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EMPLOYEE RETIREMENT PLANS | 12 Months Ended
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Dec. 31, 2025
Retirement Benefits [Abstract] |
EMPLOYEE RETIREMENT PLANS | M. EMPLOYEE RETIREMENT PLANS Substantially all salaried employees participate in non-contributory defined-contribution retirement plans, to which payments are determined annually by the Compensation Committee. We also sponsor qualified defined-benefit and non-qualified defined-benefit pension plans covering certain employees and former employees. Pre-tax expense included in income before income taxes related to our retirement plans was as follows, in millions:
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Defined-contribution plans | $ | 49 |  |  | $ | 60 |  |  | $ | 68 |
Defined-benefit pension plans | 8 |  |  | 9 |  |  | 9 |
| $ | 58 |  |  | $ | 69 |  |  | $ | 78 |
Substantially all our domestic and foreign qualified and domestic non-qualified defined-benefit pension plans were frozen to future benefit accruals. M. EMPLOYEE RETIREMENT PLANS (Continued) Changes in the projected benefit obligation and fair value of plan assets, and the funded status of our defined-benefit pension plans were as follows, in millions:
| At Year Ended December 31,
| 2025 |  | 2024
| Qualified |  | Non-Qualified |  | Qualified |  | Non-Qualified
Changes in projected benefit obligation: |  |  |  |  |  |  |
Projected benefit obligation at January 1 | $ | 125 |  |  | $ | 101 |  |  | $ | 136 |  |  | $ | 108 |
Service cost | 2 |  |  | — |  |  | 2 |  |  | — |
Interest cost | 5 |  |  | 5 |  |  | 4 |  |  | 5 |
Actuarial (gain) loss, net | (17) |  |  | 5 |  |  | (4) |  |  | (1) |
Foreign currency exchange | 16 |  |  | — |  |  | (8) |  |  | — |
Benefit payments | (5) |  |  | (12) |  |  | (4) |  |  | (12) |
Projected benefit obligation at December 31 | $ | 126 |  |  | $ | 100 |  |  | $ | 125 |  |  | $ | 101 |
Changes in fair value of plan assets: |  |  |  |  |  |  |
Fair value of plan assets at January 1 | $ | 92 |  |  | $ | — |  |  | $ | 90 |  |  | $ | — |
Actual return on plan assets | (3) |  |  | — |  |  | 8 |  |  | — |
Foreign currency exchange | 12 |  |  | — |  |  | (5) |  |  | — |
Company contributions | 5 |  |  | 12 |  |  | 4 |  |  | 12 |
Benefit payments | (5) |  |  | (12) |  |  | (4) |  |  | (12) |
Fair value of plan assets at December 31 | $ | 101 |  |  | $ | — |  |  | $ | 92 |  |  | $ | — |
Funded status at December 31 | $ | (25) |  |  | $ | (100) |  |  | $ | (33) |  |  | $ | (101) |
Amounts in our consolidated balance sheets were as follows, in millions:
| At December 31,
| 2025 |  | 2024
| Qualified |  | Non-Qualified |  | Qualified |  | Non-Qualified
Other assets | $ | 2 |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |
Accrued liabilities | — |  |  | (11) |  |  | — |  |  | (11) |
Other liabilities | (27) |  |  | (88) |  |  | (35) |  |  | (89) |
Total net liability | $ | (25) |  |  | $ | (100) |  |  | $ | (33) |  |  | $ | (101) |
Unrealized loss included in accumulated other comprehensive income before income taxes was as follows, in millions:
| At December 31,
| 2025 |  | 2024
| Qualified |  | Non-Qualified |  | Qualified |  | Non-Qualified
Net loss | $ | 8 |  |  | $ | 28 |  |  | $ | 17 |  |  | $ | 24 |
Net prior service cost | 1 |  |  | — |  |  | 1 |  |  | — |
Total | $ | 9 |  |  | $ | 28 |  |  | $ | 19 |  |  | $ | 24 |
M. EMPLOYEE RETIREMENT PLANS (Continued) Information for defined-benefit pension plans with an accumulated benefit obligation in excess of plan assets was as follows, in millions:
| At December 31,
| 2025 |  | 2024
| Qualified |  | Non-Qualified |  | Qualified |  | Non-Qualified
Projected benefit obligation | $ | 124 |  |  | $ | 100 |  |  | $ | 123 |  |  | $ | 101 |
Accumulated benefit obligation | 124 |  |  | 100 |  |  | 123 |  |  | 101 |
Fair value of plan assets | 97 |  |  | — |  |  | 88 |  |  | — |
The projected benefit obligation was in excess of plan assets for all of our qualified defined-benefit pension plans at December 31, 2025 and 2024 which had an accumulated benefit obligation in excess of plan assets. Net periodic pension cost for our defined-benefit pension plans, with the exception of service cost, is recorded in other, net, in our consolidated statements of operations. Net periodic pension cost for our defined-benefit pension plans was as follows, in millions:
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
| Qualified |  | Non-Qualified |  | Qualified |  | Non-Qualified |  | Qualified |  | Non-Qualified
Service cost | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |
Interest cost | 5 |  |  | 5 |  |  | 4 |  |  | 5 |  |  | 4 |  |  | 6 |
Expected return on plan assets | (5) |  |  | — |  |  | (5) |  |  | — |  |  | (4) |  |  | — |
Recognized net loss | — |  |  | 1 |  |  | 1 |  |  | 1 |  |  | — |  |  | 1 |
Net periodic pension cost | $ | 2 |  |  | $ | 6 |  |  | $ | 2 |  |  | $ | 6 |  |  | $ | 3 |  |  | $ | 7 |
We expect to recognize $3 million of pre-tax net loss from accumulated other comprehensive income into net periodic pension cost in 2026 related to our defined-benefit pension plans. For plans in which almost all of the plan's participants are inactive, pre-tax net loss within accumulated other comprehensive income is amortized using the straight-line method over the remaining life expectancy of the inactive plan participants. For all other plans, pre-tax net loss within accumulated other comprehensive income is amortized using the straight-line method over the average remaining service period of the active employees expected to receive benefits from the plan. Plan Assets. Our qualified defined-benefit pension plan weighted average asset allocation, which is based upon fair value, was as follows:
| At December 31,
| 2025 |  | 2024
Equity securities | 33 | % |  | 32 | %
Debt securities | 35 | % |  | 31 | %
Other | 33 | % |  | 38 | %
Total | 100 | % |  | 100 | %
M. EMPLOYEE RETIREMENT PLANS (Continued) The following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2025 compared to December 31, 2024. Common and preferred stocks and s hort-term and other investments: Valued at the closing price reported on the active market on which the individual securities are traded. Other investments include liability-driven investments in interest rate swap funds that are priced daily based on the use of observable inputs. Corporate, government and other debt securities: Valued based on using pricing models maximizing the use of observable inputs for similar securities. This includes basing value on yields currently available on comparable securities of issuers with similar credit ratings. Real estate: Real estate consists of property funds valued based on the underlying investments, which include inputs such as cost, discounted future cash flows, independent appraisals and market based comparable data. There is no active trading market for these investments, and they are generally illiquid. Due to the significant unobservable inputs, the fair value measurements used to estimate fair value are a Level 3 input. Buy-in annuity: Valued based on the associated benefit obligation for which the buy-in annuity covers the benefits, which approximates fair value. Such basis is determined based on various assumptions, including the discount rate and mortality rate. The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while we believe our valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. The following tables set forth, by level within the fair value hierarchy, the qualified defined-benefit pension plan assets at fair value as of December 31, 2025 and 2024, in millions.
| At December 31, 2025
| Level 1 |  | Level 2 |  | Level 3 |  |  |  | Total
Plan Assets |  |  |  |  |  |  |  |  |
Common and preferred stocks: |  |  |  |  |  |  |  |  |
United States | $ | 21 |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 21 |
International | 12 |  |  | — |  |  | — |  |  |  |  | 12 |
Corporate, government and other debt securities: |  |  |  |  |  |  |  |  |
United States | — |  |  | 6 |  |  | — |  |  |  |  | 6 |
International | — |  |  | 28 |  |  | — |  |  |  |  | 28 |
Real estate: |  |  |  |  |  |  |  |  |
International | — |  |  | — |  |  | 13 |  |  |  |  | 13 |
Buy-in annuity: |  |  |  |  |  |  |  |  |
International | — |  |  | 3 |  |  | — |  |  |  |  | 3 |
Short-term and other investments: |  |  |  |  |  |  |  |  |
International | 4 |  |  | 14 |  |  | — |  |  |  |  | 18 |
Total plan assets | $ | 37 |  |  | $ | 52 |  |  | $ | 13 |  |  |  |  | $ | 101 |
M. EMPLOYEE RETIREMENT PLANS (Continued)
| At December 31, 2024
| Level 1 |  | Level 2 |  | Level 3 |  |  |  | Total
Plan Assets |  |  |  |  |  |  |  |  |
Common and preferred stocks: |  |  |  |  |  |  |  |  |
United States | $ | 18 |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 18 |
International | 11 |  |  | — |  |  | — |  |  |  |  | 11 |
Corporate, government and other debt securities: |  |  |  |  |  |  |  |  |
United States | — |  |  | 6 |  |  | — |  |  |  |  | 6 |
International | — |  |  | 22 |  |  | — |  |  |  |  | 22 |
Real estate: |  |  |  |  |  |  |  |  |
International | — |  |  | — |  |  | 11 |  |  |  |  | 11 |
Buy-in annuity: |  |  |  |  |  |  |  |  |
International | — |  |  | 2 |  |  | — |  |  |  |  | 2 |
Short-term and other investments: |  |  |  |  |  |  |  |  |
International | 3 |  |  | 18 |  |  | — |  |  |  |  | 21 |
Total plan assets | $ | 33 |  |  | $ | 48 |  |  | $ | 11 |  |  |  |  | $ | 92 |
Changes in the fair value of the qualified defined-benefit pension plan Level 3 assets were as follows, in millions:
| Year Ended December 31,
| 2025 |  | 2024
Fair value, January 1 | $ | 11 |  |  | $ | 12 |
Currency translation | 2 |  |  | (1) |
Fair value, December 31 | $ | 13 |  |  | $ | 11 |
Assumptions. Weighted average major assumptions used in accounting for our defined-benefit pension plans were as follows:
| At December 31,
| 2025 |  | 2024 |  | 2023
Discount rate for obligations | 4.60 | % |  | 4.30 | % |  | 4.00 | %
Expected return on plan assets | 5.00 | % |  | 4.80 | % |  | 5.50 | %
Rate of compensation increase | — | % |  | — | % |  | — | %
Discount rate for net periodic pension cost | 4.30 | % |  | 4.00 | % |  | 4.50 | %
The discount rate for obligations for 2025, 2024 and 2023 is based primarily upon the expected duration of each defined-benefit pension plan's liabilities matched to spot rates along a high-quality corporate bond yield curve for the geography of the individual plans. At December 31, 2025, such rates for our defined-benefit pension plans ranged from 1.8 percent to 5.1 percent, with the most significant portion of the liabilities having a discount rate for obligations of 4.2 percent or higher. At December 31, 2024, such rates for our defined-benefit pension plans ranged from 2.1 percent to 5.4 percent, with the most significant portion of the liabilities having a discount rate for obligations of 3.4 percent or higher. At December 31, 2023, such rates for our defined‑benefit pension plans ranged from 1.9 percent to 5.0 percent, with the most significant portion of the liabilities having a discount rate for obligations of 3.2 percent or higher. The increase in the weighted average discount rate from both 2023 to 2024 and 2024 to 2025 is principally due to higher long-term interest rates in the bond markets. M. EMPLOYEE RETIREMENT PLANS (Concluded) The asset allocation of the investment portfolio was developed with the objective of achieving our expected rate of return and reducing volatility of asset returns, and considered the freezing of future benefits. The fixed-income portfolio is invested in corporate bonds, bond index funds and U.S. Treasury securities. Although we would expect alternative investments to yield a higher rate of return than the targeted overall long-term return, these investments are subject to greater volatility and would be less liquid than financial instruments that trade on public markets. The fair value of our plan assets is subject to risk including significant concentrations of risk in our plan assets related to equity, interest rate and operating risk. In order to ensure plan assets are sufficient to pay benefits, a portion of our foreign qualified plans' assets are allocated to equity investments and real assets that are expected, over time, to earn higher returns with more volatility than fixed-income investments which more closely match pension liabilities. Within equity, risk is mitigated by targeting a portfolio that is broadly diversified by geography, market capitalization, manager mandate size, investment style and process. In order to minimize asset volatility relative to the liabilities, a significant portion of plan assets are allocated to fixed-income investments that are exposed to interest rate risk. Rate increases generally will result in a decline in fixed-income assets, while reducing the present value of the liabilities. Conversely, rate decreases will increase fixed income assets, partially offsetting the related increase in the liabilities. Potential events or circumstances that could have a negative effect on estimated fair value include the risks of inadequate diversification and other operating risks. To mitigate these risks, investments are diversified across and within asset classes in support of investment objectives. Policies and practices to address operating risks include ongoing manager oversight, plan and asset class investment guidelines and instructions that are communicated to managers, and periodic compliance and audit reviews to ensure adherence to these policies. In addition, we periodically seek the input of our independent advisor to ensure the investment policy is appropriate. Cash Flows. At December 31, 2025, we expect to contribute approximately $11 million in 2026 to our non-qualified (domestic) defined-benefit pension plans. At December 31, 2025, the benefits expected to be paid in each of the next five years, and in aggregate for the five years thereafter, relating to our defined-benefit pension plans, were as follows, in millions:
| Qualified Plans |  | Non-Qualified Plans
2026 | $ | 8 |  |  | $ | 11 |
2027 | 6 |  |  | 11 |
2028 | 6 |  |  | 11 |
2029 | 6 |  |  | 10 |
2030 | 7 |  |  | 10 |
2031 - 2035 | 36 |  |  | 40 |

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