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Employee Benefit Plans | 12 Months Ended
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Dec. 31, 2024
Employee Benefit Plans [Abstract] |
Employee Benefit Plans | Employee Benefit Plans Defined Benefit Plans We have funded and unfunded defined benefit plans covering certain employee groups in various European countries and Canada. Local statutory requirements govern many of our European and Canadian plans. The defined benefit plans are mostly closed to new participants and, in some cases, existing participants no longer accrue benefits. Funded Status The table below summarizes the funded status of the defined benefit plans (in millions):
| December 31,
| 2024 |  | 2023
Change in projected benefit obligation: |  |  |
Projected benefit obligation - beginning of year | $ | 202 |  |  | $ | 133 |
Acquisitions and divestitures (1) | — |  |  | 58 |
Service cost | 5 |  |  | 4 |
Interest cost | 7 |  |  | 6 |
Participant contributions | 2 |  |  | 1 |
Actuarial (gain) / loss | 12 |  |  | 4 |
Benefits paid (2) | (11) |  |  | (5) |
Settlement | (2) |  |  | (3) |
Currency impact | (15) |  |  | 4 |
Projected benefit obligation - end of year | $ | 200 |  |  | $ | 202 |
Change in fair value of plan assets: |  |  |
Fair value - beginning of year | $ | 119 |  |  | $ | 61 |
Acquisitions and divestitures (1) | — |  |  | 56 |
Actual return on plan assets | 10 |  |  | — |
Employer contributions | 7 |  |  | 5 |
Participant contributions | 2 |  |  | 1 |
Benefits paid | (11) |  |  | (4) |
Settlement | (2) |  |  | (3) |
Currency impact | (9) |  |  | 3 |
Fair value - end of year | $ | 116 |  |  | $ | 119 |
Funded status at end of year (liability) | $ | (84) |  |  | $ | (83) |
Accumulated benefit obligation | $ | 194 |  |  | $ | 196 |
(1) 2023 activity relates to the Uni-Select acquisition. (2) Includes amounts paid from plan assets as well as amounts paid from Company assets. The net amounts recognized for defined benefit plans on the Consolidated Balance Sheets were as follows (in millions):
| December 31,
| 2024 |  | 2023
Noncurrent assets | $ | 2 |  |  | $ | 4 |
Current liabilities | (4) |  |  | (4) |
Noncurrent liabilities | (82) |  |  | (83) |
The following table summarizes the accumulated benefit obligation and aggregate fair value of plan assets for pension plans with accumulated benefit obligations in excess of plan assets (in millions):
| December 31,
| 2024 |  | 2023
Accumulated benefit obligation | $ | 184 |  |  | $ | 147 |
Aggregate fair value of plan assets | 105 |  |  | 67 |
The following table summarizes the projected benefit obligation and aggregate fair value of plan assets for pension plans with projected benefit obligations in excess of plan assets (in millions):
| December 31,
| 2024 |  | 2023
Projected benefit obligation | $ | 191 |  |  | $ | 153 |
Aggregate fair value of plan assets | 105 |  |  | 67 |
The table below summarizes the weighted-average assumptions used to calculate the year-end benefit obligations:
| December 31,
| 2024 |  | 2023
Discount rate used to determine benefit obligation | 3.2 | % |  | 3.7 | %
Rate of future compensation increase | 2.5 | % |  | 2.6 | %
Net Periodic Benefit Cost The table below summarizes the components of net periodic benefit cost for the defined benefit plans (in millions):
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Service cost | $ | 5 |  |  | $ | 4 |  |  | $ | 5 |
Interest cost | 7 |  |  | 6 |  |  | 2 |
Expected return on plan assets (1) | (5) |  |  | (3) |  |  | (2) |
Amortization of actuarial (gain) loss (2) | — |  |  | (2) |  |  | — |
Net periodic benefit cost | $ | 7 |  |  | $ | 5 |  |  | $ | 5 |
(1) We use the fair value of our plan assets to calculate the expected return on plan assets. (2) Actuarial gains and losses are amortized using a corridor approach for our pension plans. Gains and losses are amortized if, as of the beginning of the year, the cumulative net gain or loss exceeds 10 percent of the greater of the projected benefit obligation or the fair value of the plan assets. Gains and losses in excess of the corridor are amortized over the average remaining service period of active members expected to receive benefits under the plan or, in the case of closed plans, the expected future lifetime of the employees participating in the plan. The service cost component of net periodic benefit cost was classified in SG&A expenses, while the other components of net periodic benefit cost were classified in Interest income and other income, net in the Consolidated Statements of Income. The table below summarizes the weighted-average assumptions used to calculate the net periodic benefit cost in the table above:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Discount rate used to determine service cost | 3.7 | % |  | 3.4 | % |  | 1.0 | %
Discount rate used to determine interest cost | 3.7 | % |  | 3.4 | % |  | 1.2 | %
Rate of future compensation increase | 2.6 | % |  | 1.9 | % |  | 1.7 | %
Expected long-term return on plan assets (1) | 4.3 | % |  | 3.1 | % |  | 2.8 | %
(1) Our expected long-term return on plan assets is determined based on the asset allocation and estimate of future long-term returns by asset class. Assumed mortality is also a key assumption in determining benefit obligations and net periodic benefit cost. In some of the European and Canadian plans, a price inflation index is also an assumption in determining benefit obligations and net periodic benefit cost. As of December 31, 2024, the pretax amounts recognized in Accumulated other comprehensive loss consisted of $2 million of net actuarial gains for our defined benefit plans that have not yet been recognized in net periodic benefit cost. Of this amount, we expect an insignificant amount to be recognized as a component of net periodic benefit cost during the year ending December 31, 2025. Fair Value of Plan Assets Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants. The tiers in the fair value hierarchy include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as significant unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Investments that are valued using net asset value (or its equivalent) as a practical expedient are excluded from the fair value hierarchy disclosure. For the unfunded pension plans, we pay the defined benefit plan obligations when they become due. The table below summarizes the fair value of our defined benefit plan assets by asset category within the fair value hierarchy for the funded defined benefit pension plans (in millions):
| December 31,
| 2024 |  | 2023
| Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Insurance contracts (1) | $ | — |  |  | $ | — |  |  | $ | 62 |  |  | $ | 62 |  |  | $ | — |  |  | $ | — |  |  | $ | 66 |  |  | $ | 66 |
Other (2) | 4 |  |  | — |  |  | — |  |  | 4 |  |  | 4 |  |  | — |  |  | — |  |  | 4 |
Assets measured by fair value hierarchy | $ | 4 |  |  | $ | — |  |  | $ | 62 |  |  | $ | 66 |  |  | $ | 4 |  |  | $ | — |  |  | $ | 66 |  |  | $ | 70 |
Assets measured at net asset value (3) |  |  |  |  |  |  | 50 |  |  |  |  |  |  |  |  | 49 |
Total pension plan assets at fair value |  |  |  |  |  |  | $ | 116 |  |  |  |  |  |  |  |  | $ | 119 |
(1) Investments in insurance contracts represents the cash surrender value of the insurance policy. These amounts are determined by an actuary based on projections of future benefit payments, discount rates, and expected long-term rate of return on assets. (2) Represents balances in a refundable tax account held with the Canada Revenue Agency. (3) Consists of international bonds, equity, real estate and other investments. The following table summarizes the changes in fair value measurements of Level 3 investments for the defined benefit plans (in millions):
| December 31, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| 2024 |  | 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of year | $ | 66 |  |  | $ | 40 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Acquisitions and divestitures | — |  |  | 26 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Actual return on plan assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Relating to assets held at the reporting date | 1 |  |  | 1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Purchases, sales and settlements | (3) |  |  | (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency impact | (2) |  |  | 1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at end of year | $ | 62 |  |  | $ | 66 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets for the defined benefit pension plans in Europe are invested primarily in insurance policies. For the defined benefit pension plans in Canada, a portion of the assets representing a subset of inactive plan participants are invested in insurance policies. Under these contracts, we pay premiums to the insurance company, which are based on an internal actuarial analysis performed by the insurance company; the insurance company then funds the pension payments to the plan participants upon retirement. Employer Contributions and Estimated Future Benefit Payments During the year ended December 31, 2024, we contributed $7 million to our pension plans. We estimate that contributions to our pension plans during 2025 will be $7 million. The following table summarizes estimated future benefit payments as of December 31, 2024 (in millions):
Years Ending December 31, | Amount
2025 | $ | 8 |
2026 | 8 |
2027 | 9 |
2028 | 9 |
2029 | 10 |
2030 - 2034 | 54 |

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