This resulted in removing all of the plan’s projected benefit obligations, valued at approximately $553 million, from the company’s balance sheet. This action resulted in a second quarter 2021 pre-tax settlement loss of $182.6 million.

In the second quarter of 2021, the company’s Swiss subsidiary transferred its defined benefit pension plan to a multiple-employer collective foundation. This resulted in removing the projected benefit obligations related to retirees under the Swiss plan, valued at approximately $100 million, from the company’s balance sheet. The transfer required a one-time additional contribution of approximately $10 million to the Swiss plan during the first quarter of 2021. This action resulted in a second quarter 2021 pre-tax settlement loss of $28.1 million.

The American Rescue Plan Act, which was signed into law on March 11, 2021, includes a provision for pension relief that extends the amortization period for required contributions from 7 to 15 years and provides for the stabilization of interest rates used to calculate future required contributions. As a result, based on year-end 2020 pension data and assumptions, current projections indicate that the company will not be required to make future cash contributions to its U.S. qualified defined benefit pension plans for the period covered by such projections and the company has determined that it will not make the previously-contemplated voluntary $200 million contribution to its U.S. pension plans in 2021.

Any future material deterioration in the value of the company’s U.S. qualified defined benefit pension plan assets, as well as changes in pension legislation, discount rate changes, asset return changes, or changes in economic or demographic trends, could require the company to make cash contributions to its U.S. defined benefit pension plans.

In 2021, the company expects to make cash contributions of approximately $48.3 million primarily for the company’s international defined benefit pension plans. In 2020, the company made cash contributions of $826.2 million to its worldwide defined benefit pension plans. For the nine months ended September 30, 2021 and 2020, the company made cash contributions of $40.3 million and $340.2 million, respectively.

Net periodic postretirement benefit (income) expense is presented below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Service cost(i)	$	0.1	$	0.1	$	0.3	$	0.3
Interest cost	0.5		1.1		1.3		3.3
Expected return on assets	(0.1)		(0.1)		(0.3)		(0.3)
Recognized net actuarial (gain) loss	(0.7)		0.3		(2.0)		0.8
Amortization of prior service cost	(0.4)		(0.4)		(1.2)		(1.2)
Net periodic postretirement benefit (income) expense	$	(0.6)	$	1.0	$	(1.9)	$	2.9

(i)Service cost is reported in selling, general and administrative expense. All other components of net periodic postretirement benefit expense are reported in other (expense), net in the consolidated statements of income (loss).

The company expects to make cash contributions of approximately $5.0 million to its postretirement benefit plan in 2021 compared to $6.0 million in 2020. For the nine months ended September 30, 2021 and 2020, the company made cash contributions of $3.3 million and $4.3 million, respectively.