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EMPLOYEE BENEFIT PLANS | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Defined Benefit Pension Plans The Company sponsors defined benefit pension plans that cover certain U.S. and international employees, primarily in the United Kingdom, Canada and Germany, which provide benefits of stated amounts for each year of service of the employee. The Company uses a December 31 measurement date for the plans. The following tables provide information regarding the Company’s significant defined benefit pension plans summarized by U.S. and international components. Obligations and Funded Status
|  | U.S. |  | International
In millions |  | 2023 |  | 2022 |  | 2023 |  | 2022
Change in projected benefit obligation |  |  |  |  |  |  |  |
Obligation at beginning of year |  | $ | (29) |  |  | $ | (39) |  |  | $ | (236) |  |  | $ | (356) |
Service cost |  | — |  |  | — |  |  | (3) |  |  | (3) |
Interest cost |  | (2) |  |  | (1) |  |  | (11) |  |  | (6) |
Employee contributions |  | — |  |  | — |  |  | (1) |  |  | (1) |
Plan settlements, curtailments and amendments |  | 1 |  |  | — |  |  | 1 |  |  | 1 |
Benefits paid |  | 4 |  |  | 3 |  |  | 14 |  |  | 15 |
Acquisition |  | (29) |  |  | — |  |  | — |  |  | — |
Actuarial (loss) gain |  | — |  |  | 8 |  |  | (5) |  |  | 86 |
Effect of currency rate changes |  | — |  |  | — |  |  | (10) |  |  | 28 |
Obligation at end of year |  | $ | (55) |  |  | $ | (29) |  |  | $ | (251) |  |  | $ | (236) |
Change in plan assets |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 31 |  |  | $ | 40 |  |  | $ | 201 |  |  | $ | 307 |
Actual return on plan assets |  | 2 |  |  | (6) |  |  | 10 |  |  | (72) |
Employer contributions |  | — |  |  | — |  |  | 6 |  |  | 6 |
Employee contributions |  | — |  |  | — |  |  | 1 |  |  | 1 |
Benefits paid |  | (4) |  |  | (3) |  |  | (14) |  |  | (15) |
Settlements and other |  | — |  |  | — |  |  | (1) |  |  | (1) |
Acquisition |  | 26 |  |  | — |  |  | — |  |  | — |
Effect of currency rate changes |  | — |  |  | — |  |  | 8 |  |  | (25) |
Fair value of plan assets at end of year |  | $ | 55 |  |  | $ | 31 |  |  | $ | 211 |  |  | $ | 201 |
Funded status |  |  |  |  |  |  |  |
Fair value of plan assets |  | $ | 55 |  |  | $ | 31 |  |  | $ | 211 |  |  | $ | 201 |
Benefit obligations |  | (55) |  |  | (29) |  |  | (251) |  |  | (236) |
Funded status |  | $ | — |  |  | $ | 2 |  |  | $ | (40) |  |  | $ | (35) |
Amounts recognized in the statement of financial position consist of: |  |  |  |  |  |  |  |
Noncurrent assets |  | $ | — |  |  | $ | 2 |  |  | $ | 13 |  |  | $ | 13 |
Current liabilities |  | — |  |  | — |  |  | (2) |  |  | (2) |
Noncurrent liabilities |  | — |  |  | — |  |  | (51) |  |  | (46) |
Net amount recognized |  | $ | — |  |  | $ | 2 |  |  | $ | (40) |  |  | $ | (35) |
Amounts recognized in Accumulated other comprehensive loss, before tax at December 31, consist of: |  |  |  |  |  |  |  |
Prior service cost |  | — |  |  | — |  |  | (1) |  |  | (1) |
Net actuarial loss |  | (14) |  |  | (14) |  |  | (64) |  |  | (59) |
Net amount recognized |  | $ | (14) |  |  | $ | (14) |  |  | $ | (65) |  |  | $ | (60) |
The aggregate accumulated benefit obligation for the U.S. pension plans was $55 million and $28 million as of December 31, 2023 and 2022, respectively. The aggregate accumulated benefit obligation for the international pension plans was $241 million and $227 million as of December 31, 2023 and 2022, respectively.
|  |  |  | International
In millions |  |  |  |  |  | 2023 |  | 2022
Information for pension plans with accumulated benefit obligations in excess of Plan assets: |  |  |  |  |  |  |  |
Projected benefit obligation |  |  |  |  |  | $ | (185) |  |  | $ | (175) |
Accumulated benefit obligation |  |  |  |  |  | (178) |  |  | (169) |
Fair value of plan assets |  |  |  |  |  | 133 |  |  | 129 |
Information for pension plans with projected benefit obligations in excess of plan assets: |  |  |  |  |  |  |  |
Projected benefit obligation |  |  |  |  |  | $ | (194) |  |  | $ | (180) |
Accumulated benefit obligation |  |  |  |  |  | (185) |  |  | (172) |
Fair value of plan assets |  |  |  |  |  | 141 |  |  | 133 |
Components of Net Periodic Benefit Costs
|  | U.S. |  | International
In millions |  | 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021
Service cost |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 3 |  |  | $ | 3 |  |  | $ | 4 |
Interest cost |  | 2 |  |  | 1 |  |  | 1 |  |  | 11 |  |  | 6 |  |  | 4 |
Expected return on plan assets |  | (2) |  |  | (1) |  |  | (1) |  |  | (10) |  |  | (12) |  |  | (13) |
Amortization of net loss |  | — |  |  | 1 |  |  | 1 |  |  | 3 |  |  | 2 |  |  | 4 |
Settlement and curtailment (gains) losses recognized |  | (1) |  |  | — |  |  | — |  |  | — |  |  | (1) |  |  | 1 |
Net periodic benefit (income) cost |  | $ | (1) |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 7 |  |  | $ | (2) |  |  | $ | — |
Interest cost is recorded in Interest expense, net on the Consolidated Statements of Income. Expected return on plan assets, Amortization of net loss, and Settlement and curtailment losses recognized are recorded within Other income, net on the Consolidated Statements of Income. Service cost is considered a component of employee compensation and is recorded within Cost of sales or Selling, general and administrative expenses depending on the plan participants relative job function. Amounts recognized in Other comprehensive income during 2023 for other changes in plan assets and benefit obligations are not material. The amounts of net actuarial loss and prior service cost included in Other comprehensive loss expected to be recognized as components of periodic benefit costs in 2024 are not material. The weighted average assumptions in the following table represent the rates used to develop the actuarial present value of the projected benefit obligation for the year listed.
|  | U.S. |  | International
|  | 2023 |  | 2022 |  | 2021 |  | 2023 |  | 2022 |  | 2021
Discount rate |  | 5.25 | % |  | 5.58 | % |  | 2.87 | % |  | 4.38 | % |  | 4.77 | % |  | 1.97 | %
Expected return on plan assets |  | 3.80 | % |  | 3.80 | % |  | 5.00 | % |  | 5.09 | % |  | 4.25 | % |  | 4.27 | %
Rate of compensation increase |  | 3.00 | % |  | 3.00 | % |  | 3.00 | % |  | 2.88 | % |  | 2.78 | % |  | 2.70 | %
The discount rate is based on settling the pension obligation with high grade, high yield corporate bonds, and the rate of compensation increase is based on actual experience. The expected return on plan assets is based on historical performance as well as expected future rates of return on plan assets considering the current investment portfolio mix and the long-term investment strategy. Pension Plan Assets The Company has established formal investment policies for the assets associated with our pension plans. Objectives include maximizing long-term return at acceptable risk levels and diversifying among asset classes. Asset allocation targets are based on periodic asset liability study results which help determine the appropriate investment strategies. The investment policies permit variances from the targets within certain parameters. The plan assets consist primarily of equity security funds, debt security funds, insurance contracts, and cash and cash equivalent investments. The assets held in these funds are generally actively managed and are valued at the net asset value per share multiplied by the number of shares held as of the measurement date. (See Note 17). Plan assets by asset category at December 31, 2023 and 2022 are as follows:
|  | U.S. |  | International
In millions |  | 2023 |  | 2022 |  | 2023 |  | 2022
Pension Plan Assets |  |  |  |  |  |  |  |
Equity security funds |  | $ | 3 |  |  | $ | 4 |  |  | $ | 56 |  |  | $ | 44 |
Debt security funds |  | 35 |  |  | 25 |  |  | 129 |  |  | 131 |
Insurance contracts |  | — |  |  | — |  |  | 12 |  |  | 11 |
Cash and cash equivalents and other |  | 17 |  |  | 2 |  |  | 14 |  |  | 15 |
Fair value of plan assets |  | $ | 55 |  |  | $ | 31 |  |  | $ | 211 |  |  | $ | 201 |
The U.S. plan has a target asset allocation of 11% equity securities, 88% debt securities and 1% in other investments. The International plan has a target asset allocation of 10% equity securities, 15% debt securities and 75% in other investments. Investment policies are determined by the respective Plan’s Pension Committee and set forth in its Investment Policy. Rebalancing of the asset allocation occurs on a quarterly basis. The Company’s defined benefit pension plan assets consist primarily of equity security funds, debt security funds, insurance contracts, and temporary cash and cash equivalent investments. These investments are comprised of a number of investment funds that invest in a diverse portfolio of assets including equity securities, corporate and governmental bonds, and money markets. Trusts are valued at the net asset value (“NAV”) as determined by their custodian. NAV represents the accumulation of the unadjusted quoted close prices on the reporting date for the underlying investments divided by the total shares outstanding at the reporting dates. The following tables summarize our pension plan assets measured at fair value on a recurring basis by fair value hierarchy level (See Note 17):
|  | December 31, 2023
In millions |  | NAV |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
US: |  |  |  |  |  |  |  |  |  |
Equity |  | $ | — |  |  | $ | 3 |  |  | $ | — |  |  | $ | — |  |  | $ | 3 |
Debt Securities |  | — |  |  | 5 |  |  | 30 |  |  | — |  |  | 35 |
Cash and cash equivalents |  | — |  |  | 17 |  |  | — |  |  | — |  |  | 17 |
International: |  |  |  |  |  |  |  |  |  |
Equity |  | 6 |  |  | 14 |  |  | 36 |  |  | — |  |  | 56 |
Debt Securities |  | — |  |  | 3 |  |  | 126 |  |  | — |  |  | 129 |
Insurance Contracts |  | — |  |  | — |  |  | 4 |  |  | 8 |  |  | 12 |
Cash and cash equivalents and other |  | — |  |  | 6 |  |  | 8 |  |  | — |  |  | 14 |
Total |  | $ | 6 |  |  | $ | 48 |  |  | $ | 204 |  |  | $ | 8 |  |  | $ | 266 |
|  | December 31, 2022
In millions |  | NAV |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
US: |  |  |  |  |  |  |  |  |  |
Equity |  | $ | — |  |  | $ | 4 |  |  | $ | — |  |  | $ | — |  |  | $ | 4 |
Debt Securities |  | — |  |  | 5 |  |  | 20 |  |  | — |  |  | 25 |
Cash and cash equivalents |  | — |  |  | 2 |  |  | — |  |  | — |  |  | 2 |
International: |  |  |  |  |  |  |  |  |  |
Equity |  | 5 |  |  | 13 |  |  | 26 |  |  | — |  |  | 44 |
Debt Securities |  | — |  |  | 4 |  |  | 127 |  |  | — |  |  | 131 |
Insurance Contracts |  | — |  |  | — |  |  | 3 |  |  | 8 |  |  | 11 |
Cash and cash equivalents and other |  | — |  |  | 4 |  |  | 11 |  |  | — |  |  | 15 |
Total |  | $ | 5 |  |  | $ | 32 |  |  | $ | 187 |  |  | $ | 8 |  |  | $ | 232 |
There were no material changes to the Level 3 assets during 2023 and 2022. Cash Flows The Company’s funding methods are based on governmental requirements and differ from those methods used to recognize pension expense. The Company expects to contribute $2 million to certain international pension plans and does not expect to make a contribution to the U.S. pension plan during 2024. Benefit payments expected to be paid to plan participants are as follows:
In millions |  | U.S. |  | International
Year ended December 31, |  |  |  |
2024 |  | $ | 4 |  |  | $ | 15 |
2025 |  | $ | 4 |  |  | $ | 15 |
2026 |  | $ | 4 |  |  | $ | 15 |
2027 |  | $ | 4 |  |  | $ | 16 |
2028 |  | $ | 4 |  |  | $ | 17 |
2029 through 2033 |  | $ | 21 |  |  | $ | 91 |
Defined Contribution Plans The Company participates in certain defined contribution plans. Costs of approximately $60 million were recognized during 2023 and $55 million was recognized during 2022 and 2021, respectively. The 401(k) savings plan is a participant directed defined contribution plan that holds shares of the Company’s stock as one of the investment options. At December 31, 2023 and 2022, the plan held on behalf of its participants approximately 355,000 shares with a market value of $45 million, and approximately 371,000 shares with a market value of $37 million, respectively.

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