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Retirement Plans, Postretirement and Postemployment Benefits | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
Retirement Plans, Postretirement and Postemployment Benefits | Note J: Retirement Plans, Postretirement and Postemployment Benefits The Company sponsors defined benefit retirement plans that cover substantially all employees. Additionally, the Company provides other postretirement benefits for certain employees, including medical benefits for retirees and their spouses and retiree life insurance. Employees starting on or after January 1, 2002 are not eligible for postretirement welfare plans. The Company also provides certain benefits, such as disability benefits, to former or inactive employees after employment but before retirement. The measurement date for the Company’s defined benefit plans, postretirement benefit plans and postemployment benefit plans is December 31. During 2022, the Company amended its qualified pension plan to provide an enhanced benefit for eligible hourly active participants who retire subsequent to April 30, 2022, which resulted in a remeasurement of the qualified pension plan as of February 28, 2022. The remeasurement increased the defined benefit plans’ unrecognized prior service cost by $47.6 million. Defined Benefit Retirement Plans. Defined retirement benefits for salaried employees are based on each employee’s years of service and average compensation for a specified period of time before retirement. Defined retirement benefits for hourly employees are generally stated amounts for specified periods of service. The Company sponsors a Supplemental Excess Retirement Plan (SERP) that generally provides for the payment of retirement benefits in excess of allowable Internal Revenue Code limits. The SERP generally provides for a lump-sum payment of vested benefits. When these benefit payments exceed the sum of the service and interest costs for the SERP during a year, the Company recognizes a pro rata portion of the SERP’s unrecognized actuarial loss as settlement expense. The net periodic benefit cost of defined benefit plans includes the following components:
years ended December 31 (in millions) |  | 2023 |  |  | 2022 |  |  | 2021 |
Service cost |  | $ | 32.9 |  |  | $ | 48.1 |  |  | $ | 46.2 |
Interest cost |  |  | 51.3 |  |  |  | 41.2 |  |  |  | 35.7 |
Expected return on assets |  |  | (71.4 | ) |  |  | (77.3 | ) |  |  | (70.5 | )
Amortization of: |  |  |  |  |  |  |  |  |
Prior service cost |  |  | 5.9 |  |  |  | 4.9 |  |  |  | 0.8 |
Actuarial loss |  |  | 0.6 |  |  |  | 3.9 |  |  |  | 12.2 |
Settlement charge |  |  | — |  |  |  | 4.6 |  |  |  | — |
Net periodic benefit cost |  | $ | 19.3 |  |  | $ | 25.4 |  |  | $ | 24.4 |
The components of net periodic benefit cost, other than service cost, are included in the line item Other nonoperating income, net, in the consolidated statements of earnings. Based on the roles of the employees, service cost is included in Total c ost of revenues or Selling, general and administrative expenses line items in the consolidated statements of earnings. The expected return on assets is calculated by applying an annually selected expected long-term rate of return assumption to the estimated fair value of the plan assets during the year, giving consideration to contributions and benefits paid. The Company recognized the following pretax amounts in consolidated comprehensive earnings:
years ended December 31 |  |  |  |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |  |  | 2021 |
Actuarial loss (gain) |  | $ | 20.9 |  |  | $ | (114.5 | ) |  | $ | (67.5 | )
Prior service cost |  |  | — |  |  |  | 48.1 |  |  |  | — |
Amortization of: |  |  |  |  |  |  |  |  |
Prior service cost |  |  | (5.9 | ) |  |  | (4.9 | ) |  |  | (0.8 | )
Actuarial loss |  |  | (0.6 | ) |  |  | (3.9 | ) |  |  | (12.2 | )
Settlement charge |  |  | — |  |  |  | (4.6 | ) |  |  | — |
Total |  | $ | 14.4 |  |  | $ | (79.8 | ) |  | $ | (80.5 | )
Accumulated other comprehensive loss includes the following amounts that have not yet been recognized in net periodic benefit cost:
December 31 |  | 2023 |  |  | 2022 |
(in millions) |  | Gross |  |  | Net of tax |  |  | Gross |  |  | Net of tax |
Prior service cost |  | $ | 42.4 |  |  | $ | 20.0 |  |  | $ | 48.2 |  |  | $ | 20.3 |
Actuarial loss |  |  | 63.4 |  |  |  | 29.9 |  |  |  | 43.2 |  |  |  | 18.2 |
Total |  | $ | 105.8 |  |  | $ | 49.9 |  |  | $ | 91.4 |  |  | $ | 38.5 |
The defined benefit plans’ change in projected benefit obligation is as follows:
years ended December 31 |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |
Net projected benefit obligation at beginning of year |  | $ | 857.6 |  |  | $ | 1,135.5 |
Service cost |  |  | 32.9 |  |  |  | 48.1 |
Interest cost |  |  | 51.3 |  |  |  | 41.2 |
Actuarial loss (gain) |  |  | 72.6 |  |  |  | (363.3 | )
Gross benefits paid |  |  | (45.2 | ) |  |  | (52.0 | )
Plan amendments |  |  | — |  |  |  | 48.1 |
Net projected benefit obligation at end of year |  | $ | 969.2 |  |  | $ | 857.6 |
The largest component of the actuarial loss in 2023 was the lower discount rate compared with 2022. The actuarial gain in 2022 was primarily attributable to a higher discount rate compared with 2021. The Company’s change in plan assets, funded status and amounts recognized on the Company’s consolidated balance sheets are as follows:
years ended December 31 |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |
Fair value of plan assets at beginning of year |  | $ | 1,067.1 |  |  | $ | 1,200.3 |
Actual return on plan assets, net |  |  | 123.1 |  |  |  | (171.4 | )
Employer contributions |  |  | 31.8 |  |  |  | 90.2 |
Gross benefits paid |  |  | (45.2 | ) |  |  | (52.0 | )
Fair value of plan assets at end of year |  | $ | 1,176.8 |  |  | $ | 1,067.1 |
December 31 |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |
Funded status of the plan at end of year |  | $ | 207.6 |  |  | $ | 209.5 |
Accrued benefit credit |  | $ | 207.6 |  |  | $ | 209.5 |
December 31 |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |
Amounts recognized on consolidated balance sheets consist of: |  |  |  |  |  |
Noncurrent asset |  | $ | 307.8 |  |  | $ | 295.3 |
Current liability |  |  | (7.5 | ) |  |  | (6.8 | )
Noncurrent liability |  |  | (92.7 | ) |  |  | (79.0 | )
Net amount recognized at end of year |  | $ | 207.6 |  |  | $ | 209.5 |
The accumulated benefit obligation for all defined benefit pension plans was $881.9 million and $789.6 million at December 31, 2023 and 2022, respectively. Benefit obligations and fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets are as follows:
December 31 |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |
Projected benefit obligation |  | $ | 100.7 |  |  | $ | 86.3 |
Accumulated benefit obligation |  | $ | 90.9 |  |  | $ | 79.5 |
Fair value of plan assets |  | $ | 0.5 |  |  | $ | 0.5 |
Weighted-average assumptions used to determine benefit obligations as of December 31 are:
|  | 2023 |  | 2022
Discount rate |  | 5.58% |  | 5.88%
Rate of increase in future compensation levels |  | 4.50% |  | 4.50%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31 are:
|  | 2023 |  | 2022 |  | 2021
Discount rate |  | 5.88% |  | 3.44% |  | 3.16%
Rate of increase in future compensation levels |  | 4.50% |  | 4.50% |  | 4.50%
Expected long-term rate of return on assets |  | 6.75% |  | 6.75% |  | 6.75%
The expected long-term rate of return on pension fund assets is based on the current asset class mix of the Company's pension plan assets, current capital market conditions and a stochastic forecast of future conditions. As of December 31, 2023 and 2022, the Company estimated the remaining lives of participants in the pension plans using the Pri-2012 Base tables. The no-collar table was used for salaried participants and the blue-collar table was used for hourly participants; the tables were adjusted to reflect both the mortality experience of the Company’s participants and a geospatial mortality analysis. These adjustments were updated from December 31, 2022, where the Pri-2012 tables were only adjusted based on the experience of the Company's participants. The Company used the MP-2020 mortality improvement scale for 2023 and 2022. Retirement plan assets are invested in listed stocks, bonds, real estate, private infrastructure and cash equivalents. The target allocation for 2023 and the actual pension plan asset allocation by asset class are as follows:
| Percentage of Plan Assets
|  | 2023 |  |
|  | Target |  | December 31
Asset Class |  | Allocation |  | 2023 |  | 2022
Equity securities |  | 56% |  | 53% |  | 54%
Debt securities |  | 28% |  | 27% |  | 24%
Real estate |  | 10% |  | 12% |  | 14%
Private infrastructure |  | 6% |  | 8% |  | 8%
Total |  | 100% |  | 100% |  | 100%
The Company’s investment strategy is for equity securities to be invested in mid-sized to large capitalization U.S. funds, and small capitalization, international and emerging growth funds. Debt securities, or fixed income investments, are invested in funds benchmarked to the Barclays U.S. Aggregate Bond Index. The fair values of pension plan assets by asset class and fair value hierarchy level are as follows:
| Fair Value Measurements |  |  |  |  |  |  |
December 31 |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |  |  | Net Asset Value |  |  | Total Fair Value |
(in millions) |  | 2023 |
Equity securities 1: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mid-sized to large cap |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 307.2 |  |  | $ | 307.2 |
Small cap, international and emerging growth funds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 319.5 |  |  |  | 319.5 |
Debt securities 1: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core fixed income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 319.2 |  |  |  | 319.2 |
Real estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 136.7 |  |  |  | 136.7 |
Private infrastructure |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 90.2 |  |  |  | 90.2 |
Cash equivalents |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4.0 |  |  |  | 4.0 |
Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,176.8 |  |  | $ | 1,176.8 |
|  | 2022 |
Equity securities 1: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mid-sized to large cap |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 291.6 |  |  | $ | 291.6 |
Small cap, international and emerging growth funds |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 287.2 |  |  |  | 287.2 |
Debt securities 1: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Core fixed income |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 249.1 |  |  |  | 249.1 |
Real estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 151.5 |  |  |  | 151.5 |
Private infrastructure |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 83.1 |  |  |  | 83.1 |
Cash equivalents |  |  | 0.2 |  |  |  | — |  |  |  | — |  |  |  | 4.4 |  |  |  | 4.6 |
Total |  | $ | 0.2 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,066.9 |  |  | $ | 1,067.1 |
1. These investments are common collective investment trusts valued using the net asset value (NAV) unit price provided by the fund administrator. The NAV is based on the value of the underlying assets owned by the fund. Real estate investments are stated at estimated fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Real estate investments are valued at NAV based on the plan’s proportionate shares of the real estate funds’ fair value as recorded by the trustees/general partner of the funds. The funds are real estate investment trust based funds that offer participation in an actively managed, primarily core portfolio of equity real estate. The funds allocate gains, losses and expenses to investors based on the ownership percentage to determine the NAV. Private infrastructure assets represent investments in a fund that is stated at fair value. For financial assets in the fund that are actively traded in organized financial markets, fair value is based on exchange-quoted market prices. For investments in a fund for which there is no quoted market price, fair value is determined by the trustees/general partner of the fund based on discounted expected future cash flows prepared by third-party professionals. In 2023 and 2022, the Company made combined pension plan and SERP contributions of $31.8 million and $90.2 million, respectively. The Company currently estimates that it will contribute $32.7 million to its pension plans in 2024. The expected benefit payments to be paid from plan assets for each of the next five years and the five-year period thereafter are as follows:
(in millions) |  |  |
2024 |  | $ | 50.0 |
2025 |  | $ | 66.3 |
2026 |  | $ | 58.8 |
2027 |  | $ | 62.3 |
2028 |  | $ | 64.7 |
Years 2029 - 2033 |  | $ | 341.3 |
Postretirement Benefits. The net periodic benefit credit for postretirement plans includes the following components:
years ended December 31 |  |  |  |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |  |  | 2021 |
Interest cost |  | $ | 0.5 |  |  | $ | 0.4 |  |  | $ | 0.3 |
Amortization of: |  |  |  |  |  |  |  |  |
Prior service credit |  |  | (0.3 | ) |  |  | (0.9 | ) |  |  | (0.8 | )
Actuarial gain |  |  | (0.6 | ) |  |  | (0.2 | ) |  |  | (0.1 | )
Total net periodic benefit credit |  | $ | (0.4 | ) |  | $ | (0.7 | ) |  | $ | (0.6 | )
The components of net periodic benefit credit, other than service cost, are included in the line item Other nonoperating income, net, in the consolidated statements of earnings. The Company recognized the following pretax amounts in consolidated comprehensive earnings:
years ended December 31 |  |  |  |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |  |  | 2021 |
Actuarial gain |  | $ | (0.1 | ) |  | $ | (2.0 | ) |  | $ | (0.6 | )
Amortization of: |  |  |  |  |  |  |  |  |
Prior service credit |  |  | 0.3 |  |  |  | 0.9 |  |  |  | 0.8 |
Actuarial gain |  |  | 0.6 |  |  |  | 0.2 |  |  |  | 0.1 |
Total |  | $ | 0.8 |  |  | $ | (0.9 | ) |  | $ | 0.3 |
Accumulated other comprehensive loss includes the following amounts that have not yet been recognized in net periodic benefit credit:
December 31 |  | 2023 |  |  | 2022 |
(in millions) |  | Gross |  |  | Net of tax |  |  | Gross |  |  | Net of tax |
Prior service credit |  | $ | (0.4 | ) |  | $ | (0.2 | ) |  | $ | (0.7 | ) |  | $ | (0.3 | )
Actuarial gain |  |  | (3.7 | ) |  |  | (1.7 | ) |  |  | (4.1 | ) |  |  | (1.7 | )
Total |  | $ | (4.1 | ) |  | $ | (1.9 | ) |  | $ | (4.8 | ) |  | $ | (2.0 | )
The postretirement health care plans’ change in benefit obligation is as follows:
years ended December 31 |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |
Net benefit obligation at beginning of year |  | $ | 8.9 |  |  | $ | 11.4 |
Interest cost |  |  | 0.5 |  |  |  | 0.4 |
Participants’ contributions |  |  | 0.7 |  |  |  | 0.6 |
Actuarial gain |  |  | (0.1 | ) |  |  | (1.9 | )
Gross benefits paid |  |  | (1.7 | ) |  |  | (1.6 | )
Net benefit obligation at end of year |  | $ | 8.3 |  |  | $ | 8.9 |
The postretirement health care plans’ change in plan assets, funded status and amounts recognized on the Company’s consolidated balance sheets are as follows:
years ended December 31 |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |
Fair value of plan assets at beginning of year |  | $ | — |  |  | $ | — |
Employer contributions |  |  | 1.0 |  |  |  | 1.0 |
Participants’ contributions |  |  | 0.7 |  |  |  | 0.6 |
Gross benefits paid |  |  | (1.7 | ) |  |  | (1.6 | )
Fair value of plan assets at end of year |  | $ | — |  |  | $ | — |
December 31 |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |
Funded status of the plan at end of year |  | $ | (8.3 | ) |  | $ | (8.9 | )
Accrued benefit cost |  | $ | (8.3 | ) |  | $ | (8.9 | )
December 31 |  |  |  |  |  |
(in millions) |  | 2023 |  |  | 2022 |
Amounts recognized on consolidated balance sheets consist of: |  |  |  |  |  |
Current liability |  | $ | (1.0 | ) |  | $ | (1.0 | )
Noncurrent liability |  |  | (7.3 | ) |  |  | (7.9 | )
Net amount recognized at end of year |  | $ | (8.3 | ) |  | $ | (8.9 | )
Weighted-average assumptions used to determine the postretirement benefit obligation as of December 31 are:
|  | 2023 |  | 2022
Discount rate |  | 5.79% |  | 6.02%
Weighted-average assumptions used to determine net postretirement benefit credit for the years ended December 31 are:
|  | 2023 |  | 2022 |  | 2021
Discount rate |  | 6.02% |  | 3.02% |  | 2.48%
As of December 31, 2023 and 2022, the Company estimated the remaining lives of participants in the postretirement benefit plans using the Pri-2012 Base tables. The no-collar table was used for salaried participants and the blue-collar table was used for hourly participants; both tables were adjusted to reflect the experience of the Company’s participants. The Company used the MP-2020 mortality improvement scale for 2023 and 2022. Assumed health care cost trend rates at December 31 are:
|  | 2023 |  | 2022
Health care cost trend rate assumed for next year |  | 6.50% |  | 6.75%
Rate to which the cost trend rate gradually declines |  | 4.75% |  | 4.75%
Year the rate reaches the ultimate rate |  | 2031 |  | 2031
The Company estimates that it will contribute $1.0 million to its postretirement health care plans in 2024. The total expected benefit payments to be paid by the Company, net of participant contributions, for each of the next five years and the five-year period thereafter are as follows:
(in millions) |  |  |
2024 |  | $ | 1.0 |
2025 |  | $ | 1.2 |
2026 |  | $ | 1.1 |
2027 |  | $ | 1.0 |
2028 |  | $ | 0.9 |
Years 2029 - 2033 |  | $ | 3.8 |
Defined Contribution Plan. The Company maintains a defined contribution plan that covers substantially all employees. This plan, qualified under Section 401(a) of the Internal Revenue Code, is a retirement savings and investment plan for the Company’s salaried and hourly employees. Under certain provisions of the plan, the Company matches employees’ eligible contributions at established rates. The Company’s matching obligations were $22.3 million in 2023, $23.1 million in 2022 and $20.5 million in 2021.

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