XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.21.2

Employee Benefits | 9 Months Ended
--- | ---
Sep. 30, 2021
Compensation And Retirement Disclosure [Abstract] |
Employee Benefits | 5. Employee Benefits Short-Term Incentive Plans (“STI Plans”). We have annual short-term incentive compensation plans for senior management and certain other employees payable at our election in cash, shares of common stock or a combination of cash and shares of common stock. Amounts earned under STI Plans are based on our adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”), modified for certain safety, quality, delivery, cost and individual performance factors. The Adjusted EBITDA targets are determined based on the return on adjusted net assets. Most of our production facilities have similar programs for both hourly and salaried employees. As of September 30, 2021, we had a liability of $7.3 million recorded within Accrued salaries, wages and related expenses for estimated probable future payments relating to the nine month performance period of our 2021 STI Plan. Pension and Similar Benefit Plans. We provide contributions to: (i) defined contribution 401(k) savings plans for salaried employees and certain hourly employees; (ii) a non-qualified, unfunded, unsecured plan of deferred compensation (see “Deferred Compensation Plan” below); (iii) multi-employer pension plans sponsored by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC, the International Association of Machinists and certain other unions at certain of our production facilities; and (iv) a defined benefit pension plan for salaried employees at our London, Ontario (Canada) facility. Deferred Compensation Plan. We have a non-qualified, unfunded, unsecured plan of deferred compensation for certain employees who would otherwise suffer a loss of benefits under our defined contribution plan as a result of the limitations imposed by the Internal Revenue Code of 1986. Despite the plan being an unfunded plan, we make an annual contribution to a rabbi trust to fulfill future funding obligations as contemplated by the terms of the plan. The assets in the trust are held in various investment funds at certain registered investment companies and are accounted for as equity investments with changes in fair value recorded within Other expense, net (see Note 11). Assets of our deferred compensation plan are included in Other assets, classified within Level 2 of the fair value hierarchy and are measured and recorded at fair value based on their quoted market prices. The fair value of these assets at September 30, 2021 and December 31, 2020 was $10.4 million and $9.6 million, respectively. Offsetting liabilities relating to the deferred compensation plan are included in Other accrued liabilities and Long-term liabilities. Salaried VEBA Postretirement Obligation. Certain retirees who retired prior to 2004 and certain employees who were hired prior to February 2002 and have subsequently retired or will retire with the requisite age and service, along with their surviving spouses and eligible dependents, are eligible to participate in a voluntary employees’ beneficiary association (“VEBA”) that provides healthcare cost, medical cost and long-term care insurance cost reimbursement benefits (“Salaried VEBA”). We have an ongoing obligation with no express termination date to make annual variable cash contributions up to a maximum of $2.9 million to the Salaried VEBA. We paid $1.7 million with respect to 2020 during the quarter ended March 31, 2021. We account for the Salaried VEBA as a defined benefit plan in our financial statements. Warrick Pension and Other Postretirement Benefits. In conjunction with the Warrick acquisition, we assumed certain defined benefit pension obligations for certain union employees hired prior to January 1, 2020 and other postretirement benefit (“OPEB”) obligations relating to retiree medical and life insurance benefits for certain union employees hired prior to July 1, 2010, and were active union employees of the Warrick rolling mill on March 31, 2021 and we agreed to establish new plans with respect to each. Pension and OPEB liabilities and expenses are determined using actuarial methodologies and incorporate significant assumptions, including the interest rate used to discount the future estimated liability, the expected long-term rate of return on plan assets and several assumptions relating to the employee workforce (salary increases, health care cost trend rates, retirement age and mortality). The following data presents the key assumptions used and the amounts reflected in our consolidated financial statements with respect to the Warrick pension plan and OPEB. We used a March 31 measurement date for both of the plans. The following table presents the assumptions used to determine the Warrick pension and OPEB obligations:
|  | Warrick Pension Plan |  |  | Warrick OPEB |
|  | As of March 31, 2021 |  |  | As of March 31, 2021 |
Discount rate |  |  | 3.24 | % |  |  | 2.97 | %
Expected long-term return on plan assets |  |  | 7.00 | % |  | N/A |
Trend rate (initial) |  | N/A |  |  |  | 5.40 | %
Trend rate (ultimate) |  | N/A |  |  |  | 4.00 | %
Years to reach ultimate trend |  | N/A |  |  |  | 14 |
Rate of compensation increase |  |  | 2.50 | % |  |  | — |
The accumulated benefit obligation included in the opening balance sheet at March 31, 2021 for the Warrick pension plan and OPEB was $6.5 million and $78.1 million, respectively, of which $1.1 million was recorded within Accrued salaries, wages and related expenses. Our expected minimum contributions to the Warrick pension plan and OPEB in 2021 is $0.1 million and $0.7 million, respectively. The following table presents the minimum net benefits expected to be paid (in millions of dollars):
|  | Year Ended December 31, |
|  | 2021 |  |  | 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |  |  | 2026-2030 |
Warrick pension plan benefit payments |  | $ | 0.1 |  |  | $ | 0.1 |  |  | $ | 0.2 |  |  | $ | 0.3 |  |  | $ | 0.5 |  |  | $ | 4.4 |
Warrick OPEB plan benefit payments |  |  | 0.7 |  |  |  | 1.6 |  |  |  | 2.4 |  |  |  | 3.1 |  |  |  | 3.7 |  |  |  | 27.1 |
Total net benefits |  | $ | 0.8 |  |  | $ | 1.7 |  |  | $ | 2.6 |  |  | $ | 3.4 |  |  | $ | 4.2 |  |  | $ | 31.5 |
The following table presents the total expense related to all postretirement benefit plans (in millions of dollars):
|  | Quarter Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Defined contribution plans1 |  | $ | 3.4 |  |  | $ | 1.4 |  |  | $ | 10.4 |  |  | $ | 7.0 |
Deferred compensation plan2 |  |  | 0.2 |  |  |  | 0.4 |  |  |  | 0.6 |  |  |  | 0.8 |
Multiemployer pension plans1 |  |  | 1.3 |  |  |  | 1.3 |  |  |  | 3.7 |  |  |  | 3.8 |
Net periodic postretirement benefit cost relating to Salaried VEBA2 |  |  | 0.6 |  |  |  | 1.2 |  |  |  | 1.7 |  |  |  | 3.6 |
Net periodic postretirement benefit cost relating to Warrick pension plan3 |  |  | 1.3 |  |  |  | — |  |  |  | 2.6 |  |  |  | — |
Net periodic postretirement benefit cost relating to Warrick OPEB plan3 |  |  | 0.9 |  |  |  | — |  |  |  | 1.9 |  |  |  | — |
Total |  | $ | 7.7 |  |  | $ | 4.3 |  |  | $ | 20.9 |  |  | $ | 15.2 |
1 | Substantially all of the expense related to employee benefits are in Cost of products sold, excluding depreciation and amortization and other items (“Cost of products sold” or “COGS”) with the remaining balance in SG&A and R&D.
2 | The deferred compensation plan and the current service cost component of Net periodic postretirement benefit cost relating to Salaried VEBA are included within our Statements of Consolidated (Loss) Income in SG&A and R&D for all periods presented. All other components of Net periodic postretirement benefit cost relating to Salaried VEBA are included within Other expense, net, on our Statements of Consolidated (Loss) Income.
3 | The current service cost component of Net periodic postretirement benefit cost relating to both the Warrick pension plan and the Warrick OPEB plan are included within our Statements of Consolidated (Loss) Income in COGS for all periods presented. All other components of Net periodic postretirement benefit cost relating to both the Warrick pension plan and the Warrick OPEB plan are included within Other expense, net, on our Statements of Consolidated (Loss) Income.
Components of Net Periodic Postretirement Benefit Cost. Our results of operations included the following impacts associated with our Canadian pension plan, the Salaried VEBA, Warrick pension plan and Warrick OPEB plan: (i) a charge for service rendered by employees; (ii) a charge for accretion of interest; (iii) a benefit for the expected return on plan assets; (iv) amortization of prior service costs associated with plan amendments; and (v) amortization of net actuarial differences. Net periodic benefit cost related to our Canadian pension plan was not material for the quarters and nine months ended September 30, 2021 and September 30, 2020. The following table presents the components of Net periodic postretirement benefit cost relating to Salaried VEBA (in millions of dollars):
|  | Quarter Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Salaried VEBA: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | — |  |  | $ | 0.1 |  |  | $ | — |  |  | $ | 0.1 |
Interest cost |  |  | 0.4 |  |  |  | 0.6 |  |  |  | 1.2 |  |  |  | 1.9 |
Expected return on plan assets |  |  | (0.8 | ) |  |  | (0.7 | ) |  |  | (2.4 | ) |  |  | (2.1 | )
Amortization of prior service cost1 |  |  | 0.9 |  |  |  | 1.2 |  |  |  | 2.6 |  |  |  | 3.5 |
Amortization of net actuarial loss |  |  | 0.1 |  |  |  | — |  |  |  | 0.3 |  |  |  | 0.2 |
Total net periodic postretirement benefit cost relating to Salaried VEBA |  | $ | 0.6 |  |  | $ | 1.2 |  |  | $ | 1.7 |  |  | $ | 3.6 |
1 | We amortize prior service cost on a straight-line basis over the average remaining years of service to full eligibility for benefits of the active plan participants.
The following table presents the components of Net periodic postretirement benefit cost relating to Warrick Pension (in millions of dollars):
|  | Quarter Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Warrick pension plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 1.3 |  |  | $ | — |  |  | $ | 2.5 |  |  | $ | — |
Interest cost |  |  | — |  |  |  | — |  |  |  | 0.1 |  |  |  | — |
Total net periodic postretirement benefit cost relating to Warrick pension plan |  | $ | 1.3 |  |  | $ | — |  |  | $ | 2.6 |  |  | $ | — |
The following table presents the components of Net periodic postretirement benefit cost relating to Warrick OPEB (in millions of dollars):
|  | Quarter Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Warrick OPEB plan: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 0.3 |  |  | $ | — |  |  | $ | 0.7 |  |  | $ | — |
Interest cost |  |  | 0.6 |  |  |  | — |  |  |  | 1.2 |  |  |  | — |
Total net periodic postretirement benefit cost relating to Warrick OPEB plan |  | $ | 0.9 |  |  | $ | — |  |  | $ | 1.9 |  |  | $ | — |

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for retirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 55 -Paragraph 17 -URI http://asc.fasb.org/extlink&oid=123450688&loc=d3e4179-114921 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section S99 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(i) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (o) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (p) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 70 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 60 -Section 50 -Paragraph 3 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iv)(03) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (q) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(1) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (d)(iii) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (l) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -SubTopic 20 -Section 50 -Paragraph 1 -Subparagraph (r)(2) -URI http://asc.fasb.org/extlink&oid=123447040&loc=d3e1928-114920 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration