Meritor Acquisition and 2022 Financial Results
Table of Contents
The reconciliation of Level 3 assets was as follows:
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3)
Insurance
In millions
Balance at December 31, 2020
Actual return on plan assets
Annuity
Real Assets
Private Markets
Total
$
556 S
31
$
251
$
838
Unrealized (losses) gains on assets still held at the reporting date
(42)
2
Purchases, sales and settlements, net
Balance at December 31, 2021
114
74
(9)
(9)
514
33
356
903
Actual return on plan assets
Unrealized (losses) gains on assets still held at the reporting date
Purchases, sales and settlements, net
Assumption of Meritor's plan assets
Balance at December 31, 2022
Level 3 Assets
(178)
(2)
39
(141)
(23)
(13)
(36)
92
92
$
428
$
8
S
382
$
818
The investments in an insurance annuity contract, venture capital, private equity and real estate, for which quoted market prices are not available, are valued at their estimated
fair value as determined by applicable investment managers or by quarterly financial statements of the funds. These financial statements are audited at least annually. In
conjunction with our investment consultant and actuary, we monitor the fair value of the insurance contract as periodically reported by our insurer and their counterparty risk.
The fair value of all real estate properties, held in the partnerships, are valued at least once per year by an independent professional real estate valuation firm. Fair value
generally represents the fund's proportionate share of the net assets of the investment partnerships as reported by the general partners of the underlying partnerships. Some
securities with no readily available market are initially valued at cost, utilizing independent professional valuation firms as well as market comparisons with subsequent
adjustments to values which reflect either the basis of meaningful third-party transactions in the private market or the fair value deemed appropriate by the general partners of the
underlying investment partnerships. In such instances, consideration is also given to the financial condition and operating results of the issuer, the amount that the investment
partnerships can reasonably expect to realize upon the sale of the securities and any other factors deemed relevant. The estimated fair values are subject to uncertainty and
therefore may differ from the values that would have been used had a ready market for such investments existed and such differences could be material.
Estimated Future Contributions and Benefit Payments
We plan to contribute approximately $106 million to our defined benefit pension plans in 2023.The table below presents expected future benefit payments under our pension
plans:
In millions
Expected benefit payments
Other Pension Plans
2023
2024
Qualified and Non-Qualified Pension Plans
2025
2026
2027
2028-2032
$
367 $
351
$
357 $
361 $
363
$
1,841
We also sponsor defined contribution plans for certain hourly and salaried employees. Our contributions to these plans were $10 million, $92 million and $85 million for the
years ended December 31, 2022, 2021 and 2020.
Other Postretirement Benefits
Our OPEB plans provide various health care and life insurance benefits to eligible employees, who retire and satisfy certain age and service requirements, and their dependents.
The plans are contributory and contain cost-sharing features such as caps, deductibles, coinsurance and spousal contributions. Employer contributions are limited by formulas in
each plan. Retiree contributions for health care benefits are adjusted annually, and we reserve the right to change benefits covered under these plans. There were no plan assets
for OPEB plans as our policy is to fund benefits and expenses for these plans as claims and premiums are incurred.
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