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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2021
Retirement Benefits [Abstract] |
Employee Benefit Plans | Employee Benefit Plans Postretirement Benefits The Company provides certain health care benefits for legacy retired employees of Cabot Oil & Gas Corporation, including their spouses, eligible dependents and surviving spouses (retirees). These benefits are commonly called postretirement benefits. The health care plans are contributory, with participants' contributions adjusted annually. Most legacy employees of Cabot Oil & Gas Corporation become eligible for these benefits if they meet certain age and service requirements at retirement. The Company provided postretirement benefits to 364 retirees and their dependents at the end of 2021 and 337 retirees and their dependents at the end of 2020. Obligations and Funded Status The funded status represents the difference between the accumulated benefit obligation of the Company's postretirement plan and the fair value of plan assets at December 31. The postretirement plan does not have any plan assets; therefore, the unfunded status is equal to the amount of the December 31 accumulated benefit obligation. The change in the Company's postretirement benefit obligation is as follows:
| Year Ended December 31,
(In millions) | 2021 |  | 2020 |  | 2019
Change in Benefit Obligation |  |  |  |  |
Benefit obligation at beginning of period | $ | 33 |  |  | $ | 34 |  |  | $ | 30 |
Service cost | 2 |  |  | 2 |  |  | 2 |
Interest cost | 1 |  |  | 1 |  |  | 1 |
Actuarial (gain) loss | 1 |  |  | (2) |  |  | 3 |
Benefits paid | (2) |  |  | (2) |  |  | (2) |
Benefit obligation at end of period | $ | 35 |  |  | $ | 33 |  |  | $ | 34 |
Change in Plan Assets |  |  |  |  |
Fair value of plan assets at end of period | — |  |  | — |  |  | — |
Funded status at end of period | $ | (35) |  |  | $ | (33) |  |  | $ | (34) |
Amounts Recognized in the Balance Sheet Amounts recognized in the balance sheet consist of the following:
| December 31,
(In millions) | 2021 |  | 2020 |  | 2019
Current liabilities | $ | 2 |  |  | $ | 2 |  |  | $ | 2 |
Non-current liabilities | 33 |  |  | 31 |  |  | 32 |
| $ | 35 |  |  | $ | 33 |  |  | $ | 34 |
Amounts Recognized in Accumulated Other Comprehensive Income (Loss) Amounts recognized in accumulated other comprehensive income (loss) consist of the following:
| December 31,
(In millions) | 2021 |  | 2020 |  | 2019
Net actuarial (gain) loss | $ | — |  |  | $ | — |  |  | $ | 2 |
Prior service cost | (2) |  |  | (3) |  |  | (4) |
| $ | (2) |  |  | $ | (3) |  |  | $ | (2) |
Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Income (Loss)
| Year Ended December 31,
(In millions) | 2021 |  | 2020 |  | 2019
Components of Net Periodic Postretirement Benefit Cost |  |  |  |  |
Service cost | $ | 2 |  |  | $ | 2 |  |  | $ | 2 |
Interest cost | 1 |  |  | 1 |  |  | 1 |
Amortization of prior service cost | (1) |  |  | (1) |  |  | (1) |
Net periodic postretirement cost | $ | 2 |  |  | $ | 2 |  |  | $ | 2 |
Other Changes in Benefit Obligations Recognized in Other Comprehensive Income (Loss) |  |  |  |  |
Net (gain) loss | $ | — |  |  | $ | (2) |  |  | $ | 3 |
Amortization of prior service cost | 1 |  |  | 1 |  |  | 1 |
Total recognized in other comprehensive income | 1 |  |  | (1) |  |  | 4 |
Total recognized in net periodic benefit cost (income) and other comprehensive income | $ | 3 |  |  | $ | 1 |  |  | $ | 6 |
Assumptions Assumptions used to determine projected postretirement benefit obligations and postretirement costs are as follows:
| December 31,
| 2021 |  | 2020 |  | 2019
Discount rate(1) | 2.85 | % |  | 2.65 | % |  | 3.50 | %
Health care cost trend rate for medical benefits assumed for next year (pre-65) | 6.50 | % |  | 6.75 | % |  | 7.00 | %
Health care cost trend rate for medical benefits assumed for next year (post-65) | 4.75 | % |  | 5.00 | % |  | 5.25 | %
Ultimate trend rate (pre-65) | 4.50 | % |  | 4.50 | % |  | 4.50 | %
Ultimate trend rate (post-65) | 4.50 | % |  | 4.50 | % |  | 4.50 | %
Year that the rate reaches the ultimate trend rate (pre-65) | 2030 |  | 2030 |  | 2030
Year that the rate reaches the ultimate trend rate (post-65) | 2023 |  | 2023 |  | 2023
_______________________________________________________________________________ (1)Represents the year end rates used to determine the projected benefit obligation. To compute postretirement cost in 2021, 2020 and 2019, respectively, the beginning of year discount rates of 2.65 percent, 3.50 percent and 4.45 percent were used. Coverage provided to participants age 65 and older is under a fully-insured arrangement. The Company subsidy is limited to 60 percent of the expected annual fully-insured premium for participants age 65 and older. For all participants under age 65, the Company subsidy for all retiree medical and prescription drug benefits, beginning January 1, 2006, was limited to an aggregate annual amount not to exceed $648,000. This limit increases by 3.5 percent annually thereafter. Cash Flows Contributions. The Company expects to contribute approximately $2 million to the postretirement benefit plan in 2022. Estimated Future Benefit Payments. The following estimated benefit payments under the Company's postretirement plans, which reflect expected future service, are expected to be paid as follows:
(In millions) |
2022 | $ | 2 |
2023 | 2 |
2024 | 2 |
2025 | 2 |
2026 | 2 |
Years 2027 - 2031 | 7 |
Savings Investment Plan The Company has a Savings Investment Plan (“SIP”), which is a defined contribution plan. The Company matches a portion of employees' contributions in cash. Participation in the SIP is voluntary and all regular employees of the Company are eligible to participate. The Company matches employee contributions dollar-for-dollar, up to the maximum Internal Revenue Service (“IRS”) limit, on the first six percent of an employee's pretax earnings. The SIP also provides for discretionary profit sharing contributions in an amount equal to 10 percent of an eligible plan participant's salary and bonus. In connection with the Merger, the Company assumed the Cimarex Energy Co. 401(k) Plan (the “401(k) Plan”) with respect to Cimarex employees. The Company expects to maintain this plan throughout the integration process. Participation in the 401(k) Plan is voluntary and all regular Cimarex employees are eligible to participate. The Company matches employee contributions dollar-for-dollar, up to the maximum IRS limit, on the first seven percent of an employee's pretax earnings. The 401(k) Plan also provides for certain discretionary contributions. No such employer discretionary contributions were made in 2021. During the years ended December 31, 2021, 2020 and 2019, the Company made contributions of $7 million, $6 million and $6 million, respectively, which are included in general and administrative expense in the Consolidated Statement of Operations. The Company's common stock is an investment option within the SIP and the 401(k) Plan. Deferred Compensation Plans The Company has a deferred compensation plan which is available to officers and certain members of the Company's management group and acts as a supplement to the SIP. The Internal Revenue Code does not cap the amount of compensation that may be taken into account for purposes of determining contributions to the deferred compensation plan and does not impose limitations on the amount of contributions to the deferred compensation plan. At the present time, the Company anticipates making a contribution to the deferred compensation plan on behalf of a participant in the event that Internal Revenue Code limitations cause a participant to receive less than the Company matching contribution under the SIP. The assets of the deferred compensation plan are held in a rabbi trust and are subject to additional risk of loss in the event of bankruptcy or insolvency of the Company. Under the deferred compensation plan, the participants direct the deemed investment of amounts credited to their accounts. The trust assets are invested in either mutual funds that cover the investment spectrum from equity to money market, or may include holdings of the Company's common stock, which is funded by the issuance of shares to the trust. The mutual funds are publicly traded and have market prices that are readily available. The Company's common stock is not currently an investment option in the deferred compensation plan. Shares of the Company's stock currently held in the deferred compensation plan represent vested performance share awards that were previously deferred into the rabbi trust. Settlement payments are made to participants in cash, either in a lump sum or in periodic installments. The market value of the trust assets, excluding the Company's common stock, was $47 million and $22 million at December 31, 2021 and 2020, respectively, and is included in other assets in the Consolidated Balance Sheet. Related liabilities, including the Company's common stock, totaled $56 million and $31 million at December 31, 2021 and 2020, respectively, and are included in other liabilities in the Consolidated Balance Sheet. With the exception of the Company's common stock, there is no impact on earnings or earnings per share from the changes in market value of the deferred compensation plan assets because the changes in market value of the trust assets are offset completely by changes in the value of the liability, which represents trust assets belonging to plan participants. As of December 31, 2021 and 2020, 495,774 shares of the Company's common stock were held in the rabbi trust, respectively. These shares were recorded at the market value on the date of deferral, which totaled $5 million and $5 million at December 31, 2021 and 2020, respectively, and is included in additional paid-in capital in stockholders' equity in the Consolidated Balance Sheet. The Company recognized compensation expense (benefit) of $1 million, $(1) million and $(2) million in 2021, 2020 and 2019, respectively, which is included in general and administrative expense in the Consolidated Statement of Operations representing the increase (decrease) in the closing price of the Company's shares held in the trust. The Company's common stock issued to the trust is not considered outstanding for purposes of calculating basic earnings per share, but is considered a common stock equivalent in the calculation of diluted earnings per share. On September 30, 2021, certain executives of the Company entered into letter agreements whereby, in exchange for the cancellation of their rights under their change-in-control agreements and the non-competition and non-solicitation provisions contained in the letter agreements, each such executive would receive a contribution into his or her deferred compensation account at the effective time of the Merger. On October 1, 2021, the Company made deferred contribution payments totaling approximately $19 million into such executives’ deferred compensation accounts. All of such contributions are fully vested. In connection with the Merger, the Company assumed the Cimarex deferred compensation plan. The market value of the trust assets and related liabilities was $27 million at the effective date of the Merger, October 1, 2021. Subsequent to the completion of the Merger, in October 2021, the Company distributed $27 million to the plan participants as a result of the change-in-control provision under the plan. The Company made contributions to the deferred compensation plans of $20 million, $1 million and $1 million in 2021, 2020 and 2019, respectively, which are included in general and administrative expense in the Consolidated Statement of Operations.

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